Friday, May 27, 2011

Dutch will join IMF in refusing next Greek funding tranche. Time for a complete New Start for the EU!

Dutch prime minister Mark Rutte said in a web-based video: ""We are looking very carefully at what the IMF does ... and if they don't say a new tranche in loans should go the Greeks, then we won't either."

The above quote is in a report from the Daily Telegraph this morning, linked here.

Interestingly the sequence of unfolding events seems to have been twisted in the Telegraph coverage, for last night the IMF was warning Juncker of what was the situation, here we apparently have Juncker issuing the warning to his Euro Group, nothing, as ever can be really believed when it arrives from a source connected with the EU.

The report of Mark Rutte's statement happily is confirmed by CNBC, linked here, a source clearly mostly beyond EU influence.

A fuller report with all the various statements and suggestions that this may be more Juncker brinkmanship with the Greek Government as the target is in the Baltimore Sun (also beyond EU control) linked here.

As events are now unfolding, it appears to me that the EU position is becoming increasingly desperate. It is daily ever clearer that the politicians in Germany and France, who ultimately control the direction of events, are scared witless at the very idea of a Greek defailt, the one means these two nations can defer it is by providing an open cheque to all the countries now at risk. Greece, Ireland and Portugal could thus benefit from such a guarantee if they play their cards cleverly, they now appear to hold both the Ace and King of trumps.

In the longer run, such guarantees, will not be acceptable to the electorates of Germany and France, indeed France itself, will likely be in the line behind Belgium, Spain and Italy!

The EU could look at wholesale reform, starting by suspension of the Commission and Parliament, as long suggested by this Blog. Nothing less than a completely fresh start now seems likely to have any impact.

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