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Europe: Land of troikas, scapegoats and pirate parties

A protestor sets fire to copies of Euro banknotes outside the Bank of Greece headquarters.

The European Union, the European Central Bank, and the International Monetary Fund form the troika which decides whether Greece gets the bailout money it desperately needs to stave off default on billions of dollars in debt.

This weekend, the troika didn't sound happy. It upped the pressure on the Greeks to take their austerity measures even further. In order to get the bailout money, Greece agreed to targets on its budget deficits, which it has failed to achieve.

We spoke with economic consultant, and the man behind the blog The Street Light, Kash Mansori. He said that the IMF is there to analyze Greece's financial situation in order for the EU and ECB to decide whether to give Greece more money. The EU and ECB are Greece's largest creditors. If Greece doesn't get the next tranche of bailout money, then default is practically guaranteed.

Just how angry are the Greeks about their situation? Let's quote the finance minister, Evangelos Venizelos: "It is very crucial that Greece protects itself in such tense conditions. We should not allow ourselves to become the scapegoat or the easy excuse that will be used by European and international institutions in order to hide their inability to manage the crisis."

The Greeks, in other words, are not happy about all this outside pressure to make even bigger budget cuts when their economy is likely to shrink by more than 5 percent this year.

Kash Mansori said he feels some sympathy for the Greeks. He noted that, yes, the Greek government is responsible for most of its budget problems, but Mansori said that since the crisis began, Greece has tried to implement required austerity measures. And he added that while the rest of Europe has dithered - and dithered some more - over Greece's sovereign debt, the Greek people have suffered. So Greece resents the rest of Europe, while the rest of Europe - especially Germany - resents having to bail out what they see as their profligate neighbor.

The Pirate Party is a minor political movement in Germany that runs on a platform of internet liberation. These freebooters won quite a haul in regional elections in Berlin this weekend, compared to Chancellor Angela Merkel's coalition partners the Free Democrats. The Pirates got 9 percent of the vote while the Free Democrats' share fell to 2 percent: not enough to qualify for any seats in Berlin's local legislature.

It's more proof that Ms. Merkel is going to find it tough to keep Greece afloat in the face of growing domestic disenchantment with both the situation in Greece and Germany's inclusion in the Eurozone. Kash Mansori said that this regional election sends Merkel the message that Germans don't want to continue down the path of paying to bail out Greece and the other troubled EU nations.


Also on the show today, The Marketplace Daily Pulse is suffering a bit of a heart murmur today, thanks to a report that said investors have pulled $75 billion out of the stock market since April.

About the author

David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio

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