Given the recent Election results in NordRhein-Westphalia, it is possible the German people will be the ones to pull the plug on the others, by refusing further loans.
This could get very messy. Dead Pan is right about the "powers that be" doing everything in (and if Peston is right, outside) their power to prevent it, but they may not "be" much longer.
Last edited by Fox3WheresMyBanana; 14th May 2012 at 13:40.
1. Go broke, exit the EU and the Euro, and do it tough for years, trying to survive by starting from scratch again. 2. Stay with the EU and the Euro, accept the EU bailout, and do it tough for years, trying to cope with unbelievable "austerity" - as well as pay back vast sums to the EU.
The voters seem to be confused. The voters have voted for fringe parties that seem to want to stay in the EU, but don't want to accept the bailout.
The Greek Deputy PM has put some hardener into the coming scenario. "In 6 weeks time, Greece will run out of money". No wages or pensions will be paid. Debts will be reneged on. Greek banks will go bust. Unemployment will soar to levels of the Great Depression (up to 35%).
Tourist-related businesses will do best, as tourists will bring in hard currency. However, tourists will have to carry wads of cash into Greece with them - because no Greek business will be operating on any form of credit, they will be "cash only" - nor will they be dealing in a new Drachma, until some value for it can be agreed on.
The Greeks are facing a period of turmoil and deprivation unparalleled since WW2. However, from what info I've gleaned, there's a lot of Greeks preparing for it by reverting to a subsistence lifestyle, by growing their own vegetables and bartering. I've no doubt they will survive admirably, albeit poorly, by our modern consumer society standards. I don't think we'll see as many rotund, plump Greeks, as we used to.
Greece can't leave, but she can't stay either. The pressures of economics don't go away, however, so my guess is that Greece will be out of the Euro, regardless of how the Greeks vote.
I suspect it will come by the end of Summer, but there's a chance it could drag on for years.
When Greece is finally out of the picture, Spain, Italy and Portugal will come under increasing, irresistible pressure. That is likely to be the end of the Euro unless the necessary major structural changes, not likely to be popular, are made.
Austerity is not an option, but a given, regardless of who's in charge. This ultimately applies to all of us, not just the Greeks.
Deficit spending, the hallmark of socialism, social democracy, democrat or labor rule, whatever you call it, cannot go on indefinitely. Why are there so many smart people who can't figure that out?
Free market capitalism delivers the goods, and always has, in the form of prosperity and general well-being, but the left has always resisted and undermined it on the basis of not liking some to be rich while others are not. That envy costs everyone dearly.
It's a choice between the lesser of two massive financial catastrophes. I doubt if it is even possible to calculate whether the cost to the ECB is greater if they stay in and are constantly bailed out, or if the strings are cut and they are allowed to sink.
It's a Greek tragedy for them, whichever way you look at it, because if they'd never been allowed to join the Euro, they'd have carried on muddling along perfectly happily, fiddling and cheating their taxes, as they have for centuries. It's the outside interference that has caused the disaster.
There is, according to my Europhile friend, 'nothing wrong with the Euro'. It is working as it's meant to, he still insists. I honestly don't know how to answer that! The picture belows tell a story, and sterling is not in good shape.
Socialism is fine until you run out of other people's money to spend
And capitalism is fine until the people you've recklessly lent money to turn around and tell you they can't pay it back.
There is once recent example of a large socialist (well communist actually) country lending the world's biggest capitalist economy vast sums of money to spend on all manner of trinkets. Funny that.
There is once recent example of a large socialist (well communist actually) country lending the world's biggest capitalist economy vast sums of money to spend on all manner of trinkets. Funny that.
And there is also a recent example of a socialist government taking a surplus from a previous capitalist government and turning it into crippling debt, and with, well basicially nothing, not even trinkets to show for it.
