Does Europe Need the US to Bail Them Out Again

     Well, look take all the potshots at the US you want but their leadership is not more hopeless than what you've seen in Europe for 5 years. Who knows maybe we can help? We can't do worse.

      US Treasury Secretary Jack Lew does have a point of view and he's been voicing it over the weekend. Can't be a bad thing.

     "Senior Treasury officials say that Secretary Lew has been in constant touch with major players and has been urging Greece to agree to critical reforms. He has also been urging creditors to agree to provide Greece with sustainable debt relief, the sources said.

     "They say that, while an agreement should come sooner than later, the potential default on Greece's IMF payment is not a meaningful deadline."

     "These sources say that the mechanisms put in place in Europe against contagion are broad and potent."

     http://www.cnbc.com/id/102790605

     Ok so both sides should give a little. Here's the difference though: the Greeks have already given a lot and Tsipras has allowed for some more austerity. The recalcitrant one is the EU who refuses to bend. "

     As I noted in an earlier post part of what the EU hotshots are objecting to is Tsipras urging his countryman to vote no. He also made an interesting claim that many are trying to deny-that a no vote doesn't mean they nevertheless leave the euro. 

    He argues that the EU doesn't want them to leave the euro just crush their hope of a better deal. As a matter of fact, if they vote no next Sunday that doesn't leave them out of the euro though exactly where it does is  an interesting question. 

   Sumner isn't happy that Americans seem to be siding with Greece. 

  " In this recent article, Anne Roiphe indicated that at an emotional level she found herself sympathizing with the escaped convicts in New York, even though the logical side of her mind knew they were not deserving of sympathy.

Don’t say it. I know that is a daydream without a shred of reality. This is not the way a grown up woman should think. And yet this Jewish woman, if honest, admits that the hunted and the chased evoke her worry, and the power of the state is not always benign, and that the day I loose my faint wish that these convicts or the next ones escape captivity is the day I loose my Jewish memory. So then I have to tolerate both the twinge of fear I feel for the escapees and the hatred I have for them as killers and thugs.

    "Perhaps something like that is going on here.  Over at Econlog I have a post on themezzogiorno, a failed region of 20 million people in southern Italy.  I’d guess that in Europe there’s not a lot of sympathy for this region, perhaps because outsiders feel that Sicilians and Neapolitans have only themselves to blame.  In America, progressives employ a sort of “victims and villains” framing, where poor minorities are seen as being poor precisely because they are oppressed by the dominant class.  Americans may see the Greeks as a “victimized” group, whereas the Europeans may see them simply as a country governed by irresponsible white males."

     http://www.themoneyillusion.com/?p=29815&cpage=1#comment-393321

     So he puts the Greeks on the moral level of cold blooded murderers. 

     Anyway, is the EU would listen to Lew-not that i'm saying this is likely; I don't know-this could be a way out. Both sides should compromise. As the Greeks already are compromising the EU just has to join them. 

     I will say this. Tsipras may be right that the EU won't throw out the Greeks. I think if they did so they'd be extremely shortsighted. I have no problem with him testing this theory of his as long as he's ready if thye do call his bluff. 

     He should be ready if necessary to leave the euro. Remaining in the euro at any price is the worst possible position-it's what the EU wants it to be.