Beware the Greeks refusing gifts!

Spiegel Online has caused a bit of flap amongst the bats in the Brussels belfry!  According to them, some highly placed source in the German government has said that the Greek government, fed up with almost daily demonstrations against the Brussels/German austerity program, is now actively considering a departure from the euro and that this news has brought about a sudden and secret meeting in some Chateaux in Luxembourg.  A more measured report in The WSJ insists that this is not so and that assurances have been received from Greek government ministers that no such plan is contemplated - well, if a Greek minister says so then that's that, isn't it . . .  er, isn't it? 

Whatever, it's still " a mess of potage", or a pot of mess, according to The WSJ:

Greece already has a €110 billion program of aid loans from other euro zone governments and the International Monetary Fund. But that program envisages Greece returning to bond markets in 2012 to raise nearly €30 billion of financing.

Most euro-zone governments privately acknowledge that that won't be possible, because bond investors won't lend to Greece at affordable prices. That reality is forcing Europe to discuss lending more money to Greece.

Spiegel spells out the ramifications if the story is true:

What is certain, according to the assessment of the German Finance Ministry, is that the measure would have a disastrous impact on the European economy.

"The currency conversion would lead to capital flight," they write. And Greece might see itself as forced to implement controls on the transfer of capital to stop the flight of funds out of the country. "This could not be reconciled with the fundamental freedoms instilled in the European internal market," the paper states. In addition, the country would also be cut off from capital markets for years to come.

In addition, the withdrawal of a country from the common currency union would "seriously damage faith in the functioning of the euro zone," the document continues. International investors would be forced to consider the possibility that further euro-zone members could withdraw in the future. "That would lead to contagion in the euro zone," the paper continues.

Still, it's an ill wind that fails to blow someone's hat off, and as I'm due soon for a fortnight's jolly in Majorca I hope the euro sinks like a stone against our poor, sickly pound so that I can live like a millionaire for a fortnight.

 

Comments

[Sassyandra]

Now, I don't profess to have the slightest idea what goes on in British politics in the last few years but guide me here please and correct me if I have this wrong.
You had the Labour type, Blair for a while and then he went home and the dour Scottish type took over. You didn't like him, and I can't say I blame you, so you chucked him out and gave the job to a very personable young type, Liberal or Tory, or whatever you call them.
Now you appear to be pissed off with him and want the other lot back.
You do understand that the whole world (apart from Australia) has pretty much been declared bankrupt lately, don't you?
What, exactly, are you expecting to occur to magically restore the Great to Britain?
I'm really curious.... help me out here.
I don't know if you can still get the ten quid trip to Australia but if you can keep it quiet, Australia is full.... all those convicts you deported begat and went to work.

[David Duff]

Alas, Andra, time has run out for me to attempt a detailed set of answers to your questions - remember, I have Gabriel and his onslaught of Christian philosophy to attend to. Just keep reading D&N and gradually all will become clear, or, you will fall asleep - whatever!

[dearieme]

I say, I say, I say, what's the difference between Salmond, Cameron, Clegg and Millibum?

Salmond had a proper job before he went into politics.

Come to think of it, none of Clinton, W or O had a proper job before they went into politics, either.

[David Duff]

That's right, didn't he run one of the 'Glasgie gangs'?