That is the only question left. Germany clearly doesn't think so,
"French president François Hollande pledged to get an agreement and warned that at stake was not just whether Greece stayed in Europe but “our conception of Europe”. "But a grim Ms Merkel said: “There’s not going to be an agreement at any cost.” Eurozone leaders, she added, were considering “nothing more and nothing less” than the preconditions for a Greece rescue by Europe’s bailout fund — a stance that appeared to cast doubt on whether a full accord could soon be reached."
http://www.ft.com/cms/s/0/8681a02a-287d-11e5-8613-e7aedbb7bdb7.html#ixzz3fjGRKzOh
The worry at this point is that Greece does want to be part of the euro at any cost. I mean one 'suggestion' by Germany is that Greece could recover some of this lost trust by giving the EU $50 billion euros in state assets.
Tripas seems to have bought into this idea that it's simply impossible to consider leaving the euro-even vassalship seems to him preferable.
Some seem to think that leaving the euro is a fate worse than anything. Sumner points out that there are some strange bedfellows in this crisis:
"We American are simpletons; completely unable to comprehend the dizzying series of twists and turns in this Greek drama. The latest twist is Germany treating Greece like a naughty child, suggesting that maybe they need a 5-year “timeout” from the euro. And so we arrive at a German/Krugman alliance trying to get Greece out of the euro. Germany to punish Greece and restore order to the euro, while Paul Krugman sees it as a way of avoiding punishing Greece, of sparking an Argentine-style recovery."
"On the other side is the Sumner/Syriza alliance, taking the high road. Agreeing with the Financial Times that:
"Tripas has capitulated. His antagonists must show magnanimity."
"Syriza sees Grexit as an economic disaster for Greece and a political disaster for Syriza. I actually think Syriza would do worse politically if they stayed in the euro. Even Greece might to worse (it’s unclear, and depends on what else they do). Instead I fear that a Greece pushed out of the euro by Germany would nudge Greece in a radical leftward direction. A letter writer to the FT reminded readers of the dark side of the “Argentine miracle”:
“One can learn a lot about photography by studying excellent pictures and looking at bad ones. We can emulate the good and try not to duplicate the bad. Argentinian politicians raided bank accounts and absorbed pension plans in the collapse. People who saved for retirement were taken advantage of by populist politicians. Keep that in mind when your country goes down.”
http://www.themoneyillusion.com/?p=29923
Well at this point it's the pensioners and small savers who can't get their money out of the Greek banks. I just don't know that the worst case scenario can be Grexit even if it means 'a left wing government.'
Sumner is right, I believe, that if Tripas and his party take this deal it's an absolute disaster for him. If he therefore carries the water of the EU here and pushes Parliament to pass this poison pill he's ironically going to suffer the same fate as his predecessor who he beat in January did. The Eurocrats talk about trust but you have to be nuts to trust them-doing what they want gives you nothing.
To me whether you like what the Greeks do after they leave the EU is besides the point. It's their country and they have the right to make their own decisions-even if those are poor ones. I have agree with Sumner's MM buddy Lars Christensen here:
"Imagine that the euro had never been introduced and we instead had had freely floating European currencies and each country would have been free to choose their own monetary policy and fiscal policy."
http://marketmonetarist.com/2015/07/12/the-euro-a-fatal-conceit/
That is the only thing worth imagining. Christensen also didn't like what Argentina did after it left either but still agrees it was better than staying in the currency board. Countries can have bad monetary and fiscal policy if they want-and sometimes this is in the eye of the beholder.
My worry is that Tripas really is totally afraid of leaving the euro:
"Tsipras apparently allowed himself to be convinced, some time ago, that euro exit was completely impossible. It appears that Syriza didn’t even do any contingency planning for a parallel currency (I hope to find out that this is wrong). This left him in a hopeless bargaining position. I’m even hearing from people who should know that Ambrose Evans-Pritchard is right, that he hoped to lose the referendum, to give an excuse for capitulation."
http://krugman.blogs.nytimes.com/2015/07/12/disaster-in-europe/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body
I hope it isn't true about no contingency plan either as Germany clearly has one.
"French president François Hollande pledged to get an agreement and warned that at stake was not just whether Greece stayed in Europe but “our conception of Europe”. "But a grim Ms Merkel said: “There’s not going to be an agreement at any cost.” Eurozone leaders, she added, were considering “nothing more and nothing less” than the preconditions for a Greece rescue by Europe’s bailout fund — a stance that appeared to cast doubt on whether a full accord could soon be reached."
http://www.ft.com/cms/s/0/8681a02a-287d-11e5-8613-e7aedbb7bdb7.html#ixzz3fjGRKzOh
The worry at this point is that Greece does want to be part of the euro at any cost. I mean one 'suggestion' by Germany is that Greece could recover some of this lost trust by giving the EU $50 billion euros in state assets.
Tripas seems to have bought into this idea that it's simply impossible to consider leaving the euro-even vassalship seems to him preferable.
Some seem to think that leaving the euro is a fate worse than anything. Sumner points out that there are some strange bedfellows in this crisis:
"We American are simpletons; completely unable to comprehend the dizzying series of twists and turns in this Greek drama. The latest twist is Germany treating Greece like a naughty child, suggesting that maybe they need a 5-year “timeout” from the euro. And so we arrive at a German/Krugman alliance trying to get Greece out of the euro. Germany to punish Greece and restore order to the euro, while Paul Krugman sees it as a way of avoiding punishing Greece, of sparking an Argentine-style recovery."
"On the other side is the Sumner/Syriza alliance, taking the high road. Agreeing with the Financial Times that:
"Tripas has capitulated. His antagonists must show magnanimity."
"Syriza sees Grexit as an economic disaster for Greece and a political disaster for Syriza. I actually think Syriza would do worse politically if they stayed in the euro. Even Greece might to worse (it’s unclear, and depends on what else they do). Instead I fear that a Greece pushed out of the euro by Germany would nudge Greece in a radical leftward direction. A letter writer to the FT reminded readers of the dark side of the “Argentine miracle”:
“One can learn a lot about photography by studying excellent pictures and looking at bad ones. We can emulate the good and try not to duplicate the bad. Argentinian politicians raided bank accounts and absorbed pension plans in the collapse. People who saved for retirement were taken advantage of by populist politicians. Keep that in mind when your country goes down.”
http://www.themoneyillusion.com/?p=29923
Well at this point it's the pensioners and small savers who can't get their money out of the Greek banks. I just don't know that the worst case scenario can be Grexit even if it means 'a left wing government.'
Sumner is right, I believe, that if Tripas and his party take this deal it's an absolute disaster for him. If he therefore carries the water of the EU here and pushes Parliament to pass this poison pill he's ironically going to suffer the same fate as his predecessor who he beat in January did. The Eurocrats talk about trust but you have to be nuts to trust them-doing what they want gives you nothing.
To me whether you like what the Greeks do after they leave the EU is besides the point. It's their country and they have the right to make their own decisions-even if those are poor ones. I have agree with Sumner's MM buddy Lars Christensen here:
"Imagine that the euro had never been introduced and we instead had had freely floating European currencies and each country would have been free to choose their own monetary policy and fiscal policy."
http://marketmonetarist.com/2015/07/12/the-euro-a-fatal-conceit/
That is the only thing worth imagining. Christensen also didn't like what Argentina did after it left either but still agrees it was better than staying in the currency board. Countries can have bad monetary and fiscal policy if they want-and sometimes this is in the eye of the beholder.
My worry is that Tripas really is totally afraid of leaving the euro:
"Tsipras apparently allowed himself to be convinced, some time ago, that euro exit was completely impossible. It appears that Syriza didn’t even do any contingency planning for a parallel currency (I hope to find out that this is wrong). This left him in a hopeless bargaining position. I’m even hearing from people who should know that Ambrose Evans-Pritchard is right, that he hoped to lose the referendum, to give an excuse for capitulation."
http://krugman.blogs.nytimes.com/2015/07/12/disaster-in-europe/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body
I hope it isn't true about no contingency plan either as Germany clearly has one.
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