Sunday, June 17, 2012

17/6/2012: Stability & Greek elections

Quote of the week:

Pamela McCourt: "Stability in language is synonymous with rigor mortis. - Ernest Weekley, lexicographer". To EU & its 'national' elites: watch what you wish for, for it just might happen.

And in light of the Greek elections results, 'stability' in the euro area is, indeed, a form of rigor mortis. Need proof? Here's the EU statement on the Greek elections results, quoted in full [emphasis mine]:

"The Eurogroup takes note of the provisional results of the Greek elections on 17th June, which should allow for the formation of a government that will carry the support of the electorate to bring Greece back on a path of sustainable growth.

The Eurogroup acknowledges the considerable efforts already made by the Greek citizens and is convinced that continued fiscal and structural reforms are Greece’s best guarantee to overcome the current economic and social challenges and for a more prosperous future of Greece in the euro area.

The Eurogroup reiterates its commitment to assist Greece in its adjustment effort in order to address the many challenges the economy is facing.

The Eurogroup therefore looks forward to the swift formation of a new Greek government that will take ownership of the adjustment programme to which Greece and the Eurogroup earlier this year committed themselves.

The Eurogroup expects the Troika institutions to return to Athens as soon as a new government is in place to exchange views with the new government on the way forward and prepare the first review under the second adjustment programme."

So you have to be a bit of an optimist to read any of the above as a commitment by the Eurogroup to any sort of change in the Greek bailout terms. And absent significant and rapid changes in the programme, there is not a snowballs' chance in Hell that Greece is going to satisfy these conditions in the medium term. Stability of status quo reaffirmed in the Greek elections results is, in fact, the death warrant to the yet-to-be formed Greek Government.
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