Greek Crisis Is EU Banking Crisis

A Paris-based Executive Intelligence Review source who has connections in Athens, London, and Washington, commented yesterday that "the real question is that German banks are full of Greek bonds up to their neck" and that is the reason why the German government will bail out Greece in some form.

A Paris-based Executive Intelligence Review source who has connections in Athens, London, and Washington, commented yesterday that "the real question is that German banks are full of Greek bonds up to their neck" and that is the reason why the German government will bail out Greece in some form. The real question is that the German population is against bailout, and the government is afraid that Papandreou cannot implement the program he has announced. In Athens, the crisis is seen as an attack against the euro, which has chosen Greece as the entrance door. In the United States, even the most pro-European faction is skeptical on the credibility of the euro, which is seen as incapable of managing its own problems. "And therefore, they stay at the window, watching 'how they solve this.'"

The source pointed to the fact that in the end, Greece might go to the IMF, and this would be a total discrediting of the euro. "Papandreou went to Washington to see Obama, but there is also another person whom he might have met: Strauss-Kahn." He pointed to the fact that IMF Managing Director Dominique Strauss-Kahn's close adviser Jean Pisani-Ferry recently said that the Europeans do not have the money to bailout EU members and therefore we must use the IMF. The source agreed that there is no way out of the current crisis except through the implementation of a Glass-Steagall in a bankruptcy reorganization.