FedUpUSA

Expect Chaos

 

I remain amused by the complete silliness of statements coming from ECB officials. At best ECB proclamations are laughable, at worst they are completely counterproductive.

With that introduction, please consider ECB’s Mersch says Greek default would bring “chaos”

European Central Bank Governing Council member Yves Mersch said on Saturday a Greek sovereign debt default would lead to chaos, adding it was up to the parliament to deliver on its austerity promises.

Banks and policymakers moved closer to a deal on Friday to help Athens secure funds ahead of a parliamentary vote on austerity next week that Greek Prime Minister George Papandreou must win to avert default.

If the vote next week is lost, international lenders are unlikely to release a 12 billion euros funding tranche, meaning the government will run out of cash within days.

“Now it’s up to the Greek parliament. I observe,” he told reporters on the sidelines of the Bank for International Settlements annual meeting in Basel.

“The next step will be to observe whether there will be delivery.”

When he asked about what would happen if Greece defaulted, Mersch said: “Chaos.”

Greece Default Irrelevant

Here is a succinct summation of the current state of Euro-Zone affairs.

  1. Greece will default, but at this point it is irrelevant.
  2. The situation in Spain, Ireland, Portugal, and Italy is now so dire that it is does not matter whether or not Greece defaults.
  3. Expect chaos

Mike “Mish” Shedlock
Global Economic Analysis