Amid a more prolonged economic doldrums than The Great Depression, Greece is heading towards its 4th bailout/deal with creditors. Adding to Grexit fears (voiced by many in and out of Greece), Ted Malloch, President Trump's proposed US ambassador to the EU, casts doubt on survival of eurozone and says Athens should return to drachma.
As we noted previously, for the umpteenth time, the IMF has warned that Greece cannot meet fiscal targets set by its creditors. And once again, the IMF insists that it will not be a part of the “Troika” unless the goals on Greece are realistic. History suggests the IMF will cave in to Germany and agree to some half-baked plan (make that 1/8th baked plan) that will supposedly put Greece back on track. Such nonsense has been going on for years. Mercy, Please!
[It's worse than the Great Depression...]
A view President Trump's proposed ambassador to EU holds...
Days after being accused of “outrageous malevolence” towards the EU for publicly declaring that it “needs a little taming”, The Guardian reports that Trump's nominee, Ted Malloch, said on Wednesday that the euro currency area in its present form was unlikely to last longer than 18 months.
“Whether the eurozone survives I think is very much a question that is on the agenda,” he told Greek Skai TV’s late-night chat show Istories. “We have had the exit of the UK, there are elections in other European countries, so I think it is something that will be determined over the course of the next year, year-and-a half.
“Why is Greece again on the brink? It seems like a deja vu, will it ever end? I think this time I would have to say that the odds are higher that Greece itself will break out of the euro.”
The stridently Brexit-supporting businessman, who has yet to be confirmed as the US president’s EU ambassador, said he wholeheartedly agreed with Trump’s tweet from 2012 saying Greece should return to the drachma, its former currency.
Greece should get out of the euro & go back to their own currency--they are just wasting time.— Donald J. Trump (@realDonaldTrump) October 9, 2012
"I personally think [Trump] was right. I would also say that this probably should have been instigated four years ago, and probably it would have been easier or simpler to do,” Malloch said in the interview with the show’s chief anchor, Alexis Papahelas.
Malloch said: “I have travelled to Greece, met lots of Greek people, I have academic friends in Greece and they say that these austerity plans are really deeply hurting the Greek people, and that the situation is simply unsustainable. So you might have to ask the question if what comes next could possibly be worse than what’s happening now.”
The biggest unknown was not a euro exit, but the chaos it would likely engender as Greece moved to a new currency, he said.
“If the [IMF] will not participate in a new bailout that does not include substantial debt relief, and that’s what they are saying, then that, more or less, ensures a collision course with eurozone creditors,” Malloch added, saying it was imperative that EU member states forgave a substantial part of Greece’s mountainous public debt.
“Now we all know that primarily [puts pressure on] Germany, which remains opposed to any such actions, so I think it suggests that Greece might have to sever ties and do Grexit and exit the euro,” he said.