From a German perspective, there are two solutions to the Greek crisis. Either we lose the entire 80 billion euros of Greek loans. Or do we only lose a part of it. It is the official position of the Federal Government that they necessarily want to lose everything. There now remain only a few weeks, in which we can correct the biggest German grand delusion of the 21st century. I always find it amazing how deep this delusion is rooted in German society. It does not surprise me that Angela Merkel, the Greek crisis came in 2010 and 2012 with unrealistic obligations under the carpet. Is astonishing that her current coalition partner, the SPD, which nothing opposed. Merkel has gambled with the Greece-credit, and no one says anything.
Greece threatens the inevitable bankruptcy
Greece needs a haircut. But if you talk about the issue with the Social Democrats, then always comes the answer: We see that in principle the same, but we can not broach in Germany. The only thing that would go would be an extension of maturities and reduction of interest rates, because then you do not see the implicit debt cut of such an action.
If debts are not sustainable, then it is always and everywhere to haircut. Right there we are now. Greece moves towards the inevitable bankruptcy. The Greek Government can still make further budget cuts, but desperately needs an explicit haircut for this to work. At the very least would be a binding promise to negotiate such a. If Merkel wants the Greeks really hold in the euro, they have to do just that. You will have to admit the fact that their previous euro rescue policy has failed.
Vice Chancellor Sigmar Gabriel is wrong when he said that the Greek game theorists have gambled the future of the country, moreover. I think the Greek Finance Minister Yannis Varoufakis his statement that he, the game theorist, has come quite early to conclude that the game theory in these negotiations is not applicable. The Greeks play with open cards. That’s just what irritated the negotiators so. The Greeks said in February: no
What complicated the whole thing is false morality. Only in the German language have the words “debt” and “debt” has the same linguistic root. It would be easier to call a spade a spade, rather than longer to charter with value judgments. Germany has awarded a loan to Greece and should behave like a rational lender, in which it maximizes the net present value of this loan now. If there are signs the insolvency of the borrower, the lender is rational if it waives some of the money, thus avoiding the insolvency and thus the total failure of his claim. Whether this works technically an extension of maturities, a write-down of receivables or other financial tricks, is basically the same. When lenders and borrowers act rationally, an agreement should always be possible.
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If you can not agree, at least one side is irrational. For what believer wants to risk the entire default if he could save a portion of its debt?
What explains this irrationality? From my perspective, there are the fabrications, we tell ourselves repeatedly over the years: that the euro is as strong as the mark that a currency union can work without a common budget and that the Greeks repay their loans. We now are stuck in the network of our own fairy tale.
The truth is that the monetary union is broken or a fiscal union forces. The other truth is that the Greeks are broke.
And a third truth is that the haircut is, either way.
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