Greek meltdown

[Dr Mordrid]

Jeeezzzz....what a cluster f***

http://www.reuters.com/article/2011/11/01/us-greece-referendum-idUSTRE79U5PQ20111101

(Reuters) - The Greek government faced possible collapse on Tuesday as ruling party lawmakers demanded Prime Minister George Papandreou resign for throwing the nation's euro membership into jeopardy with a shock call for a referendum.

Caught unawares by his high-risk gamble, the leaders of France and Germany summoned Papandreou to crisis talks in Cannes on Wednesday to push for a quick implementation of Greece's new bailout deal ahead of a summit of the G20 major world economies.

The euro and global stocks were pummeled on financial markets after the Greek move threw into question the survival of crucial efforts to contain the euro zone's sovereign debt crisis.

Six senior members of Greece's ruling PASOK socialists, angered by his decision to call a plebiscite on the 130 billion euro rescue package agreed only last week, said Papandreou should make way for "a politically legitimate" administration.

A leading PASOK lawmaker quit the party, narrowing Papandreou's already slim parliamentary majority, and two others said Greece needed a government of national unity followed by snap elections, which the opposition also demanded.

Euro zone leaders thrashed out Greece's second financial rescue since last year, in return for yet more austerity, in the hope that it would ease uncertainty surrounding the future of the 17-nation single currency.

Instead, financial markets suffered another bout of turmoil on Tuesday due to the new political uncertainty and the risk that austerity-weary Greeks could reject the bailout. Opinion polls show most voters think it is a bad deal.

The euro fell nearly three cents against the dollar and the risk premium on Italian bonds over safe-haven German Bunds hit a euro lifetime high, raising Rome's borrowing costs to levels that proved unsustainable for Ireland and Portugal.

"The referendum is a bad idea with a bad timing. The post-summit rally is over," said Lionel Jardin, head of institutional sales at Assya Capital, in Paris.

European bank shares dived on fears of a disorderly Greek default and the Athens Stock Exchange suffered its biggest daily drop since October 2008, with the general index shedding 7.7 percent.

"GRENADE"

European politicians expressed incredulity and dismay at Papandreou's announcement on Monday evening that took everyone by surprise, including his own finance minister.
"Announcing something like this only days after the summit without consulting other euro zone members is irresponsible," Slovak Finance Minister Ivan Miklos told Reuters.

Ireland's European affairs minister, Lucinda Creighton, whose own country is struggling through an EU/IMF bailout program, said last week's European summit was meant to have dealt with the uncertainty in the euro zone.

"And this grenade is thrown in just a few short days later," Creighton said. "Legitimately there is going to be a lot of annoyance about it."

In a statement after French President Nicolas Sarkozy and German Chancellor Angela Merkel conferred by telephone, Sarkozy's office said: "France and Germany are determined to ensure, with their European partners, the full implementation in the quickest time frame, the decisions adopted at the summit, which are today more important than ever."
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[UtwigMU]

Greece also bought 400 Abrams tanks from USA recently.

I think they'll get out of Euro.

[cjolley]

I think they'll get out of Euro.

And become an economic pariah.
Not a good plan. Better a crash landing than just a crash.

I think they see through the referendum as the spineless cya that it is and will dump Papandreou.

[Elie]

The only option left is to kick Greece out of the EU.

That country will never recover.

[TransformX]

Followed by Portugal, Spain, Ireland and Italy?

[UtwigMU]

No they won't become economic pariah, they'll be able to print Drahmas and lower wages of public servants (14 wages a year) and pensions (billions paid for dead people) and lower prices of their tourism, which will increase influx of money.

They will still be members of common EU market. EU doesn't mean you need to have Euro.

The catch with Greece in EU (and Turkey in NATO for that matter) is that it was done for strategic reasons during cold war in order to enclose Russia into Black Sea. So they got a lot of lenience.

[Brian Ellis]

I think the initial reaction to Papandreou's announcement was predictable, simplistic and even naive. He is a wily old bastard and there is more behind it than is obvious. He never intended a referendum, he wanted the value of the Euro to fall to buy more from the country's gold and foreign reserves (yes, there are still some stashes there). He has succeeded. In a few weeks, the referendum will be postponed or cancelled "as he cedes to public and EU pressure". Believe me, he won't allow the country to quit the euro without one helluva fight because he knows that, if it does, they would be forced out of the Union, as well. He has no wriggle-room left and his timing was perfect. Don't underestimate the man; he has one of the finest brains in Greece, rare in a politician, and he is half-a-dozen steps in front of 99.9% of the Greeks (not difficult, as the political class in Greece is particularly dim!). He may appear to be in check, but it is many moves away from checkmate.

[RedRed]

He is a really, really smart american.

[cjolley]

...In a few weeks, the referendum will be postponed or cancelled "as he cedes to public and EU pressure"...

Well it didn't take that long even.
Nice call.

[Brian Ellis]

... By confronting the Greek public with this stark choice, Mr Papandreou has, in one masterstroke, broken through all the duplicity, deceit, ignorance, uncertainty and political manoeuvring that have been clouding the issue of the Greek dilemma. If the public vote goes for remaining in the euro zone, the Greek nation endorses, by implication, the necessary steps to do so, thus giving Mr Papandreou, for the first time, a massive, solid base from which to push through his reforms. Should they vote to exit the EU, Mr Papandreou will have to accept that nobody can save the Greek economy, that he should bow out and will have to watch the near destruction of Greece as a state. If the result is negative and the loan is not secured, civil servants and pensioners will not be paid at the end of December, outstanding government bills will be left unpaid and the country will descend into immediate bankruptcy.

The allegation has repeatedly been made that the Greek prime minister is a man without a plan - or, alternatively, a man unable to implement his plan. This decisive action shows that his plan has been to remain in the European Union and the euro zone at all cost, and that he is determined to do so. His people, by their actions, have demonstrated that they are unable to grasp what it is all about. By focusing their attention on the only question that matters, he demonstrates leadership and responsibility.

This announcement is a role of the dice through which he can only gain.

http://www.cyprus-mail.com/greece/papandreou-s-masterstroke/20111104

I can only agree with the conclusion of this article. I can only repeat what I said in post #7: Don't underestimate the man; he has one of the finest brains in Greece, rare in a politician, and he is half-a-dozen steps in front of 99.9% of the Greeks (not difficult, as the political class in Greece is particularly dim!). He may appear to be in check, but it is many moves away from checkmate.