“It is the time of the Endgame. There will be contagion.”
MAULDIN: There Will Be Contagion…
… (December 11, 2009) – Greece’s prime minister, George Papandreou, told reporters in Brussels on Friday that European Central Bank President Jean-Claude Trichet and Luxembourg Prime Minister Jean-Claude Juncker see “no possibility” of a Greek default, Bloomberg News reported. Papandreou also said that there was no possibility of Greece leaving the euro area, according to the report.
… (January 29, 2010) – There is no bailout and no “plan B” for the Greek economy because there is no risk it will default on its debt, the European monetary affairs commissioner, Joaquin Almunia, insisted on Friday.
… (September 16, 2010) – “Restructuring is not going to happen. There are much broader implications for the eurozone should Greece have to restructure its debt. People fail to see the costs to both Greece and the eurozone of a restructuring: the cost to its citizens, the cost to its access to markets. If Greece restructures, why on earth would people invest in other peripheral economies? It would be a fundamental break to the unity of the eurozone.” – George Papaconstantinou, former Greek Finance Minister
… (March 9, 2012) – ISDA EMEA DC Says Restructuring Credit Event Has Occurred With Respect To Greece
… (This week) – Take your pick from scores of quotes from various EU leaders: “A Greek default has no real impact on the rest of the Eurozone. No other countries are at risk.” Or: “The contagion ‘domino effect’ from Greece no longer threatens the rest of Europe, according to Marco Buti, the director general for economic affairs at the European Commission. In addition, Portugal and Ireland were said to be ‘in a much better place,’ while the credibility of Spain and Italy had ‘increased.'”
The headlines are about Greece, but the real story is not Greece but who is next. European leaders were right to be worried only a short while ago about contagion effects of a Greek default to the entire Euro system, which of course they now say doesn’t exist. This week we look at Europe, and sort through the ever more fascinating implications of the news in today’s headlines.