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Thursday, February 5, 2015

Frances Coppola : What on earth is the ECB up to?

Coppola Comment: What on earth is the ECB up to?

P.Krugman's short take: "A Dance With Draghi"

Does Draghi know what he’s doing? Of course not — nobody in this situation knows what he or she is doing, because it’s structurally a mess. But don’t panic — yet.
While Tomas Hirst at BI says : "Greece's endgame is finally coming into view"

Ultimately, Varoufakis doesn't really have any choices if no deal is struck: Greece must either accept the terms of the bailout or risk going bust. 
As this is a strategic game, or rather more than one, re-read Jacques Sapir 's column : "Greece’s brinkmanship"
What would a frontal collision signify in the case of Greece? If we are dealing with a refusal of Germany to admit that austerity doesn’t work, a refusal motivated as much by ideological representations as by a certain vision of Germany’s interests, combined with a refusal to give in to Greece because it is Greece (we are reminded of the wounding words about the “olive-pickers”), and if on Athens’ side they refuse to give in because they know that this will be the end of the Syriza experience, the idea of the frontal collision takes its full meaning. In this case, no solution will be found between now and July, and Greece must default on its debt. The ECB’s reaction will be to cut off the financing of Greek banks, which will entail the decision by the Greek government to mobilize the Greek Central Bank in order for banks not to be deprived of credit and, with one thing leading to another, Greece will leave the Euro.





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