That Europe has been unable to do the simplest thing, and come to a conclusion in its negotiation with Greek creditors, now running into its six month [19], is not very surprising. After all this is Europe, where nothing gets done before the deadline, only in the case of Greece the deadline also means the risk of runaway contagion. And as of today there are about 53 days left before the March 20 Greek D-Day. Yet the one thing European should at least be able to do is to have their story straight on what happens once Greece defaults. If nothing else, to show solidarity for optics' sake. Alas, it can't even do that. Because just overnight we have two diametrically opposing stories hitting the tape. On one hand we have Spanish economic minister Luis de Guindos telling Bloomberg TV in Davos that the euro region could withstand a Greek default [20]. This is very much in line with the Jamie Dimon line of thinking that there will be limited fallout. Yet on the other hand, it is that perpetual bag of hot air, Europe's very own head propaganda master Jean Claude Juncker, who ironically told Le Figaro that a Greek default must be avoided at all costs as it would lead to Contagion (read tipping dominoes all over the place). Too bad that both Fitch [21] and S&P [22] said that a Greek default at this juncture is inevitable. And while Juncker's statement in itself is absolutely true, the fact that discord is appearing at the very core of European propaganda - the one place it can afford to stay united until the very end - is troubling indeed. Especially since Juncker also told Le Figaro that Germany can not be asked to do everything alone. Is that a quiet request for the Fed to keep bailing out Europe since the ECB apparently has no interest in doing so?
From Le Figaro [23]:
Juncker: "We must avoid a default of Greece at all costs"
INTERVIEW - The President of the Eurogroup, Jean-Claude Juncker, appeals from the foot to the ECB before the European summit. He believes that we can not ask Germany to "do everything".
LE FIGARO. - The euro stood the test of Standard & Poor's, rates of debt subside, Europe will loop Monday his pact of fiscal discipline. The worst of the crisis happened?
Jean-Claude Juncker. There is a lull, unexpectedly for many, but we are not free from worries. All countries recognize the need to restore order in their public finances. Remains a serious flaw: we have no growth strategy at European level.
Do you agree with Christine Lagarde, and Joseph Stiglitz when they say adds austerity to austerity is the bed of the recession?
Yes, because obviously a pinch, if necessary or it will not solve the problems of the weakest European countries. No, because the gurus have used since 2008 to contradictory requirements. We must first correct the public finances. There is no example of sustainable growth based on budgets deliberately plunged into the red. It is also necessary to agree on a European level of rigor smart, that will not break growth.
Angela Merkel got what she wanted: a collective fiscal tightening. Are you disappointed that she now refuses to make room for maneuver in the German service of European growth?
Many Germans believe that release the brakes would lead other countries to relax the effort of fiscal discipline. But this is not to please in Berlin that the Netherlands, Austria and Luxembourg are less indebted than the Federal Republic. Italy, Spain and Portugal have also found a national and European interest to accept more discipline. The fear of Angela Merkel is not justified.
In the euro area, governments have fallen in series. In France,
Nicolas Sarkozy is in trouble. Are we not reached a point where you have
to offer hope to the voter, to prove that the austerity pay?
The problem is not to offer gifts to the voter. But to do everything now to control budgets and do not carry debt on future generations. This is the question at any responsible politician. It should also explain to the public.
What could push now the Chancellor to loosen the grip?
You can not ask Germany alone to do everything. Its room for maneuver is not as wide as they say. All of this is the economic government of Europe. There is no longer reserved for the national domain. If we can agree on who does what, when and how Germany will find its place.
The EU summit on Monday shows a dual purpose: employment and growth. With what means?
There is money, but it is poorly operated. At the top, there will be no sales or decision spectacular. This is to identify pockets of potential growth and to mobilize more funds to regional, social and European Structural. Perhaps he should also review all the flows.
Athens is again on the brink of bankruptcy. Do you think the problem confined to Greece?
Greece is a special case. I am not criticizing the Prime Minister Papademos. There is a real fatigue Greek political forces to continue on the road to reform. The recession is going beyond what had been expected the European Union. We ask the Greeks not to let go, to decide their priority of recovery in the days or weeks, in short, does not endanger the financial assistance coming from the EU and the IMF.
Greece can it fail without leaving the euro zone?
I do not reason in those terms. There is no default without contagion. It is in the interest of all to avoid a default of Greece.
Should the ECB get their hands in their pockets?
The question arises, but it would not be wise for the President of the Eurogroup urges the ECB to steer policy in one way or another. It remains a fact. Other creditors have a role rather anecdotal ...
Do you think the UK will return in the European game?
In December, faced with the obstinacy of David Cameron, we had no choice other than a fiscal pact without Britain. Today we see put in place a European architecture distorted. In the medium term, a Europe at twenty-six that's called a construction defect.