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Take a look at Walter Russell Mead’s recent post on the end game for at least this stage of the euro soap opera. He points out that the seemingly complicated game of bailing out the Greeks amounts to nothing more than allowing them to take a big haircut on their obligations which will essentially ruin Europe’s banks. The logical next step is to then recapitalize the banks. He explains quite simply the political strategy that’s driving this approach.

The current sticking point is that the Germans are holding out for each country to attend to their own banks while the French prefer a eurozone bailout, or to put it less diplomatically they want other countries to help pick up the tab for their banks foolishness. Are you surprised?

It all makes for interesting reading and is particularly useful as Mead does a good job at teasing out the politics which will ultimately define the Greek solution. He does, however, throw in a bit of a spine tingler at the end:

Is the European financial crisis so severe that France can’t ride out the storm without help from Germany? The French are behaving in ways that suggest that they are worried; if this is true, then politically and economically this crisis is just getting started. Germany can protect itself from meltdowns in Greece.

Source: How Greece Gets Bailed Out