Well the bailout for Greece is now official as the EU elite pledged 30 billion euros to the bankrupt nation. You notice that it does not matter what the German or French people think--all that matter is what the EU elite decide behind closed doors without any accountability. This is what happens in the undemocratic EU. Along with EU money the IMF contributed to the bailout with 15 billion euros which I am told should keep Greece solvent for about 1 year. However an interesting tidbit from a Greek spokesman indicated that the money would be approx. 80 billion euros over 3 years. Of course anyone following the Greek situation will see that this does not solve Greece's problems. Giving a bankrupt country more cheap loans is like giving an alcoholic more liquor.
What I believe will be the important point regarding this situation is how the German and French public react to this. As the two largest economies in the EU they will be on the hook for most of the money. Do the German and French people accept the responsibility for Greece's overspending? Are they willing to suffer higher taxes and less social welfare? And more importantly are they willing to extend the same bailout terms to Spain, Portugal, Ireland, and possibly Italy? In my opinion this will be the issue that destroys the EU once and for all. Anyway the Euro is trading higher in early Asian trading. One would think that it would trade down on the news but then again the market is peculiar.
Black Swan Insights
What I believe will be the important point regarding this situation is how the German and French public react to this. As the two largest economies in the EU they will be on the hook for most of the money. Do the German and French people accept the responsibility for Greece's overspending? Are they willing to suffer higher taxes and less social welfare? And more importantly are they willing to extend the same bailout terms to Spain, Portugal, Ireland, and possibly Italy? In my opinion this will be the issue that destroys the EU once and for all. Anyway the Euro is trading higher in early Asian trading. One would think that it would trade down on the news but then again the market is peculiar.
Black Swan Insights
Nice bailout package.
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