Greek PM George Papandreou is aiming to form a coalition government and push through an international bailout package. However Patrick Young, executive director of investment advisory firm 'DV Advisors' views the situation as a political disaster.
“What we have here is a political disaster area. I realize we are talking about economics, but the problem is we have been hearing the Greek politicians have decided to have an overall political argument, and that is basically holding the rest of the eurozone to ransom,” he stated. “Mrs Merkel can’t afford to spend any more money or she will not get re-elected. Mr Sarkozy needs to get results and he has just had a complete disaster at the G20 meeting, where he promised so much and failed to deliver anything. Therefore Greece is now hanging on the end of a thread dangling over a cliff. It is going to go bankrupt and it is probably going to take the eurozone with it, and that really is a tragedy,” he predicted.Young added the focus should be on ejecting Greece from the single currency rather than saving it.
“The umbilical cord should be cut with Greece immediately. Ultimately Greece itself is incapable of staying within the kind of austerity regime that the eurozone wants to force it into,” Young explained. He added that for the rest of the eurozone it would be a lot better to throw out Italy, because this is a big festering sore and is completely unable to manage to get its house in order.
“Italy looks to me as if it is going to end up going straight into the hands of the IMF. The IMF said they were willing to lend money, but the terrible problem we have here is called politicians,” Young pointed out. “We don’t have any leaders, we only have politicians who are trying to save their own jobs in the era of high unemployment and therefore we are not getting the sort of leadership that will push the world forward. Isn’t it ironic that the small countries of Europe like Estonia have taken their medicine? They have been the people that actually injected austerity and changed their economies around,” he emphasized.
The euro has never been so shaky. And if the eurozone does not get its act together, the euro could be dead by the end of November, maintained Young.
“There is no leadership, everybody is rushing to try and get themselves re-elected, particularly Sarkozy, but Obama as well. This is going to implode and it is going to have terrible impact on all of Europe,” he concluded.