Crisis in Greece leaves EU future in balance

[karmakramer]

 

Europe was threatened with its gravest modern crisis tonight as Germany warned that the EU's future was on the line in the Greek emergency.

 

The spiralling tension over Greece's ballooning debts and Europe's first ever bailout of a country in the single currency has exposed fundamental questions about the EU and Germany's pivotal role as the union's biggest power.

 

In Berlin, where Chancellor Angela Merkel faces a groundswell of hostility to sending the Greeks a €22bn lifeline next week, leaders issued stark warnings about the prospects for the EU and insisted on a punitive new regime for the 16 euro countries if the monetary union is to survive.

 

The leaders of the eurozone's 16 nations are to assemble for an emergency summit on the Greek crisis in Brussels on Friday evening, with the mood bleak and the stakes high.

 

"Europe is at a crossroads," Merkel declared to the German parliament in Berlin today. "This is about no more and no less than the future of Europe and about Germany's future in Europe."

 

Her sombre tone was echoed by the opposition leader and former foreign minister, Frank-Walter Steinmeier, who said the Greek crisis presented the EU with its biggest challenge since the union was created in the 1950s.

 

The strongest warnings in months of wrangling in Berlin over how to respond to the first risk of national insolvency in Europe's single currency zone coincided with an explosion of anger in Greece, where households face years of hardship and declining living standards to meet the terms of the bailout from the eurozone and the International Monetary Fund.

 

There is strong scepticism in the financial markets over whether the bailout will work and over whether the Papandreou government in Athens will be able to deliver its side of the bargain. Should Greece renege on the terms of a €110bn rescue package, agreed at the weekend, it will lose the funds, say European leaders. It would then face financial collapse, defaulting on some €300bn of sovereign debt. There are also increasing warnings of the debt crisis cascading across the Mediterranean into Portugal and Spain. The tensions within the eurozone could see the single currency unravelling.

 

Merkel comes to Friday evening's summit in Brussels armed with stiff new prescriptions to defend the euro and ringfence the Greek crisis. She is also engaged in a simmering power struggle with the European Commission over who should police the new regime – Brussels or the member states.

 

After months of prevarication and deep reluctance to come to Greece's rescue, she committed passionately to the bailout today, portraying herself as the saviour of the euro and Berlin as indispensable to a solution. "Europe is looking to Germany today," she declared. "Without us or against us, there will be no decision."

 

In return for leading the rescue attempt, Germany is demanding new rules and penalties for the 16 countries taking part in the single currency.

 

The 16 could not keep muddling along turning a blind eye to the fudges and fiddling of fiscal miscreants, she argued. Instead, persistent breakers of the euro rules could be "suspended" from the single currency, fiscal sinners would have to forfeit their voting rights in EU councils, and would lose EU subsidies.

 

If there was no alternative, a country using the euro should be allowed to go insolvent, meaning hundreds of billions in losses for international banks and other creditors. This was seen as a warning to the markets betting on a country's sovereign debt default, while confident that investors would recoup their money from European and German bailouts.

 

As a last resort, Wolfgang Schaeuble, the German finance minister, is proposing that a persistent rule-breaker be expelled from the eurozone, though not from the EU. Olli Rehn, the European commissioner for monetary affairs, is to unveil proposals next week for new rules that would give Brussels the power to scrutinise national budgets, withhold EU funds, and impose penalties in the eurozone.

 

The Germans support and oppose some of Rehn's measures, but are against vesting the powers in the European Commission. Merkel's proposals are radical and would require renegotiating the Lisbon Treaty defining how the EU works. Few leaders in Europe have the stomach for that.

 

The stark warnings came only three days after 15 EU countries and the IMF agreed to rescue the stricken Greek economy. As Germany, Europe's economic powerhouse, is liable for more than 22 of the eurozone's €80bn. But the bailout is unpopular with Germans and costly politically for a chancellor facing a crucial regional election in the large state of North-Rhine Westphalia this weekend.

 

But parliament in Berlin is expected to give a green light for the bailout so the funds can be released before 19 May, when Greece has to redeem €8.5bn of debt.

 

http://www.guardian.co.uk/world/2010/may/05/greece-crisis-threatens-eu-future-merkel-germany

 

[megapussi]

lively people, those greeks.

 

what is funny is that many eu countries have to borrow money to lend it to greece

 

[Guest bigs]

in america, we riot over sports games.

[Dale]

just have to wait for this to be a global crisis

it's the monetary system collapsing as we speak - and mathematically, it is an inevitability.

[elusive4]

wiped out all my gains for the year

thanks, assholes

[Guest ezkerraldean]

Fuck those dirty Greeks. They literally lied to get into the Eurozone, they shouldn't be in the EU

 

nor should Romania or Bulgaria. Stop fucking up my EU with your shitty dirt poor countries!

 

just have to wait for this to be a global crisis

it's the monetary system collapsing as we speak - and mathematically, it is an inevitability.

this happens most years, somewhere in the world. how come the monetary system didn't collapse those times?

[Alcofribas]

*calmly drinks hemlock*

[Guest Rambo]

Fucking lol at that guy in The Who t-shirt. He's been waiting to do this since he was 15

[Guest bigs]

Fucking lol at that guy in The Who t-shirt. He's been waiting to do this since he was 15

hahahhaha this was almost exactly my thought when i saw that picture

[Guest Rambo]

lol

[Salvatorin]

I like dude in the bottom most picture with the red shades and a white sheet covering his head.

[vamos scorcho]

just have to wait for this to be a global crisis

it's the monetary system collapsing as we speak - and mathematically, it is an inevitability.

 

do you have any studies or anything to back this up because when i read stuff like this it freaks me out, and if you don't know what you're talking about you really ought not to say anything

[Hoodie]

Fuck those dirty Greeks. They literally lied to get into the Eurozone, they shouldn't be in the EU

 

nor should Romania or Bulgaria. Stop fucking up my EU with your shitty dirt poor countries!

seriously man?

[azatoth]

greece has been a right mess for years. spending money right and left. people retire there as 50 year olds and their pension gets paid out to their kids if they die...wtf.

[lumpenprol]

just have to wait for this to be a global crisis

it's the monetary system collapsing as we speak - and mathematically, it is an inevitability.

 

all I want to know is who ended up with the most toys?

[Guest EDGEY]

Sooo... Is it really finally coming down to the "Us VS Them" scenario? Is the only option left at this point to kill and eat the fat bastards that benefit from a 400:1 income disparity? Believe me, I'm a capitalist, grew up blue collar in a family owned business, and always worked for 'mom and pop' shops, but if capitalism means 1 guy gets everything and the rest of us get nothing - I'm with the greeks.

 

They have the money, resources, power, and armed might... and they've taken it all from us. And even though we don't have anything left, they still ask for more. Riotmm.

[joshuatxuk]

Fucking lol at that guy in The Who t-shirt. He's been waiting to do this since he was 15

hahahhaha this was almost exactly my thought when i saw that picture

 

yeah this shit pisses me off, but that pic was pretty funny. these are also easily most well dressed rioters I've ever seen.

[Bob Dylan]

Those Olympic games sure helped the economy eh?

[awesomeperson]

these are also easily most well dressed rioters I've ever seen.

 

Seriously

[J3FF3R00]

Honestly, the way those Greeks can cook a lamb, those muthafuckas should all be driving Bentleys.

[vertsk8er419]

at least the people are doing something. the rioters have my solidarity.

[chenGOD]

yeah wrecking shit is really constructive.

 

edgey - yes capitalism with free market tendencies will always concentrate wealth in the hands of the few at the expense of the many.

 

Although EZkilla the Yid is a little rough around the edges, he's basically correct in saying that the Greeks, Romanians, Bulgarians and a lot of former Eastern Bloc countries pulled the wool over some eyes to get in the EU. There was almost certainly a lot of pressure from the US to include those countries quickly in the EU to stop them falling back into Communist type states.

 

Interesting times lie ahead. Hopefully this will see a return of the means of production come more into the hands of the people.

[Guest ezkerraldean]

Fuck those dirty Greeks. They literally lied to get into the Eurozone, they shouldn't be in the EU

 

nor should Romania or Bulgaria. Stop fucking up my EU with your shitty dirt poor countries!

seriously man?

yep. I love the EU and really want it to prosper, grow into a model for successful cooperation and integration and whatnot. but it expanded over-zealously and included countries that really shouldn't have been let in. it's not entirely the fault of those in the EU though - several of the incoming states covered up various dodgy bits in their economic figures to be allowed in. we're paying for that now. as much as i want to see the whole of Europe in the EU, the time isn't right for it yet. and I'd rather kick Greece out now than let it drag the rest of Europe down the shitter, and I say they've partially justified that themselved by lying to get in in the first place.

[Guest ezkerraldean]

Although EZkilla the Yid

hahaha

is a little rough around the edges,

my style y0

he's basically correct in saying that the Greeks, Romanians, Bulgarians and a lot of former Eastern Bloc countries pulled the wool over some eyes to get in the EU. There was almost certainly a lot of pressure from the US to include those countries quickly in the EU to stop them falling back into Communist type states.

from where i'm standing, it's only really those three. i've got nothing against Poland, Czech-land, Hungary and Slovenia being in the EU, they're actually decent countries that have run themselves quite well since commietimes. I'm really wary about further Balkan states joining, they're all completely backwards ultra-nationalist shit-holes, which is fundamentally incompatible with what the EU is.

[candlestickmaker]

wow ezkerraldean... just wow