After two days of the EU summit in Brussels a compromise seemed to be negated but the devil is in the details. The leaders agreed to a tentative agreement regarding an EU wide financial bailout for Greece, with strings attached of course. However, there are as many strings attached as needed to manipulate an octopus marionette on stage. Ultimately the EU simply played for time but achieved nothing concrete.
The EU leaders agreed to a 20 billion aid package for Greece which would be done through 16 bilateral loans between individual Eurozone countries to Greece. It sounds good until one reads the fine print. 1/3 of the 20 billion loan must come from the IMF. Furthermore, Greece can only receive the loans after all “market” attempts to find financing have been exhausted. In other words, Greece must try to raise money by selling it’s sovereign debt bonds which the financial markets will only accept for high interest rates. As of last week, Greek bonds were selling at the minimum of 5.5% interest. Financial speculators won’t touch them even at that high interest rate and will most likely ask for 7% and higher. Even at 5% interest rate, the Greek government will find it nearly impossible to pay off the interest alone and will be forced to default.
Should that option fail and Greece applies to the EU, there is still another snag in the tangled web which the EU has weaved. The agreement reached in Brussels must be subject to approval by all 16 nations of the Eurozone. If one country balks, then Greece is left in a lurch. Once again, Germany has played its Kings and still has 4 Aces up its sleeve.German Chancellor Angela Merkel was irritated to even discuss Greece on the agenda. She set all the terms of the agreement just to placate Greece and to shut the face of French President Sarkozy. When Merkel stipulated that all Eurozone countries must approve the agreement, she really set Germany up to veto the package at a later date. Germany has made up its mind that Greece must leave the EU. Furthermore, the fine print stipulates that any country which fails to adhere strictly to budgetary rules must face painful sanctions under threat of expulsion.
Meanwhile, the entire German financial establishment through the international media have spelt out the reality is no uncertain terms. They have put Europe on notice. The Greek government must impoverish its citizens if it wants to remain in the EU. The best solution, of course, would be for for Greece to drop the Euro once and for all. The other struggling EU countries such as Spain, Portugal, Italy must shape up or ship out. France meanwhile must emulate Germany. The French government must decrease wages by implementing 1 Euro per hour jobs as Germany has done and savagely dismantle the social safety net. What happens if the other countries refuse to play ball according to the rules dictated by Germany? Germany will simply pull out of the monetary union and screw the Continent. The match has reached 88 minutes with 2 minutes left on the clock before it”s game over for the EU
