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Germany's Roadmap For A Greek Return To The Drachma

Tyler Durden's picture


There has been much speculation about how the Greek endgame will play out, but precious little from the perspective of Germany. Until today. Courtesy of a three part series from Handeslblatt (here, here and here) we now know precisely what the next steps are as visualized by Europe's piggybank, which now is telegraphing it is set to cut Europe's most wayward child loose.

Step-by-step summary:

  1. Greece cannot stand by the spending cuts expected by the Troika. €11.5 Bn until June
  2. The creditors refuse the payment of the next tranche. Greece must pay €30 Bn until the end of June, to pay pensions, civil servants salaries, and support its ailing banking sector.
  3. Greece cannot service its debt anymore. Which means essentially service its debt to debtors like banks, bringing its banking sector to a likely bankruptcy (remember Greek banks were already hardly met by the 80 Bn PSI in March, 2 big Greek banks already have negative equity).
  4. Greece must save its banks to avoid a bank run. There will be no other way than reintroducing the Drachma since no one will lend them money, IMF or EU.
  5. Greece gets out of the Euro and reintroduces Drachma. "It wouldn’t be that easy since to avoid panic and a bank run, a banking holiday (perhaps a week) would be necessary.Even with capital controls with foreign contries, the process would remain technically difficult. For the Greeks this would mean serious consequences as loans would see the value drop and prices would go up. On the short term, the competitiveness of the country would improve. According to economists, a 50% depreciation would be necessary. That would, at least theoretically, mean that holidays in Greece would be substantially cheaper. It can still be doubted that Greece would solve its problems its way. Who wants to spend there its holidays , where unrest and chaos reign. “Greece could earn air to breath on the short term. This would change nothing to its problems on the longer term”, Commerzbank economist Christoph Weil says."

Much more in the full Handelsblatt series.

The only question is now that the return of the Drachma appears set, how long before the "Greek case" metastatizes to Spain, which is already roughly where Greece was about a year ago, with the bank sector now effectively having seized up, and the only question is how soon until the sovereign debt has to get the "PSI" treatment.


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Wed, 05/09/2012 - 12:23 | 2410244 NotApplicable
NotApplicable's picture

Roadmaps. Those always work.

Wed, 05/09/2012 - 12:33 | 2410271 gatorengineer
gatorengineer's picture


who needs them when you have a German Public Sector (GPS) willing to get you where you need to be....

Wed, 05/09/2012 - 12:43 | 2410310 AldousHuxley
AldousHuxley's picture

Greek finance minister Evangelos Venizelos: hey we are going out for all-you-can-eat lunch buffet at this German restaurant, you wanna go?

German finance minister Wolfgang Schäuble: no, I'm on an austerity diet. I brought my lunch.

or "talk to the hand pig"

or half way heil hitler

Wed, 05/09/2012 - 13:01 | 2410357 nope-1004
nope-1004's picture

Insolvency meet time.  Time, meet insolvency.

Not a matter of IF, just WHEN.  Sucks having made financial promises you can't keep.


Wed, 05/09/2012 - 13:29 | 2410388 LawsofPhysics
LawsofPhysics's picture

Yes, especially when the people you made those promises to have directions to your house.

Wed, 05/09/2012 - 13:34 | 2410470 Oh regional Indian
Oh regional Indian's picture

What dizzying speed all this is happenign at, eh? T'was just yesterday that Euro Zone Unity was paramount, tantamount and generally...mounted y'know.

And then along comes this past weekend. Nothing too great happens. Not tectonic anyways. And suddenly all we can see is the short hair on a greek arse disappearing down the debted hole of no return, with a diffic ult transition predicted.

WHAT is the other hand doing? So much distraction. 

Greeks will have to riot no mater what. If there is no money, there is no money. It's part of the script anyways. Fitting that the land of Playdough and Ariestoddler loses all reason. 

Such is how it is...



Wed, 05/09/2012 - 14:04 | 2410591 Chief KnocAHoma
Chief KnocAHoma's picture

I am still confused. Those Greeks sure can run a restaurant or liquor store, but give them a country and they fuck it up every time.

Wed, 05/09/2012 - 14:13 | 2410635 Oh regional Indian
Oh regional Indian's picture

Entrepreneurship does not scale well. At all. 

Perhaps the greek lesson is that we all need to collapse the system back to micro-operations. Not co-operations, just operations.


Wed, 05/09/2012 - 13:12 | 2410389 redpill
redpill's picture

"Who wants to spend there its holidays , where unrest and chaos reign."


Well if you dumb fuckers had allowed Greece to do this a year and a half ago with when it was already BLATANTLY OBVIOUS that this was the inevitable conclusion anyway, they wouldn't have had so much unrest and chaos.

Wed, 05/09/2012 - 15:15 | 2410946 resurger
resurger's picture


The Loss must be carried forward, there is no shortage of fall guys


Wed, 05/09/2012 - 14:00 | 2410576 Cole Younger
Cole Younger's picture

Its not as if those financial promises where in real money..Its just electronic digits and paper...

Wed, 05/09/2012 - 14:18 | 2410664 He_Who Carried ...
He_Who Carried The Sun's picture

The question is NOT whether Greece has massive problems,

it is a question of whether they are willing to do something about it

and elections and the whole history of bogus budgets show,

that they don't. End of story!

Wed, 05/09/2012 - 12:36 | 2410286 noses
noses's picture

Well... They should have bought a Garmin immediately. It would have adjusted the route selection immediately after going in the wrong direction.

Wed, 05/09/2012 - 12:40 | 2410305 CrimsonAvenger
CrimsonAvenger's picture

Don't you mean a Gartman?

Wed, 05/09/2012 - 12:26 | 2410252 evolutionx
evolutionx's picture

Bundesbank Target 2 new record:


644 Billions in April

+ 23 Billions from March!


Wed, 05/09/2012 - 12:28 | 2410258 cossack55
cossack55's picture

They should have pulled an Iceland years ago.  Course, they did get all that free money. 

Wed, 05/09/2012 - 12:30 | 2410260 agent default
agent default's picture

And what will happen to the rest of the periphery under such a scenario?  This may be the event that in the long run will break Europe's back.

Wed, 05/09/2012 - 12:32 | 2410262 bdc63
bdc63's picture

"... avoid a bank run ..."

who in their right mind would still be holding their money in a Greek bank for 'safe keeping'?

Wed, 05/09/2012 - 14:08 | 2410617 Chief KnocAHoma
Chief KnocAHoma's picture

LOL... oh you're funny. What is the worst that could happen? 

No your money is safer in the bank... it's not like the people running these instutions are greedy and have no character. They are bankers and only have the best interest of society as a whole in mind...nothing will happen to your deposits.

Wed, 05/09/2012 - 12:31 | 2410267 machineh
machineh's picture

Greece has no public holidays between May 1 and August 15th.

Let's pencil in Monday, June 25th, as the commencement of the Greek bank holiday.

Summertime blues, biTcheZ!

Wed, 05/09/2012 - 12:32 | 2410272 Fidel Sarcastro
Fidel Sarcastro's picture

This is bullish, right?

Wed, 05/09/2012 - 12:58 | 2410354 Belarusian Bull
Belarusian Bull's picture

Everything is!

Wed, 05/09/2012 - 14:01 | 2410587 Cole Younger
Cole Younger's picture

Must be...You can set your watch by the DOW. Market is going up, must be 11:00 am...

Wed, 05/09/2012 - 12:33 | 2410273 Blammo
Blammo's picture

Can modern Greeks read a map ...I wonder

Wed, 05/09/2012 - 12:34 | 2410275 mariner22
mariner22's picture

I would imagine gold coin dealers are doing great business today in Greece!

Wed, 05/09/2012 - 12:34 | 2410281 TooRichtoCare
TooRichtoCare's picture

how much would the germans pay to buy Mykonos?  

Then they could all run around in their little marble-bag Speedos, and not worry about having to wake up at 5:30 to nab the best poolside deckchairs, and they could listen to kraftwerk and the Scorpions all day long whilst sipping shitty retsina which reminds them of their own shitty riesling back home.

Wed, 05/09/2012 - 12:39 | 2410296 noses
noses's picture

Jealous because you always have to sleep off your all the cheap beer you drank the night before end never even got near the pool? Poor you.

Wed, 05/09/2012 - 12:35 | 2410283 Bag Of Meat
Bag Of Meat's picture

Venizelos just announced that he discussed two propositions for a government including PASOK with the Syriza leader, Tsipras.
Buy euro!!(sell tomorrow) 

Wed, 05/09/2012 - 12:37 | 2410294 bdc63
bdc63's picture

"Buy euro!!(sell tomorrow)"

Homey don't play that game ...

Wed, 05/09/2012 - 12:39 | 2410297 PR Guy
PR Guy's picture

I think Venizelos teaming up with those guys is the wild card and could happen.


Did Venizelos sign that Troika letter himself (committing to continue with cuts) or was it Papandreou who signed it for PASOK?

Wed, 05/09/2012 - 13:01 | 2410366 Loukanika the r...
Loukanika the riot dog's picture

They all had to sign committments even Samaras when he was in opposition before the last  coalition started. The EU wanted to make sure they had all the bases covered.

They didn't figure on the main parties getting their arses kicked in this last election.

Wed, 05/09/2012 - 22:18 | 2411994 mjcOH1
mjcOH1's picture

Well it's lucky they got those commitments rather than loan payment promises!   Cause those didnt work so well but these must be worth more.

Wed, 05/09/2012 - 12:38 | 2410289 PR Guy
PR Guy's picture

Isn't the likelihood that there's a step 3.5


 i.e. Greek Generals step in and start shooting (Creditors hopefully)?

Wed, 05/09/2012 - 12:37 | 2410290 Jason T
Jason T's picture

Waiting for the Edward III debt default moment to usher in the new dark age and perhaps another plauge.

Wed, 05/09/2012 - 12:44 | 2410315 Sandmann
Sandmann's picture

Greece defaults and retains its gold. It makes itself a super tourist destination and sucks all those tourists out of Non-Euro Turkey. It creates a tax haven to encourage Russian and Middle Eastern money. It invites Russian and Chinese investors. Governments nationalise banks throughout the EU. Geithner offers TARP 2,3 and 4 to US Banks and Happy Clappy Americans sing Halleluja.

It is all possible. Look how readily the US broke Kosovo out of Serbia, destroyed Libya, destroyed Iraq - noone asked about repaying loans or whether Iraq could pay the costs of invasion. Afghanistan - the Us did not ask the Chinese how many Treasuries they would buy to finance it and we don't see a US Debt Clock for Afghanistan - it simply gets done - just like the J-35 jet fighter - just buy them and hang the consequences


That is how life works. You are all CPAs fretting about the Audit - you never bothered when Wall Street was loading up on Dericvatives or when putting Lehman into liquidation.......but Greece....well the Greeks should take time off from hunting for food in garbage cans to wonder about poor Bond traders in hedge funds and their bonuses......right.

Wed, 05/09/2012 - 14:34 | 2410724 Jean
Jean's picture

Russia is the wild card here.  They could make a play, orthodox unity move.  Be interesting if they funded a greek "investment" by rising EU gas prices.

Wed, 05/09/2012 - 12:39 | 2410299 azzhatter
azzhatter's picture

Would be interesting to see where the piigs would be if this horrible EU experiment never started

Wed, 05/09/2012 - 12:39 | 2410300 Jacque Itch
Jacque Itch's picture

Gold and Silver bugs beware:  Forced selling is gonna test your mettle (metal!) during the upcoming collapse.  We have only just begun the unwind.  It could be years.

Wed, 05/09/2012 - 12:49 | 2410323 Sophist Economicus
Sophist Economicus's picture

Nonsense.   During every bull run, investors have been thrown off at exactly these correction cycles, only to watch the correction stop and the market turn-around.    The tech bubble was a classic case of folks not having the stomach to ride out the corrections when it was under-owned and the mantra of why the bull could no longer run made alot of sense.


Patience.   If you understand what gold is, this is an opportunity.    If you're overleveraged or just a trader in this market, you will probably be hosed.

Wed, 05/09/2012 - 12:54 | 2410338 LawsofPhysics
LawsofPhysics's picture

"patience, you will be dead soon" - fixed.

Wed, 05/09/2012 - 12:45 | 2410309 Sophist Economicus
Sophist Economicus's picture

The rest of the road-map once the Drachma gets introduced:


Everyone gets a massive haircut on the debt they OWE OR on promises they are OWED.   

Savers that had Euros, Gold or Silver in their mattresses or overseas should gain purchasing power

Government workers, 'social workers', career students, 'artists', lawyers, and other leaches of society become redundant - their ranks drastically reduced

Risk takers will look at opportunities and boot-strap new business activities - many will fail, but a few will take-off and a new class of entrepreneurs take hold

Those with savings will begin getting a real rate of return commensurate with risk

The indolent student class and the hangers-on will either provide productive services to society vie employment or monetizing other talents or find living off of others far more difficult than before

In 5 years, Greece become a more vibrant place to live - the shadow world of tax avoidance, the boon in specious educational majors, and the lack of a safety net slowly erodes the ranks of the parasites




Wed, 05/09/2012 - 12:55 | 2410330 LawsofPhysics
LawsofPhysics's picture

right.  Now please tell me this;  1) where is the energy coming from that is required in order to make all this happen, 2) who is providing it, and 3) will the energy producers continue to accept worthless paper or do the greeks have a huge stash of gold somewhere that they will be using to pay for the energy they need to make any economic recovery actually happen?

Wed, 05/09/2012 - 12:58 | 2410355 Joe The Plumber
Joe The Plumber's picture

Quality young pussy is highly fungible and liquid. I dont know any energy supplier who doesnt want any.

Demand is infinite

Wed, 05/09/2012 - 12:59 | 2410358 Sophist Economicus
Sophist Economicus's picture

Ewww!   Did you really use liquid in the same sentence as kitty...

Wed, 05/09/2012 - 13:09 | 2410380 LawsofPhysics
LawsofPhysics's picture

LOL, this is greece right.  Did you mean to say "quality young hairy..."


Wed, 05/09/2012 - 13:50 | 2410534 Joe The Plumber
Joe The Plumber's picture

I will bring a blade and shaving cream. Always prepared for that diamond in the rough

Wed, 05/09/2012 - 12:58 | 2410356 Sophist Economicus
Sophist Economicus's picture

Like most trade, it will come from products that they produce.  Greece will learn that only 'hard money', be it cheese, gold or yogurt is the path to obtain desperately needed resources they don't produce.

If they fail to understand that, well, then I guess they're screwed.   That realization should focus their human capital in the right direction.   I cannot wait for it to happen here!

Wed, 05/09/2012 - 13:10 | 2410384 LawsofPhysics
LawsofPhysics's picture

How does one "produce" anything without energy?-  FAIL.

Wed, 05/09/2012 - 13:39 | 2410454 Sophist Economicus
Sophist Economicus's picture

Ah yes.   There is no more energy.   Right.   And those with energy are husbanding it for trade for ONLY precious, rare products - LIKE US DOLLARS!    LOL


Poor Taiwan, Singapore, Japan, etc.....  They'll never produce anything because they have no indigenous energy....Oh wait, they do make stuff and get their energy!   Now, how is this possible????  Hmmmm.....

Wed, 05/09/2012 - 13:43 | 2410495 LawsofPhysics
LawsofPhysics's picture

Pay attention, who said that there was no more energy?  You obviously can not read.

The question is how much energy is in Greece numbnuts.

Moreover, the countries you mention do produce stuff because they also developed and are developing much of the new technology.  Now, please remind us all, what does Geece have to offer?  Thanks for playing, but you still FAIL.

Wed, 05/09/2012 - 13:55 | 2410551 Sophist Economicus
Sophist Economicus's picture

No, you cannot read.   I told you Greek companies will trade their products (MOSTLY FOODSTUFFS listed in post above) for 'currency' they can use to purchase energy.    Greece also has a tourism industry that can also generate 'currency.'  

Trade does not have to be direct with an oil producer for this to work.   For example, Greece produces Yogurt that is in demand by the USA and rest of Europe.   THey can exchange this for currency to purchase oil or natgas.    Greek companies can promise equity in businesses or cashflow streams to investors in exchange for 'curreny' to purchase the energy needed for production.


How hard is this anyway?    This has been going on since time began.   Are you confusing Greek companies with Greek government?   

BTW, name calling is the last resort for those with nothing else in their quill....

Wed, 05/09/2012 - 14:19 | 2410631 LawsofPhysics
LawsofPhysics's picture


Having been in agriculture almost thirty years I assure you that food production is very energy intensive. There isn't enough time to explain why you FAIL yet again.  You really think those "foodstuffs" cannot be produced elsewhere for less???

For the record, the greeks will suffer greatly, but they will survive.  Personally I think the greek companies should leverage their assets in the shipping industry in order to bring world trade to it's knees.  They are sailors after all and if the world won't negotiate, they could resort to piracy or sinking a few of those vessels in real inconvenient locations.  You talk about "foodstuffs", which are extremely energy intensive to produce, and then you ignore an area where the greeks and greek companies have tremendous assets.  Again, thanks for playing, but FAIL.

Wed, 05/09/2012 - 14:21 | 2410688 Sophist Economicus
Sophist Economicus's picture

This wasn't supposed to be an exhaustive treatise on how Greek companies translate their products inot things they can trade for energy.


So, to go to your original question "where will the energy come from and from whom", I guess you finally answered it yourself -- by leveraging their products and ingenuity.

As an FYI, we raise crops and animals here.   I've been doing it for quite a while now.    As a reminded, farming is fossil fuel intensive when labor is scarce/expensive.    Farming can be less fossil fuel intensive when labor is abundant and cheap.    If a country needs to boot-strap itself, there is no shortage of human creativity that can be brought to bear to solve a problem.

Go back to selling your lawn tractors...

Wed, 05/09/2012 - 14:45 | 2410810 LawsofPhysics
LawsofPhysics's picture

Please try to stay focused.  Who said anything about "selling tractors".

So essentially what you are saying is that Greece can become competitive because they have so many people desperate to become sharecroppers? I thought the U.S. already found out that slavery does not work out so well.  Just the same, I think I will take the other side of that trade.  Good luck.

Wed, 05/09/2012 - 14:59 | 2410879 Sophist Economicus
Sophist Economicus's picture

No, what I'm saying is you asked a silly question.   When confronted with the facts, you back tracked, raised more dust and now find yourself with nothing else to do but make silly assertions.

Sorry, LOP, you are out of your element here.   I thought you were seriously asking how greek cbussinesses could get energy for their production efforts.

Go back to your bombastic postings.   I know what you are now....

Wed, 05/09/2012 - 15:02 | 2410892 LawsofPhysics
LawsofPhysics's picture

Yes, facts are a bitch.

Wed, 05/09/2012 - 14:57 | 2410870 rete
rete's picture

Having been in agriculture almost thirty years I assure you that food production is very energy intensive. There isn't enough time to explain why you FAIL yet again.  You really think those "foodstuffs" cannot be produced elsewhere for less???

Absolutely correct. That's why the world only started agricultural production in 1859 after the Titusville discovery. Before that our forefathers were all hunter-gatherers. Luckily Greece has goats and fish. 

Wed, 05/09/2012 - 15:02 | 2410896 LawsofPhysics
LawsofPhysics's picture

True, and as I point out above, the greeks know a thing or two about transporting goods around the world.

Wed, 05/09/2012 - 12:58 | 2410349 Joe The Plumber
Joe The Plumber's picture

I really like it when students monetize other talents.

I hope to monger in greece for a week looking for the GFE with a hot young spinner chic.

Wed, 05/09/2012 - 13:10 | 2410381 Mountainview
Mountainview's picture

Beware of EURO Banknotes with a Y before the serial number. Those are the Greek ones, issued by the bank of Greece and changed in Drachma( if the return to Drachma should happen)

Wed, 05/09/2012 - 19:00 | 2411617 flyweight
flyweight's picture

I am in Greece and your statement had me worried for a moment. But now I just made a withdrawal of 36 euro banknotes from my local ATM.

Not one of them has a Y in their serial number. I got 17 Xs (Germany), 6 Ps (Netherlands), 8Ss (Italy), 3 Zs (Belgium), 2 Vs (Spain).

I guess Greek banknotes are somewhere else then.

Wed, 05/09/2012 - 13:28 | 2410443 Vigilante
Vigilante's picture


This is the good senario..

Wed, 05/09/2012 - 12:45 | 2410314 insanelysane
insanelysane's picture

When it happens will the event be considered a default?

Wed, 05/09/2012 - 16:42 | 2411273 Matt
Matt's picture

If you hold bonds, yes. If you are holding CDS, no.

Wed, 05/09/2012 - 12:55 | 2410339 midgetrannyporn
midgetrannyporn's picture

The arrogance. Who says they have to call it the "Drachma?" Greeks who own property with a mortgage against it will love paying it off in Greek money. That will be a huge boost right there.

Wed, 05/09/2012 - 12:53 | 2410340 Sudden Debt
Sudden Debt's picture

You know... If we knew they would make such a fuzz about paying back the money we would have never asked it back....

Wed, 05/09/2012 - 12:59 | 2410350 carbonmutant
carbonmutant's picture

Piraeus Bank has launched an attack on the Reuters news group, for an article concerning the bank's property deals.

One of Greece's biggest banks has filed a lawsuit against Reuters claiming 50 million euros in damages over a story that exposed a series of property deals between the bank and companies run by the family of its executive chairman.

Wed, 05/09/2012 - 12:58 | 2410359 Biggvs
Biggvs's picture

Meanwhile, in Japan, Noda is watching... Godzilla movies.

Reuters: Japan to take over Tepco after Fukushima disaster

Wed, 05/09/2012 - 13:01 | 2410360 Joebloinvestor
Joebloinvestor's picture

Have they moved the gold out of Greece yet?

Wed, 05/09/2012 - 13:04 | 2410371 Joe The Plumber
Joe The Plumber's picture

Lol there was an article yesterday in Bloomturd that casually memtioned no one expects the greeks to leave the euro.

Dumazz reporter. I emailed him asking what the replacement PSI bonds were trading at and that he needs to quit being so sloppy in his reporting

Wed, 05/09/2012 - 13:34 | 2410467 williambanzai7
williambanzai7's picture

What they should do is disavow the Euro and pursue the Icelandic model. They should make no secret of their disdain for banksterism and invite all like thinking people to support their cause by buying yogurt, honey and ouzo and vacationng in the Greek isles which would be a bargain compared to Euro vacation destinations.

I don't know about you, I would happily support that model with my customer patronage. The problem is if they do this Germany will declare financial war on them.

Wed, 05/09/2012 - 13:48 | 2410518 Joe The Plumber
Joe The Plumber's picture

Hell yeah. Too bad you arent minister of tourism

Wed, 05/09/2012 - 13:39 | 2410473 Jonas Parker
Jonas Parker's picture

Greek parliament passes a non-extradition bill and a bank secrecy bill, both effective immediately.

Greek Banks announce that they will NOT co-operate with the IRS and invite American millionaires to park their funds in Greece.

Greek stock exchange bans HFT.

Greece moves to gold/silver standard with "new drachma".

Sales of mansions and real estate in Greece soars.

Wed, 05/09/2012 - 14:09 | 2410486 GreetingsFromGermany
GreetingsFromGermany's picture

Yes, mood is changing - also in the Merkel-Court-Press (although they are still defending austerity) - here in Germany. Too much headwind from experts, bloggs, politicians. This time it seemes that they will give up Greece. We will see the inflection after Sunday, when they have elected here in Nordrhein-Westfalen (at the time is election campain rhetoric everywhere).

Interesting: Yesterday CDU-front-runner Norbert Röttgen (same party as Merkel) declared the election as a voting about the Euro-policy of Merkel, although the polling concerns only issues of the biggest Bundesland in Germany. His chief (Angela Merkel) was not very amused (if not to say in a real peeve) because there is no doubt that the left parties will win here in NRW...;-) 

Wed, 05/09/2012 - 13:40 | 2410487 HastyP
HastyP's picture

I would use a GPS for a Greek return to the Drachma.  No need for gold just trust in the new Greek fiat!!

Wed, 05/09/2012 - 13:56 | 2410553 krypplephite
krypplephite's picture

The German mindset is always to obsess with how things 'should be' instead of how they are...


It's how their third attempt to dominate europe in a century will collapse - Under it's own weight, like it always does.


Fill your wheelbarrows with Euros and line up at the bakery... it's Weimar 2.0 time bitchez!


Wed, 05/09/2012 - 14:34 | 2410632 GreetingsFromGermany
GreetingsFromGermany's picture

"It's how their third attempt to dominate europe in a century will collapse"

I don't think that's the real backround. To the contrary: Germany gives up it's own national interests (and workers) to serve the rest. ClubMed-workers were remunerated in a much too strong curreny - German workers in a much too weak currencies. It's insane that the average income of Greece has been about 80% of the German incomes (with goat milk, olives and lending beach chares - most of them tax-free) - as recently as 3-4 years ago in Spain politicians proudly pronounced that spanish average incomes soon will exceed German incomes. 

10 percent of the Germans (the economic and political class) did make profit - the rest served. Because money doesn't care about national vanities. 

The increase of wealth, infrastructure and real estate on (nevercomeback-)credits in the PIGGS since introduction of the Euro was significant and interests on borrows were based mainly on the reputaton of the Bundesbank - always in expectations that Germany backs this game. All this will finally be paid by German taxpayers (bailouts, transfers, haircuts, allocation of assets and target-credits) Thats the reason why none of the affected nations wants to step out.

Wed, 05/09/2012 - 15:50 | 2411094 krypplephite
krypplephite's picture

Please… since when is the remuneration of individual citizens in any way related to the “National Interest” of any country in 2012.

You are a dairy cow.

The National Interest of Germany is the same as it always has been – To exert control over other European nations. Do you think Merkel gives a shit if you – The Citizens - have to pay for her privilege?

In modern terms you are now asked to become a debt slave to buy Europe instead of carrying a rifle to take it by force.

Either way, if you think Greeks, Spaniards and Italians have any interest in raising their productivity to German levels only to pay the world price for their domestic produce, you are dreaming.

Wed, 05/09/2012 - 21:31 | 2411911 GreetingsFromGermany
GreetingsFromGermany's picture

- - - 

Wed, 05/09/2012 - 21:32 | 2411912 GreetingsFromGermany
GreetingsFromGermany's picture

You forgot that it was Greece - against many warnings - which enfcorced it's accession to the EWS and EMU in the late 90th. It was all over town what would be the consequencs (...which doesn't excuse international bankers (and their delegates in Bruxelles) business model to credit them without end - the big bubble was part of the game...) 

Wed, 05/09/2012 - 14:21 | 2410681 Pancho Villa
Pancho Villa's picture

The problem is that now the markets see Spanish and Italian debt as unappealing, but not actually toxic. Kind of like leftovers that have been in the refrigerator for six weeks or a couple of months. You would think very carefully before eating them, but they probably wouldn't kill you.

If the euro starts to break up, then Spanish and Italian debt will become absolutely toxic. Not like 3-4 month leftovers with a light covering of whitish fuzz. No, they would then become so toxic that you would have to have the entire refrigerator carted away to a special toxic waste dump.

However we shouldn't underestimate the ability of TPTB to get together give the can one more swift kick.

Wed, 05/09/2012 - 14:53 | 2410843 financial apoca...
financial apocalyptic contagion's picture

holy shit

so for every country to go bust and leave the Euro its gonna take that long?

we need to speed up the process yo

there's enough people on ZH lets all crash this fuckin artifical market

Wed, 05/09/2012 - 19:52 | 2411697 covert
covert's picture

greek hookers are the best.


Sun, 05/13/2012 - 23:26 | 2422667 qiongqiong
qiongqiong's picture

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Coach Bags
Nike Air Max

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