No Bailout for You, Greece! Um, Right?
There have been multiple reports of some kind of deal worth $30-$34 billion, and yet check out what Germany's Angela Merkel told German TV, according to the Sydney Morning Herald:
...the German chancellor denied any such plan was in the works, saying "there is absolutely no question of it".
"We have a (European) treaty under which there is no possibility of paying to bail out states in difficulty," Merkel told ARD public television.
Merkel went on to say that Germany would help Greece by supporting the campaign to get their shit together, you know, in a moral support sense. I'm sure Greece is eternally grateful for Germany's kind words but where is the damn money? I guess it really is all in the interpretation.
I've heard it said that Americans are hopelessly in the dark on this one; so all we get are bailout media reports and wild speculation, right? Something like that. Don't hold your breath, this is not the bailout you are looking for.
So who is going to do it if not Germany?
Not the ECB:
ECB President Jean-Claude Trichet is expected to stick firmly to his view that there won't be an ECB bailout for indebted Greece. Instead, he is likely to insist that the government must rigorously pursue its goal of getting the budget deficit down to less than 3% of gross domestic product in 2012.
The ECB's Governing Council Wednesday praised Greece's "strong commitment" to reach its fiscal objectives through its latest austerity plan.
And not France:
Greece has not asked its European Union partners for financial aid to help it through its fiscal crisis, and France and Germany do not have a bailout plan for that country, France's budget minister said Wednesday.
"Today, there isn't one," Budget Minister Eric Woerth said in an interview on French radio. He was asked if there is a Franco-German plan to bail out Greece, which he said has only asked for "a little cooperation...a little political support."
He said the only solution for Greece is to reduce its budget deficit. Woerth said that without substantive deficit reduction, Greece faces escalating interest rates it would have to pay in bond markets to get financing.
And why not? There's a simpler solution and it involves - surprise - the same reacharound jerk-off that's gotten us this far. Greece doesn't have the luxury to devalue its own currency but what's to stop the ECB?
Globe and Mail:
European officials are adamant that they do not want to send the International Monetary Fund to rescue Greece using one of its bailout packages, which provide emergency loans in exchange for mandated austerity measures. This, they say, will be perceived as a failure of the euro zone to correct its own problems.
But economists warned that a homebrew bailout is unknown, and technically illegal, territory, and it could trigger a domino effect.
“The worst thing that can possibly happen is for European countries to assume the debt of Greece – the only way they can justify it is with the quid pro quo of appearing to get really tough on the Greeks, even though they don't have any instruments to do so, and that will build up resentment and bad faith and cause a series of missteps in other countries,” economist Charles Wyplosz, a monetary policy expert, said in an interview yesterday.
Don't hold your breath.