Monday, February 06, 2012

End game for Greece?

The "Troika" (EC, ECB, IMF) is laying the smackdown on poor little Greece with demands of immediate public sector wage cuts, the closing of unprofitable publicly owned firms, and other spending cuts in exchange for the next "bailout" payment.

Supposedly, the "technocratic" (meaning unelected and troika-friendly) Greek PM can't get political buy-in, and without the "bailout" Greece could default quite soon.

While all this may just be weird Euro-posturing, I think that Germany and the EU is trying to show Greece the door.

I guess they think that the ECB's massive lending to banks has put them in a position to survive the default, but if I were them I'd be a bit more worried about what will happen in Portugal if Greece defaults and what might happen in Spain or Italy when Portugal defaults.

I think that if the Troika wants to keep the Eurozone intact, they should be putting much fewer conditions and burdens on Greece, not adding them.

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