This is going to be a nasty break up. Zero Hedge. Excerpts:
Preparing for Greece’s exit from the Eurozone has been picking up momentum and has reached critical mass—on the way to a fait accompli. Still unspeakable in public discussion last year, it has become a routine topic at all levels of government. While everyone at the very top still hues to the line that Greece should stay in the Eurozone, out of the other side of the mouth comes the but—especially since the focus is on Spain, the real problem, the one problem that the Eurozone will have trouble digesting.
Even if it could digest bailing out Spain or losing Spain, the next step up, Italy, due to its size, is beyond bailout and would cause the Eurozone to fracture into its component pieces—unless the ECB decides against all treaty limitations and stiff German opposition to monetize directly and without qualms any sovereign debt that needs to be monetized. And even that would tear up the Eurozone because Germany and a handful of other countries would refuse to be tied to that kind of loosey-goosey management of their currency.
There are political realities in Germany, where Chancellor Angela Merkel, slipping in the polls, is trying to decipher the scribbles on the wall. Her people, who vacation in Greece more than any other people, have handed her some clues: 60% said they wanted Greece out of the Eurozone, a jump from November when an already shocking 49% had wanted them out, according to a ZDF Politbarometer poll released Friday. Only 31% wanted Greece to remain in the Eurozone, down from 41% in November, with 9% not giving a hoot.
And:
But the next big battle may actually revolve around keeping Germany in the Eurozone: 50% of the respondents saw more disadvantages than advantages, up from 43% in February; only 45% saw more advantages, down from 51% in February. The more costs and risks rise for Germany, the more this number is going to skew away from the euro. A scary trend for Eurozone bailout freaks. And suddenly Germans woke up to the headline, "Greeks Pay less Taxes"—taxes being a sore subject for Germans who pay out of their noses to get their welfare-state budget into balance. For a debacle without equal, read.... The Confiscation Conundrum in Europe.
"The notoriously tax-sinning Greeks paid their government even less than before," the article began unnervingly. Turns out, Reuters had gotten two anonymous “senior” finance ministry officials to talk: Greeks were refusing to pay their taxes in euros in anticipation that they could soon pay them in drachmas, albeit with minor penalties. And lacking a government, they wanted to wait for the outcome of the next election on June 17, which hopefully would produce a government, any government. And so tax revenues in May were on track to drop 10%. Outside of Athens and Thessaloniki, tax revenues would fall between 15% and 30%. First capital flight then quiet bank runs, and now a refusal to pay taxes to a government they don’t have, in a currency they might not have much longer.... The Greeks are preparing for a reversion to the drachma, and they're trying, very understandably, and very smartly, to protect whatever they can—which, of course, simply speeds up the process of reverting to the drachma.
Forced to answer, I'd say that by July 1st, Greece's Eurozone exit will be the foregone conclusion. Momentum in Greece's June 17th election is swinging towards anti-austerity Syriza, and they won't hesitate to drop the hammer on all prior agreements. Bank runs have already begun, and will most likely intensify. Greece's collapse will also effect non-E.U. countries like Romania and Bulgaria. Greece's exit also hastens Spain and Italy's demise. Further chaos in Greece really could get this whole party started. Yeah. By July 1st, things should be coming to a boil.
Buy canned goods and water!
Preparing for Greece’s exit from the Eurozone has been picking up momentum and has reached critical mass—on the way to a fait accompli. Still unspeakable in public discussion last year, it has become a routine topic at all levels of government. While everyone at the very top still hues to the line that Greece should stay in the Eurozone, out of the other side of the mouth comes the but—especially since the focus is on Spain, the real problem, the one problem that the Eurozone will have trouble digesting.
Even if it could digest bailing out Spain or losing Spain, the next step up, Italy, due to its size, is beyond bailout and would cause the Eurozone to fracture into its component pieces—unless the ECB decides against all treaty limitations and stiff German opposition to monetize directly and without qualms any sovereign debt that needs to be monetized. And even that would tear up the Eurozone because Germany and a handful of other countries would refuse to be tied to that kind of loosey-goosey management of their currency.
There are political realities in Germany, where Chancellor Angela Merkel, slipping in the polls, is trying to decipher the scribbles on the wall. Her people, who vacation in Greece more than any other people, have handed her some clues: 60% said they wanted Greece out of the Eurozone, a jump from November when an already shocking 49% had wanted them out, according to a ZDF Politbarometer poll released Friday. Only 31% wanted Greece to remain in the Eurozone, down from 41% in November, with 9% not giving a hoot.
And:
But the next big battle may actually revolve around keeping Germany in the Eurozone: 50% of the respondents saw more disadvantages than advantages, up from 43% in February; only 45% saw more advantages, down from 51% in February. The more costs and risks rise for Germany, the more this number is going to skew away from the euro. A scary trend for Eurozone bailout freaks. And suddenly Germans woke up to the headline, "Greeks Pay less Taxes"—taxes being a sore subject for Germans who pay out of their noses to get their welfare-state budget into balance. For a debacle without equal, read.... The Confiscation Conundrum in Europe.
"The notoriously tax-sinning Greeks paid their government even less than before," the article began unnervingly. Turns out, Reuters had gotten two anonymous “senior” finance ministry officials to talk: Greeks were refusing to pay their taxes in euros in anticipation that they could soon pay them in drachmas, albeit with minor penalties. And lacking a government, they wanted to wait for the outcome of the next election on June 17, which hopefully would produce a government, any government. And so tax revenues in May were on track to drop 10%. Outside of Athens and Thessaloniki, tax revenues would fall between 15% and 30%. First capital flight then quiet bank runs, and now a refusal to pay taxes to a government they don’t have, in a currency they might not have much longer.... The Greeks are preparing for a reversion to the drachma, and they're trying, very understandably, and very smartly, to protect whatever they can—which, of course, simply speeds up the process of reverting to the drachma.
Forced to answer, I'd say that by July 1st, Greece's Eurozone exit will be the foregone conclusion. Momentum in Greece's June 17th election is swinging towards anti-austerity Syriza, and they won't hesitate to drop the hammer on all prior agreements. Bank runs have already begun, and will most likely intensify. Greece's collapse will also effect non-E.U. countries like Romania and Bulgaria. Greece's exit also hastens Spain and Italy's demise. Further chaos in Greece really could get this whole party started. Yeah. By July 1st, things should be coming to a boil.
Buy canned goods and water!
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