Let's not forget Grexit

Not so long ago, a mere 5 years which seems like yesterday, it was the Euro that was breaking up.


Only the use of a crazed scheme of money printing has kept it together at the expense of Japanification of the European Economy.


Currently, the Remain side is cruising in the UK in the polls, and as predicted here, it is only events that can lead to the shift necessary for Brexit to win the Euro Referendum.


But June is nearly upon us and Greece is needs another change to its terms, given Merkel will not allow the desperately needed re-structure. So it may yet come to pass that the EU boot on the throat to Greece provides the #BREXITEVENT.

The "O'crapalypse"

It's really hard to see how Greece can stay in the Eurozone and even the EU from here on in:

1. There is only around €500 million of cash in Greek banks  and even with allowances of €60 euros per person that is only 1 days supply left.

2. The ECB is not a political unit and Draghi hates being seen as partisan so it will not do anything ahead of agreement by the EU leaders.

3. The EU leaders are not meeting until tomorrow - so good luck in Greece trying to live for at least 48 hours with no money.

4. The IMF loans are sub-ordinate to the EU ones and the Greeks have defaulted anyway.

Basically, by the middle of this week Greece will have no money left, let alone trying to pay €3.5 billion in a couple of weeks time to the EU.

So, even if the Euro leaders try hard - which initial reactions suggest they are not minded too anyway, the chances are that Greece will have to issue its own scrip sometime this week in order to keep any semblance of the economy going. Medicines and food are running low with the Banks shut - the Country maybe struggling but ordinary Greeks can afford to buy goods - it is the EU via the ECB that is creating an artificial shortage.

As I have maintained for years, the sooner they do this, bite the bullet of a hefty devaluation and get on with it the better - The Country will be a much better place in 3 years, versus the 7 years of disaster that have accompanied trying to pay the debts.

As for the Eurozone, ECB and all that - there is nothing positive to be said at all. The actions to create the crisis in Greece are sickening, the lack of vision and judgement to design an easy path to exit or a parallel 'soft euro' for Italy, Spain and Portugal too is pathetic. The UK can also see clearly where attempts to negotiate or change the will of Germany get you - nowhere and worse.

The sooner we can leave the better, when is that Referendum?

The EU non-negotiation?

The Great Leader, Mr Cameron, so recently the beneficiary of a fluke, but complete, victory takes centre stage in Europe today.

By a hilarious co-incidence he has chosen yet another Grexit deal-or-no-deal day to launch into his list of 'demands' that need sating to keep Britain in the EU.

The list will no doubt be short with plenty of uncontroversial bits on it like simplification of regulations and a better single market. No EU ministers will be voting against that.

Nor on an opt out from joining the Euro which we already have.

But there remain two issues still to give us 'Outers' some hope. One is that on immigration and freedom of movement the EU stance is very solid. Polish people in the UK should be treated like English people in Poland - fair's fair. The fact our benefits system is out of control is really an expression of our own dysfunctional Government and not an EU problem.

Of course, were Poland suffering from huge net immigration rather than emigration with its attendant remittance benefits perhaps the song would be different.

On this issue, I see little room for compromise and so the Government will be forced to sell a fudge at best to the UK public in a referendum. Given this is also UKIP's strongest and best criticism of the EU then there is some hope.

Then there is Greece. With no deal it will be a calamity and how this shows the EU's strength is beyond me. The mess is awful and largely self-made but it reflects badly on German Leadership to allow the EU to show it is not one for all and all for one. The question is Greek exits is who next? When is it our turn? Will the Germans turn on us?

Again, that could be powerful re a UK referendum. The hopes are very small but the seeds are there and we will see if they can grow. Cameron is at his highest point politically; hubris normally hits at this point.

Will Tsipras win the election for Cameron?

I come back from abroad for a couple of weeks and realise there is a complete left-wing take-over of the UK in prospect! Blimey!

The first thing I see is a group hug on the telly of three loony-left non-English women all high fiving because they have been discussing magic money tree economics and saying Farage is a racist and Tories eat babies.

It's like a form of weird time travel to the early 1980's militant timezone.

Worse for the forces of the Right, the Tories seem to have forgotten about sound money and campaigning on their successful(ish) economic record in favour of attacking a Labour and the SNP - which just by doing so is giving them more legitimacy.

Even weirder in this bizarre world, the opinion polls which now appear daily like cluster bombs, are showing precisely no changes to anything with all the Parties stuck on around the same likely voting figures for months on end. The very definition of hot air.

So we await a so-called 'Black Swan' an event to change the dynamic of the election. As ever, this can be anything from a major disaster to a Foreign Policy issue or even a Royal Baby.

The only one I can foresee happening is the rapid end to the Greek stand-off. Domestically the Greek government is very popular just at the time when the EU is rallying to Germany's side. The QE in Europe has sucked up so much of the bond market that there is confidence that a Grexit could be contained and managed.

This may be misplaced, maybe not. Certainly I do not believe a 10% fall in UK GDP from Grexit that some of the madder Euro-enthusiasts like to spout.

However, the money is due to run out in Greece in mid-May and even now the Government is hoovering up money from local authorities to try and keep the salaries and pensions paid. This is desperate stuff an may not work.

A sudden Grexit or the panicky build up to it in Early May would surely be a big boost for the Tories - on a no change and sound economic management platform - maybe enough to get them to largest party with a minority Government. Logically, UKIP should  benefit to as the overall insanity of the EU is exposed further for the damage it is doing to constituent member countries who happen not to be Germany.

It's a sad state of affairs for right wingers that we are left hoping for this to avoid a Communist take-over...

Self-igniting euro collapse?

Loving this article from the peerless FT Alphaville today. over the sumemr lots of US companies have been thinkin about what to do to sustain their business if greece falls out of the euro. Bank of America is looking at a fleet of trucks to ship in cash from abroad (how advertising this to potential brigands is sesnisble is beyond me).

My reaction to this is that we are witnessing the further build up of the Euro crisis. bad enough is the Eurozone's inept performance at managing the crisis. Still every day senior German minister's gon on and on about not saving Greece. This forms the basis f the plot re Grexit to whcih private actors then work to.

By withdrawing all money from Greek bank accounts the Country is forced closer to bankruptcy - so the rhetoric in the media has a causal effect on Bank share prices and others in Greece.

In one weeks time is the meeting of the Trioka in Greece. After a summer lull, all the talk of eurozone collapse will return to provide and indian summer of hot air for the autumn.

What if anything can stop this cycle? I doubt myself it is possible, but when politicians are involved it maybe there is a massive printing of money or some other kind of mega-collapse that will allow Greece to continue in the Eurozone. the price for exit is a disaster of 2008 proportions, only this time piling into a much weaker Eurozone economy.

Squeaky Bum Time - Grexit on the cards

Ok, no one knows what is going to happen. However, the signals are coming fast and strong now. The Chancellor George Osborne's announcement last night of another type of credit loan to the Banks shows they know perhaps a little more than they let on.

(As a quick aside, its a balance sheet recession, the issue in an acute crisis such as this is demand not credit. For once I'd be in favour of some big Govt capital spending increase, without actual economic activity we could have a 2008 recession rerun. Credit supply is only a part of the problem so this seems to me to be half an answer - this is not long-term keynesianism I am advocating, its a crisis response).

I see events unfolding thus:

Sunday - Inconclusive Greek general election, a total rerun of last time (the polls are almost identical). So no new Government on Monday and Syriza getting a chance next week to try and form a Government. Loans and market confidence in Greece evaporates.

Monday - Some chaos on the markets, Spain and Italy find funding hard - but no October 2008 crash, yet. G20 meeting will avoid this as traders and investors wait and see

Tuesday/Wednesday - Now what? Does the Troika give more money to Greece and will it matter? With bad policy management this could see some very sharp drops if policy response is not forthcoming from the G20.

All in all, shaping up to be a very interesting week - clogging will be heavy here in contrast to the lightness of the past week due to heavy workloads being endured by your contributors.

PS  And can England even beat Sweden tonight...