Greeks delay bailout talks as Merkel demands action

[dipsydoodle]

(Reuters) - German Chancellor Angela Merkel told Greece on Monday to make up its mind fast on accepting the painful terms for a new EU/IMF bailout, but the country's political leaders responded by delaying their decision for yet another day.

Failure to strike a deal to secure the 130 billion euro ($170 billion) rescue - much of which Germany will fund - risks pushing Athens into a chaotic debt default which could threaten its future in the euro zone.

Speaking in Paris, Merkel expressed the exasperation spreading among euro zone leaders at seemingly endless wrangling in Athens that has yet to produce a definitive acceptance of the austerity and reform conditions demanded by the lenders.

"I honestly can't understand how additional days will help. Time is of the essence. A lot is at stake for the entire euro zone," she told a news conference with President Nicolas Sarkozy.

http://www.reuters.com/article/2012/02/06/us-greece-idUSTRE8120HI20120206

[MNBrewer]

1. The Greeks should tell Merkel to stick it where the sun don't shine

[DallasNE]

2. Merkel Is Heartless And Nuts

Greece has a current unemployment rate of 18.2% and she is demanding that the govenment slashes still more jobs. The country has suffered through 5 years of recessions and she demands that the minimum wage be cut. There has already been wave after wave of austerity measures put in place and they haven't had the desired outcome so what makes her think that this time will be different. Merkel's formula is exactly backwards for what is called for. The European Central Bank need to commence on a program of quantative easing to provide liquidity into the Euro zone so economies can expand, not contract. Now Greece does have problems that need to be addressed but why not tie them to a change in monetary policy. Being heartless only makes matters worse. Much worse. Merkel and Sarkozy must go.

[Snake Alchemist]

3. As the saying goes, "He who pays the piper chooses the tune."

The other option is going back to the drachma which would be incredibly painful in the short term and would have it's own austerity of a sort, but would likely be better in the long term.

[amandabeech]

4. Citibank upped its prediction of the chances for Greece to revert to the drachma today.

Formerly, Citi had the changes at 30-35%.

Today it went for 50.

No info on chances for the other PIIGS to exit the Eurozone.

[DallasNE]

5. I Hear A Lot Of People Saying That

But fail to see how it helps in the long run. And how long before Spain, Italy and Portugal are also shoved over the cliff by Germany. I think my way would be a lot less painful, both in the short term and long term. There is simply no reason for draconion measures. Greece has already been in recession for 5 years. Going Merkel's way would make for a permanent recession in Greece because European banks would continually have them by the throat. Doesn't anybody have a clue over there?

[Gringostan]

6. The Greeks need to tell the banks

The Greeks need to tell the banks to go pound sand; this is not a problem created by the Greek population, it's a money issue - we need to do the same here in America.

[dipsydoodle]

7. The difference being

that the US government can just print fiat money : the Greeks can't.

Dont forget that when Greece folds Goldman Sachs and AIG will need bailing out again.

[flobee1]

8. Goldman Sachs and AIG will need bailing out again

If that happens-EVERYBODY should overrun gov. offices with email, phonecalls and protests.
That scenario must not be allowed to happen.

[dipsydoodle]

9. Bigtime

they hold the bag on the CDSs.

[flobee1]

10. Really-find bohener, find Obama

Find every elected official you are able to locate. If they dont allow you in the building, pound on the windows and yell. Surround the building and dont let them out! These banks dont get another cent. PERIOD!

[DallasNE]

12. The European Central Bank

Can just print money too -- and in fact, that is just what they should do. They could also lower interest rates as inflation is nowhere to be seen. But the European Central Bank does not have the same level of indpendence as our Federal Reserve and that is one of the problems Merkel refuses to address.

[rayofreason]

11. Greece needs to default and exit the euro.

Of course, it will be extremely painful, and the short-term cuts will be more than what the Germans want. That is because Greece is running a primary deficit - It can default on all its loans, not pay a penny on interest, and still it will run a deficit. The difference is that after a default, no one will lend the Greeks money.

Would you lend your money to the Greeks (perhaps the contents of your savings account, 401K, or IRA), knowing that they are still running big deficits and that they would price your loan in Drachmas?

I didn't think so.

So with no one to loan them money, and running a deficit, what can they do? Print Drachmas like crazy and watch the value fall as everyone in Greece gets hammered and all the things that Greeks import (medicine, etc.) grow scarce.

It will be horrible indeed. But at least they would be the masters of their own fate.

And yes, this is a problem created by the Greek population, for whom tax avoidance is the national sport, in concert with their politicians, who lied and bought their votes. You cannot spend and live a standard of living far above what you produce and expect others to loan you the money to do it for ever. They will probably have to drop back to the income level a decade ago, or even more.

http://www.tradingeconomics.com/greece/gdp-per-capita-ppp

It is time for the Greeks to grab control of their own destiny, not leave it in the hands of others, and face the reality of what that means.