Greeks are taxing EU patience

The simplest explanation of what is occurring in Greek debt talks is this: Taxes

The Greek Finance Minister, Yanis Varoufakis is proposing raising taxes in order to finance the debt. The Trioka say that Greeks don’t pay their taxes so cut benefits and pensions or else we will be back here very soon facing another default.

Varoufakis knows that raising taxes is not the solution, but cutting benefits will not fly back home.

And therein lies the debate. Next move is for the European regulators to cease the emergency funding of the Greek banks through the ELA.

If that happens, bank holiday with rioting in the streets could resume. Not a good situation.

Joke headline of the week: Moody’s Says Greece Missing IMF Payment May Not Prompt Downgrade.

Really and I guess it would not trigger a credit event either, in which case no credit derivatives or interest rate swaps would be triggered either.

So what’s the worry? There’s a reason Christine Lagarde was put in charge of the IMF, her experience in derivative law and how to skirt it.


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