With Greece unable to form a government and therefore now set on new elections, how’s this going to pan out? Very badly, is the almost certain answer.
Let’s look first at the now odds on possibility of a Greek exit. The outcome of the last election was basically just a protest vote – the Greeks are against austerity, against the programme, but they also want to stay in the euro. They want to have their cake and eat it too, and they are gambling that when the Germans come to look into the abyss and realise the devastation a Greek exit will cause, they’ll give them the cake – oh, and let them default on all their external debts and provide big Marshall Plan style grants to rebuild their shattered economy to boot. And where do they expect the money to come from? The tooth fairy?
Next month’s election will be different. Even the Greeks must realise that it’s now a straight choice – the programme or the dreaded drachma. But the Germans are changing, some protest. Francois Hollande will persuade them of their folly, and a gentler, more conciliatory eurozone will be born. This is just wishful thinking.
Appetiser cost of Greek exit is €155bn for Germany, France: trillions for meat course
Merkel tells Greece to back cuts or face euro exit
Merkel Won’t Budge on Austerity Despite Setback
Germany Demands Britons Pay Another £1bn To Bail Out Euro
IMF prepares for a ‘messy’ Greek exit
12:02 pm EDT, May 16th, 2012 — Investors pull 1.4billion euros out of crisis-hit country in just two days
12:03 pm EDT, May 16th, 2012 — Italy’s banks shaken as economic slump deepens
12:04 pm EDT, May 16th, 2012 — Greek election set for June 17, as public withdraws millions from banks
12:05 pm EDT, May 16th, 2012 — Bondholder fury as Athens pays off debts to hedge funds
12:06 pm EDT, May 16th, 2012 — Global lenders face ‘killer losses’ on Greek debt
12:07 pm EDT, May 16th, 2012 — German investor confidence hit by French, Greek elections results
12:08 pm EDT, May 16th, 2012 — A eurozone without Greece?
12:09 pm EDT, May 16th, 2012 — Back to Utopia?
12:10 pm EDT, May 16th, 2012 — For Greece – and Europe – the true calamity is to delay exiting the euro (good read)
12:11 pm EDT, May 16th, 2012 — Debt crisis: live
VN:F [1.9.22_1171]Warner: This is how the euro ends – not with a whimper but a bang (15),