Weekend Economists Go Out with a Boom August 24-26, 2012

[Demeter]

48. Obama asks eurozone to keep Greece in until after election day

NOW THAT I'LL BELIEVE! IT'S CALLED CHUTZPAH, BABY!

http://www.independent.co.uk/news/world/europe/obama-asks-eurozone-to-keep-greece-in-until-after-election-day-8076852.html

US officials are worried that if Greece exits the eurozone, it will damage President's election hopes...YEAH, A GLOBAL ECONOMIC COLLAPSE COULD DO THAT!

...Representatives from the International Monetary Fund, the European Central Bank and the European Commission are due to arrive in Athens next month to assess Greece's reform efforts. They are expected to report in time for an 8 October meeting of eurozone finance ministers which will decide on whether to disburse Greece's next €31bn aid tranche, promised under the terms of the bailout for the country. American officials are understood to be worried that if they decide Greece has not done enough to meet its deficit targets and withhold the money, it would automatically trigger Greece's exit from the eurozone weeks before the Presidential election on 6 November.

They are urging eurozone Governments to hold off from taking any drastic action before then – fearing that the resulting market destabilisation could damage President Obama's re-election prospects. European leaders are thought to be sympathetic to the lobbying fearing that, under pressure from his party lin Congress, Mitt Romney would be a more isolationist president than Mr Obama. The President discussed the eurozone crisis with David Cameron during a conference call on Wednesday and both welcomed statements by the European Central Bank that it was "standing firmly behind the euro"...Britain is understood to have pressed the Germans to ensure that if eurozone leaders decide Greece's position is unsustainable the financial "firewall" around Spain and Italy is made stronger. Officials are worried that if Greece was to exit the eurozone, the move could result in dramatic increases in the cost of debt for other weaker eurozone members – making their financial situation unsustainable.