The aus­ter­ity “solu­tion” to Capitalism’s lat­est cluster-f**k — the bleed­ing white of the work­ing class — is a bi-partisan under­tak­ing and is inter­na­tional in scope.

“The State Bud­get Cri­sis Task Force” is tasked with doing the pol­icy grunt-work and con­sists of:

Paul Volker, Richard Rav­itch, Nicholas F. Brady, for­mer Sec­re­tary of the Trea­sury under Rea­gan and Bush; Peter Gold­mark, the for­mer bud­get direc­tor of New York State; Alice Rivlin, for­mer Vice Chair­man of the Fed­eral Reserve under the Clin­ton Admin­is­tra­tion; and for­mer Sec­re­tary of Labor, Trea­sury, and State, George P. Shultz.

They are set to mount their assault in the US after the elec­tion, no mat­ter which pup­pet wins.

Greece is their beta-test.

@Ironcloudz: Maybe so. Hope­fully, though, peo­ple will con­tinue to wake up and real­ize that Obama isn’t and hasn’t been at fault for at least most of the eco­nomic woes here in Amer­ica, espe­cially not those that have symp­toms caused by forces overseas(like the Greece crisis).

Bain Cap­i­tal is not that rel­a­tively impor­tant and is only one of hun­dreds of such globe span­ning cap­i­tal invest­ment groups, but it is lit­er­ally every­where in the world, seek­ing raw cap­i­tal return with no regard for the long term wel­fare of peo­ple in general.

One of their recent projects was in Tibet, where the trade in cash­mere (Yak wool) was defined by ( or ham­pered by, accord­ing to Bain phi­los­o­phy ) bureau­cracy, tra­di­tion, and com­pe­ti­tion among many inde­pen­dent pro­duc­ers. With the evi­dent con­nivance of the rel­e­vant gov­ern­ments Bain engi­neered a smoothly func­tion­ing cash­mere car­tel, from Yak in the pas­ture to branded high-end retail out­lets in New York, Hong Kong, etc. The suc­cess of this project included ‘reg­u­lar­iz­ing the income’ of for­merly inde­pen­dent Yak herders.

The above syn­op­sis had to be painfully deduced purely from Bain’s own volup­tuous pro­pa­ganda web­sites, which are full of cheery and inspi­ra­tional mes­sages from young, fresh-faced, ide­al­is­tic, cor­po­rate go-getters talk­ing about their green agenda and their vol­un­teer work in Africa with the Gates Foun­da­tion. I restrained myself from giv­ing a donation.

The euro credit cri­sis was a long time brew­ing, but it sur­faced at a moment when the dol­lar was in a cat­a­strophic decline and when its posi­tion as the world cur­rency was threat­ened. Europe’s debt trou­ble saved the dol­lar, at least tem­porar­ily, and that fact serves to high­light that the par­a­sitic attrib­utes of cap­i­tal­ism, which are always a poten­tial if not con­tin­u­ously and explic­itly sup­pressed, are now in the ascen­dant.
With the entire world avail­able as a gam­ing arena, one area (or cur­rency, or indus­try) may be brought to the brink of col­lapse, trig­ger­ing a par­tial recov­ery in other areas as cap­i­tal seeks the least rel­a­tive risk. The net result from each cri­sis is the low­er­ing of labor costs in the tar­geted area.
Whether the levers of eco­nomic power are being pulled in some cen­tral con­trol room or whether by myr­iad indi­vid­ual instances of cap­i­tal seek­ing its own advan­tage, the results are the same. In an effec­tively law­less global cap­i­tal envi­ron­ment, the great­est return is to be had by find­ing exist­ing pro­duc­tive processes and either carteliz­ing them, can­ni­bal­iz­ing them or find­ing some source of mar­ginal value in the process not pre­vi­ously com­man­deered by investors. That source typ­i­cally involves worker wages and ben­e­fits above mere sub­sis­tence or inde­pen­dent small pro­duc­tion sub­ject to real competition.

Per­haps the sin­gle social ser­vice we will be allowed to keep will be the cart being pulled along the street, with a ragged man shout­ing “Bring out your dead”.

It looks like it’s the IMF’s turn to, uh, “help”:

IMF to Stop Fur­ther Aid Tranches to Greece, Spiegel Says
By Brian Parkin — Jul 22, 2012 6:45 AM CT

The Inter­na­tional Mon­e­tary Fund will stop pay­ing fur­ther res­cue aid to Greece, mak­ing the country’s insol­vency in Sep­tem­ber more likely, the Der Spiegel mag­a­zine said. cit­ing uniden­ti­fied Euro­pean Union officials.

While a review of Greece’s progress in meet­ing terms of its res­cue is unfin­ished, it is “already clear” to the review­ing body of the IMF, the EU Com­mis­sion and the Euro­pean Cen­tral Bank that Greece will not be able to ful­fill its promise to cut debt to 120 per­cent of annual eco­nomic growth in euro terms by 2020, Der Spiegel said.

Miss­ing the tar­get means Greece needs between 10 bil­lion euros and 50 bil­lion euros ($60.8 bil­lion) in addi­tional aid, a poten­tial out­come that the IMF and sev­eral uniden­ti­fied euro– area states are not pre­pared to accept, the mag­a­zine said, cit­ing the review.

Euro-area lead­ers regard Greece’s exit from the euro as man­age­able even though they want to prop up the country’s finances until the new and per­ma­nent res­cue fund called the Euro­pean Sta­bil­ity Mech­a­nism is in oper­a­tion, the mag­a­zine said, cit­ing from the same sources. Ger­many is hold­ing up the incep­tion of the ESM as it awaits a court rul­ing on the fund’s con­sti­tu­tion­al­ity on Sept. 12, Spiegel said.

...

A Greek exit has “lost its ter­ror”. So says Germany’s vice chan­cel­lor. Be afraid. Be very afraid.

With bor­row­ing costs for Spain and Italy still near record highs, it’s worth remem­ber­ing that the Ger­man government’s offi­cial stance on the record high inter­est rates is that it’s a good a nec­es­sary source of pres­sure to force “reform” on the finan­cially trou­bled nations. Yes, that’s right, Merkel & Friends like the record high inter­est rates that exac­er­bate the under­ly­ing prob­lem with national sol­vency:

Italy doesn’t need Ger­man cash, Monti tells Ger­mans
August 05, 2012|Erik Kirschbaum | Reuters

BERLIN (Reuters) — Italy needs moral sup­port from Ger­many but not its cash, Prime Min­is­ter Mario Monti said in an inter­view pub­lished on Sun­day as Ger­man con­ser­v­a­tives renewed calls for Greece to leave the euro zone.

The Ital­ian leader also told weekly mag­a­zine Der Spiegel that he was con­cerned about grow­ing anti-euro, anti-German and anti-European Union sen­ti­ment in the par­lia­ment in Rome.

The Ger­man gov­ern­ment has resisted calls from Italy and strug­gling coun­tries to intro­duce com­mon euro zone bonds or take other action to help alle­vi­ate the bloc’s sov­er­eign debt cri­sis, say­ing it would remove pres­sure to enact painful reforms.

...

It’s also worth not­ing that the these near-record high inter­est rates are cost­ing tens of bil­lions of dol­lars a year. You could build avoid clos­ing a lot of schools and hos­pi­tals with that kind of cash:

Here’s Why Mario Monti’s Finally Fight­ing Ger­many
Barry Moody, Reuters | Aug. 13, 2012, 8:55 AM

Ital­ian Prime Min­is­ter Mario Monti has taken the gloves off in his fight to save Italy from dis­as­ter in the euro zone debt cri­sis, dar­ing to stand up to Euro­pean pay­mas­ter Ger­many in a way unthink­able a few months back.

His change of atti­tude is dri­ven by increas­ing Ital­ian exas­per­a­tion with repeated delays in for­mu­lat­ing an effec­tive response to a cri­sis on bond mar­kets that has put Spain and Italy in the front line against an exis­ten­tial threat to the euro and per­haps the whole Euro­pean Union.

...

Ital­ian offi­cials say the country’s eco­nomic fun­da­men­tals war­rant a diver­gence of its 10-year bonds against Ger­man Bunds of around 200 basis points instead of 440 at present.

Each 100 points of “spread” adds 20 bil­lion euros a year in debt ser­vice costs, equiv­a­lent to the entire rev­enue raised by unpop­u­lar new hous­ing taxes.

A senior gov­ern­ment eco­nomic offi­cial, speak­ing on con­di­tion of anonymity, said soar­ing bor­row­ing costs dis­torted nor­mal macro­eco­nomic mech­a­nisms, com­pound­ing Italy’s pain.

“The Euro­pean Cen­tral Bank low­ers its rates but our rates go up... inter­est rates are going up instead of down in a reces­sion,” he said. “Coun­tries that don’t need low inter­est rates get them and those in reces­sion get high rates.”

...

And in addi­tion to avoid­ing cuts in health and edu­ca­tion these gov­ern­ments could also extend pro­grams like unem­ploy­ment insur­ance to help alle­vi­ate some of the suf­fer­ing that’s already taken place.

Never mind:

Rajoy Risks Ril­ing ECB in Bid to Avoid Union Ire: Euro Credit
By Emma Ross-Thomas — Aug 15, 2012 2:32 AM CT

Span­ish Prime Min­is­ter Mar­i­ano Rajoy risks irk­ing the Euro­pean pol­icy mak­ers he needs on his side after he extended unem­ploy­ment ben­e­fits to avoid stok­ing social unrest.

Rajoy said yes­ter­day his gov­ern­ment will con­tinue to make pay­ments to the long-term unem­ployed, extend­ing for six months a ben­e­fit adopted by his Social­ist pre­de­ces­sor three years ago that was due to expire today. Rajoy, who reit­er­ated he may con­sider seek­ing Euro­pean help to tame 10-year bond yields hov­er­ing near 7 per­cent, didn’t say how he’d pay for the mea­sure he described as “just.”

The pre­mier is try­ing to head off protests from Europe’s largest army of unem­ployed as his pop­u­lar sup­port sinks. The plan to increase spend­ing two weeks after Euro­pean Cen­tral Bank Pres­i­dent Mario Draghi offered to wade back into bond mar­kets threat­ens to under­mine his best way of bring­ing down bor­row­ing costs from near lev­els that prompted Greece, Por­tu­gal and Spain to seek bailouts.

“He’s going to pro­voke an angry response and make the ECB even less will­ing to pro­vide sup­port,” said Stu­art Thom­son, a fund man­ager at Ignis Asset Man­age­ment in Glas­gow, who expects Spain to seek exter­nal funds by the end of the year. “Why poi­son the nego­ti­a­tions with resis­tance and deci­sions that will annoy the north­ern Europeans?”

Strict Con­di­tions

Span­ish 10-year bond yields dropped 1 basis point to 6.72 per­cent as of 9:26 a.m. in Madrid today com­pared with 6.73 per­cent yes­ter­day and a euro-era intra­day record of 7.75 per­cent on July 25. They have fallen 44 basis points since Aug. 2, when Draghi said the ECB was pre­pared to buy sov­er­eign bonds to bring down yields if coun­tries applied for sim­i­lar sup­port from Europe’s res­cue fund and accepted strict con­di­tions. Rajoy said the next day he would con­sider trig­ger­ing the mech­a­nism if it were “in the best inter­est” of Spaniards. He reit­er­ated those com­ments yesterday.

ECB pol­icy mak­ers have com­plained that pre­vi­ous attempts by the cen­tral bank to bring down bor­row­ing costs have led politi­cians to ease pledges to imple­ment bud­get cuts and mea­sures to over­haul their economies. The ECB briefly bought Span­ish and Ital­ian bonds last year.

“We haven’t for­got­ten what hap­pened in August of last year: We bought Ital­ian bonds and right after that the Ital­ian gov­ern­ment reneged on its pledges,” ECB Gov­ern­ing Coun­cil mem­ber Luc Coene said in an inter­view with De Tijd and L’Echo on Aug. 11 “The con­clu­sion is clear: When you take away the mar­ket pres­sure, you take away the pres­sure on politi­cians to act.”

Costs Unknown

Under the exten­sion announced by Rajoy, Spaniards who have run through as much as two years of contributions-based job­less ben­e­fits will con­tinue to receive 400 euros ($494) per month. The gov­ern­ment hasn’t given an esti­mate of the price tag of extend­ing the pro­gram, which cost 642 mil­lion euros for six months at its incep­tion in 2009 when the job­less rate was 18 per­cent. More than 200,000 peo­ple were get­ting the aid as of June, the Labor Min­istry said yesterday.

...

The lat­est pack­age of 65 bil­lion euros of bud­get reduc­tions, announced after the Euro­pean Union gave Spain an extra year to meet its deficit goals, included trim­ming the main job­less ben­e­fit and rais­ing the value-added tax in breach of Rajoy’s elec­tion pledges.

Yes, the costs of the 6-month exten­sion to unem­ploy­ment ben­e­fits are unknown, except we known that it cost 642 mil­lion euros for 6 months in 2009. So...they are sort of known and it’s prob­a­bly not much more than 1 bil­lion euros today. And we also know that 65 bil­lion euros in cuts were just announced and that’s the lat­est round of cuts. So a coun­try that’s cut­ting tens of bil­lions from its bud­get is going to get scolded by the ECB for spend­ing tiny frac­tion of that on amount on a pro­gram intended to ward off social unrest. Those are some won­der­ful priorities.

Work­ing hard, pay­ing atten­tion in class, get­ting your home­work done on time, and even doing all the extra credit assign­ments won’t get you that pass­ing grade when that old hag Mrs. Merkel is at the head of the class (I heard she once sent a kid away to deten­tion and they were never seen again!).

This is why the “good stu­dents” become burn outs.

I’m not sure how another call to turn the EU into a giant usury-colony is a “shock” at this point, unless that’s a med­ical ref­er­ence to the psy­choso­cial sep­sis author­i­tar­i­an­ism tends to induce:

Ger­many shocks EU with fis­cal over­lord demand
qGer­many has stated its exor­bi­tant price for keep­ing Greece in the euro and agree­ing to mass bond pur­chases by the Euro­pean Cen­tral Bank.

By Ambrose Evans-Pritchard

8:39PM BST 16 Oct 2012

There must be an EU “cur­rency com­mis­sioner” with sweep­ing pow­ers to strike down national bud­gets; a “large step towards fis­cal union”; and yet another EU treaty.

Finance min­is­ter Wolf­gang Schaeu­ble dropped his bomb­shell in talks with Ger­man jour­nal­ists on a flight from Asia, and appar­ently had the bless­ing of Angela Merkel, the chan­cel­lor. “When I put for­ward such pro­pos­als, you can take it as a given that the chan­cel­lor agrees,” he said.

Offi­cials in Brus­sels reacted with hor­ror. “If that is the demand, they are not going to get it. Nobody in the Coun­cil wants a new treaty right now,” said one EU diplomat.

“We’ve got the fis­cal com­pact and quite enough fis­cal dis­ci­pline. Not even the Dutch want a com­mis­sioner telling them how to tax and spend,” he said.

The new demands risk another stormy sum­mit in Brus­sels on Thurs­day, pit­ting Ger­many against the Latin bloc. The last sum­mit in June ended with an acri­mo­nious deal in the small hours on a bank­ing union that began to unravel within days.

Mr Schaeu­ble said the cur­rency chief should have pow­ers sim­i­lar to those of the EU’s com­pe­ti­tion com­mis­sioner, a man “feared around the world”.

The com­pe­ti­tion Tsar is the arch-enforcer of the EU machine, with pow­ers to launch dawn raids, deploy SWAT teams, and block merg­ers on his own author­ity. The job was the mak­ing of Italy’s Mario Monti a decade ago when he blocked the GE-Honeywell merger after it had been cleared by Washington.

The Schaeu­ble plan is highly provoca­tive. The EU can set deficit tar­gets but it can­not man­age bud­gets, unless a coun­try requests a bail-out and gives up fis­cal sovereignty.

Nor is it clear how Germany’s con­sti­tu­tional court would react. It ruled last year that the Bundestag’s bud­getary pow­ers are the bedrock of democ­racy and can­not be alien­ated to any supra-national body.

Mr Schaeu­ble poured scorn on counter-proposals by EU pres­i­dent Her­man Van Rompuy, includ­ing a first step towards debt pool­ing through joint “euro­bills”. The term “Fiskalu­nion” in Berlin has a spe­cific mean­ing: more power to police the affairs of debtor states. It does not mean debt mutu­al­i­sa­tion or a joint EU trea­sury. Ger­many has so far refused to cross this Rubicon.

Michael Link, the country’s Europe min­is­ter, said Mr Van Rompuy’s plans are dead on arrival. “When you make pro­pos­als that are sim­ply unac­cept­able for cer­tain mem­bers, this will only give the impres­sion of divi­sion. You can phrase it any way you like, ‘trea­sury bills’, ‘debt-redemption funds’ or ‘eurobonds’, this type of debt issuance will not fly with our gov­ern­ment. We have always said this very clearly.”

...

It looks like Mit­tens is mak­ing the GOP’s eco­nomic black­mail threat of an end­less House Insur­gency a cen­tral part of his clos­ing argu­ment for the pres­i­dency. While it’s not exactly a sur­pris­ing argu­ment at this point in the race, it’s a some­what curi­ous approach given that the argu­ment implic­itly puts the focus on the end­less House Insur­gency of the last two years. Oh well, it could have been worse.

Speak­ing of eco­nomic black­mail, it’s start­ing to look like Ger­many is start­ing to develop the same under­ly­ing prob­lem that caused much of the euro­zone cri­sis in the first place: far too much national sov­er­eignty, health­care, and pub­lic own­er­ship of crit­i­cal infra­struc­ture a mas­sive pri­vate sec­tor bor­row­ing binge lead­ing to hous­ing bub­bles across the con­ti­nent. Yep, now we can expect to watch the Ger­man hous­ing bub­ble get used as an excuse for doing noth­ing about the dis­solv­ing social fab­ric across the euro­zone because, you know, ris­ing hous­ing prices in Ger­many = infla­tion and infla­tion = bad.

The only way for­ward:

The Tele­graph
Angela Merkel sticks to aus­ter­ity script in Por­tu­gal as revolt builds
Ger­man Chan­cel­lor Angela Merkel braved hos­tile crowds in Por­tu­gal on Mon­day to show unflinch­ing sup­port for the country’s aus­ter­ity ordeal and plead for patience as social cohe­sion frays.

By Ambrose Evans-Pritchard

8:20PM GMT 12 Nov 2012

The fly­ing visit came as trade unions led a protest march through Lis­bon “in defence of national sov­er­eignty” and the Left Bloc in par­lia­ment said its top pri­or­ity is to “bring down the gov­ern­ment” and forge a sal­va­tion front.

Swoop­ing into Lis­bon amid tight secu­rity, Mrs Merkel praised the “coura­geous actions” of free-market pre­mier Pedro Pas­sos Coelho and vowed do to “every­thing pos­si­ble” to help the coun­try through hard times. Yet she also insisted that there would be no rene­go­ti­a­tion of the country’s €78bn (£62.5bn) EU-IMF Troika pack­age or softer terms to alle­vi­ate the slump, say­ing aus­ter­ity is the “only way for­ward”.

The tough love mes­sage comes as unem­ploy­ment reaches 15.7pc, with 35pc among the young, and dole dura­tion is slashed from nine months to four under Troika reforms.

Mr Pas­sos Coelho has been able to count on a tacit sup­port from oppo­si­tion social­ists but con­sen­sus broke down two months ago in a bit­ter clash over pay­roll levies.

Social­ist leader António José Seguro said on Mon­day that Por­tu­gal is crum­bling under the weight of debt ser­vice costs and “can­not endure any fur­ther aus­ter­ity”. The Troika has warned of mount­ing polit­i­cal risk and “aus­ter­ity fatigue”.

Ger­man offi­cials have cited Por­tu­gal as a suc­cess story, proof that Europe’s strat­egy of deep bud­get cuts com­bined with labour reform is pay­ing off.

The coun­try has com­plied with Troika demands – unlike Greece – becom­ing the pin-up coun­try for advo­cates of fis­cal shock ther­apy. But this means that any fail­ure indicts the EU policy.

...

The IMF has revised its pub­lic debt fore­cast to 124pc of GDP next year, chiefly due to the “pro­tracted reces­sion”. This is up from 118pc just months ago.

“The IMF is admit­ting that aus­ter­ity is doing more dam­age than thought,” said Marchel Alexan­drovich, from Jef­feries. “They under­es­ti­mated the fis­cal mul­ti­plier and there is a risk that Por­tu­gal will go down the same route as Greece.”

The Troika said Portugal’s exter­nal debt has risen from 196pc to 239pc of GDP over the past five years and has yet to sta­bilise. While unit labour costs have begun to fall – plum­met­ing 5pc over the past year – this is entirely due to pay cuts for pub­lic work­ers. Man­u­fac­tur­ing wages have con­tin­ued to ratchet up, cast­ing doubts on claims that Por­tu­gal is really claw­ing back lost com­pet­i­tive­ness within EMU by an “inter­nal deval­u­a­tion”. This is in stark con­trast to the Baltics.

The Troika says there is no mar­gin for error. If the slump drags on and there are any more shocks, Portugal’s debt dynam­ics will become “unsus­tain­able”. That is a mes­sage that Mrs Merkel does not want to hear.

Poor, poor France. Why can’t you just be a good vas­sal state team player like Por­tu­gal Esto­nia Lithua­nia Latvia? Or bet­ter yet, Ire­land! Ok, you can’t be like Ire­land, as they are a spe­cial case, but at least try to be more like Poland.

Come on France, get back in the game.

This is pretty help­ful: in response to the strange new trend of restau­rant own­ers declar­ing that they have to cut their employee health­care plans in response to Oba­macare, folks are point­ing out that these bold cor­po­rate lead­ers are also announc­ing to the world that the very peo­ple that are han­dling the food at their restau­rants are more likely to be sick. Thanks for the health-advisory.

It’s one of those sto­ries that helps to under­score the myr­iad of rea­sons why finan­cial aus­ter­ity that comes at the expense of the real econ­omy — some­thing that includes the health of the mem­bers of the econ­omy — is so incred­i­bly stu­pid and destruc­tive. Money is a really neat tech­nol­ogy because it allows for decen­tral­ized decision-making. But the idea that money is a highly imper­fect proxy for what is tak­ing place in the real world is an enemy of fascism/corporatism, so it’s not sur­pris­ing that soci­eties still seem to equate “finan­cial health” with “health”(it’s dis­ap­point­ing, but not sur­pris­ing). But it’s fas­ci­nat­ing how the impor­tance of con­tract enforce­ment (i.e. if you have a finan­cial debt you will repay it even if repay­ing it destroys your abil­ity to repay it. i.e. usury) is still viewed as a foun­da­tional lynch­pin of the con­tem­po­rary social con­tract that keeps soci­eties func­tion­ing. And yet things like car­ing for the poor and vul­ner­a­ble or edu­cat­ing the next gen­er­a­tion are gen­er­ally seen as an increas­ingly unaf­ford­able a lux­u­ries that really have min­i­mal impor­tance to social cohe­sion and eco­nomic per­for­mance. Because, you know, noth­ing dis­cour­ages “risk-taking” and entre­pre­neur­ship quite like a social safety net. Fascinating.

“The mae­stro” also has some thoughts on this topic.

With a new Greek debt deal now a done deal, it’s worth repeat­ing the obvi­ous: in the con­text of our age of aus­ter­ity, doing the “bare min­i­mum” to resolve a national cri­sis also dou­bles as doing max­i­mum to achieve the fas­cist objec­tives of shred­ding social cohe­sion. It’s the kind of fas­cist effi­ciency we should expect more of in the future. In the drive to increase pro­duc­tiv­ity Merkel leads by exam­ple. A really bad exam­ple:

Merkel Did ‘Bare Min­i­mum’ to Keep Greece Sol­vent: Ana­lysts
Pub­lished: Tues­day, 27 Nov 2012 | 7:24 AM ET

By: Shai Ahmed
CNBC Asso­ciate Editor

The lat­est Greek debt deal is at the behest of Ger­man Chan­cel­lor Angela Merkel and the needs of the domes­tic polit­i­cal land­scape there rather than about ensur­ing Greece’s long term eco­nomic well- being, ana­lysts told CNBC Tuesday.

“They’ve done the bare min­i­mum just to keep the show on the road to pre­vent Greece from falling apart and hav­ing to leave the euro in the next few months. They’ve not done enough to get Greece back to a sus­tain­able eco­nomic or fis­cal path,” Michael Saun­ders, chief econ­o­mist for West­ern Europe at Citi, told CNBC Europe’s “Squawk Box”.

“A few months ago Merkel her­self made a deci­sion that Greece would not leave the euro until the Ger­man elec­tion is passed because she feared she her­self would be blamed for any adverse polit­i­cal and eco­nomic con­se­quences. That’s why this deal has been done. Merkel wants to keep the show on the road for the time being,” he said.

The lat­est deal, secured late on Mon­day, will see Greece’s debt level low­ered to a more sus­tain­able level and lead to the release of the next tranche of aid of $44 bil­lion needed to keep the coun­try solvent.

A Ger­man par­lia­men­tary vote on the deal is expected later this week on Thurs­day or Friday.

Alas­tair New­ton, senior polit­i­cal ana­lyst at Nomura, told CNBC.com that the Ger­man elec­tions were a sig­nif­i­cant aspect of the deci­sion to get the deal through.

“The Ger­man elec­tions are a huge influ­ence here and it would obvi­ously be very bad for Merkel if any­thing were to cause a crash in Europe before the elec­tions. Merkel is com­mit­ted to keep­ing the euro together but not at any cost. The Greeks now have to deliver on what is being asked of them,” New­ton said.

Saun­ders added that once the Ger­man elec­tions are over at the end of next year there could be a sig­nif­i­cant change in atti­tudes towards Athens and scoffed at the notion that this would be the deal that changes the for­tunes for the belea­guered coun­try.

“At that point, as I sus­pect when the deal is unrav­el­ling , what will the cred­i­tors do then? The econ­omy is dis­in­te­grat­ing we’re in the fifth year of reces­sion head­ing into the sixth and beyond that the sev­enth and the eight. The longer this goes on it’s not going to get any bet­ter,” Saun­ders warned.

...

It never ends:

Decem­ber 2, 2012, 4:01 pm
Oper­a­tion Rolling Tantrum
Paul Krugman

Oh, boy. This isn’t going to end, even when or if a deal is reached on defus­ing the aus­ter­ity bomb; John Boehner has just declared that he’s going to hold the full faith and credit of the United States hostage every time we hit the debt limit. Nor will it be a case of hold­ing the nation at gun­point until it meets GOP demands; Repub­li­cans are sig­nal­ing that they don’t intend to make any spe­cific pro­pos­als, they’re just going to yell and stamp their feet until Obama soothes them somehow.

So this is going to be night­mar­ish, unless Obama sur­ren­ders — which I don’t think he will (because he shouldn’t).

...