Greece is a test site for what it is to follow for Europe

Germany and France are heading towards financial problems, but as yet these are not as serious as the problems in Italy, Spain, Portugal, not forgetting Ireland, and of course Greece, along with a few others. At the behest of the EU, but mainly Merkels Germany, every country in the euro zone have been forced to apply austerity measures, shed jobs, and make things so tight that many businesses have closed down. Add to this that in almost every euro zone country personnel, and business taxes have risen dramatically, along with ever increasing fuel bills. Not surprisingly the this means that the working public, assuming people still have a job, just do not have the money to buy in some cases not even basic food, and certainly not new cars, TVs, fridges etc., etc. When you drive most Europeans down to near poverty levels there is no way they will spend. Even the pensioners, who had money to invest, can now only get a meager return on investments, because of the very low interest rates. Against this background it is not surprising that sales of both products and services are in serious decline. For me the question is, why did we get to this state of affairs? The answer is to try and keep the euro alive. For me this is the root problem all across Europe. If you look at Europe as a whole we have many different and divergent economy bases, some based on manufacturing, and some based on tourism, with many others. To expect each and every one of these very different economy bases to be able to hold the value of the euro to within such very tight limits is just not practical. To turn their economies round, what most of Europe needs is not increased borrowing leading to unsustainable debt, but growth and increased tax revenue, and this can only comes from creating a climate of stimulating higher employment levels, and investment in business by lower taxes, on both people and business. Most of the euro zone countries need to devalue their currency to create this climate for growth, but the single currency prevents this, which leads to the inevitable conclusion that the euro is in fact a dead duck. In theory, Europe's leaders created the temporary euro rescue fund, the European Financial Stability Facility (EFSF) and its successor, the European Stability Mechanism (ESM), both headed by Germans (though some have different citizenships but the same origin) precisely to support countries facing financial bottlenecks. But providing more help for Greece would be a very tough sell for Europe's politicians. Chancellor Angela Merkel would have to get the consent of the German parliament, the Bundestag, which could prove tricky. And Merkel's junior coalition partner, the conservative Bavarian Christian Social Union (CSU), has been adopting an increasing shrill tone against

Greece lately -- meaning that the government could plunge into crisis if the chancellor supports more aid for Athens. For some weeks now, it has been clear that the Greeks would run out of money this summer. And there is no emergency backup plan in place. Everyone has instead counted on the ECB. For his part, ECB chief Mario Draghi seems to have accepted this and allowed the leaders of the euro-zone countries to force him into the role of the pragmatic emergency helper. ... For now, the priority for Greece is to keep its head above water until it receives its next planned bailout payment. The troika overseeing Greece's aid package, comprised of the European Commission, the ECB and the International Monetary Fund (IMF) and headed by Horst Reichenbach, The German Governor of Greece is expected to decide on the payment of the next tranche of 31 billion in September. In terms of communication, it appears that the troika is already trying to pave the path for a "yes" on the tranche payout. Recently, it gave unexpected praise for an agreement that would see Greece introduce additional austerity measures worth 11.5 billion in 2013 and 2014. "Talks went well, we made good progress," the IMF's mission chief for Greece, Poul Thomsen, told reporters. And the troika has stated that progress has been made with Greece's plans to privatize state-owned assets. The Greek government is claiming it will have binding offers for the sale of state gas company Depa and the gas grid operator DESPA by the end of September. The message is meant to be that things are moving forward. Meanwhile, Greek Prime Minister Antonis Samaras wants to do a bit of hustling before the governor of Greece Mr Horst Reichenbach issues his decision. He is planning visits to Germany and France at the end of August. The Greek media have already reported on his plans for the trip: Samaras wants to ward off Greece's "quick euro death."....well there is no "troika" - there is a German expansion however and Greece is a test site for what it is to follow for the entire Europe.
Date: august 20.2012

Mircea Halaciuga, Esq. 004.0724.58.1078 PROXEMIS - Managementul Riscurilor