Angela Merkel, the German chancellor, mounted stiff resistance tonight to any swift bailout of Greece, as a rift opened up between European capitals over how best to tackle the risks posed to the euro. Despite a show of Franco-German unity on the crisis and the first statement from EU leaders pledging to safeguard the currency's stability, hopes on the markets of a German-led rescue plan to shore up Greece's critical public finances were dashed by Merkel, who repeatedly emphasised that Athens would need to put its own house in order and brushed aside all questions of financial support. "Germany is stepping totally on the brakes on financial assistance," said a senior EU diplomat. "On legal grounds, on constitutional grounds and on principle." Another senior diplomat said of the Germans: "They're not waving their chequebooks." http://www.guardian.co.uk/theguardian/2010/feb/11/germany-greece-merkel-bailout-euro
During the good times the Franco-German axis was happy to lend money to Greeks so they can in turn purchase their autos, planes, military equipement, and all sorts of other durable goods. At some point Greeks purchased a number of German made submarines that were unstable and were flipping over! Siemens corrupted many Greek officials so that they would get all contracts at the expense of US companies like At&T who offered better quality at a lower price. That kept the productivity of the axis high and inflation low at the expense of Greek productivity falling and inflation being double the EU average. At no point those EU masterminds step forward and said that they were not willing to lend Greeks money because they would get into problems in the future. They share the blame with the Greeks and their corrupted politicians and huge public sector. Maybe half of the foreigh debt of Greece is in offshore and Swiss accounts controlled by ex governemnt officials. The biggest threat to international economic stability is corruption.
I believe AEP in his Telegraph column touches upon this subject quite often. Intrest rates were kept artificially low in the begining of the decade to smooth Germany trough it's slump creating huge investment mis allocations in the club med which have come home to roost today so in a way there clearly is shared guilt in this story as well which is ofcourse dificult to sell for politicians.
in a specific case it might be true. in general high end german exports are bought based upon quality not price e.g restaurant equipment which costs 3x other producers.
Same OLD problem Greedy pigs at the top filling their boots with shedloads of money and annoyed and stroppy workers at the bottom they could always sell some more artifacts !! I could put some marbles around my garden or the odd statue or two of naked females ?
I was wondering if Greece was considered to be French or German hemisphere or are they more all on their own really? I read French banks have the biggest exposure to it, how about the presence of foreign companies? For instance in my country (Belgium) our biggest bank has become French owned during this crisis and the energy sector was already privatised and sold to the French (partially state owned) energy giant GDF Suez which makes the entaglement between countries far more complicated than solely using the same currency. Are there any similar mechanisms in Greece and does that effects their case in any way?
================ Thought the NYT, & FOX provided some helpful February clues. a]Greece borrowered on....... lots of lottery /future revenues; borrowed big on health care.Sounds like whatever the mistakes bankers made, Greece borrows & spends to much. b]Instead of calling the lottery what is is= a stupid tax; sounds like Greece tried to mislead investors.May be a tough year for some,Progressive Farmer mag is forcasting many USA PIGS farming bankruptcys also. c]Not all stupid taxes ,as a lottery is ,could bankrupt a state or nation; Greece gov has wrongly tried to micro-manage most everything.