Greece Is to Remain in Euro: Sarkozy, Merkel

[Turbineguy]

French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are “convinced” Greece will stay in the euro area as they faced international calls to step up efforts in fighting the region’s debt crisis.

The euro rose after the leaders of Europe’s two biggest economies issued a statement yesterday following a telephone conversation with Greek Prime Minister George Papandreou. It erased most of those gains today. Papandreou committed to meet deficit-reduction targets demanded as a condition for an international bailout, according to statements from governments in Berlin, Athens and Paris.

European governments are aiming to ratify a July 21 agreement to bolster the euro region’s bailout fund and extend a second rescue to Greece. Investor skittishness over the spread of the debt crisis has raised banks’ funding costs and roiled markets worldwide.

http://www.bloomberg.com/news/2011-09-14/sarkozy-merkel-convinced-greece-to-stay-in-euro-area-amid-fiscal-steps.html

Sounds like they've done an end run around the banksters and speculators for now. This crisis will start back up again in a few months.

[vets74]

1. Despite that wages and prices are 20% higher in Greece ???

This is a crazy situation.

The Germans had a recession going from 1998-2002 when the big 9/11 shock arrived. That problem got "solved" by pumping out low-interest rate money in Euros... which immediately filled up bank coffers in the north and flowed south and west into the PIIGS economies.

Inflation exploded amongst the PIIGS.

Yeah, Greece is a mess. But their wages/prices are pegged now way above Germany, Belgium, France, etc.

How you keep the same currency, but run a 20% wage/price differential ?

It's insane, if EU is trying to be economically rational. And btw: craziness started with Greek giveaways to such as the Orthodox church. A billion at a whack....... Madness.

[roamer65]

2. They are getting ready for a Greek default.

The Federal Reserve is basically giving European banks unlimited dollar funding. They are insuring liquidity, in preparation for a Greek default. They are stupid if they think they can contain this crisis. They have 1 month to solve this crisis or the markets will begin to solve it for them.

[Yavin4]

3. Bingo. Greece Is As Good As Gone.

This charade is nothing more than buying a little time to get everything in place for the inevitable default.

[bemildred]

4. Just one more Friedman Unit.

:sarcasm: