What in the world is going on in Europe? Each day things just seem to get stranger and stranger. We are being told that a “deal” for a second Greek bailout has been reached and that Greece will not default in March.
But behind the scenes it seems clear that many politicians in Germany (and in the other northern European countries as well) would like to kick Greece out of the euro. So what exactly is happening here? Well, it is complicated.
The United States, along with other members of the international community, put a tremendous amount of pressure on Germany to bail out Greece one more time. Germany does not want to look like the bad guy, so they are going along with this bailout but they are also imposing conditions on Greece this time that will be almost impossible to meet.
And when Greece fails to meet its “obligations”, that will give the northern Europeans the excuse that they need to kick Greece out of the euro. At this point, many politicians in northern Europe are convinced that Greece is a “lost cause” and that it is not fair to ask northern European nations to pay the price for the financial mistakes of Greece.
Greece is basically completely and totally bankrupt, and the nations of northern Europe don’t want to have a “financial dependent” on their books forever. They are looking for a “way out”, and this new agreement lays the foundation for that.
Right now, Greece is experiencing depression-like conditions. The following description of what life is like in Athens these days is from a recent Daily Mail article….
What is so shockingly evident as you walk around Athens are the awful parallels between that war-time era and today. The soup kitchens, the beggars, the pensioners picking up discarded vegetables after street markets close, the homeless scavenging for food in bins. These are the signs that can be seen.
Less noticeable is the quiet desperation of dignified people who turn off heating despite the cold and share dwindling savings with jobless relatives. Or the workers unable to afford fares home and the children fainting in school from hunger.
Greece is an economic basket case at this juncture, and many northern Europeans are not keen on the idea of endlessly supporting Greece financially.
The way that the other nations of Europe have been torturing Greece makes it clear that their patience is running out. The outrageous austerity demands that the EU and the IMF made on Greece this time were so oppressive that many believed that Greece would never agree to them. It was thought that Greece might finally be forced out of the euro.
But the current Greek government desperately wants to stay in the eurozone and the Greek Parliament did agree to them.
Unfortunately for the Greek government, they are going to be watched much more closely this time. In essence, they will be under the microscope. If they slip up, and they almost certainly will, that will give those that wish to abandon Greece the ammunition that they need.