Greek Prime Minister George Papandreou, in an emergency accouncement, has officially called on the European Union to bail out his wastrel, spendthrift, socialist failed state. From Los Tiempos de Nueva York:
"The time has come for us to ask our partners in the E.U. to activate the mechanism we formulated together."
He was referring to an emergency aid package arranged two weeks ago in Brussels. The plan foresees up to €30 billion, or $40 billion, in loans from Greece's euro-zone partners, and up to €15 billion from the International Monetary Fund.
The activation of the E.U.-I.M.F. rescue plan, Mr. Papandreou said, "will send a strong message to the markets that the E.U. is not playing their game and will not leave its currency at risk."
Whole article. If by "game," Panandreou means "making rational decisions based on past behavior and future prospects," then he is certainly right: Greece is not playing that game. The case against bailing out Greece is so strong even Old Europe has gotten the message. German Chancellor Angela Merkel, one of the few marginally responsible players in the Great Recession, is still talking tough on the bailout, and as noted here, German voters are hopping mad about the possibility of dumping more money into the Aegean. Why would Germans be acting like such misers? From the Times again:
Other countries like Germany, the Netherlands and Austria have kept deficits down while retaining an edge in global markets, in part of by restraining domestic wage increases. France lies somewhere between the two camps.
Greek bonds have shot up to yields above 8.7 percent, but here's a curiosity: While Portugal, widely considered to be the next of the PIIGS countries in line to default, has also seen its price of debt service climb, it is still running a yield of just 4.8 percent on 10-year bonds. That's less than 1 percent above the current yield on 10-year U.S. Treasury bonds. Now the United States is not exactly setting a shining example of fiscal responsibility, but it appears to be some way from default, and unlike Portugal it has the ability to inflate away its debt. So why isn't the land of Fado, Fatima, and Futbol getting rougher justice in the debt markets?