Sunday, February 2, 2014

Greece Will Be Rescued! (again)

SpiegelOnline reports that German Finance Minister Schäuble is working on a third rescue package for Greece. The numbers mentioned range between 10-20 BEUR. Great news! With that kind of a rescue package, a wonderful future for Greece will be assured!

Coincidentally, the 95-year old former top German banker Ludwig Poullain published an article where he vehemently argued that Germany should exit the Eurozone. Not only does he call the Euro a 'shroud over the economies of the periphery' but he also argues that the Euro, because it is cheaper than a new DM would be, slows down innovation on the part of German industry (because it is too easy for them to export). Hans-Olaf Henkel will be happy to have found a prominent ally.

So, the front lines in the debate are clearly marked. One side says that the system, however inadequate it may be, must be preserved at virtually all cost. And the other side says let's create a new system which is adequate.

The EU as a whole would be better off if there could be an open discourse, based on arguments and free of prejudices, about these two sides.


  1. Many thanks for that link to Poullain. It is very interesting also about how politics happens today.

    "Falls sich einer der Wortführer der Politik einmal eine eigene Meinung gebildet haben sollte, so wird sie kein noch so überzeugendes Argument jemals ändern können."

    This also explains what is going to happen in EU unless the fully unexpected happens...


  2. Klaus, did you notice, that the "help" wil be delivered through the ESM? To me that means, this will not be with the participation of the IMF. Seems, the Troika-Guys are really badly at odds. The IMF is pondering the table for a haircut for a long time.

    And: It is such a relatively small amount. Wonder why? Because this is all that is needed - one or two days before the European elections a 10 Billion Bond is due. If there is no extra money, Greece goes bust, what a bad timing!

    1. It seems to me that the suggested timing aim at having a 'gift' ready for Greece before the EU-elections. This could really backfire if Tsipras succeeds in convincing voters that the gift is actually a Trojan horse.

    2. It is already backfiring, after the german press articles about a further Schauble plan for Greece.

      In practice it is a 3rd memorandum, without calling it
      "memorandum". There are pre-requisites that the greek goverment must do to take the "gift". This "gift" is also now what Samaras has been promicing for a long time now "we do our homework, we do debt restructuring and once in primary surplus, we stop the memorandums".

      Even worse, when such articles are made public (through german leaks), it strengthens the SYRIZA position, which says that Greece is a german protectorate, where the Germans decide all the terms and simply the ND goverment signs accepting it as inevitable faith.

      SYRIZA's plan is quite simple: Beat heavily the current goverment coalition in the european elections, so that afterwards they can raise a strong question about the legitimacy of a coalition that combined gets, let say 20%. SYRIZA will then say "how can the 20% of the votes decide on a 3rd memorandum, when this goverment wasn't elected with such a mandate"?

      SYRIZA will make for a an even worse goverment for Greece, it is already starting to be divided between the more "compromised" and the "reactionary" wing (which wants unilateral actions taken for the debt), but, in effect, Samaras' "allies" are doing him more harm than good to his image, consistently.

      Konstantinos Karamanlis Sr., once has said "in politics, there are things said but not done and others that are done, but not said". It seems that this advice applies to german politicians too. Some things, are better if you don't leak it to the press. Just do them when time comes.

    3. Correction on the above: I meant: "This gift is NOT what Samaras has been promicing".

      Another blow to Samaras came from the Constitutional court that recently ruled that all the cuts on wages of armed forces, police, fire dept personnel, as well as all cuts in pensions of the "special cases" (judges, state employed doctors, military, armed forces) are inconstitutional and the state must refund them everything since summer 2012, as well as raise their salaries/pensions to those levels. It is a shameful decision, made by the judges to "bless" themselves (and use the other professions as cover), but that will create major problem to Samaras, as the cost exceeds 1 billion euros. In practice, this means, no more primary surplus, troika asking new cuts, Samaras' public opinion getting new hit.

      If Tsipras didn't have a party with conflicting forces inside, that sabotage themselves every now and then and if Tsipras had more "down to earth" proposition, Samaras' would be completely wiped out in the elections. The saving grace of New Democracy is that SYRIZA has no past experience in being a big party or of goverment for what matters, so they are still struggling to find cohesion and a behaviour that shows that they are "ready to govern".

      Still, Samaras is in dire condition.

  3. It seems that Ludwig's Poullain article published in 8 October 2012 ? There is a new article?
    It's quite difficult to accept this government a 3rd package if this include again cuts in salaries but also in public expenditures.


    1. Yes, I was alerted right away that Poullain's article was not 'coincidental' but, instead, almost 2 years old. Sorry!