Monday, February 13, 2012
The full article written by an economist which is quite superb in its accuracy and understanding of the situation in the EU can be found here:
Here is a portion of the article from the Telegraph UK:
"Over the weekend, the Greek parliament voted to accept Europe’s latest demands for spending cuts and tax rises and other reforms and retrenchments. The aim was to make it marginally less implausible that Greece will pay back the hundreds of billions of euros that its neighbours are lending it. The alternative, we were told, was that it would become “ground zero” for a new financial meltdown, with its exit from the euro leading to social chaos within the country and economic chaos outside.
"So Greece’s MPs voted it through, 199 to 74 – despite the tens of thousands rioting on the streets of Athens, despite GDP having contracted for three years in a row, despite tax revenues collapsing thanks to austerity-induced depression and overt, systematic tax evasion, despite the main governing party’s popularity falling to 8 per cent in the opinion polls.
"Now it won’t default or leave the single currency, and everything will go back to normal… won’t it? Almost certainly not. For a start, despite the vote yesterday, the Greeks probably won’t ever see a single cent of that second bail-out. The idea is that the eurozone will lend money to Greece, which it can use to pay off the banks holding its debt, as part of an agreement to save it from outright bankruptcy in March. But when the members of the single currency originally agreed to this second bail-out last year, Greece was not expected to last this long.
"In particular, the Slovakians, Finns, Austrians and Dutch would never have agreed to the deal if they had thought there was any chance of them actually having to pay. It was a political arrangement, spatchcocked together to force the International Monetary Fund to keep forking out for the initial bail-out. The Slovakians failed even to contribute to that first rescue package, so it was never credible that they had any intention of funding a second. The Finns have passed a law banning their government from giving any more money to Greece without collateral. The Austrians have enough trouble coping with the crisis in Hungary – to which their banks are heavily exposed – without sending money elsewhere; being downgraded by the credit ratings agencies hasn’t made them any keener to pay..."
"The truth is that Europe doesn’t want to pay – so despite all the drama in Athens, the Greeks will probably default outright in March anyway..."
~ And somehow the soulless know-it-all, piece of shit Rat investors who pushed the global markets up today based on Greece, do not understand this reality...or care to.