Well, does Germany want a EU or doesn't it? As I mentioned, if all the EU is some sort of Kumbaya, then it is a paper tiger to begin with. Greece is the first crack, Italy Spain and Portugal are not that far behind. Soon it will be Germany as the sole proprietor of the EU. I submit that a strong Germany, Spain, Italy, Portugal, Greece, etc etc, in addition with some sort of Fiscal Transfer also instituted, so that when some part of the EU falters, the others pick up the slack. This is how you deal with "giving away the crown jewels." When the US rebuilt Germany, it gave away the crown jewels. When the US rebuilt Japan, it gave away the crown jewels. They are in it together or they are not. Anything less is just a make pretend union.
You are turning in circles again. But to answer your question straightforward: no, I do not think the EU needs Greece if it means paying for someone who does not want to work hard and get back on its feet. Simple as that. Patience has run out. And this is not what Germany wants. This is what Germans want and what many other citizens of various European countries want. Hard work or bullets. Greece has the choice.
I hear you and I understand what you are saying. I hope there are still people on both sides that can put their emotions aside and start fresh with problem solving skills that can overcome the spiraling situation. Easy to say, hard to do.
Here is what Europe will most likely offer Greece: * Greece will be offered a hair cut on outstanding debt, maybe something to the tune of 20% of debt reduction, hopefully earlier maturing debt will be cancelled. In exchange Greece MUST commit again to reforms and those reforms WILL BE MONITORED. Because of past transgressions debt is not cancelled beforehand but in tranches when improvements are measured as a result of reforms. The measuring and accounting of such change is NOT DONE by Greeks but outside auditors, appointed by the EU. So, we will have Troika 2 and they will roam around freely and go about their work in Athens. This is the deal Greece will be confronted with. => I am absolutely sure that Greece will not receive debt concessions without austerity. This is a total and absolute impossibility for Germany, it will never happen because it would deny everything the German culture stands for. The above deal will be beneficial for everyone: a) Greece can go back and sell the deal as a victory because finally creditors have agreed with debt reductions b) Creditors can go back because Greece agreed with further pension cuts and other reforms and that can be sold as victory to the home base as well. Also, a total default has been averted. Greece will never be allowed to get out of its entire debt without repayment. Hence chances of a partial recovery of loaned debt will be much higher this way. c) Reforms mentioned above have to include structural reforms. We talked about it earlier, Greece has to become self-sustainable again. What will not happen was what you suggested earlier, no EU country will walk in and deliver its high priced IP to Greeks in exchange for nothing. European partners can assist on getting jump started the Greek economy. But miracles are not to be expected. In the end Greeks choose to be a nation of farmers, ship builders, and tourist destination. If they want to expand into an advanced service based economy then they have to show the will to do so. So far they have not shown such. I am almost absolutely certain that a debt haircut will come and in exchange Greece will offer further reform and austerity cuts.
Thanks for sharing that. What do you think the chances are that Greece decides it would rather walk away, unless it is offered more cash (and no austerity)? This is painful to watch.
Yes it is painful but the Greeks can decide and freely choose. What a lot of haters ignore is that a bully only complies when being offered hard choices. Greeks can walk away but they know they will suffer a whole lot more outside Europe because they have nothing to turn around their economy. Tourism alone will never allow Greece to survive. Nitro made a lot of good points in saying Greece needs to again stand on its own feet and Europe is willing to assist but not if Greeks do not want to participate with their fair share of efforts. Many Greeks have not yet realized that complacency yet full support is not any option on the table anymore. Those times are over. EUROPEANS decided this will not happen anymore. And I speak of European citizens in majority, not politicians and not a loud mouthed Socialist minority nor some European haters on this board. This is not abut Germany , Merkel, Podemos, Tsipras, this is what European citizens want. And they are in majority sick of being bullied by Complacent and depressed Greeks. Plenty people in the rest of the PIIGS suffer and work hard to improve the situation and they deserve full support. But not a people who do nothing but complaining and whining.
I remember John Taylor of FX Concepts (14 USD billion fund that went bankrupt) said the exact same in 2008 along many other US economists and those that looked to benefit from a demise of the Euro and Europe in general. I will revisit your forecast in 7 years and we shall re-evaluate...
The end is not near. But there will be some fundamental and profound changes in the near future. Learn form your mistakes.