Thursday, May 17, 2012

Greek Kamikaze Pilots?

The Lehmann Letter (SM)
Is Europe’s drama just high-stakes bluffing? Or do these folks mean what they say? Is it possible that the situation is so fluid that the authorities’ positions are evolving? More darkly, are some Greek politicians “kamikaze pilots” (as a recent New York Times article put it), bent on self-destruction for the nation they seek to lead?

Stock markets began today with losses stemming from continued concerns over Greece’s struggles and their impact on Europe.

This letter believes that Europe will, once again, muddle through. But today’s news reports are so contradictory it is difficult to get a grip on events.

For instance, The New York Times began an article with the title, “Softening, Merkel Says She Is Open to Stimulus for Greece,” with this paragraph:

“Chancellor Angela Merkel of Germany said Wednesday that she was ready to discuss stimulus programs to get the Greek economy growing again and that she was committed to keeping Greece in the euro zone, signaling a softer approach toward the struggling country.”

Consider, however, these words in a Wall Street Journal article captioned, “Greece Sets Showdown Vote Over Euro:”

“Officials from Germany and European Union authorities reiterated Wednesday that Greece needs wrenching economic overhauls to stay inside the common currency…..

“German and European Central Bank officials have suggested in recent days that the euro zone would be able to deal with the financial fallout from a Greek exit, and that contagion in other struggling euro members would be manageable…..”


“Syriza's popular leader Alexis Tsipras dismisses the threats to force Greece's return to the drachma if the country abandons austerity, calling it a "caramel that has already melted," and saying Greeks, having "already been so sorely tested, cannot be blackmailed further."

Wow! Fighting words…….

We’ll see.

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© 2012 Michael B. Lehmann

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