A small dose of reality has set in for a group of European central bankers: Euro Officials Begin to Weigh Greek Exit as Euro Weakens.
Greece’s possible exit from the euro moved to the center of Europe’s financial-crisis debate, rattling markets as authorities in Athens struggled to form a government.
Meetings brokered by Greek President Karolos Papoulias were set to continue today after Syriza, the leading anti-bailout party, rejected a unity government following inconclusive elections May 6. That moved the country closer to a new vote, with at least five European central bankers broaching the once-taboo topic of its exit from the euro.
Euro finance ministers meeting today in Brussels may discuss the bailout for Greece, as well as the situation in Spain, where the government last week made a fourth attempt to clean up banks. Getting German Chancellor Angela Merkel to weaken her demand that debt cutting be the core of the crisis response will be a key objective of new French President Francois Hollande when the two meet tomorrow in Berlin.
The euro fell for the 10th day in 11, weakening 0.4 percent to $1.2872 at noon in Brussels, the lowest in three months.
No New Concessions
The euro finance ministers, known collectively as the eurogroup, will convene in Brussels at 5 p.m. local time.
The European Commission isn’t considering easing the terms of the joint bailout for Greece from the EU and the International Monetary Fund, EU spokesman Amadeu Altafaj said, denying a report by Athens-based Real News.
Message to Greek Politicians “No New Concessions”
Greek Unity-Clown proponents Evangelos Venizelos, leader of Pasok party, and Antonis Samaras, leader of the centre-right New Democracy party, keep promoting the idea of a “Unity” government that will renegotiate the terms of the bailout. Clearly they are liars.
If the eurocrats, Germany, and IMF were to agree to negotiate new terms, that would be now, not after Greece kisses the Troika’s ass with a “Unity Pledge”.
Given the statement from the EU on concessions, Syriza party leader Alexis Tsipras would be a fool to agree to a “Unity” government. Actually, he would be a fool anyway because no one can possibly believe meaningful concessions are coming, promised or not.
Lies and Half-Truths from German Finance Minister
German finance minister Schaeuble Says If Greeks Had Own Currency It Would Devalue.
The devaluation claim is certainly true enough, but it is also obvious.
Here is Schaeuble’s blatant lie: “The advantages for the Greeks [to stay in the eurozone] are greater, but it will be strenuous”.
Chancellor Angela Merkel will host French President Francois Hollande in Berlin tomorrow after his election on a platform of a switch away from the chancellor’s focus on austerity. Hollande wants to reopen the European Union’s budget treaty to include measures to spur economic growth.
“I think Hollande knows that the fiscal pact can’t be renegotiated,” Schaeuble said.
That is a lie as well and we will find out soon enough. Given the Crushing Defeat for Merkel’s CDU Party in German Elections last weekend, Hollande will press even harder for what he wants: Eurobonds and a weakening of austerity measures.
Mike “Mish” Shedlock
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