Will be interesting to see whether Draghi turns on the presses over the next week or two. That will determine whether Germany bails (it eventually will, if he does) or if the PIIGS do (they'll have to if he doesn't).

It seems that one of Mach's major goals is in life is to show that our economic system is better than the type of economic system practiced in Western Europe. . Why Mach keeps this topic going after our economy has gone down the tube is beyond me.

Never my intent to make a comparison between the US and Europe, Freeman. The Euro is screwed on an absolute standard--whether it's better or worse than the dollar remains to be seen. We've got our own problems ahead--largely a function of bad checks written to current and former government employees in the form of pension benefits. But that iceberg has been well and truly spotted and I don't think anyone is denying its existence.

I bump this thread from time to time simply because I pointed out the structural flaws that are now tearing apart the Euro several years ago and was roundly poo-pooed in these forums.

I stand corrected, Mach.

Still, Mach predicted that the Greek referendum would return a 'No' or that the government would fall.

Since then the referendum has been ditched and Papandreous has survived a confidence vote.

Do you do racing tips, Mach?

Papandreous survived a no confidence vote on a promise to resign and allow someone else (presumably Venizelos) to form a new government. Assuming he keeps that promise (and if he doesn't, he'll fail a no confidence vote), it looks like a government falling to me!

But the result will be to accept the bailout deal, which is somewhat different from your vision of things.

We shall see. With or without "foreign monitors" Greece will not reach its austerity targets, so the bailout just kicks the Greek can down the road (and not more than a month or two, at that). Meanwhile, Spain, Portugal and Italy continue to pile up debt that will never be repaid. Sooner rather than later Klaus and Fritz in Dusseldorf will get tired of working to age 67 to pay Juan and Giorgio in Madrid and Rome to retire at 50. Merkel is a lame duck, IMHO. Her successor will take a much harder line toward bailouts.

mach

With or without "foreign monitors" Greece will not reach its austerity targets,

In reality, none of the members of the monetary union met the proosed limitations for debt to GDP or annual deficits. Even Germany failed at times since they adopted the euro.
And I think thats the problem. Without enforacble regulated fiscal policies ... comprehensive currency can be damaged by the loosest and weakest memebrs. And has been.
its instructive that outside of England with its failing and ill timed austerity measures, the nations in Europe that held onto their own currencies have weathered the rough economic times best.
I've come to think Mach is right and that the Euro is a half measure. Neither fish nor fowl. And as a result doomed from the out set. Just a matter of time till a large enough problem scuttled the idea,

A population that has never been behind the austerity requirements just spent the week being promised a referendum on the deal only to be told that ain't gonna happen. You seriously think they are going to accept the government's decision?

Russell, the Greek people massively opposed holding a referendum because they want elections instead.

Ahem. As I was saying....

danivon wrote:Russell, the Greek people massively opposed holding a referendum because they want elections instead.

Owen,

Isn't the reason they want elections so they can vote in people who will not follow through on the euro bailout austerity requirements? Which means we end up with the same question.

Do you really think Greece is going to follow through with the deal requirements?

The problem is that Greeks overwhelmingly oppose the bailout conditions and also overwhelmingly support staying in the Euro. These are contradictory positions.

Not sure about what they want, to be honest, and I'm not sure that the Greek people do either. The main opposition (the centre-right New Democracy) are largely blamed for what they did in their period of office 2005-2009. The centre-left PASOK under Papandreous are also unpopular. Both will reluctantly go through with Austerity and blame the other for needing it. The communist KKE would oppose it but will probably not win much support. The other parties are less pro-austerity than the others, but ultimately will likely be junior coalition partners. They want an election so that they can punish politicians, but that doesn't mean that they don't want to be bailed out.

Sass is right that the population (which is not homogeneous) holds contradictory positions, that's not unusual. The American people want lower taxes and a lower deficit. The Germans want a strong currency and a good economy for exporting their goods.

I think that the Greeks will try, and if they are seen to try and not quite make it, the Eurozone will grudgingly accept it. While they have the 1 trillion Euro bailout fund they are building, they won't want to use it yet, or unless they have to. At the end of the day, however, even the French banks can afford to take a haircut, or even a total loss on Greece as long as they don't on Italy or Spain.