EU and IMF lurking in the corner…

The unstable political landscape in Europe, coupled with potential government instability in Greece, may be an explosive mix for the economy and society. Perhaps the return to the drachma is not our worst prospect.

As "Proto Thema" has reported, our lenders have developed a scenario whereby they will lend to Greece only to repay its loans. Beyond that, for salaries, pensions, allowances, defense, civil protection, state expenditureand so, Greece will have to fend for itself with what it collects in the State coffers, much less than the current amounts, since in such an eventuality government revenues would also collapse, as wages will be dramatically reduced.
 
Unfortunately this scenario is not a remote possibility if the coming elections prove insufficient to bring a government that will implement the commitments. If Greece does not implement the memorandum, it is faced with a dilemma: either request its exit from the euro area and willingly go back to the drachma or stay in the EMU with the terms of the creditors.
 
And they will only lend us so we can pay them back in exchange for collateral by the Greek government. The ultimate goals of this option would be to bring about the structural changes in our country in a violent manner and ease the way for foreign capital to take part in public enterprises in very positive terms for new investors.
 
Realizing this prospect is what makes Evangelos Venizelos defend the memorandum. In a Sunday interview on "Proto Thema", the PASOK president points out that those who think they can play on the safe side are making a big mistake, and challenges those who are on the anti-memorandum front to pledge that if they get elected in June, the state will be able to pay salaries and pensions.
 
The climate of uncertainty is also sustained by analyses of international firms who question the ability of Greece to return to the markets and believe it will return to the drachma. It is obvious that the bar is lowered even further, so that the negative scenario of borrowed money only to pay our loans might appear as the lesser of two evils to the Greek citizens. The anxiety about the prospects of the Greek economy after the elections is widespread and officials at Maximos Mansion admit that "the threat of Greece’s exit from the euro or its punishment within the EMU is real."
 

French elections will play an important role in the development of the Greek case. On the night of May 6, Europe and the major players on both sides of the Atlantic will know the winners in Greece and France. And they will make their decisions depending on the newly configured setting, or remain alert in order to see the next move in the two countries.
 
Any decision will be made soon. If one eye of the international community is watching France and the other Greece, the whole attention is focused on the need to prevent the spread of the crisis; hence the leak of information that Spain and Italy will not join the support mechanism. This is a clear message to the markets not to overdo it with their interest rates, otherwise they will remain alone with all their potentially bankrupt customers.
 
That is, Berlin, ECB and IMF are playing a “poker game” with the markets in which Greece, Spain and Italy have become the playing cards and France is the …wildcard; a “game” under the watchful eye of the US, which is concerned about more important issues such as the continuing rise of China, India and Russia, along with their geopolitical pursuits.