Hey children! Let's all pretend that Greece can pay its bills, Germany loves giving away money, and Europe is one big happy family. That would make a hilarious fairy tale suitable only for the dumbest of credulous kids. Europe's leaders are living this fairy tale right now even though they know the grown-up math will never make it work.
Tuesday's approval of Greece's proposed austerity compliance plan was a farce beyond all belief. European finance ministers somehow gave it their seal of approval with a straight face. Whether they were complicit in drafting it before Greece pretended to own it is a moot point. Every responsible adult at the European financial table is now engaging in mass self-deception, national deception, and continental deception.
Here's a trumpet blast of reality for any Europeans still asleep. Greece has no intention of ever paying its debts or fulfilling its austerity promises. Athens' capitulation to the troika's new bailout terms was a feint to stop Greek bank runs. The Tsipras regime knows it will run out of money but needs another few weeks or months to turn disorderly starvation into something that does not lead to civil unrest. Europe knows it will never see its banks made whole after a Greek default. The ECB needs the next few weeks to figure out how to front-load as much quantitative easing as possible into Greek bonds.
Childish fairy tales are now okay for grown-ups. European parliaments will sleep for the next four months telling themselves a bedtime story of prompt Greek payments, generous German taxpayers, and kindly central bankers. The hard wake-up will be a surprise thunderstorm breaking in the middle of the night.
Tuesday's approval of Greece's proposed austerity compliance plan was a farce beyond all belief. European finance ministers somehow gave it their seal of approval with a straight face. Whether they were complicit in drafting it before Greece pretended to own it is a moot point. Every responsible adult at the European financial table is now engaging in mass self-deception, national deception, and continental deception.
Here's a trumpet blast of reality for any Europeans still asleep. Greece has no intention of ever paying its debts or fulfilling its austerity promises. Athens' capitulation to the troika's new bailout terms was a feint to stop Greek bank runs. The Tsipras regime knows it will run out of money but needs another few weeks or months to turn disorderly starvation into something that does not lead to civil unrest. Europe knows it will never see its banks made whole after a Greek default. The ECB needs the next few weeks to figure out how to front-load as much quantitative easing as possible into Greek bonds.
Childish fairy tales are now okay for grown-ups. European parliaments will sleep for the next four months telling themselves a bedtime story of prompt Greek payments, generous German taxpayers, and kindly central bankers. The hard wake-up will be a surprise thunderstorm breaking in the middle of the night.
