Tom Keene Talks to Brown Brothers Harriman’s Marc Chandler

Tom talks with Marc Chandler, chief currency strategist at Brown Brothers Harriman, about public support for the euro and the currency’s rescue

How much more austerity can the Greek government impose on its citizens?
With the latest protests, the Greek government is losing support in the polls and there could be a change in government there. But so far I would say that the government is going to push ahead with these reforms, partly because it doesn’t look like there is much of an alternative.
What’s the chance the Europeans will leverage up their €400 billion rescue fund to €2 trillion to give the fund real firepower?
I’ll tell you, we are not counting on very much leveraging of the EFSF [the special rescue fund set up by the Europeans]. To leverage it up is going to take another series of meetings. That is probably going to be a fourth-quarter issue, so there is not going to be closure on the European debt situation anytime soon.
The people of Germany are not at these summits, are they?
They’re not. It’s the machinations of the elites that make this thing work. Germany never had a referendum to ditch the deutsche mark and accept the euro. They didn’t have a referendum, and if they had it would have lost. Even in France, they barely passed the euro. So the euro zone from Day One did not really have the kind of massive public support that you would expect such a grand experiment to have. That is perhaps one of its weaknesses.

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