Skip to comments.Europe's nuclear brinkmanship with Greece is a lethal game
Posted on 05/10/2012 2:00:54 PM PDT by bruinbirdman
Fresh from the Hellenic Statistical Authority:
Youth unemployment up to the age of 24 reached a fresh record of 53.8pc in February.
The rate for those aged 25-34 rose to 29.1pc.
The total rate hit 21.7pc but will soon be much higher as 150,000 public sector workers are chopped with pro-cyclical effects, in the middle of a depression to comply with the EU-IMF Memorandum
Polls show that 70pc or even 80pc of Greeks still wish to stay in the euro, while at the same voting in large numbers for hard-Left and hard-Right parties committed to tearing up the Memorandum a course of action that will take them straight out of the euro.
I do not wish to reproach the Greeks for cognitive dissonance. We all do this, and besides, euro membership is more than just a currency for Greece. It is the anchor of identity for an isolated Balkan nation living cheek by jowl with the Ottoman nemesis (nemesis from their point of view. I like Turks).
Greeks have yet to conclude that the euro itself is the cause of their catastrophe though they are getting there. By the euro, I mean the whole structure of monetary union, made worse under current policy settings (incompetence). There can be no possible escape from this lamentable state of affairs at this late stage until they return to the drachma.
As Charles Dumas from Lombard Street Research argues, the EU doctrine of "internal devaluations" is based on a fallacy. Restoring competitiveness through wage cuts is not remotely equivalent to currency devaluation.
The mechanism of an internal devaluation is to push unemployment to excruciating levels until it breaks the back of labour resistance, opening the way for pay cuts. In fact, it tends to break societies before this theoretical outcome
(Excerpt) Read more at blogs.telegraph.co.uk ...
What the heck is wrong with letting the Greeks have their Drachma? Its frankly the CHEAPEST solution to the mess at this point...
Having Greece return to an independent monetary policy would ruin the decades old project of creating a “United States of Europe”.
Economy chaos is simply the price of progress as the Eurocrats solidify control over the continent.
Because it leaves the IMF, Federal Reserve, Bundesbanc, Bank of England and the EU bank holding the bag for serveral hundred billion dollars. For some stupid reason the entities above want the Greeks to pay back the money. Greece being socialists don't believe in pay debts unless it is owed to them.
Besides the political blow to the road to a “United States of Europe” the fear is there will be massive capital flight from the other Club Med countries.
“For some stupid reason the entities above want the Greeks to pay back the money”
Only the stupid could expect repayment of that kind of money from Greece...there’s reasons, all excellent, each of us doesn’t loan money to our relatives.
Collective, institutional stupidity is a poor excuse for war.