Not a surprise but watch the markets today;
Greece has said its budget deficit will be cut in 2011 and 2012, but that it will still miss targets set by the EU and IMF. The 2011 deficit is projected to be 8.5% of GDP, down from 10.5% in 2010 but short of the 7.6% target. The government, which on Sunday adopted its 2012 draft budget, blamed the shortfall on deepening recession.
Greece is doomed, it cannot meet obligations, and it will default. Of course everyone now accepts this, even the Eurocrats. However their challenge is what to do with a defaulted bankrupt Greece. If Greece LEAVES the EU, a route openly advocated by some Greek politicians, the house of cards will collapse. So, Greece is to be retained “pour encourager les autres”.
In the meanwhile even as the Euro €440bn bail out fund is built up, the €2.2bn fund is on the back burner to be produced at the next crisis. It’s a curious thing listening to the Brussels elite insisting that the ONLY solution to EU problems is even MORE EU! I read a line in the Irish press yesterday which resonated “Integrate or die.” The weaklings will choose integration and to hell with what voters think. They instinctively rally around the Euro flag and abandon their own national sovereignty with disdain. But in the final analysis, unless every part of the EU operates to German rules and accepts fiscal subjugation, then there is no solution. And even that sounds a bit like a final solution…