The nation’s newly installed prime minister, Antonis Samaras, and his nominee for the crucial post of finance minister, Vassilis Rapanos, have been in the hospital since Friday. They will miss a crucial European Union summit meeting on Thursday and Friday that was intended to discuss whether to ease the terms of Greece’s bailout conditions, a government spokesman said Sunday.Way too much of the German commentary I see on this situation is based on arrogance and a post-truth disregard of the economic realities that have been crashing down on Greece, Ireland, Italy, Portugal and Spain. Here's an example from Deutsche Welle English, No mercy for Greece's new old political elite by Spiros Moskovou 21.05.2012
Mr. Samaras, who is recovering from eye surgery, and Mr. Rapanos, who was struck by intense abdominal pain, nausea, sweating and dizziness on Friday, will be replaced at the meeting by a ministerial delegation.
But what's stopping Athens from convincingly tackling corruption and tax evasion and only then asking for compromises from Brussels and the IMF? And why is it that the Pasok government after 2009 and the caretaker Papademos government in 2011 – which had the backing of both Pasok and New Democracy – had so little to show when it came to fighting corruption and tax evasion?In the current situation, German commentary like that is frivolous, head-in-the-sand arrogance and recklessness.
Despite all the relief about the speedy formation of a new government in what often seems like an ungovernable country in the birthplace of democracy, Europe now has to be firm. It can say 'yes' to somewhat relaxing the reform timetable for the reforms in Athens, 'yes' to growth stimuli to get the economy going, 'yes' to concrete measures to help the weaker strata of society – but Brussels should have no mercy with Greece's new old political elite.
But it's in line from the signals coming from German Chancellor Angela Merkel. Wolfgang Schäuble, Germany's Finance Minister and Angie's one-time mentor before she coldly knifed him in the back (politically speaking!), says pretty much the same thing. Athens news reports, Schaeuble tells Greece to stop asking for more help 06/24/2012:
"The most important task facing new prime minister (Antonis) Samaras is to enact the programme agreed upon quickly and without further delay instead of asking how much more others can do for Greece," said Schaeuble, a close ally of Chancellor Angela Merkel and Europe's most powerful finance minister. ...Short version of Schäuble's message to the Greek people: bite me.
The [new Greek government] coalition's platform particularly challenges euro zone paymaster Germany, which has offered to adjust the lifeline's terms to make up for time lost as a result of two Greek elections since May, but refuses to revise it radically. ...
"The ball is now in Greece's court," said Schaeuble. "It's in their hands to win back the confidence of the people of Europe. They're only going to accomplish that with concrete actions and deeds." ...
In a separate interview on Sunday published in Der Spiegel news magazine, Schaeuble again ruled out any form of collectivised debt such as euro bonds and defended the German government's hard line on that.
"It's because you cannot separate the responsibility for decision-making from the liability," he said when asked why Germany was so adamantly opposed. "That's true for almost everything but especially when it comes to money.
"Anyone who has the chance to spend someone else's money will do that," he added, before telling the reporter: "You'd do that and so would I. The markets know that. And so from that point of view they wouldn't be convinced by euro bonds." (Reuters)
And, as Paul Krugman notes, even if the Greek government got the concessions they are demanding, it wouldn't come close to actually solving the problem: "I really can’t see how the relaxation of austerity being demanded by the new Greek government can make more than a marginal difference." (Getting Away With It 06/24/2012) And he doesn't mean that it's not worth doing. He means that it's too small a departure from the austerity madness to do much good.
And in Revenge of the Optimum Currency Area 06/24/2012, he discusses the problems that the ill-conceived nature of the euro currency union is now produced in a catastrophic way. He writes, "the advantages of a single currency come at a potentially high cost."
Tags: angela merkel, austerity economics, eu, euro, european union, greece, paul krugman