Suspicions are being mumbled that perhaps these negative yields on the bonds of the surplus Euro countries may be an indication of a pending exit of Germany from the Euro rather than of Greece.
Since Germany has shown in every way it possibly can that it doesn’t really want to turn the Euro into a proper currency, but prefers to enjoy only its perks but none of its down sides, this may well be the only logical conclusion. The decent, virtuous, hard working countries of the north, say Germany, Finland, Holland and of course Austria (with their dear lady Minister of Finances) could form the New DMII block, and the rest of us be left with the Euro.
This could indeed work. Of course the seat of the ECB would have to move away from Frankfurt and to Rome. (Fortunately we can keep Mario Draghi at the helm. At least initially). Thereafter the Euro could drop in value by 50%, inflation could be allowed to rise, and hey! Guess what? Growth may well start returning to the abused economies of the south.
The more you think about it, the better it sounds. For Germany too. Once growth has returned to these beleaguered states, they might even start buying up Mercedes again and all that stuff. Of course, Germany will have a “bad Brand” syndrome to overcome, in that these states might prefer French, Italian, Japanese even Chinese cars, which will of course be cheaper, in an “Anything BUT German!” backlash. But be that as it may, I would say that short of a complete Euro bust up which is beginning to look likelier by the day, a Gerexit could be more beneficial to all concerned.
Otherwise, southern Mediterranean Europe will turn into a scorched earth waste land. Already Greece is falling apart at the seams. The new government is obliged by the terms the previous government signed up to, to impose even worse and more stringent austerity on an economy in free fall. Now, since the Greek electors were under the illusion that they were voting for “renegotiation” of these terms, the politicians who lied to them over this find themselves between a rock and a hard place.
To submit in their usual servile manner to the most extreme demands of the troika and knock the bottom completely out of the pit, or to try and alleviate some of the worse excesses in a vane attempt to achieve a modicum of growth. Which is what the troika “will not allow”? Either way they will lose their cushy jobs, which is all they care about. And the risk of blood flowing in the streets rises daily.
As for blood in the streets, it has already started in Madrid with the senseless, cruel and vicious demand that another 65 billion Euro be sucked out of a market already in recession with the highest, for now, unemployment rate in Europe. Are all these Euro apparatchiks just dumb or simply sadistic little fiends getting their kicks from watching us all down south squirm and die off? What an aphrodisiac for them all!
And perhaps the “best” piece of news last. Italy has said that owing to all the cut backs and diminution of the public sector imposed by The Frau’s Nonsense Economics, it will no longer be possible for Italy to provide the statistics the EU requires even if it means fines. They simply no longer have the means to do this.
So come on guys! Give up the pretence that any of this Frau inspired Nonsense Economics will ever work and start proceedings for the amicable divorce.
In the light of what things have been reduced to, there does not seem to be another way. As for all those Euro optimists who maintain that oh well, that is how Europe functions. They dither and procrastinate but they do get it right in the end. All I can say is: “Don’t hold your breath!”