What struck me about the reporting on Greece today was that senior officials from Core-Europe said that Greece had not asked for financial assistance. They wanted to make clear that everyone heard the message – like here & here & here:
Before today, we were engaged in a game of chicken between a Greece that is in a lot of financial trouble, and a Europe caught between bad precedent & sovereign contagion.
After today… we’re in the same place. Time-honored expressions of “political will” and “European commitment” from Sarkozy/Merkle/Gilligan/TheSkipper/AndTheRest are empty. The game of chicken remains “on”: Core Europe is going to secure a groveling request from Greece for help before it lends support, so that it can bind Greece with iron-clad budgetary commitments. Something akin to contingent loan guarantees, where Brussels effectively writes Athens’ budget.
If the Greeks try to avoid this humiliation and cut spending themselves, the streets of Athens will come alive with government-leveling protests. If the Greeks go groveling to Brussels or Berlin, Euro-Core quid pro quo contingencies will… animate government-leveling protests.
I’m calling “Game over” on the Aegean. As clear as Porter’s pick in Miami.
I think this nails it:
Greece has to leave because having never reasonably qualified for inclusion, nor having worked to satisfy Maastricht criteria, it never belonged in the first place. So, the natural path is out. Messy details to follow.