Posted by Jim under Economy
Comments Off on They Blinked!
According to a few articles today the EU and the IMF (read “US”) are going to announce a new bailout of Greece. This one apparently is for immediate disbursement (read “no need to actually complete the austerity programs”). That means that the whiners and thugs that pass for the Greek populace have now intimidated the EU into submission.
All two year olds should learn a valuable lesson from this. If your mother is someone like Angela Merkel, tantrums work. This is a perfect demonstration of moral hazard.
Apparently the German people are not thrilled; Ms. Merkel is in danger of loosing her majority in Parliament.
Having spoken to several German’s about this issue, it seems to me they’re not ready to pay for the much better benefits, much more generous pensions, earlier retirement, much worse corruption, and a higher percentage of people working directly for the state.
Commenting on the issue in Greece, Charles Ortel said on Bloomberg on May 6th (I’m getting caught up):
Does the population (of Greece) have the internal will to actually make the tough collective choices that need to be made to get this state back on track. And I think the early returns from Greece are very distressing. We see, in that awful case in the bank [where three people were burned alive in the riots] signs that the population just doesn’t get it.
Comparing the experience of the UK under Thatcher to Europe, British economist Kit Juckes said on the same interview:
I don’t know if they [the rest of Europe] get the idea that the social structures in Europe are not affordable anymore, and that they have to change. When you look at Greece, clearly, the people think the bank’s to blame, banks caused all this problem, or foreigners, or the government. Not, ‘we all borrowed too much money and spent it […], and now we don’t want to pay it back’ that’s difficult for people […]
Let’s face it, the cowards in the EU blinked, kicking the can a little further down the road. The failure of European socialism may have been delayed a few days or months, but when it finally comes it’s going to be massive and now even more cataclysmic.