Three Reported Killed in Greek Protests

I'm sure the Greeks will immediately know whose fault it was: Germany, for not giving German taxpayers' money away at once on first request, and unconditional, of course. I like Greece and the Greeks I met very much, having been there half a dozen times on holiday, but this state of denial is just ridiculous. It's time to grow up. Where is the responsible, tax-paying, law-abiding Greek middle-class (which I reckon is the majority of the population!)? Why do they leave the streets to the radical left and their murderous "SA-troopers"?!

http://krugman.blogs.nytimes.com/2010/05/05/greek-end-game/

"If Greece were a highly cohesive society with collective wage-setting, a sort of Aegean Austria, it might be possible to do this via a collectively agreed reduction in wages across the board –an “internal devaluation.” But as today’s grim events show, it isn’t.

The alternative is a devaluation — which means leaving the euro.

Any announcement of plans to leave the euro would, as Eichengreen points out, trigger disastrous bank runs. By the same token, any suggestion by outside players, like the ECB, that the option exists would amount to invoking a speculative attack on Greek banks, and therefore can’t be made. The whole thing is effectively undiscussable.

But that doesn’t mean it can’t happen. Greece is already starting to look like Argentina 2001.

Again, this isn’t an alternative to debt restructuring; it’s what might be needed in addition to debt restructuring to make the fiscal adjustment possible.

I hope that somewhere, deep in the bowels of the ECB and the Greek Ministry of Finance, people are thinking about the unthinkable. Because this awful outcome is starting to look better than the alternatives."