"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler
by Smitty
Nigel Farage is slightly less refined that Daniel Hannan, but that’s no complaint: sometimes you feel like a mallet, sometimes a scalpel.
Farage goes all Donald Trump and starts telling the Eurocrats that they should be fired. We have legions of civil servants in need of the same words here.
via HillBuzz, who do not seem to grasp that Farage is in fact an elected official, not a media personality like Beck.
by Smitty
Daniel Hannan in The Telegraph with an insider view of the Brussels reaction to the Greek referendum on the latest bailout farce:
I wish I could convey the sheer horror that his proposal provoked in Brussels. The first rule of the Eurocracy is “no referendums”. Brussels functionaries believe that their work is too important to be subject to the prejudices of hoi polloi (for once, the Greek phrase seems apposite). Referendums are always seen as irresponsible; but, at a time when the euro is teetering on the brink, Papandreou’s proposal was seen as an act of ingratitude bordering on treason.
Across the palaces and chanceries of the continent, Euro-elites closed ranks. Nicolas Sarkozy’s spokesman described Papandreou’s announcement as “irrational and dangerous”, Angela Merkel’s called it “irritating”, Silvio Berlusconi’s “negative”. Such phrases, in the mouths of government officials, suggest purple, choking rage.
Read the whole thing. This sounds about right for the pack of clowns that excreted the Treaty of Lisbon. The worldwide choice before us liberty or social democracy. You can fret some media-driven nonsense about Herman Cain’s ‘uncomfortable gestures’, or you can focus on what matters, Americans.
My title, of course, refers to the Worst Speaker of the House in American History, whose disgusting, farcical tenure was the closest American analogue to the EUrocrats.
via The Corner
Update: Zander, in the comments, is a good friend of mine. If I may request people edit themselves a bit, please disagree agreeably with the fellow. Thanks, Chris.
Update II: Linked at The Rio Norte Line.
Update III:Monty over at Ace of Spades
A note about this Greek “referendum”: it doesn’t matter whether it takes place or not. The damage is already done, the demons already set loose. The Greeks have already voted “no”, whether they know it or not.
Ow, ow, ow, a thousands ows, and again, I say: ouch!
Update IV:Oh, and from the comments on Monty’s post, a blast from Tyler Durden at Zero Hedge
The fact that it is impossible for Greece to regain competitiveness while clinging to the euro is becoming increasingly evident. Prominent economists such as Nouriel Roubini, as well as investor George Soros have said as much and influential voices in Greece are now questioning the wisdom of clinging to the euro.
Well, if King George has made the call, time to roll out Rosie O’Donnell in the steel bikini.
Update V: linked at The Camp of the Saints.
by Smitty (h/t Memorandum via Google Reader)
Reuters reports:
European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region’s third largest economy.
European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region’s finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.
Van Rompuy’s spokesman Dirk De Backer said: “It’s a coordination, not a crisis meeting.” He added that Italy would not be on the agenda and declined to say what would be discussed.
Yeah, when Van Rompuy says “It’s a coordination, not a crisis meeting,” that’s a code phrase to his wife, meaning: “Honey, please bring me a change of underwear.”
For those not paying attention to EU politics outside of the Greeks imitating Wisconsin, Nigel Farange provides an ‘introduction’ of sorts:
My take: we need to hire Nigel to cross-examine Ben Bernanke. Nigel strikes, I think, a most appropriate tone for un-elected, over-powered officials.
The stock market surged last week after France announced a plan for French banks to roll over some maturing Greek bonds, thus helping avert default. But now credit rating agencies have had a chance to read the fine print on that plan and aren’t liking what they see:
Greece risks being judged in default on its debt obligations if banks are forced to bear part of the pain, Standard & Poor’s said Monday, suggesting that current proposals for rescuing the euro zone’s weakest member may have to be reconsidered.
In particular, a plan proposed by the French government and banks “could require private sector debt restructuring in a form that we would view as an effective default,” S.&P. said in a statement.
The effects of a Greek default would be felt around the world. The country’s debt of €330 billion might not be large enough in itself to set off a renewed financial crisis, but once the precedent of a euro-zone default had been set, investors would likely abandon the debts of other struggling members, including Portugal and Spain.
More worryingly, Western banks, including the giants of Wall Street, have built a tower of credit default swaps — essentially insurance — on the debts of those countries, and the cost of paying up in a default would be huge. . . .
Just keep reading, it gets worse. Europe has managed to kick the can a bit further down the road, delaying the day of reckoning for a few months, but the essential problems of the Euro-zone’s PIIGS (debt-laden Portugal, Italy, Ireland, Greece and Spain) stubbornly remain.
UPDATE: From Adjoran’s comments below:
No, they haven’t really kicked the can down the road. They are at the point that the most they can manage is to kick the can across the room a bit. The can ain’t a-goin’ nowhere.
S&P and other agencies warned about this early in the Greek crisis, that any restructuring which involves the creditors eating any loss would constitute a default and the credit rating would be affected. Even if the rating agencies didn’t, the bond market isn’t stupid, everyone except Obama and Greece understands a line has been crossed.
Even if this deal didn’t cost the ratings devaluation, it isn’t some miracle like the equity markets seem to believe (probably classical wishful thinking added to the inflated “value” of debased currencies). This deal is only being advertised as carrying Greece through until 2014, but that presumes a lot: that every economy envisioned in the austerity plan will be fully and immediately implemented, that the large segment of taxes which have been uncollected in Greece for decades will suddenly come into the Treasury, and that nothing else will go wrong at all for the next three years. They should have asked for a pony, too.
“The bond market isn’t stupid.” Indeed.
PREVIOUSLY:
Financial markets breathed a sigh of relief Wednesday after the Greek parliament approved an austerity plan needed to avert default on the nation’s debt:
The Dow Jones Industrial Average rose 72.73 points, or 0.60%, to 12261.42, capping the blue-chip measure’s biggest three-day gain since March. . . .
Stocks have swung up and down for weeks on worries that Greece poses a contagion risk to European banks and other heavily indebted euro-zone countries. The passage of unpopular austerity measures Wednesday was seen as paving the way for the heavily indebted country to get another round of aid, staving off a default. It was also viewed as moving the euro zone closer to containing its debt crisis.
Greek lawmakers voted on Wednesday to sharply reduce government spending and sell off an array of national assets, staving off default on the country’s debt and easing, for the moment, a crisis among countries that use the euro. . . .
[C]ritics said they doubted that Europe had done more than postpone a day of reckoning for the euro, with Ireland, Portugal and Spain, as well as Greece, all struggling with slow or negative growth and rising debts.
The passage of the measures, a difficult and possibly debilitating feat for a Socialist Party elected on a social welfare platform, ensures that Greece’s foreign lenders will unlock the next installment of $17 billion in aid that the country needs to meet its debt obligations through August.
While the Greek vote was cheered by financial leaders — who had warned of a possible global financial meltdown if the austerity measures had not passed — the approval of the budget-cutting plan by the Greek parliament sparked a third day of riots in the streets of Athens.
PREVIOUSLY:
Here is raw video of today’s riots in Athens:
Greece has no alternative to passing the austerity plan if it wishes to prevent default on its debt, Reuters reports:
Anti-austerity protests turned violent in Athens on Tuesday as the European Union warned Greek lawmakers the country faces immediate default unless they back an unpopular economic plan this week.
Hooded youths throwing stones and wielding sticks set fire to garbage bins and a telecoms truck outside parliament and riot police fired teargas to disperse them. Trade unions began a 48-hour strike against the EU/IMF-imposed measures. . . .
The EU’s top economic official, Olli Rehn, stressed that any further assistance for the debt-crippled nation hinged on parliament adopting a raft of spending cuts, tax rises and privatisations in crucial votes on Wednesday and Thursday.
“The only way to avoid immediate default is for parliament to endorse the revised economic programme … They must be approved if the next tranche of financial assistance is to be released,” he said in a statement.
“To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default,” Rehn said, dismissing widespread reports that Brussels was working on a fallback plan to keep Greece afloat.
There is no evidence Americans are paying much attention to the critical situation in Greece, but — “unexpectedly”! — U.S. consumer confidence has hit a seven-month low.
PREVIOUSLY:
Here are a couple of video reports from EuroNews about this week’s big economic question: Can Greece deal with its debt crisis or will default trigger a global economic meltdown?
At the Hot Air Green Room:
The good news, such as it is: French banks have reportedly agreed to a plan to roll over Greek debt. However, Germany’s finance minister doesn’t sound optimistic: “We are doing everything we can to prevent a perilous escalation for Europe but must at the same time be prepared for the worst,” Wolfgang Schaeuble said, invoking the specter of 2008, when “the world was able to take coordinated action against a global and unpredictable financial market crisis.”
Recall that the 2008 meltdown led to the Dow Jones Industrial Average — which had been above 12,000 in June 2008 — falling below 7,000 by March 2009. If Europe dodges the Greek bullet this week, stocks should gain, but the threat of civil unrest in Greece is sufficiently serious that there have been rumors of a military coup.
Katie Benner of Fortune magazine says Greece won’t default:
Of course, if Greece does default, it will do so “unexpectedly.”
Cato’s Dan Mitchell points out that U.S. taxpayers are helping fund the Greek bailout through the International Monetary Fund, and offers these interesting facts:
UPDATE: How bad could it be? Pretty doggone bad:
Contagion of Greece’s debt problems to the rest of Europe could be worse than the collapse of investment bank Lehman Brothers in 2008, Deutsche Bank Chief Executive Josef Ackermann said on Monday. . . .
“If it is Greece alone, that’s already big. But if other countries are drawn in through contagion, it could be bigger than Lehman,” he said at a Reuters banking conference on Monday.
The Standard & Poor 500 this week suffered its seventh week of losses in the past eight weeks, and the Dow Jones Industrial Average again closed below 12,000 on Friday. The problem? In a word, Europe:
“Everybody is trying to digest how the European debt situation is going to shake out,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages about $20 billion. “They’re playing an expensive game of chicken with Greece because the downside of not passing a bailout for that country is effectively a financial system meltdown.” . . .
The outlook in Greece? Not so good:
A knife-edge vote in the Greek parliament on a new package of [spending] cuts is expected on Wednesday, with [socialist prime minister George] Papandreou desperately needing to convince his reluctant backbench MPs to approve the measures.
If Greece refuses to accept more austerity measures, the consequences for Greece, the EU and indeed the global economy could be dire.
“The problem with socialism is that you eventually run out of other people’s money,” Margaret Thatcher once observed, and for Greece, “eventually” is now.