European news outlets are reporting that a “senior source” in the German coalition government has said that European governments have decided in principle to help Greece.
Financial Times Deutschland is reporting that the German government is preparing a plan to help Greece.
That goes along with comments from that senior source that the most likely form of aid will be bilateral. That description would fit a German aid package.
doydum,
I’ve read enough of Krugman’s editorials to recognize him as a brilliant mind who mistakenly lets his emotions rule over his better judgement. He is the living embodiment of the old saying, “A mind is a terrible thing to waste”, but he certainly manages to do it.
EdMcGon,
I strongly recommend you read “The Conscience of a Liberal” to understand what Krugman advocates. Don’t believe everything you are told. Go to the source my friend:
http://www.amazon.com/Conscience-Liberal-Paul-Krugman/dp/0393333132/ref=sr_1_1?ie=UTF8&s=books&qid=1265811117&sr=8-1
One other thing. My point was that what good would it have done to unify Europe’s fiscal and labor markets if no one could have foreseen the problem, as Krugman says?
The problem is Krugman’s economic knowledge runs over his political bias, which is clearly in favor of more centralized government power. Frankly, I’m surprised he isn’t China’s biggest cheerleader.
>Would you prefer USA to disintegrate into separate states?
Yes.
> Gotta love Krugman! On the one hand, he says no one could have foreseen the mess in Europe.
On the contrary…
He was saying all along that a unified currency (Euro) without truly unified fiscal policies and labor markets was a bad idea. Euro is the straight jacket Spain is in right now. Greece’s problem is pure fiscal irresponsibility, a la USA.
There is nothing wrong with being united. Would you prefer USA to disintegrate into separate states?
doydum,
Gotta love Krugman! On the one hand, he says no one could have foreseen the mess in Europe. On the other hand, he calls for more centralized control over Europe’s economy to deal with this. This begs the question: If no one can foresee a problem, how is more centralized control supposed to prevent it?
As usual, Krugman mixes his politics with his economics to come up with the wrong solution.
Strongly agree with drevil. How else do you show you are the boss? Besides, Germans (Europeans in general) are used to being taxed unlike Americans.
Greece is small potato and can be easily saved by Germany. Spain is a bigger bite to chew. But on the other hand, Spain and Greece are different stories. Greece is a mess, Spain is not. Please read:
http://krugman.blogs.nytimes.com/2010/02/09/anatomy-of-a-euromess/
Germany wants to continue to be the hegemony of the EU. To do so it needs to bail out Greece to show it can. But there will be strings attached this time. They are still sensitive about prior sins but Germany is ready to flex its power with money and not a war machine. Where is France all this while? They must not be too far behind Spain.
Jim,
Perhaps, but if the German economy tanks, the next election could be ugly for German incumbants (“Politician X voted to help the irresponsible Greeks, and then taxed YOU for it…”).
EdM: Germany just had an election. Guess the hope is that voters will have forgotten (or have something else to worry about) by the next time they vote.
And
The wheels on the bus go round and round, round and round, round and round….
I wouldn’t be surprised to see the eurozone come up with some deal that creates a “time out” or “penalty box” whereby help is pro offered with the understanding that excepting that help puts the offending country on notice “ or in a time out” whereby if they do not meet with certain numbers and reduction of debt levels that by and by that country is removed from the euro zone until that time that they can prove (On somebody else’s dime) that they have made the proper concessions to show that they are serious about reducing debt, and only then be reviewed for a fast track reentry into the eurozone economies…
DJ,
You missed an important Chinese link:
http://www.reuters.com/article/idUSTRE6183KG20100209
Basically, some Chinese military officers are recommending the sale of U.S. bonds in order to punish Washington for their arms sale to Taiwan.
And I’m just wondering what surprise Iran has for us on Thursday? Stay tuned…
“China builds stakes in Canadian mining companies”
http://www.theglobeandmail.com/report-on-business/china-builds-stakes-in-canadian-mining-companies/article1460614/
http://www.bloomberg.com/apps/news?pid=20601109&sid=aMnAdzyfPl0A&pos=10
“Investors are turning a deaf ear to EU officials as Greece’s fiscal woes focus their attention on gaping budget deficits across the euro region’s southern fringe. Credit- default swaps on Spain and Portugal rose to a record yesterday.
“Greece, Portugal and Spain have the most challenging fundamentals but Italy and Belgium could also start to raise some concerns,” said HSBC’s Henry.
“
Which begs the question: How do they plan to pay for helping Greece? Let’s add Germany to the PIIGS list.
By the way, if I was German, I’d be really ticked off about this. This doesn’t bode well for German politicians who agree to this.