Greece Stands At The Precipice

As predicted, despite the recent paltry IMF/EU "rescue" deal, Greece is determined to be the author of its own destruction.

Greece's borrowing costs rose yesterday, as markets tested the sincerity of Greece and the rescue package itself.

Rumours abound that Greece has little or no intention of complying with the austerity measures enforced upon it by the rescue package, and that it is in fact trying to renegotiate the package.

Greece has of course denied that it is in a renegotiation. It knows full well that any admission of such a renegotiation would push it over the precipice.

Aside from Greece's sincerity over rebuilding its shattered economy, the markets are also questioning the exact terms and conditions of the package.

Germany wants any deal done on commercial rates. However, other member states are prepared to offer sub market rates. Until the EU sorts its own position out, the package itself cannot actually be implemented.

Once Greece falls, as it looks likely to before the summer, other weak economies (aka "PIGS") will also fall:

- Portugal
- Ireland
- Greece
- Spain

As I have noted before, the solution for the EU is to kick Greece out of the Euro before the markets force it and the other PIGS out.