Oh boy, just how small is the world becoming!? The Geek parliament passed what they had to pass today in order to obtain the additional 8 billion Euros that they were going to get anyway but this just makes things go a little smoother, meaning no one in authority at the Troika was forced to lie. Close vote, however, 154-144, and guess over what the was the final battle fought? The elimination of the collective bargining rights for public labor unions. Hummmmm, where have we heard that before? Madison? You betcha! This is no little thing either over here and especially not over there and the reprecussions across Euroland are going to be loud and ugly at times. But fear not all you "progressives" out there. When we come to the end of this thing, i.e. when everyone agrees how badly the banks get wacked and the Greeks are allowed to restructure whatever is left, this provision of the austerity measures will be one of the first to be overturned. Zorbra will dance again and Greece will remain firmly rooted in an underachieving life of bliss--that is the optomistic scenerio of course. The alternative; well, let's not go there just yet.
Now I'm feeling pretty good about myself. I just wish I could get the lottery as right as I have gotten this up to this point. Maybe I'll get lucky there, too. But, as suggested the Euros decided that the highly touted meeting this weekend during which final decisions were to be made is going to be more about thrashing out an agreement as to what it is that will be decided by Wednesday of next week than anything else. Anybody want to bet that Wednesday comes and goes, after all it's a meaningless deadline chosen to give the impression that the determination of the parties is rock-solid. It isn't. There is no agreement on universal treatment of the Euro banks, no agreement as to the use of the bail-out facility, no agreement as to the amount of debt relief Greece needs much less how to achieve the same, and no agreement as to the timing or the formal role of the IMF. In short, there's no agreement on anything including, for that matter, the need to agree! Overlaying all of this is the specter of Italy which terrifies everybody except of course the Italians themselves! In a short conversation I had today, my friend Massimo told me that they have been trying to convince their Euro colleagues that they are going to be just fine. I almost believe him but no matter what one believes, Italy is the key and the only point of agreement among the warring tribes is precisely that. Now this is going to sound really stupid but believe me, it's true. The one thing Italy has going for it is that everyone loves Italy and even in today's brutal, take-no-prisoners market, that still counts for something. If you never have been, go...and see what I mean.
Big crowd arriving tomorrow for the game over the weekend and believing that nothing of importance will occur until next week, I'm taking a break until Monday but not before extending congratulation to M. Le President et Mme. Sarkozy on the birth of their daughter yesterday. I'm sure they were waiting for this. I'm told she resembles Mama. Whew!
I lked this historical piec on the ERM crisis by Paolo Pescenti from NY Fed.
ReplyDeleteConclussion:
1. Institutional arrangements will change
2. Thy will not chang until the old ways fail and are thrown away.
3. At the end of the day, Germany gets whatever it wants
http://libertystreeteconomics.newyorkfed.org/2011/10/back-to-the-future-revisiting-the-european-crisis.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LibertyStreetEconomics+%28Liberty+Street+Economics%29&utm_content=Google+Reader