Most people are bewildered by what is going on in Greece. So am I.

But here is a wily view from everyone’s favourite Serb Paleocon, Srdja Trifkovic, who explains how the whole manoeuvre looks like a quirky judo move to floor the opposition and so end up making the whole EU austerity policy towards Greek debt more likely to be implemented (not that that is necessarily good for Greece).

Not just the Greek opposition feel unbalanced and dizzy. Perhaps the French too:

On the foreign front I still suspect that Germany (but not France) may have been briefed in advance of Papandreou’s referendum gambit, and that he will use the aftermath of the scare to exact an even greater “haircut” in the weeks to come—primarily to the detriment of the three big French banks.

Meanwhile anyone with any sense (and, more importantly, any Euros) in Greece will be shipping out those Euros in case Greece crashes from the Eurozone and those Euros end up worth massively less in newly denominated New Drachmas.

This capital flight of course makes it all worse! As is happening in Italy. In effect ‘Italian’ and ‘Greek’ and some other national Euros are now worth less than ‘German’ Euros. This is a farcical but inevitable result of trying to push economic water uphill.

But of course it’s all the wicked banks ripping us off, wail the thick Leftists. To which comes more elegant analysis from Tim Worstall:

The banks have already lost their money. Deutsche Bank carries Greek debt on its books at 50% of nominal. So does RBS. So, in fact, does every bank that has even a modicum of sense (this excludes certain French banks but then we knew that was likely, finance and Frenchmen not mixing well).

For the banks Greece going bust has already happened, they’ve already lost their money. What’s next on the banks’ agenda is, OK, so, they’re bust. What do we all do to get them moving again?

The people who are not being asked to take a haircut are the IMF, the ECB, the EFSF, the whole lot of public sector holders of Greek debt. They too have, in reality (perhaps not the IMF as it is always first in line as a creditor) lost 50% of their money…..because Greek debt is trading at 50% of nominal.

This whole farce of a bailout, the austerity, the entirely counter-productive wringing out of a nation, is all to try and make sure that those public sector holders do not have to acknowledge the loss they have already made…

Wait! It’s all the fault of the evil anonymous markets! How dare ‘markets’ dictate to governments!

Er, not that either.

Governments choose to borrow from different parts of the planet because taxpayers won’t pay enough tax to finance things governments say taxpayers must have even though they won’t pay enough tax.

And if you borrow money, the lenders may politely ask how you plan to pay it back, and trust you to give an honest answer. If they don’t get an honest or credible answer, they are inclined to put up the cost of lending you more money.

That’s not an evil market at work. That’s good manners.

Last word with Tim who explains why the EU elite won’t do what is needed to end the crisis:

… What wouldn’t survive is the Grand European Dream, that the disparate continent can be turned into one Great Country ruled by the technocrats in Brussels. Which is why the technocrats in Brussels won’t solve the problem in the obvious and simple manner. Because the Dream is more important than the People.

Sadly, an economy, a country, where a Dream, any Dream, is more important than the People isn’t a nice one for people to inhabit.