Daily Double Talk From Europe

The surprising announcement by the Greek prime minister, Papandreu, is causing all sorts of disruptions in the Euro-space-time continuum.

What did the guy do? He had the audacity to suggest the Greek people should vote and decide for themselves if they like the deal.  Leave to the politicians to praise the virtues of democracy when they win but decry its inefficiencies when they lose (and they haven't even lost yet).  

In any event it is interesting to read what they are saying if only to identify who is not to be trusted. Here are my highlights:

The plan, designed to aid Greece and stem the wider debt crisis, is “more necessary than ever today,” they [Merkel and Sarcozy] said in a joint statement issued in Berlin and Paris. Germany and France “are convinced that this agreement allows Greece to return to lasting growth” and want to draw up a road map for locking in the second Greek bailout.

Translation:" Don't you see? We did it all for you! Why do you want to throw away your future by ignoring our selfless advice" ( The German and French bankers stare quietly from behind the curtain).

“We fully trust that Greece will honor the commitments undertaken in relation to the euro area and the international community,” European Council President Herman Van Rompuy and European Commission President Jose Barroso said in a joint e- mailed statement that acknowledged Greece’s move.

Subtitle: "What can we say? If these guys decide to pull the plug, they will come after my country [Portugal] next [Barroso] you guys are next in line behind Italy and Spain.  This is why we do not have a government in Belgium [Van Rompuy].  Nobody can call a referendum to ask our voters if they want to pay."

The Greek prime minister’s personal and government popularity have plunged as cost-cutting measures have sparked a wave of social unrest. The Greek leader announced a confidence vote yesterday that will conclude late on Nov. 4. The referendum would probably be held after the details of the European accord are worked out. 

 No kidding.  Bondholders want austerity, voters do not.  Papandreu has been, so far, working for the former while telling the latter that it is really for their own good. If the voters decide their interests are no longer aligned with those of the creditors, they will find a way to repudiate the debt.  At that moment, they will choose a politician that represents that point of view and there is little that EU or the bankers can do about it. 

If you owe the bank a thousand dollars, you have a problem, if you owe one million, the bank has a problem (still valid even if the amounts need to be indexed by inflation).