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Europe
Germans say euro zone may have to expel Greece
2010-02-15
A majority of Germans want debt-ridden Greece to be thrown out of the euro zone if necessary and more than two-thirds oppose handing Athens billions of euros in credit, a poll published on Sunday showed.

Vocal opposition to aid for Greece from members of Chancellor Angela Merkel's coalition also grew at the weekend with several senior politicians expressing skepticism, especially as Germany's own recovery is fragile.

The Emnid poll for Bild am Sonntag newspaper showed 53 percent of Germans asked said the European Union should, if necessary, expel Greece from the euro zone.

Athens has struggled to convince investors it is tackling its debt crisis and markets are nervous about a default.

EU leaders discussed the issue last week and offered words of support but failed to outline concrete steps, further unsettling markets. Euro zone finance ministers are expected to discuss Greece again on Monday and Tuesday.

Merkel has adopted a cautious stance on support, saying while Greece will not be left on its own, it is up to Athens to sort out its own problems.

The poll also showed 67 percent of Germans did not want Germany and other EU states to give billions of euros in credit to Greece.

"If we start now, where do we stop?" Michael Fuchs, deputy head of Merkel's conservatives in parliament, told Welt am Sonntag newspaper. "I can't explain to people on unemployment benefit that they won't get a cent more but Greeks can draw a pension at 63."

In her first term, Merkel raised Germany's retirement age to 67 from 65 in an effort to rein in the deficit to meet EU goals.
Posted by:Fred

#25  In the short term - cash or gold if you are risk inclined.

The countries that have been replacing USD with EUR in their reserves will now start to dump the EUR.
Posted by: phil_b   2010-02-15 23:48  

#24  A majority of Germans didn't want the Euro in the first place.

That's what I recall, European Conservative. They were concerned about having to foot the bill in exactly this situation.
Posted by: trailing wife   2010-02-15 23:31  

#23  California take heed.
Posted by: rwv   2010-02-15 23:28  

#22  "A majority of Germans want debt-ridden Greece to be thrown out of the euro zone"

A majority of Germans didn't want the Euro in the first place.
Posted by: European Conservative   2010-02-15 21:07  

#21  So in the short term (45 days) buy US dollars and oil futures; then swap into Swiss Francs and krona.

Posted by: Spanky Wheack7175   2010-02-15 19:31  

#20  Expel Greece and the EEEEE--UUU---RRR ---OOOOO is a Zimbabwe "dollar" over night !
Posted by: Daffy Speger7083   2010-02-15 18:54  

#19  Sometimes politicians tell the truth.

Papaconstantinou (Greek Finance Minister) said in Brussels today that “People think we are in a terrible mess. And we are,”
Posted by: phil_b   2010-02-15 16:58  

#18  Bulk shipping rates have moved up sharply over the last 6 months. Indicating a commodity price spike in progress.

But perhaps just the last splurge of the China bubble, before reduced consumer demand and economic protectionism kick in.
Posted by: phil_b   2010-02-15 16:38  

#17  To have consumer price inflation, don't you have to have increasing consumer income, or at least increasing consumer debt?

Or you have a critical commodity spike as with the Arab Oil embargo of the early 70s. While they're now as much tied to the flow in dependency of income, then they were then, to maintain economic balance and domestic stability, it doesn't mean they have to execute the transactions in US dollars. If the external holders of American money start to dump their holdings for something else [and the euro isn't looking too good now], you'll see lots of dollars chasing such commodities making importing them far more expensive [in world market competition]. When its a component that effects nearly all aspect of the economy directly or indirectly [as in transportation of goods and services], you'll see overall costs rise even without an increase in consumer income or debt.
Posted by: Procopius2k   2010-02-15 15:16  

#16  Anguper Hupomosing9418
I'm sending you the bill for my new Bullshit detection meter, it exploded in sparks from an overload.
Posted by: Bright Pebbles   2010-02-15 15:00  

#15  Feb. 15 (Bloomberg) -- The European UnionÂ’s statisticians werenÂ’t aware that Greece used currency swaps to disguise holes in its balance sheet, the EU said
Posted by: Anguper Hupomosing9418   2010-02-15 13:16  

#14  Coming onto the radar.

Spanish intelligence probe 'debt attacks' blamed for sabotaging country's economy

Posted by: tipper   2010-02-15 11:49  

#13  Maybe Germany can......

Oh, sorry.

Wrong war.
Posted by: Kelly   2010-02-15 11:12  

#12   To have consumer price inflation, don't you have to have increasing consumer income, or at least increasing consumer debt? Both income & debt seem to be either flat or decreasing in the US. Sellers can jack up their asking prices to the moon, but that doesn't mean buyers will meet those prices.
Posted by: Anguper Hupomosing9418   2010-02-15 11:06  

#11  All reductions in debt including defaults are deflationary. This is because most debt is used to purchase real property. Less money available to purchase property results in price declines.

It's generally assumed that property deflation and consumer price deflation always occur together, because thats what happened in the 20th century (The Great Depression, Japan since the 1990s). However, IMO both were special cases and this time around we will see the opposite, simultaneous property deflation and consumer price inflation.

One reason I think this is that the main lever governments have to stimulate the economy is to put more money in consumer pockets, while less debt causes fewer productive assets to be built, ie demand increases while supply decreases.

Although, Japan's experience was putting more money in consumer pockets just made them save more. There is already evidence that Americans and Europeans are saving more, so perhaps I am wrong about consumer price inflation.
Posted by: phil_b   2010-02-15 11:03  

#10  because bank collapses are deflationary, it's possible to safely print money without net inflation. Aren't defaults on debts also deflationary?
Posted by: Anguper Hupomosing9418   2010-02-15 10:16  

#9  Next on the radar, or EU agenda, if you please:


  • Portugal

  • Spain



The govt wants belt tightening. The unions won't do it. Everyone is up to the gunnels in debt. No easy way out. General strikes, civil unrest.

The US is heading that way, too.
Posted by: Alaska Paul   2010-02-15 09:56  

#8  Think of a currency drop as a pay cut for everyone paid in that currency.

Would you want to trade more with someone who just had a pay cut?
Posted by: Bright Pebbles   2010-02-15 09:45  

#7  Germany won't bailout Greece. Greece will default on its Euro debt and the cascade will spread to the rest of the PIIGS. Phil

Short-term consequences? Euro drops, USD gains strength, US Exports to Europe decline.

Posted by: Besoeker   2010-02-15 09:30  

#6  If you hate the EUSSR like I do, then this is a pop-corn moment.
Posted by: Bright Pebbles   2010-02-15 09:26  

#5  Germany won't bailout Greece. Greece will default on its Euro debt and the cascade will spread to the rest of the PIIGS.

It's going to be an interesting few weeks.
Posted by: phil_b   2010-02-15 08:27  

#4  more than two-thirds oppose handing Athens billions of euros in credit

1) Hope German gov't listens better than ours;
2) Hope Zero doesn't take this as an "opportunity" to suck up to the world and give Greece OUR money. I know he doesn't care what 2/3s of Americans think.
Posted by: AlanC   2010-02-15 06:51  

#3  It's only a pity they didn't do the same for the banks.

Bailing out depositors would have been cheaper, and because bank collapses are deflationary, it's possible to safely print money without net inflation.
Posted by: Bright Pebbles   2010-02-15 06:17  

#2  At least the German people understand Moral Hazard.
Posted by: phil_b   2010-02-15 03:43  

#1  By, by Greece.
Posted by: g(r)omgoru   2010-02-15 02:58  

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