The eurozone is doomed whatever happens in Athens
‘Greeks went to the polls on Sunday in an election that could decide whether their heavily indebted country remains in the euro zone or heads for the exit,’ opined Reuters this morning. I do wish the MSM (especially in the States) would stop writing half-baked bollocks about the Greek elections. If Greece leaves the euro next week following today’s election, it will be because other forces want it out, not because the Greeks themselves want to leave.
The percentage of Brits wanting to leave the EU is almost double that of Greeks who want to leave the ezone. The only difference between the Syriza Party led by Antonis Sipras and the former leading Greek Parties in 2012 is that he wants to renegotiate the scorched earth austerity insanity imposed by Sprout & Kraut GmBH of Berlin-am-Brussels. That’s it. But Sipras represents The Resistance as far as the Fuhrerin is concerned, because he dares to suggest that her economic ‘policy’ is devastating the entire ClubMed area. He should dare a little further and suggest that she’s a complete Dummkopf.
All last week, trading houses across the West and in Asia were giving their staff detailed briefings on accepting any trades beyond a certain size “because of the turmoil that will follow if Greece votes to leave the eurozone”. Do these ‘analysts’ ever read any briefing notes past the first paragraph? Two things are obvious about the Greek election: first, it is highly unlikely to the point of near-impossibility that any Party will win a majority, or cobble together an anti-austerity Government – another stalemate is still the odds-on probability; and second, it is a General Election, not a referendum.
In turn, there are three certainties about the eurozone: first, it has lost all bond market credibility; second, its economy is at a near standstill outside Germany, thus exacerbating its imbalance problems with every day; and third, there is no way it can bail out Spain, Italy and France….all of which it would have to do in order to arrived at a Fiskal Union not entirely peopled by the inmates of a debtors’ prison.
The eurozone will leave the stage before Greece leaves the eurozone.
A month ago, the MSM thought the French election was more important than the Greek one. They were wrong. Now they think it’s the other way round. They’re wrong again. Today’s Athens count will tell us little or nothing we don’t know already. If, however, Francois Hollande wins a majority in the French Assembly, he will take to the next EU summit on June 28th what he can present as the popular will of France in favour of growth actions and eurobonds in order to calm the markets. Angela Merkel will then find herself between a rock and a hard place – especially as by then, Spain’s need for a full bailout will have come to light, and Italy’s bonds will be spiking up towards the Suicidal Seven too.
Forget the Greek election for a while, and focus instead on what will be a far more significant event: full Greek default, bailout or not, unless more bailout monies are poured in, and pretty damn quick. Both Berlin and Washington know for sure this is coming. The White House especially would like that one out of the way well before November; and the Merkeschäuble would prefer the Greeks to be out of the ezone when it happens. They won’t be: but what the gargoyles want tells you everything you need to know about what they’ll try to get.