For the third or fourth time, it has become clear that Greece is missing targets. It's totally understandable, every time they cut back, the economy shrinks, and then even more activity and market presence shrinks in fear of the future.
But, this time, when the economy missed targets, the European 'Leaders' baulked at 'paying' extra, and appear to have tried to push the costs onto the private sector in the form of an even bigger haircut. Remember, so far Europe is not bailing Greece out, but making money lending to them at a profit!
Shock news: haircuts were already at the logical limit. The private sector is doing its part. Greece, several rounds into a painful internal devaluation, is also doing it's part.
Who isn't? Erm, Europe. Why? Erm, because Sarkozy and Merkel face re-election and CHOSE to approach saving Europe this way to try to save their miserable arses.
So, either public lending gets in on the act, allowing an economically logical wrte-down, involving a change of electoral tactics, to reflect reality and really unite Europe. Or, we risk a default that hurts everyone. Germany can finally celebrate getting the chance to treat another country the way the US treated it in the 1930s. Shocking collapse of European values!
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