Normally when you think of politicians the word brilliant does not come to mind. There’s an appreciable difference between being a brilliant politician and an effective legislator. You can be a brilliant politician and do nothing for the people you serve. Brilliant politicians know how to play the game. One of the best game players was President Bill Clinton. Think of the scandals he faced, as well impeachment proceedings, and he walked away from it all, unscathed. Some might suggest that his reputation have forever been tarnished. Really? His speaking appearance fee is $125,000 minimum. He’s made a significant sum of money since leaving the White House. Today he’s viewed as a worldly statesmen, and millions of Americans today wax nostalgically about the Clinton era. President Clinton was brilliant politician. But what about George Papandreou, Prime Minster of Greece?
We’ve all seen and heard about what’s happening in Greece. It’ kind of like driving by an accident. We may not understand how it might affect us but it’s hard to divert your eyes from this train wreck. This is a first, a major industrialized country on the verge of going bankrupt. It’s impacting markets on a daily basis. To follow the markets today you need gravol. Based on the decisions being made by the Greek government today, we could be in for a turbulent ride.
Here’s what we know today. Greece has no money, and she cannot afford to pay her debts. Greek society will have to be transformed. Greece was a country of entitlements, not unlike many other countries in Europe. The threat of taking away entitlements has caused massive demonstrations and riots in Greece. If Greece defaults on her financial obligations it will significantly impact the EU. Rather bleak! The only solution for Greece was to go out hat in hand, and look for a bailout. This is where the Germans and French come in. Collectively these two countries have a lot of skin in the game, and it’s in their best interest to come up with a financial solution for Greece. So, they did just that. When the deal was announced the markets rallied. There was financial stability in Europe, which in Europe means there won’t be a crisis for at least one week. Almost a week to the day, the Prime Minister of Greece said, “thanks for the bailout but I need to hold a referendum to accept the terms and conditions of the bailout”.
When I first heard the news about the referendum I instinctively said, “are you kidding”. Let’s see, your country is broke, and you want to ask the same people who are rioting in the streets to support further cuts and more job loss. You dumb ass. Or is he? The cuts that Greece will have to make will impact Greek society. Therefore, as a democratic society shouldn’t the citizens of Greece have a say? Moreover, if miraculously the referendum was to pass, the Prime Minister has political cover for the next four years. His response to any demonstrations or criticism will be simple, “citizens of Greece, you approved it”. Here’s the tricky part, what if the no’s win the referendum? Does the Prime Minister of Greece go back to the table, knowing the failure of Greece will impact the rest of Europe, and demand better terms and conditions? So who blinks? Germany, France and the EU? Or Greece? This is a high stakes game of chicken. If the Greek Prime Minister ends up being the world’s biggest dumb ass, the game changed from chicken to Russian Roulette.
There’s a lot of confusion about what’s happening in Europe, and how it might impact us. I found a video that provide some clarity about Europe, and the mess they’re in. Enjoy!
Until next time,