Greece ‘in a corner’ as Europe blocks payment

As oft stated here, Greece will not leave the union and it’s all leading back to Berlin, the world’s next superpower, who runs the show on the continent. Worst case scenario: There could be a compromise entailing a two tier currency system that allows regional states to retain their economic sovereignty to some degree — or at least they would think.

Such an idea already has backing from Angela Merkel and if the crisis deepens — because it’s not going to magically go away — look for ideas like these to gain even more traction and possibly become reality. ‘Eurobonds‘ were also another scenario.

For further info on a plausible two tier currency system, please see the following posts:

The new Great Game: Europe looks within for roots of renewal

European Commission Plans for Greater Integration

France Is Heading For The Biggest Economic Train Wreck In Europe

Is Germany Already Signaling The Complete (Economic) Collapse Of The European Union?

 

Greece’s last-ditch attempt to get desperately-needed funds from its euro zone neighbors failed on Wednesday, but the country appears eternally optimistic that a list of reforms — as yet to materialize — will unlock vital aid.

Greece appealed for the European Financial Stability Facility (EFSF) to return 1.2 billion euros ($1.32 billion) it said it had overpaid when it transferred bonds intended for bank recapitalization back to the fund this month, Reuters reported Wednesday.

However, euro zone officials ruled that Greece was not legally entitled to the money, the news wire said.

Is Germany Already Signaling The Complete (Economic) Collapse Of The European Union?

Should the proverbial you-know-what hit the fan, expect a breakup and future realignment with a ‘coalition of the willing’. We could also be looking at a two-tier monetary system. The uniting factor will likely be economically, plus security and defense driven (by fears of Russia), with the former being necessary for the latter. The question isn’t if a crash and subsequent breakup will follow, because it will, but what will lie in the wake of the aftermath.

 

In an attempt to try to divert a looming economic stagnation in the European Union, some leading German and French economists have launched some plans to try to revive (read: ‘resuscitate’) the economy of the Eurozone by tackling two issues which might have deteriorated the economic situation in the currency bloc.

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Even though it’s unlikely that Germany will revert its stance and more than double its investment in infrastructure-related projects, it does look like the country would be willing to keep the door open for private parties to incur the expenditures. Those will obviously have to be incentivized by for instance a tax holiday or some other monetary advantages. But the budget for infrastructure isn’t Germany’s only problem. Because of its rapidly ageing population, there will be a strong need for new entrants on the labor market and those will very likely have to be sourced through immigration. One of the proposed plans is to automatically give foreigners who graduate from a German university a work permit. This should entice more people to effectively stay in Germany and to support the pyramid of the labor market.