Greece is only the first domino to fall, and fall it will, whether this month or next. Then the rest of the dominoes will follow, smashing creditors along the way on a path once called contagion. Though it's truly not a virus, it's mathematics triumphing over political fantasists. And the turn of the United States will itself eventually come, unless and until we begin electing leaders with virtue.
People in the mold of Reagan and Cruz. People apart from the system, willing to speak truth to power.
6. Janet Daley, The Telegraph
Greece has become a battleground for the worst ideas of the 20th century: Which of these do you find more repugnant: an autocratic European Union which is no longer bothering to conceal its intention to displace an elected government, or a shambolic clique of Left-wing fantasists who are propelling a country – and its hapless population – into economic ruin and political chaos?
5. The Z Man:
The Greek Revolution: The problem at the core of global finance is that there’s no market mechanism to restrain public debt. The whole point of a floating currency regime is to disguise public debt in order to avoid making tough choices about the welfare state. It’s not an accident that since the Louvre Accords the size and scope of government has skyrocketed throughout the West.
In other words, a currency system based on credit has worked at hiding the cost of government. In fact, it has been so good at it no one noticed that Greece was running up debt at an alarming rate. In the old system, Greece would have been facing double digit borrowing rates long before they reached this point...
...The only people with the ability to pay sovereign debt are the tax payers.
In the old currency arrangements, this was understood. Lenders knew this. If you lent gold to the neighboring king, you did so knowing you may have to invade his lands to get it back. That made lenders more prudent, which made the crown more prudent. Credit currency makes it appear that default is impossible so no one considers the cost of collection.
Successive Greek governments have promised the property of Greek tax payers as collateral. The Greeks on the dole are demanding their checks and making a fuss about it on TV. The real revolt is the from the people with money. The Greek taxpayers are refusing to pay up. Unless the EU is ready to roll in the tanks, the debts will have to be forgiven.
4. Walter Russell Mead:
After The “No” Vote, Soft Grexit Landing Now EU’s Best Option: What is undermining Europe’s global credibility isn’t doubt about whether Greece can be kept in the euro; it is doubt about whether Europe’s current leadership and institutional base can solve serious problems in real time. Europe’s inability to find a way out of the Greek impasse has damaged Europe’s global reputation much more than an orderly Grexit would do.
The European monetary union and the European Union are both in deep trouble. The EU needs to resolve the Greek crisis not so it can go back to the pretense that all is well; it needs to resolve the Greek crisis so that it can devote its attention and resources to addressing the much more important questions about Europe’s future that make the Greek crisis look like a tempest in a tea pot.
3. Mike Shedlock
Overwhelming "No" Vote; The Way Forward; Congratulations!: Congratulations are in order. Greece voted against further Troika servitude.
...The good news stops with the revolt against servitude. The way forward requires three items, all of which seem rather unlikely with Tsipras and the radical left in charge.
• Reduced public service sector
• Free market reforms (pensions, work rules, ease in firing, ease in starting a business, retirement age, etc.)
• Fair, flat tax system
...Unfortunately, there is little reason to believe they will take the necessary steps. At least they have a chance. They had no chance under Troika servitude.
2. Fraser Nelson
The Greeks have voted ‘no’. Now, the real crisis will begin: Eurozone parliaments will resist any further bailouts. The old deal is just not on the table anymore: that ship has left the harbor. Tspiris will want more ECB liquidity into the banking system; in other words, a third bailout. But can anyone see Eurozone parliaments giving their approval? Look around. The Finns and Danes now have right-wing, Eurosceptic governments. Francois Hollande is terrified of Madame Le Pen – whose National Front are having a field day with all of this. She has already hailed the Greek ‘no’, saying the next task is to, "organise the dissolution of the single currency system, which is needed to get back to real growth, employment and debt reduction."
Wolfgang Schaeuble, Germany’s finance minister, known for having little sympathy with the Greeks, has seen his approval rating soar to a record 70pc. The same poll showed Germans split, 45/45, on whether Greece should stay in the EU. The front page of tomorrow’s Bild (right) says: “Greeks celebrate their ‘no’. What now, Chancellor?”
What indeed. She’s meeting Hollande tomorrow, and has called crisis talks for Tuesday. It’s going to be an interesting week.
1. Mohamed El-Erian
10 Consequences of Greece's 'No': Greek and European politicians don't have much time to get their act together. The horrid conditions in Greece will get a lot worse before they improve. Without huge emergency assistance from the European Central Bank -- a decision that faces long odds -- the government will find it hard to get money to the country's automated teller machines, let alone re-open the banks...
...As hoarding increases, shortages of goods, including fuel and food, will intensify. Capital and payments controls will be tightened. The economy will take another worrisome step down, worsening unemployment and poverty. And the government will struggle to pay pensioners and the salaries of civil servants.
Oh, and a reminder: "U.S. debt headed toward Greek levels".