Apologies for the scant posting lately. John and I have been pretty consumed with producing “The Upshot,” for which we’ve got about another week and a half. But there’s so much going on elsewhere, and this Greek thing just needs a comment.
Now, if you think the Greeks will roll over and go along with the draconian German demands just in order to get some money (a lot of money, actually, but still,) well, just remember, the Trojan War took 10 years. This can be a pretty stubborn group. Dateline, Athens:
ATHENS (AFP)–Greece has turned down proposals by the European Union and International Monetary Fund to cut salaries under austerity measures to shore up its crisis-hit economy, the Greek labour minister said Wednesday.
“We have been asked for a cut which we don’t accept. Neither we as a state, nor our social partners,” Andreas Loverdos said after a meeting with the Hellenic Federation of Enterprises, a key business lobby group.
The main sticking point — essentially Germany wants the Greeks to take severe auserity measures, and the Greeks are like, hey, Germany, give us back our gold you scoundrels — the one that has held up this entire sordid process, remains firmly in place. Germany won’t agree to a deal until the Greeks agree to severe budget cuts, not painful, severe. The Greeks won’t do it. That is where we are, and that is where we’ve been. Meanwhile, Rome (not the literal Rome, the figurative one) continues to burn.
It’s all got the feeling of the guns of August, as UBS’ Art Cashin says, even if it is only spring.
We said on the global conference call last week that the Greek rescue effort reminded me of Barbara Tuchman’s Pulitzer prize-winning book, “The Guns of August”. In the book, Tuchman skillfully detailed how the world headed into World War I because leaders on all sides believed the other side would fail to take the next step – knowing the tragedy and chaos all out war would bring. Yet neither side stopped at step after step until they found themselves at war.
Germany and Greece may be engaged in a similar mis-assessment. Greece seems to believe that Germany will recognize that the European Union must avert the negative consequences of a Greek default. Therefore, Germany would not dare to let it occur. The Greeks seem to believe the Germans will be compelled to put up the money in the end.
The Germans, on the other hand, think that Greece will come to its senses and reform in order to get the needed funds. They don’t want to give money to a guy with a drinking problem so that he may buy another drink. They will give him money to go to a sanitarium to straighten out……as of this morning the standoff continues.