The Bonds of July

The sources of the Europe/Greek disaster are plain, and quickly seen in these two short posts:

Kevin Drum, Europe’s Message to Greece: Don’t Let the Door Hit You On Your Way Out, summarizes just how much Germany et al have demanded of Greece, including this excellent quote from that bastion of anarcho-liberalism, the Wall Street Journal:

Sunday’s statement on Greece by eurozone finance ministers will go down as one of the most brutal diplomatic démarches in the history of the European Union, a bloc built to foster peace and harmony that is now publicly threatening one of its own with ruination unless it surrenders.

….The other 18 euro members were late Sunday pushing Greece to implement all of the austerity measures and broader economic overhauls its voters have twice rejected—in elections in January and in a referendum on July 5—not in return for new rescue loans, but as a precondition for even talking about them.

Not that there isn’t plenty of blame to go round to the Greek side also, as Yves Smith reminds us in “Greece Brought a Latte to a Gunfight”:

Yanis appears to have assumed that he could grasp the European light on the hill and persuade with elegant reason all of Europe to embrace enlightened super-national consciousness. He’s been genteelly sipping lattes at a gunfight and by doing so has played right into realist German hands by destroying his country’s economy as an example to all other European ‘dead beats’.

There is nothing new here. Yanis has simply been outplayed. When it was elected, Syriza either had to sign up to new terms of austerity or immediately leave the euro. It’s stylish five month congress with Europe has ruined its economy to no purpose of its own given it will either now buckle under to even deeper austerity or will still be forced out of the euro, taking its economy from wrecked to destroyed.

As for me, either Europe will provide subsidies under the table and quickly (unlikely!) or I still say that Grexit is coming.

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