Wednesday, August 29, 2012

Greece is ‘Not Lost’ Say German Chancellor Merkel and French President Hollande – Meaning –

Greece Probably is Lost

Speaking of lost, lost in the domestic political news of the summer of 2012 is the continuing crisis in Europe.  After elections in Greece, the new government pledged to honor the existing austerity agreements, except it cannot do so.  Greece wants another two year delay in meeting its goals.  That probably will not happen.

Mr Samaras’ hopes of persuading eurozone partners to delay this goal for two years have alarmed German politicians, who fear it could lead to yet another rescue package for Greece. Many of Ms Merkel’s allies believe such a request would not win majority support in an increasingly restive Bundestag, the German parliament.

But events have been put on hold until September, when several things will happen including a report on the state of Greece by the ‘Troika’ (the IMF, the European Commission and the European Central Bank) who are nominally running things (and when did this Russian term become generally accepted?)

With the “Troika” expected to finish a report on Greek reforms only next month, Ms Merkel said her government would “not take any premature decisions”. Mr Samaras said the Troika’s progress report would show Greece was “delivering results”.

Of course, the Troika is not really running things, Germany is, and domestic politics in Germany are going to play a large role in the outcome.

Volker Kauder, parliamentary leader of Ms Merkel’s conservative Christian Democrats, said he was against changing “the timeframe or the content” of February’s bailout. “The phrase ‘time is money’ can hardly be more relevant than in this case,” he said, noting that Greece’s exit from the eurozone would “not be a problem”.

So everybody can rest easy, but only for a couple of weeks.  By late September we can all look forward to another replay of that great movie “Crisis in Europe”, except the reruns are getting stale and boring, and we all know the ending is not going to be all that great.

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