Opinion – Greece disqualified from new IMF bailout, board told – FT.com – John Gelmini

Whether the IMF is Germany’s poodle or not is an issue as Dr Alf says.

Christine Lagarde’s continued role, as IMF managing director, is another connected issue but people in those sorts of roles do not, as a rule, go quickly if they go at all, so we are left with the continued problem of Greece which was supposedly settled week’s ago.

If the bailout is withdrawn, having been forced onto Greece, then Germany loses credibility and Greece financially implodes, then reverts to the Drachma.

If the bailout is granted, or granted in modified form, it does not reflect well on Germany nor the EU.

We are left with a situation in which what has been agreed needs to be implemented in a form of “Last chance saloon” economics.

Once implemented, there can be no turning back, no vacillation and no backsliding by Greece, Germans or anyone else–This has to be the cocaine addict going into rehab and coming out clean and completely changed but with the doctors and psychologists all singing from the same hymn-sheet.

 

John Gelmini

Opinion – A Greek Morality Tale by Joseph E. Stiglitz – Project Syndicate – John Gelmini

The Troika have not helped Greece’s economic situation but neither have the Greeks themselves.

Dr Alf has brought us an interesting but incomplete analysis by Joseph Stiglitz which tells only part of the story.

In the past, I remember visits to that country in which buildings always remained in unfinished condition so that people and businesses could avoid paying any taxes on property; civil servants would retire on full pensions at age thirty-eight;  and then take up other jobs.

From what I see, very little has changed. The Greeks do not make things that people want to buy and have for years imagined that well-heeled German tourists and others would drink Greek ouzo, soak up culture and spend their money on a sufficiently large-scale. Relying on the sun and one or two industries is not a wise strategy. And the robber baron tendencies of five leading Greek families, who have plundered the country with impunity, have made matters worse.

It is time as Alan Greenspan, formerly of the Fed says, for contemplating the inevitability of a Greek exit from the Euro.

That will be painful for the Greeks but necessary so that they can solve their own problems.

John Gelmini