Eurozone crisis: silly season is over – circus in retreat – grown ups back on stage

After what felt like a long and unbearable silly season, in Germany, in which the circus was in town, shamelessly and brainlessly victimizing the currently weakest country of the European Union, the sillies are now back in their cage and the heavy weights are back on stage sporting a fresh tan and some words of caution.

In the meantime the newly formed Greek government appeared to, at least on paper, have been doing its homework all summer long: “cutting” costs. Partly because of that the troika appears to be taking its time with its progress report. Another reason of course must be related to the fact that for yet another time the naive projections of the IMF regarding the depth of the Greek recession are off target (these bozos will ruin the country in the end).

What remains to be seen is what will happen on the streets in Greece when this government will start announcing and implementing the new cuts: will it survive to see any of them go into effect? One thing creates hope that it will not all crash and burn. As this Greek government demonstrated its willingness to abide by the rules for harsh cuts (essentially delegitimizing Greece-bashing), all grown ups must already know that the numbers are terribly off target and the recession is much deeper than on the excel sheets of the troikan drones in the field. What the German grown ups start spinning now is the geopolitical significance of Greece. Besides it being a real factor in the equation (which they wrongfully ignored all along) it is also what Frau Merkel will sell to her constituency (the one she herself galvanized to Greece-bashing): any extra concessions (money or time) she will make for Greece will be buying Germany and Europe “geopolitical significance”, she will say. Not a bad play for now.

The summer is over and with it the silly season. Hopefully the grown-ups have learned some economics over the summer. It is showdown time.

 

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