Europe’s Crazy Girlfriend

There she is. Sobbing on the phone. Making threats. Trashing her bedroom. And of course, making all sorts of promises to stay in the relationship.

Meanwhile, Ireland is holding her breath and crossing her fingers. News radio here is breathless and buzzing with anticipation with whether this is the “Big One” – whether today’s teleconference will push Greece further to the brink, or indeed – over it. The way it has been painted is that if Greece goes, Portugal could be next. And then, Gd help us – what happens to Ireland?

Hmm. Better pick up a few more pound notes when I go get the kids today…

14 thoughts on “Europe’s Crazy Girlfriend”

  1. I am seeing a picture the Greeks make of Angela Merkel dressed as a Nazi – as if the Germans are to blame for Greek financial behavior.

  2. @Bill – Only to the extent that they aren’t showing the Greeks the door. If Greece is the crazy girlfriend, then Germany is the enabling boyfriend or parent, trying to pretend that this situation can be saved in front of the relatives. However, if rumors are to be believed, even the Germans are hedging their bets…

  3. @Telegram: Not only are they not showing the Greeks the door, they pretend that there isn’t a door at all. That seems to have changed recently, but dragging out this whole mess has been anything but helpful.

  4. Greece is probably lost. Even the reforms that led to the riots won’t be enough.

    But I don’t understand the fears for Ireland. I listen to RTE over WRN during my evening commute – a show named “Drive Time.” From what I hear, Ireland is doing all the things Greece should have done. Am I missing something?


    The two teams of expelled MPs are strong enough to create two new parties: one at PASOK’s left perhaps (although most of them are also in disrepute exactly for following the PASOK leadership’s orders for so long)and one at ND’s populist right. Panos Kammenos, an economic populist (and virulent nationalist, it has to be said) is said to be preparing such a party,
    though not all of the MPs who were expelled would feel comfortable in such a political environment.

    The problem is the banksters, even from a populist-nationalist Right perspective.
    You’ll evidently be siding with them when it finally hits here.

  6. In my town, the town runs a restaurant at a loss. No matter how fraudulent the banksters are, the town shouldn’t be doing that. Contract it out or outright sell the place. In my county, the county runs an amusement park. They should not be doing that even when they turn a profit. One is not siding with the banksters when one advocates reform to improve performance.

  7. @Telegram from Innisfree – if we take this analogy further – that Germany is the enabling boyfriend, then the crazy girlfriend is throwing a toaster, and anything else she can find, while screaming at him ;-)

  8. More like the Germans have been taking Greece down to the store they own at the mall, encouraging her to max out her credit cards buying from it, and co-signing on all her loans. Nobody noticed that when they co-signed the signature always read “Mickey Mouse”. Now the cards are in collection and the lenders are telling the Germans they can’t expect to get away with that crap. So the Germans, with great bitching and whining, are telling her they’ll make the card payments but she’s got to do a few extra services to make up for it…

  9. John Wolfsberger, Jr

    But I don’t understand the fears for Ireland. I listen to RTE over WRN during my evening commute – a show named “Drive Time.” From what I hear, Ireland is doing all the things Greece should have done. Am I missing something?

    You are missing this, because it isn’t usually being reported:

    When compared with Greece, Ireland is carrying more than two-and-a-half times more debt. We are twice as indebted as Portugal.

    This deterioration happened when we were members of the euro. When we borrowed hand over fist from German and British banks in particular.

    The implication of this figure is that the Irish economy has to grow six times faster than the interest rate charged on this debt in order for the overall debt burden to remain stable. Assuming that the rate of interest — even with all the negotiations — is 4pc. This means that the Irish economy would have to grow by 24pc next year, just to ensure that the debt/GDP ratio stays stable.

    While Irish industry is competitive inside the Eurozone or without, things aren’t good now and will quickly turn ugly once Ireland experiences even a minor economic crisis, for the debt-to-GDP ratio (a much more important indicator than debt in absolute numbers) will worsen quickly.

  10. As to Greece and some other countries around the Mediterranean Sea: Before they entered the Euro, they had to rely on frequent devaluations of their currencies to stay competitive. Without those devaluations Greece (and maybe some others) will simply grow ever weaker inside the Eurozone. Under these circumstances, austerity makes things even worse. The Greek economy doesn’t get enough revenue from abroad as it is and austerity is diminishing domestic purchasing power. The result is that debt grows ever larger in respect to GDP.

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