The latest BBC news item on Greece can be found here.

Let me give you a few quotes:

Here is the important point: outside of Germany it is almost impossible to find an economist or central banker who believed that the previous reconstruction of Greek debt was ever going to work.

GDP per head, perhaps a better measure of the hardship imposed on Greeks, has fallen 22% since the onset of the 2008 debacle. So austerity has certainly hurt. But has it worked to get Greece’s debts down? To the contrary, Greek debt as a share of GDP has soared to 176% of GDP, as of the end of September 2014.

Little wonder therefore that a party – Syriza – campaigning to end austerity and write off debts, has enjoyed an overwhelming victory in the general election. That it appears to be two seats short of a clear majority in the Athens parliament should not disguise the clear message sent by Greek people to Brussels. Or perhaps it would be more apt to talk of the message being sent to Berlin – since it is Germany which has been the big eurozone country most wedded to the economic orthodoxy that there’s no gain without austerity pain.

So just maybe, after Greeks have made a colossal and some would say pointless economic sacrifice, Germany will allow a rescue that permits the country a fighting chance of crawling out from beneath its colossal debts.

Now for some observations of my own.

Some time ago, when the Canadian dollar (CAD) was equal to or greater than the US dollar (USD) one of the best rates we saw, while travelling, was 1.40 CAD to the Euro. It was at times 1.48 and even higher. Now the CAD is about .80 of a USD and it is predicted to drop further, to .77.

Guess how much a Euro costs in CAD right now? 1.40855, about what it was when the CAD was 5/4 as valuable in USD terms as it is now.

What’s my point, you may ask. I have several:

• Many Eurozone countries were forced into austerity to get their bailout loans.
• In general, austerity has worsened the situation in each such country.
• Not having one’s own currency one can devalue means, a country’s central bank is handcuffed.
• Eventually, the austerity hardships result in change – riots or new, scary, radical governments that have broad popular support.
• Paying back the debt, and keeping the austerity, these options are off the table.

In short, the Eurozone is in trouble. A problem of its own making, with Germany firmly in control and clearly, deliberately, responsible.

The value of the Euro reflects this fact. Expect it to tumble farther.

Expect Germany to find some half-way, face-saving offer to sort-of forgive or restructure Greece’s debt.

Expect Greek politicians to reject this offer.

Then the real bargaining will start.