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3/31/15

Greece: In order to save Greece and the EMU the EU might have to dump Ukraine

Greece failed to reach an initial deal with the European Union and the IMF to unlock aid after the creditors dismissed a package of reforms from Athens as ideas rather than a concrete plan, officials said on Tuesday.
The lack of a deal further raises pressure on Athens, which faces the prospect of running out of money in a few weeks unless it can convince lenders to dole out more financial help.

Athens put a brave face on the failure to reach an agreement with the "Brussels Group" of representatives from the EU and the IMF, saying it remained keen for a deal on the basis of its long-held demand that the measures it is asked to implement do not hurt economic growth. Lenders will intensify efforts to collect data in Athens, it said.

he country’s immediate fate now hinges dangerously upon a colourful but corrosive personality struggle. Prime Minister Alexis Tsipras’s charm has worn thin, and so has Finance Minister Yanis Varoufakis’s charisma. Mr. Varoufakis is visibly despised by his German counterpart, Wolfgang Schaeuble, though the latter is no match for him in wit and lucidity.

Mr. Schaeuble is more or less in tune with his boss, Chancellor Angela Merkel, but both are at loggerheads with Jean-Claude Juncker, the new President of the European Commission in Brussels. Mario Draghi, president of the European Central Bank, is in conflict with Jens Weidmann, president of the German Bundesbank. The Prime Minister of Spain, fearful of a challenge from his leftist opposition, is openly derisive of the new Greek government, and even the socialist leaders of Italy and France are keeping their distance.

The root cause of this personality struggle is the merit of so called “austerity” as a remedy for indebtedness. Under German leadership, the European Union has imposed spending cutbacks on Greece that are the most severe in postwar history: the outcome has been the most prolonged economic contraction and highest unemployment in Europe’s postwar history.

In order to save  Greece the EU might even have toi go as far as cancelling its planned investments in Ukraine and offer Ukraine as a gift to Russia thereby guaranteeing stability in the EMU and the survival of the EU if the US likes it or not..

EU-Digest

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