October 15, 2012: yup, here it is -- "reality bites" -- EU forced to give into Greece; can kicked down the road;
Der Spiegel, the German magazine, reports that Athens will be given another two years to implement tough budget cuts and reforms.And, of course, more money from the Germans. Did anyone think otherwise?
October 11, 2012: two updates -- it looks like Germany, the EU, and the IMF cave -- they will kick the can down the road; EU will lift demands. Second thing: the largest company in Greece (Coca-Cola Hellenic) is moving headquarters out of Greece. It's hard to believe: Coca-Cola Hellenic represents 20% of the Greek bourse. So, Germany, the EU, and the IMF may walk away for now, but the situation will only get worse in Greece as more companies fail or leave.
October 9, 2012: Merkel arrives in Greece today. Everywhere the news is bad:
- on the street: protestors in Nazi uniforms
- in parliament: Greek debt is not "repayable" right now (maybe ever?)
- in the news: Greek's debt nightmare just got worse -- CNBC (October 9, 2012, 7:00 a.m. Eastern);
I think most Americans -- if they think about it at all -- consider the Greek budget crisis a story about the viability of the Euro, and the Eurozone. Some have suggested that Greece should just bail on the Euro. The country cannot. It crossed the Rubicon at least a year ago.
There is now something much greater at stake. It is possible the Greek crisis is a bigger story and a more concerning story than the impending implosion of Iran. It's possible the Mideast will "blow up" sooner than later, but it seems we've been through that saber-rattling before and somehow things just continue to muddle along. If there is regime change in Iran will many Americans notice; if there is regime change in Syria, will many Americans notice?
But Greece is a different story. It is a democratic state and the Guardian suggests that it could very well implode, perhaps even before the end of the year.
The high-wire act of placating international lenders while keeping social unrest at bay will be tested as never before when Merkel, the German chancellor, flies into Athens next Tuesday. With anti-EU sentiment at an all-time high, opposition parties and trade unions vowed a baptism of fire.Exiting the Eurozone was probably never an option; if it was an option at one time, it no longer is. As it stands, Greek cash reserves will run out by November; and it is highly unlikely that a decision to infuse more cash will be made at the October 18th EU summit. It appears Greece imports 70 percent of its energy requirements. Except for coal and coal-fired utility plants providing electricity, I assume Greece has no other hydrocarbon-based fuel of its own: no natural gas and no oil. This was posted yesterday.
If Greece implodes, it will not simply be a change in regime. Greece will become a failed nation-state overnight. It will be Balkanized, not because that's what the Greeks want (unlike the Balkans) but because it will become "every man for himself." We may see the rise of Sparta and Athens once again.
Merkel's visit to Greece next Tuesday will be the story of the week.