‘Grecian Formula’ eludes greying economies of Europe
As CalculatedRisk noted last week, Greece is the word….Germany seems to remember the Weimar Republic, they aren’t going into bailout mode easily…their demographics in Western Europe seem to make their entitlement policies unsustainable (excluding Germany)…
Germany rejects the idea of setting up a special fund to bail out eurozone countries, like Greece, that run into fiscal trouble because budgetary problems must be solved at the root, the Finance Ministry said Monday.Spokesman Michael Offer told reporters that a European equivalent to the International Monetary Fund, as has been floated in the German media, “does not appear to be the solution” to a problem such as that plaguing Greece, because it does not get to the “root” of the problem.
Greece must reduce its budget deficit by four percentage points this year and bring it down to 3 percent of gross domestic product by 2012, Offer said. That is in line with requirements for participation in the common currency.
“The problem is in Greece and therefore there is no way around … the painful austerity measures,” he said. Offer stressed that the IMF, which provides loans to nations in budgetary crisis, would be limited to “technical assistance.”
Financial Minister Wolfgang Schaeuble underlined in an interview with the Frankfurter Rundschau newspaper on Saturday that responsibility for the euro lies with the 16 eurozone countries. “There is no textbook that explains what to do when a land within a monetary union goes bankrupt. There is no precedent” for such a case, Schaeuble was quoted as saying.
And get a load of Schaeuble’s comment:
“The state of California does not go to the IMF for help,” Schaeuble said…
To which I reply..sure not yet! Give the public unions a few minutes to figure out how to strongarm you and Andy Stern will be there momentarily…But seriously, if they bailout Greece the rest of the PIGS are next. Same here with Obama bailing out Cali..but SEIU made Obama so ya know, he will find a way, stimulus/jobs bill/green jobs bill, whatever he calls it, is is bailouts to state government workers he is about….unsustainable…