Greece is falling out of Europe

It's been crystal clear for weeks, if not much longer, that Germany has been actively seeking to persuade Greece to abandon the Euro. Confirmation came on February 7 with Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote .

THE battle for the euro zone is a multi-front endeavour. For much of the past few weeks, the Greek front has been the more disconcerting. Fears have flourished over whether new June elections will produce a Greek government too hard-headed to come to terms with (just-as-hard-headed) German officials over whether and how to modify Greece's latest bail-out deal, leading to a potential Greek exit. But over the past few days, attention has shifted to a deteriorating situation in Spain.

By Simon Johnson Most experienced watchers of the eurozone are expecting another serious crisis to break out in early 2011.  This projected crisis is tied to the rollover funding needs of weaker eurozone governments, i.e., debts falling due in March through May, and therefore seems much more predictable than what happened to Greece or Ireland in 2010.  The investment bankers who fell over themselves to lend to these countries on the way up, now lead the way in talking up the prospects for a serious crisis.

By Daryl Montgomery: The market lost its rose colored glasses today with Greece announcing a political referendum early in 2012 on the recent EU bailout deal. This could lead to the deal falling apart sooner rather than later. Stocks sold off on the news in Europe and the U.S. while interest rates rose in Greece and other troubled EU countries.

Curious how Europe's insolvent peripheral countries, where the government is increasingly the only source demand (if not funding), have managed to avoid falling into a primary budget deficit abyss? Simple: instead of paying their outstanding bills, Europe's insolvent nations are simply not paying them. And with the entire European bond market now a central bank controlled policy mechanism, meaning there are no longer any checks and balances to keep governments honest, there is no pressure on said countries to actually pay.

BRUSSELS/ATHENS (Reuters) - Euro zone finance ministers conferred on h

Armcharles submits: If you own stocks, last week probably wasn't your favorite. Still, it could have been worse; you could be European.The EU got smacked around last week in a scene not unlike the penultimate brawl in Road House; you know, when that dude with the stick beats up all of the bouncers at the Double Deuce.Take a look at the Euro over the last three months.

Today in the bond market: German and French government bonds rose, pushing yields to record low levels, and securities of so- called peripheral nations such as Spain fell on concern Europe lacks a united response to its debt crisis. [...] The spread between the bund and 10-year Treasuries narrowed five basis points to 55 basis points, indicating investors may perceive assets outside Europe as safer.