Europe's Game Of Chicken Enters The Twilight Zone
Europe's game of chicken, all of which is geared to one simple thing - to spook the Greeks into voting for pro-bailout powers, and against Syriza - has now officially entered the Twilight Zone. In the latest episode of what can now simply be described as the world's most entertaining yet terrifying mutual assured destruction showdown, because should Greece leave, the destruction, at least in the short-term, will impact both Europe and Greece, although Greece will recover far, far faster as the standard of living there has already been crushed (which incidentally is the primary reason why Europe has lost control over the situation: without the carrot of welfare state promises, a Ponzi regime is meaningless), we learn that on Monday a Eurogroup Working Group held a teleconference in which officials "agreed to prepare for individual contingency plans if and when Greece exits." Here is the problem - the contingency plan can be summarized in one word: panic. Because absent a full blown coordinated monetary intervention, Europe's individual states are completely powerless, and they know it. Sadly, and this is where the farce and charade are complete, the Greek people know it too. As a result, this little adventure, leaked subsequently to Reuters, loses all utility. But we expect many more such escalations from Europe: after all we have nearly a full month before June 17: plenty of time to crush the market in order to get a reaction out of the Greek voters, European politicians and ECB bankers, just as Citigroup suggested. Only issue is, the more Greek voters are prodded into a corner, the more likely they are to simply snap.
The agreement was reached during a teleconference of the Eurogroup Working Group (EWG), which started at 9:00 a.m. EDT (1300 GMT) on Monday and lasted for about one hour.
As well as confirmation from two officials, Reuters has seen a memo drawn up by one member state detailing some of the elements that euro zone countries should consider.
The EWG consists of officials who prepare meetings of finance ministers and also form the board of the temporary bailout fund, the European Financial Stability Facility (EFSF).
"The EWG agreed that each euro zone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit from the euro," said one euro zone official familiar with what was discussion on the call.
"Nothing was prepared so far on the euro zone level for now, for fear of leaks," the official said.
A second official confirmed the EWG agreement on Monday.
The document detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought. It also said that Greece decides to leave, support could be given from the EU/IMF to help it do so.
And since the EU will be in the process of falling apart, and thus unlikely to provide much if any support, the only real source of funding will be the IMF.
That's right: you, America.