Δευτέρα, 6 Σεπτεμβρίου 2010

Feather-brained if you believe that…


Greece is the cradle of civilization. The current trend is that Greece is the cradle of crisis.
Although we have suffered the first (or the second after Black Wednesday 1992) financial attack against a State in the world’s history, we still had the opportunity to resist.
Friends of abroad… Of course there is a substantial share of blame that has to be put on Greek people. For that matter, we will talk through another article.
Now consider why Europe delayed 3- 4 months to reach a consensus for Greece bail-out. In few words, just for mental economy:
German Global Exports
Germany: Given that it has an export-led economy, the downturn of euro currency fosters the acceleration of German international sales. That is easily proclaimed by the boost of BMW sales, the biggest maker of luxury vehicles, in USA this period. That’s the reason why Germany was indecisive and followed this ca’canny policy. 
Cast an eye on the chart given nearby. The general trend is upturn. Focus on the period between March and May. The peak of that upswing is located on the very hot period of Greek debt crisis, simultaneously, indeed, with the lowest level of euro-dollar exchange rates (see graph below).
Admittedly, the boost of German Exports is not based only on the currency trend but also on the expansion of China’s economy.
France: But why France wasn’t reluctant to a Greek bail-out? That’s because French institutes hold the major proportion of the Greek debt. Therefore, a possible default of Greek economy or a debt restructuring would provoke a disastrous situation for the debt- and austerity-hit French Republic.
 USA: Exchange rates at the level of 1.5$ for one single euro is not so complementary for the strong dollar which is the main currency in the largest economies reserves, such as China. Any change on such composition may hit the prestige of the US economy. Everybody desire normal, stable rates.
Furthermore, do not forget that IMF’s helmsman is US. So, by putting Greece under IMF’s protection umbrella, USA expands its economical settlements in Balkans and, undoubtedly, in Europe.
See you soon…

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