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Monday, January 26, 2015

Greeks declare war on the Euro

It was Dick Tuck who declared, on losing a Californian State Senate race, "The people have spoken, the bastards". It  may well be that some European leaders are feeling something similar as the Greek General Election results come in.

Alexis Tspiras, who leads the victorious Syriza party, is pledged to end austerity. That can only mean one choice: he either has to come out of the Euro and go his own way, or he has to renegotiate the bail-out package that was put in place by his predecessors. Either way, it heralds a period of unsettled weather for the Eurozone and that may well have an impact on the UK's economic recovery.

The Telegraph reports that Eurozone finance ministers will meet on Monday when they will threaten an end to negotiations on debt relief for Greece unless its new radical Left government promises to honour all existing austerity agreements. They are trying to steady the ship and prevent speculation against the Euro.

The paper says that Eurozone officials are convinced that the EU holds all the trump cards in the coming clash with Greece's leader-in-waiting, Alexis Tsipras, including the nuclear option of letting Greek banks collapse. They believe Mr Tsipras knows his weakness.

But, this hardline approach will be sugared with offers of flexibility on the detail of austerity measures, and a move to allow Greece more time to meet an end of February deadline for renewal of key EU loans that are keeping the country’s economy afloat.

Suddenly, the stakes are very high indeed for the Euro zone countries.
Its totally predictable that the EU Minister's are talking tough because like so many of the ruling elite across Europe, (your party and the Tories included) they have so much invested in austerity economics.

I'm no fan of Syriza but if i was advising the EU I''d cut a deal with them or end up in 6 or 12 months with neo nazi's Golden Dawn in power in Athens threatening the whole EU facade not just the Euro.
I suspect the Greeks will default within the next two months and, by so doing, declare a state of national bankruptcy.

God help the Greek people. But they got what they voted for. As did the people of Scotland and Wales.
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