After a confrontation with Merkel and Sarkozy made it clear that the question was whether Greece remained in the eurozone and that there would be no payments while Greece remained divided, the debt deal referendum quietly has been shelved.
With shades of the Chinese leader’s famous statement that it was too soon to say if the French Revolution had been successful, Zhu Guangyou, Chinese Finance Vice Minister commenting on the Greek situation said, it was “too soon” to decide whether China would invest in a bail out fund to support Greece and other-debt laden countries.
The PM of Greece may be forced to step down today in the face of rifts in the governing party’s willingness to make required cuts in government spending. Chancellor Angela Merkel faces internal party opposition from her finance Minister who wants to exploit the Greek crisis to establish a United States of Europe.
Papandreou may be replaced by another Greek Papa – Mr Papademos, 65, who was directly involved in Greece’s transition from the drachma to the euro as its national currency.
He is best known for his work as one of the country’s most senior economists. After a stint at the Federal Reserve Bank of Boston, Papademos joined the Bank of Greece as Chief Economist in 1985, rising to the position of Governor in 1994.
A distinguished scholar who has published papers on macroeconomic theory and policy, Papademos has held academic positions at Columbia University, Harvard University and the University of Athens.
Educated at Massachusetts Institute of Technology (MIT) in America during the 1970s, he holds a degree in physics, a masters in electrical engineering and a doctorate in economics.
In a case that would defy Ripley’s Believe It or Not!, a PM who previously declared a lack of interest in foreign affairs might have her biggest victory in Cannes through investments in the IMF, while the Opposition leader continues to find opportunities to prove he is the leader of consistent opposition.
In the backwoods of Australia, the proposal of Julia Gillard to get the G20 leaders to back the IMF with an increase in resources as a standby funds to ring fence any further European collapse brought on a rash of what Wayne Swan labelled as the Coalition’s xenophobia.
Tony Abbott predictably said extra support to the IMF would be throwing good money after bad and that it would be offensive to borrow money to lend to a country that could not pay its debts. This prompted Jennifer Westacott of the Business Council of Australia to back Gillard, especially as Australia would make money on the investment.
Smart companies can only stare at all this and get on with the business of making the most of a Cup Day rate cut amid the Oliver Twist demands of the big banks for more cuts after making record profits. The equity markets continue their road to recovery, the earning season looks good and business is building inventory and continuing to cut staff to make profit targets by the end of the year.
Garry Morgan suggests that another rate cut before Christmas should get Aussie retailers to look forward to a better Christmas shopping season than they would have expected only a few weeks ago. Consumer Confidence is now at its highest point for six months.
Australians say we will have “good times” over the next 12 months (36%, up 4%) and Australians saying “now is a good time to buy” major household items (58%, up 3%). Roy Morgan Consumer Confidence has increased 2.1pts to 116.8, now up for the fourth straight week and up 8.2pts since October 1/2, 2011.
All of this volatility makes it hard to plan but the best bet is to stay focused on superior service, technological upgrades and productivity promotion through skills training and active staff engagement. Generally Australian business will be pleased to see the end of this calendar year but can look forward to a prosperous financial year even if there are only a couple more rate cuts.
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Dr Colin Benjamin is an entrepreneurship and strategic thinking consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Colin is also a member of the global Association of Professional Futurists.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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