Saturday, January 28, 2012

Das boot

is exactly what Germany wants to give to what's left of the Greek government. Apparently installing an unelected "technocratic" government hasn't moved Greece very close to where Germany wants them to be so now they want to appoint a "budget commissioner" with veto power over Greek fiscal decisions. And they want Greece to pass a law saying that "first and foremost" all state revenues will go to debt reduction.

Read all about it here.

To me, this is Germany saying, "don't let the door hit you in the butt on the way out" to their southern vassals.

In my opinion Greece should take them up on the offer and generously offer investors including the ECB, German & French banks, and the IMF a 100% haircut on their holdings of Greek debt.

Greece has more leverage in this situation than Germany seems to want to believe or at least admit.


FifthBeatle said...

Umm, except that 'das Boot' means 'the boat', I think!

Angus said...

ummm, yes it does. It's a joke.

Anonymous said...

I am not so sure the Greeks won't take Germany up on the offer. If the Greek elite (read: whomever is in charge.) was primarily interested in Greece and not so much themselves they would have defaulted long ago. I suspect there are under the table kickbacks being offered and that is what will matter.

Anonymous said...

Greece cannot default because it needs international funds to service its trade deficit.

If Greece defaults completely or walks out on the IMF/EU, no one will fund their trade deficit.

In the year to Q3 2011 Greece had a trade deficit of €27bn, around 10% of GDP.

Greece has no meaningful domestic oil supplies.

Without the IMF/EU, how will Greece import oil, medicines, and food needed for a functioning economy?

If Greece defaults without agreement from the IMF/EU, it’s hard to see anything other than a humanitarian crisis in Greece.

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