Greece: closing in to Judgment Day

Posted: April 17, 2015 in Uncategorized

Greece keeps on making the small headlines….but the issue is bubbling along.

Somewhere between May and August there will be Judgment Day.

And the first showdown is the 11 May.

I have a negative view on this as the positions are not sustainable in the long term.

Syriza has been elected with the double mandate of improving the life standard of Greece (renegotiating the debt) and remaining in the Eurozone.

This two goals are not achievable at the same time. So probably there will be some barter between UE and Greece, but at the end Syriza will have to call or a referendum or an election.

Similarly Germany is a similar position.

Angela Merkel knows that it must keep Greece in Europe as all the wealth of his export economy is based on the European Union (and Greece could be start of a movement of European exit), but on the other side it has the mandate to limit the amount given to Greece.

So they will negotiate and barter, but there are only two ways out

1. A Grexit.

2. A technical default of Greece (meaning a Greece default that only the professionals will understand…for example making the Greek debt in perpetuity (AKA interest only)).

3. A political coup/ revolution (1967 Greece had a military coup d’etat which lasted till 1974 when it returned to democracy…so it is not that far fetched)

But the Greek economy is not sustainable in any case

News of today: the Central Greek Government is seizing the local municipalities assets otehrwise it would not be able to make the IMF European loans and the pensions/salaries!

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