Monday, June 1, 2015

Greece: Now the Americans are worried of an accident

U.S. officials are generally cautious about intervening in European policy debates. The European Union is, after all, an economic superpower in its own right — far too big and rich for America to have much direct influence — led by sophisticated people who should be able to manage their own affairs. So it’s startling to learn that Jacob Lew, the Treasury secretary, recently warned Europeans that they had better settle the Greek situation soon, lest there be a destructive “accident.”
Paul Krugman, New York Times, June 1, 2015

Things are getting serious.  Over the past few days other (many many others) things have been on my mind, and Greece has been off my radar.  Now, it appears that the negotiations are heading towards a breakdown.  For American policymakers the problem is the consequences of a Greek exits are unknown.

Turns out that Greece's hand on "Russian negotiations" is a lot weaker than I had thought -- there are too many governments that are weary of "pissing off" Putin to get all Gung Ho about the renewal of sanctions against Russia -- if other countries are against the renewal, Greece becomes a side player.

It would seem that a deal is now nearly impossible unless Merkel and friends make a political decision.  Till then the odds on my now three month old bet are looking, unfortunately, better and better!

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