The band Fehlfarben already wrote an impressive song in the 80s of the last century, which seems tailor-made for the current financial crisis. "No breathing space will be taken" is the refrain. And it comes to mind for anyone who opens the daily newspaper or watches the news: The news is in a seemingly endless loop of: Greek over-indebtedness, possible default, reforms, increased competitiveness, additional aid from the Troika, Grexit avoidance, cuts in Greece, lack of tax morale....
Only to swing back to the next turn of the month, when - once again - the interest and redemption payments cannot be made. The financial market is then irritated, lowers the rating for Greek government bonds even further and, in the end, everyone fears a sovereign default. Thereupon either the introduction of a new Greek currency and thus also the exit from the euro and/or the EU. The Grexit is hanging over the scene as a sword of Damocles, so to speak.
What's next.... the songext provides us with interesting clues - without the band even having an inkling of the Grexit at the time.
Mountains explode - blame the president
The explosion of the debt mountains is almost inevitable. In these weeks and months the future will be decided, history will be written by politics and the financial market: With a loud bang, the euro was devalued by 20% against the Swiss franc a few months ago, losing almost a fifth of its purchasing power. Something similar can be observed against the US dollar, which also does not necessarily rest on solid government finances.
There is an almost 100% guarantee that the mountains of debt will explode. The financial market has already taken almost invisible countermeasures: Fearing a Grexit, many institutional investors have long since stopped buying hardly any government bonds. The ECB therefore started a new infusion - as a substitute for the real financial market, so to speak: government bonds that find no buyers can in turn be offloaded to government bodies such as the ECB or the new stabilization fund. Thus, until the expected Grexit, more and more government bonds of the crisis countries are accumulating as a kind of shadow debt.
However, U.S. President Obama is least to blame for the Grexit: He is simply looking for a strong European partner within the framework of a transatlantic community of values. And he himself is probably amazed at the instability of Europe, which was considered an economic locomotive for so long. That is why he would prefer Greece to be stabilized - so as not to increase the sphere of influence of former intelligence officer Vladimir Putin.
Crisis country or crisis countries - which is true?
If you read the last paragraph carefully, we are no longer talking about just one country, Greece, with the threat of a Grexit. If you ask around on the financial market, you will also hear more and more critical voices that the Grexit could find imitators. In just a few years, the question will arise as to whether England will not also want to leave the European Union, the Brexit could see the light of day. So if history is now being made in the next few years, the question is: Why isn't the IMF saving the day?
IMF participates in negotiations and prescribes bitter medicine
It is now almost a matter of course that a troika leads the negotiations. This consists of the European Union, the European Central Bank and the International Monetary Fund. In the meantime, forgetfulness is spreading about the role of the latter (as was said in the song: Vergessen macht sich breit): He repeats mantra-like the creed that falling wages and social benefits will lead to increased competitiveness and thus the crisis can be overcome.
But a look at Greece's big companies shows that most of them are not global market leaders, so they wouldn't provide the constant flow of foreign currency that stabilises the country. As a distraction - and to present the citizens with something new for a change - German Finance Minister Wolfgang Schäuble came up with a brilliant idea: he no longer speaks of a troika but of the "3 institutions". The question, which is also disputed in economics and on the financial market, is then: is an upswing triggered by an increase in mass purchasing power and cost increases or by savings and boosting exports.
Where do we go from here: Alternative saviour and the warner against the fascists
There have already been almost innumerable rescue packages for Greece, in some cases with considerable financial support from the state. In some cases, the financial market has also deferred debts as part of a "voluntary" creditor waiver in order to prevent a Grexit. Thus, for the time being, Mrs. Merkel remains the savior of Europe, trying to preserve the legacy that was considerably damaged by former Chancellor Gerhard Schröder. In addition to what appears to be genuine enthusiasm for the dissolution of the Federal Republic and the creation of a single European state, it is also the lack of other fields of activity that drives her. She is perhaps still known everywhere as climate chancellor, but otherwise the external image is rather fuzzy.We should not forget another important player, this time from the SPD: Martin Schulz, President of the European Parliament has a very natural interest in keeping his parliament intact. So he paints the devil of Grexit on the wall everywhere and talks about a catastrophe on the financial market if word gets out that it is possible to leave the EU again. An image he uses very often is the strengthening of the fascists, who, according to his information, already have 12% in Greece again. A Grexit would therefore contribute to the destabilization of democracy and affect the entire society beyond the financial market.
In these weeks and months, the future of Europe will be decided. The financial market is drawing its conclusions from the political picture and, unfortunately, is not leading the way. In the end, however, it will go on like in the song, there it says: "Spacelabs fall on islands".
I would not see it quite so dramatically, but it is the case that the debt falls at the feet of the finance ministers.
