mathjax

Friday, July 3, 2015

The Greek PM is smart and desperate over Euro bailout

The Greek PM Tsirpas is caught between creditors and a hard place. It's obvious the IMF and ECB are playing hardball negotiations to avoid more European nations defaulting on loans.  That's what's really going on. They aren't afraid of Grexit. They are afraid of a knock-on effect of other nations defaulting given Greece got a good deal or wasn't forced to pay off debt. So Europe is making an example of Greece.  Too many European nations have tried to balance their books on other nations in the EU. That is the practice the ECB, EU, and IMF are trying to punish so that fewer local politicians try to steal from the rest of the union.

Consider that the EU wants to expand into central Europe and those nations might try the same thing as Ireland, Greece, and so on given their economies are weak as well. The EU is balancing on a knife edge when it comes to finances.

It's ironic that Germany started two world wars and yet was given a repayment scheme that they could afford and pay back; which they did last decade if I recall. Greece has started no war, bailed out Germany in the past,  and while they were stupid with money they are being asked to accept a payment scheme that can't possibly work.


This is the larger reality. Greece is never getting a good deal.

So the PM is stuck between his people and creditors.

Instead of asking his people on bailout terms he is asking them the better question: do you want to stay in Europe or not?

Because if the Greek people want to stay in Europe, then they must accept what their European creditors want. So if they vote yes then they can't turn around and refuse to accept all the cuts and reforms that are expected can they? Then PM Tsirpas can impose harsh policies and the people must accept them since they voted to stay in.

But if they don't want to be part of Europe, then the Greeks must face all the problems of sovereignty and going it alone. Then PM Tsirpas is forcing the Greek people to accept that and deal with all the problems of a new currency and