Yesterday, the headlines screamed there is finally a deal to solve the Greek financial crisis. Yet, the stock market barely reacted. Why?
Frankly, the market doesn't believe it. The announcement was made only by the Greeks. (The "troika" still have a few more conditions they insist must be part of the package.) Greece has unfortunately lost creditability in the marketplace. They have made numerous promises that have been "postponed" due to voter opposition. In fact, we are witnessing one of the few disadvantages to democracies, i.e., that voters will vote to give themselves benefits when convenient but not to take them away when necessary.
There is also an increasing comfort level with Greece no longer being part of the European Union or maybe becoming a second-class member of the Union or even dropping the Euro in favor of some "Euro-lite" instead of their old Drachma. Whatever happens, if I were a Greek living in Greece, I would be buying a plane ticket somewhere else.
Frankly, the market doesn't believe it. The announcement was made only by the Greeks. (The "troika" still have a few more conditions they insist must be part of the package.) Greece has unfortunately lost creditability in the marketplace. They have made numerous promises that have been "postponed" due to voter opposition. In fact, we are witnessing one of the few disadvantages to democracies, i.e., that voters will vote to give themselves benefits when convenient but not to take them away when necessary.
There is also an increasing comfort level with Greece no longer being part of the European Union or maybe becoming a second-class member of the Union or even dropping the Euro in favor of some "Euro-lite" instead of their old Drachma. Whatever happens, if I were a Greek living in Greece, I would be buying a plane ticket somewhere else.
