The EuroCrats have a plan--Destroy Greece!
This is what the experts had to say in today's NY Times.
Policy makers want to put Greece on a path toward reducing its debt load to just below 100% of its GDP within this decade so it can wean itself off taxpayer bailouts.
The Hope is that much of that reduction would come through revived economic growth.
(They get paid to say things like that.)
This plan has the same academic substance and efficacy as the "policy of analysis past:
They supported the 110 Billion Euro bailout for Greece on the assumption that the Greek economy would grown. Then they recommended imposting sanctions on Greece to punish them because their "assumptions" were wrong.
Next we learn that German Officals (et. al.) are not opposed to increasing the rescue funds power to leverage its government guarantees.
This sounds like they are not willing to be part of the programme to put money into the rescue fund but will be one of the co-signers on a loan if the fund wants to borrow money to increase its size. Some ideas don't need any comment. This is one of them.
Next we notice how the market is responding. (In real life.)
1. Greek 2-year notes are at 69.7% because investors "concluded" default is inevitable.
2. Investors worry that the 440 Billion Euro Bailout is insufficient.
3. Heavy bank investment resulted in a heavy bank-stock drop.
"Money is not a substitute for management."--Slim Fairview
Investors invest to make profits. Not to mitigate their losses. Leveraging the stability fund is analogous to the margin buying immediately prior to the Crash of '29.
Robert Burns surely knew what he was writing about. He must have been writing about the EuroCrats.
But Mousie, thou art no thy lane,
In proving foresight may be vain:
The best-laid schemes o' mice an' men
Gang aft agley,
An' lea'e us nought but grief an' pain,
For promis'd joy!
At some point in time, the EuroCrats must realise that the process is not working. Thus, Change the Process. However, NB, at some point in time, the Greeks will realise that the process is not working. When that happens the resentment and not the debt crisis will spread to Ireland, Portugal, Italy, Spain, et. al.
You cannot see growth in Greece if you make every effort to impede growth and keep the Greek people shackled to poverty by keeping the Greek people shackled to poverty programmes.
That you cannot predict the future is not a proper rebuff to the one who tells you to "get off the tracks, the train is coming".--Slim Faiview
Copyright (c) 2011 Slim Fairview