Mon Jul 6th, 2015 at 03:08:14 PM EST
It is my impression that still many are assuming that somehow the Eurogroup or Germany are bluffing. This seams for me to be a huge miscalculation. We should consider a couple of important facts. Lets start with the general policy directions of all European leaders but those of Greece:
- All European leaders agree that a specific set of structural reforms are necessary to create a strong economy and reduce unemployment. Especially it needs to be easer to fire people.
- All European leaders agree that government spending needs to be reduced. On the speed of the reduction there are certainly differences, but in total there is agreement.
The fact that there is total agreement on this points certainly creates certainly a strong feedback loop which makes this an absolute truth.
Now what about the European people. Here we also might not have an anti-austerity majority in the Eurozone. Especially in eastern europe* it seams possible that large majorities support the current Eurozone actions. And while 5 Stars and Podemos are going strong, they are far away from being able to capture the governments of their respective countries.
Now the results to the Oxi, is become more visible. Nothing. The European Central Bank has now imposed extra conditions for the collateral of Greek Banks, so the Banks are not going to open any time soon.
Hollande and Merkel have met and their message to Greece is clear: Nothing.
I am not sure where all this is going but it is not good.
Update [2015-7-7 3:33:19 by rz]:*: an informative take on the 'Central European' political situation from Dodo from another threat:
First my usual geographical sidenote: I assume you meant the part of Central Europe east of Germany (and shifted Russia to Asia :-)).
If we look at the Eurogroup, you have
the Baltic states, all of which have gone through different levels of hardcore austerity, massive emigration and have US-groomed neoliberal elites who implemented radical policies like flat tax, and who think they actually preside over "reform" successes.
Slovakia, which has a left-populist government but one with hollow promises and no clue about truly leftist economics. The first(?) Greek bailout was close to election time, and this birthed an anti-Greece tone (coming both from the then opposition and the then right-wing government) based on the fact that most Slovakians are still poorer than Greeks, so the Northern European false story of "they spend our tax money" got the added flavour "to live better than us but then complain, the swindlers". During and after the last Eurogroup talks, Slovakia's finance minister was even more venomous than Schäuble. As I wrote earlier, here the Syriza government probably missed a chance: they focused on France & Italy, although the Slovakian government could have been reminded that public outrage about healthcare privatisation played a large part in their election victory.
I haven't read up about the position of the current Slovenian government.
However, I think Germany got the strongest support for the strict austerity policy in general not from Central Europe but Finland and the Netherlands. And against Greece, perversely, from the quisling governments of the other PIGS. And, while France and Italy make the most noises for a different approach, you can't underestimate the damage Hollande and Renzi did by joining Merkel & Gabriel's "this referendum is about staying in the Euro" regime change attempt.
All in all, the result is that the now completely nuts German political elite and its completely nuts domestic echo chamber get 100% support from other Eurozone elites minus Greece to maintain their parallel reality.