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January 31, 2012


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Two out of the three points, one might think, would apply to Greece today.

The third point is waiting to happen, and might make the Germans reconsider their plans.

Slow motion, though. Greeks are not likely to take up arms first; rather, many will move to other EU states to look for work. Your friendly Chistian Democratic government does not mind Greek immigration too much (no Muslims, after all) but German popular opposition to any sort of bailout is real, heavily working-class, and especially strong among folks who also oppose immigration. And if there's one thing in this crisis Merkel does personally care about, it's getting reelected. (Which is very likely barring serious economic trouble - e.g. such as would follow after an EU breakup. So I guess we won't see that either.)

Btw, Greece has not really pushed this option yet.

I've been waiting for the folks over at A Fistful of Euros to post as a comment on this. I've heard snarks that this is makes Greece the first direct province of the EU. I don't quite buy it, but its an amusing comment.

May I ask what's taking so long for the creditors and Greeks to reach a deal? The Creditors are going to lose a lot more if Greece defaults and Greece will take it in the shorts (possibly Euro zone exit even) if they don't sort something out.

Then...Germany! Oh, Germany!

Creditors are betting on Eurozone survival. (It's All or None, really.) Which will require (another) bailout.

Minor objection: in one sense, Greece is getting a similar service to that provided to the DR. That is, further aid has clearly been conditioned on the private creditor haircut taking place and being deep. So it's a bit of carrot & stick for the creditors. Take a haircut and have a real chance of making some money (for the recent buyers) or play hardball and watch Greece (and any hope of repayment) die.

Second minor objection: Isn't the relative lack of democracy in the DR one of the reasons the U.S. could be more generous than Germany is being with Greece? Morales could credibly commit to ceding some sovereignty. Further, the U.S. could thereafter do whatever it needed to in order to improve efficiency and reduce corruption. Finally, new creditors could expect the whole arrangement to stick. As the "failure is the plan" link notes, nobody expects to be able to change modern Greek political culture and make it stick.

So Noel, have you read the news about the Dominican constitutional court ruling concerning the citizenship (or lack thereof) for the children of illegal migrants? Apparently it affects anyone after 1929 and could affect thousands of people. The reasoning is that Haitian migrants who came to work in the canefields after 1929 were in transit and their children were not automatically entitled to citizenship just because they were born in the DR. The reasoning (at least the reasoning reported) behind the ruling seems a little on the weak side to me.

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