31-Jan-12 World View: Analysts Ridicule Germany's Plan to Control Greece's Budget

This morning’s key headlines from GenerationalDynamics.com.

  • Greece appears to be close to meltdown
  • Analysts ridicule Germany’s plan to control Greece’s budget
  • Portugal’s slide towards becoming the next Greece accelerates
  • Turkey denies that it’s aiding Hamas
  • Imran Khan promises Pakistan a bigger revolution than the Arab Spring

Greece appears to be close to meltdown

Athens, Greece
Athens, Greece

An article in Der Spiegel on Monday begins:

“Europe’s politicians are losing touch with reality. Greece is broke, and yet Brussels wants to send the country billions in new loans, to which there is growing opposition within the coalition government in Berlin. Rescue efforts are hopelessly bogged down by bickering over who will ultimately step up.”

Out of touch with reality? It’s been obvious to a lot of people since the whole Greek bailout saga began two years ago that Europe’s politicians were out of touch with reality, so one can only roll one’s eyes to see it in print in the mainstream media. Though of course I, for one, never really believed that they were out of touch with reality so much as that they were openly lying and defrauding the public.

The article goes on to point out that Greece’s economy keeps getting worse, and now they need a €145 billion bailout loan, rather than the measly €130 previously expected. Who’s going to pay the extra €15 billion? The Germans are refusing, the private investors are balking, and the European Central Bank (ECB) is unwilling to lose even a single euro, which is pissing off a lot of people. EU Economic and Monetary Affairs Commissioner Olli Rehn finally conceded that the €15 billion hole could only be plugged with government funds. The German government, which would supply most of those government funds, is not amused. Spiegel

Analysts ridicule Germany’s plan to control Greece’s budget


Probably nothing illustrates the bizarre dysfunction of Europe’s politicians than the German proposal to appoint a “budget commissioner” who would have the power to veto Greece’s decisions on taxes and spending. This proposal is so absurd that it’s been openly rejected by politicians and openly ridiculed by analysts. Here’s something from a Greek blogger, Yanis Varoufakis:

“On a final note, I have a message for Germany’s politicians: As a private Greek citizen, I understand your fatigue with all things Greek. But if you are so sure that your blueprint for stabilising Greece is so good (and that the problem is its implementation by the Greek authorities), I would welcome you to come to Athens to take over its implementation. But on one condition:

If you succeed in making austerity work in the middle of a debt-deflationary cycle, I am happy for you to name your price. E.g. if within a year or so Greek GDP starts growing again and unemployment diminishes to below 10%, you can have our electricity grid (that Siemens has always coveted), our water companies, any assets that you name in advance. But, if you fail, then you must pay a price: e.g. pay in full Greece’s outstanding loans to the troika.

So, how about it? Are you game?”

However, the German proposal does carry a message for Greece that can’t be ignored: If we’re going to give you any more money, then, one way or another, we’re going to be in control of how you spend that money. Yanis Varoufakis

Portugal’s slide towards becoming the next Greece accelerates

Portugal 10yr yield 17.4%
Portugal 10yr yield 17.4%

Panic selling hit Portugal’s government bonds on Monday, pushing yields (interest rates) for 10-year bonds to 17.4%. As anyone can see from the adjoining graph, Portugal is following the same path as Greece, though is several months behind. It now costs almost 4 million euros, payable immediately, if you want to purchase credit default swaps (CDSs) to insure 10 million dollars of Portuguese debt. Portuguese Prime Minister Pedro Passos Coelho pinned the blame for Portugal’s problems on the EU’s failure in sorting out Greece’s problems. “The Greek situation continues, after all this time, to be the main factor of instability. It would be very good for everybody in Europe and for Portugal that the situation in Greece is resolved as soon as possible.” And so, Dear Reader, if you’re behind on your credit card payments, just tell the bank that it’s all the fault of Greece. Reuters

Turkey denies that it’s aiding Hamas

Recent reports that Turkey is providing $300 million in aid to Hamas have been dismissed by Turkey’s government. Until Monday, an open question was whether Turkey would be willing to become the new host of Hamas leader Khaled Mashaal, now that the genocidal violence by the regime of Syria’s president Bashar al-Assad has forced Hamas to split with Iran and Syria, and to move out of Damascus. However, Deputy Prime Minister Bülent Arinç said that Mashaal’s being based out of Turkey is out of the question. Mashaal is thought to be considering moving to Jordan or Egypt, though it’s not clear that those countries would welcome the controversy of having Hamas headquartered there. Zaman (Istanbul)

Imran Khan promises Pakistan a bigger revolution than the Arab Spring

Imran Khan on Sunday
Imran Khan on Sunday

Former cricket superstar Imran Khan, now an anti-American Pakistani politician, promised to bring the people of Pakistan together under his leadership, when he “captains the nation”:

“My tsunami is much bigger than the leaderless Arab Spring, which was triggered by social media, but in Pakistan the media is free and I am leading the ‘revolution’ from the front.

We will immediately announce a ceasefire and will not use our military against our own people because I have always said that it is not our war and we should not fight it. The US should also exit from Afghanistan to ensure peace in the region.”

In his interview in Dubai on Sunday, he reiterated that he would sweep the next general elections, eradicate corruption within 90 days and bring reforms in all fields. After that, he said, “This is the moment when the rise of the oceans began to slow and our planet began to heal.” Oh wait, that was someone else. Gulf News (UAE)

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