Thetrader has written extensively on the topic of Greece, and other countries in Europe needing to take the big STOP, default on the debt, leave the Euro, and try to get e fresh start where the country can be competitive. This might sound harsh, but this is the way to go. Already over indebted won’t be solved by borrowing more money on unrealistic rate levels. Austerity as the only solution, is not the way to go for future growth, if to stay in the Euro area. Receiving bail out by leaders such as Mr Kahn makes one wonder what kind of judgment and interest actually lead all the economic reforms. The last week’s developments from the Danes closing borders, Greece in a total coma, Spain’s protests leaving a huge footprint are all starts of the new Europe, where Euro is the ultimate victim. The countries will survive, but the Euro seems a little shaky…. Below from the Telegraph about a Greek default;

It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

What happens when Greece defaults. Here are a few things:

- Every bank in Greece will instantly go insolvent.

- The Greek government will nationalise every bank in Greece.

- The Greek government will forbid withdrawals from Greek banks.

- To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

- Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)

- The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.

- The Irish will, within a few days, walk away from the debts of its banking system.

- The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

- A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

- The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

- The French and German governments will meet to decide whether (a) to recapitalise the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

- They will recapitalise, and recapitalise their own banks, but declare an end to all bailouts.

- There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.

- This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalising a number of banks via debt-equity swaps.

- Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.

- Attention will turn to the British banks. Then we shall see…

Welcome to the new Europe.

Here is the symbol of the M 15 protest movement in Spain. It sure is bearish….

El Pais, by Google translator;

In Brussels, the sun rises “with the word sun symbol contained in the Madrid metro was the text of one of the banners as yesterday showed, for the second consecutive day, some 300 young people in the vicinity of the Embassy of Spain to Belgium . Spanish MEPs, broth made by any personal experiences ” ee=”Los concentrados discutían en asamblea cómo mantener con vida el Movimiento 15-M en la capital donde se halla la sede de la Comisión Europea y de muchos organismos de la UE.Los eurodiputados españoles, puestos a caldo con experiencias personales por alguno de”>The meeting focused on discussing how to keep alive the 15-M Movement in the capital which is the seat of the European Commission and many EU bodies. <NO1> Spanish MEPs, broth made by any personal experiences young people, will have news this week from them.

The meeting agreed to establish an international commission to coordinate with similar movements to the 15-M in other nearby countries. Banners displaying inveighed against the bankers, the PSOE and the PP. “They call it democracy and it is not,” read one. On Friday, we could read in another: “Why go back?” Reports from Brussels Ricardo M. of Herrod.

In Paris, a hundred supporters of the Movement 15-M gathered at the Place de la Bastille, but it coincided with another rally moved to the nearby Piazza della Repubblica, reports Antonio Jiménez Barca. “The majority are Spanish, but gradually more and more French and citizens of other countries,” said Bruno Gangoiti, one of the participants. Young had planned to spend the night in the square.

In London, thousands of students and workers gathered again at the Spanish Embassy to continue showing their identification with the Movimiento 15-M. At noon they began to meet the first protesters, while “a minority group” continued the protest after spending the night outdoors.

In Italy, hundreds of young Spanish and Italians expressed their identification with the Movimiento 15-M. In streets and squares of Rome, Milan, Pisa, Bari, Bologna, Florence, Taranto, Padua, Palermo and Turin displayed placards, staged sit-ins and exhibited white balloons as a symbol of unity and peace. In Rome, some 200 people gathered for a second day on the plaza of Spain, next to the Embassy to the Holy See, Miguel Mora report. In Copenhagen, about 300 people gathered well before the Spanish legation.

In Mexico, some 100 young people gathered at the Embassy of Spain. They chanted and cheered, the slogan “they call it democracy and it is not.” Most were Spanish, but then joined Mexican protesters.

“Young people who reside outside of Spain we must support and match the actions that challenge our current political system,” explained one of the organizers. In Milan, the students gathered again in the Piazza del Duomo with some Italians. The # italianrevolution seemed to be gaining popularity in Facebook (14,000 registered last night) with the support of Viola and movement Popolo 5 Stars, whose leader, comedian Beppe Grillo, participated in the protests on Friday in Barcelona.

From El Pais,

15-M movement is a dance of numbers. More than 25,000 people rallied in Madrid early on Saturday. Some 8,000 did in Barcelona. Hundreds endured another night in the open in Bilbao, Valencia, Sevilla, and some less in London, Copenhagen, Paris, Mexico … In the city of Omsk, Siberia, exactly 5,678 miles from where it all began, the figures are simplified: one.

No countryman living in a radius of miles
On Saturday morning (late in Spain), a man stood in front of the Lenin statue in the center of Omsk. In the hands, a camera and a piece of cardboard with hand-painted message: “real democracy now. # russianrevolution. ” Xavi is called, is from Barcelona and has 31 years. It also says, the only Spanish registered at the consulate in Siberia. On Saturday he joined, indignant, vindictive and only to the mass demonstrations around the world.

Xavi settled in Siberia for five years. No running away from a bad employment situation in Spain, but personal issues led him to move, and also wanted to start her own business, something that was easier there, said by telephone. Now try to take forward a business project and manages, for several hours, the Web site Digg, one of the best drivers # nolesvotes movement. That is precisely the idea.

Here we go again, the end of the world, or not, Iceland’s most active volcano erupts. Will this cause the double dip recession? From Foxnews.

Iceland’s most active volcano has started erupting, scientists said Saturday — just over a year after another eruption on the North Atlantic island shut down European air traffic for days. Iceland’s Meteorological Office confirmed that an eruption had begun at the Grimsvotn volcano, accompanied by a series of small earthquakes. Smoke could be seen rising from the volcano, which lies under the uninhabited Vatnajokull glacier in southeast Iceland. One eyewitness, Bolli Valgardsson, said the plume rose quickly several thousand feet into the air. Grimsvotn last erupted in 2004. Scientists have been expecting a new eruption and have said previously that this volcano’s eruption will likely be small and should not lead to the air travel chaos caused in April 2010 by ash from the Eyjafjallajokul volcano. Sparsely populated Iceland is one of the world’s most volcanically active countries and eruptions are frequent. Eruptions often cause local flooding from melting glacier ice, but rarely cause deaths. Last year’s Eyjafjallajokul eruption left some 10 millions of air travelers stranded worldwide after winds pushed the ash cloud toward some of the world’s busiest airspace and led most northern European countries to ground all planes for five days. Whether widespread disruption occurs again will depend on how long the eruption lasts, how high the ash plume rises and which way the wind blows. In November, melted glacial ice began pouring from Grimsvotn, signaling a possible eruption. That was a false alarm but scientists have been monitoring the volcano closely ever since. The volcano also erupted in 1998, 1995 and 1993. The eruptions have lasted between a day and several weeks.

Is Us going down the same path as Spain? With this chart we see where US is going…..

The Movement 15-M once again shows its strength a few hours before Election Day this Sunday. After a day marked by symbolic and recreational activities in areas where protesters are concentrated on Monday, thousands of people in Spain have joined them in the late afternoon and returned to flood the streets to demand “real democracy ”on the day of reflection before the elections, despite the prohibition of the Central Electoral Board. And as in the afternoon and evening of Friday, every minute that passes more than fills the main squares in Spain. The 22-M gets marked by the 15-M syndrome.

The First Deputy Prime Minister and Interior Minister Alfredo Perez Rubalcaba, has met this morning with the leaders of the security forces and have verified the peaceful development of concentration and the correct action of the police, which has so far to watch, but not to evict the protesters. Agents have even befriended the protesters, who this morning at Sun have served chocolate with churros.

Puerta del Sol in Madrid has started a day earlier active with a full agenda of activities, which include two parades, a concert and workshops for clowns, Samira Saleh reports. And tonight is going to fill.

Thousands of people had slept last night in tents. Protesters have occupied almost the entire place after a night “quiet” as qualified officials of the newly created “compliance committee” of the Movement 15-M. A total of 12 people had to be met by the Samur, mainly because of faintness and dizziness. Services include cleaning the sidewalks are “three times cleaner” than any weekend in the bottle is practiced.

Already in the morning, when the people have risen, the activity was very much alive.After the first activities, the concentrates have held an assembly from one in the afternoon, in which it was recalled that there should be no political slogans.

The campers exchanged ideas on a stage they want to be as happy as possible and have decided to dye yellow posters and clothing of that color. Gradually improve your organization and are defined as a “city-state as a permanent, ready to continue beyond May 22,” said a spokesman.

To fraternize with the rest of concentrates in Spain, the Sun have camped in a canvas spread on a newspaper stand to project images of the situation of the places in other cities. The organizers have received over 300 requests from Spain and other countries to expand their domains tomalaplaza.net, Carmen Pérez-Lanzac reports.

In Valencia, the assembly held late in the afternoon at the Town Hall Square was the largest in recent days. Attendees exceeded the central island of the square (4,000 square feet) and cut off traffic surrounding some of the lanes due to the large number people concentrated, reports Paul Ferri.

Supporters of the Movement 15-M camped in the Andalusian cities today have held symbolic acts and cultural activities on a day which have brought crowds to hear their claims, reports EFE. May 15 Movement “has no intention of talking about votes or anything that distracts the” day of reflection, but has invited citizens to “all ideologies” to learn of his claims, explained a spokesman in Sevilla.

The same has happened in Barcelona, ​​where thousands of people participated in a meeting this afternoon in the Plaza Catalunya in Barcelona, ​​while families with children and tourists included a visit to the “outrage” in his walks a day of reflection, Rebecca has Carranco. Hundreds of concentrates have discussed today on whether to go or not to vote tomorrow, do cast a blank or invalid vote, and others have wondered: what on Monday what?. Proposals have also been raised as to withdraw money from traditional banks, to promote democracy or assembly-debtor countries returned to the International Monetary Fund loan capital, but not the interest.

In other Spanish cities, this has been the balance of the protests during the day of reflection:

ZARAGOZA Hundreds of people have raised this afternoon their umbrellas in the Plaza del Pilar de la capital as a symbol of resistance against which “is falling” and to demand change in Spanish politics, with ironic slogans like “we are thinking.”

ALICANTE The “outraged” that participated in the assemblies of the concentration of the Plaza de la Montañeta have tried to avoid dealing with political issues in order to respect the day of reflection, although they have talked about education, health or any other matters not directly propose related to the 22-M. For its part, the approximately 120 “outraged” that occupied the square after midnight Alcoy Spain dismantled the camp this morning after the National Police were warned of a possible fine of 6,000 euros.

MURCIA In the Plaza de la Glorieta de Spain, protected from heat with awnings, fifty people have remained focused and have said they do not intend to withdraw their camp despite the decision of the Central Electoral Board because, they say, are doing what they touch : reflection.

BILBAO In Bilbao had not convened assembly, but at eight o’clock in the afternoon, as in previous days, about 3,000 people gathered in front of the Teatro Arriaga. Throughout the day, hundreds of outraged citizens took part in workshops organized to keep alive a winning color camping with the placement of new signs, reports Asrhi Karim.

OVIEDO In the Plaza de La Escandalera, where they accumulate banners with slogans like “We’re not afraid to utopias” or “We are not anti-but cambiasistemas” meetings were held on various topics of the manifesto promoted by the Civic Platform “real democracy now” and for remembering those who wish to join to avoid consuming alcohol or drugs in the area.

LEON One hundred people camping Movement held 15-M in the Plaza de Boots, which have been conducted theater workshops in percussion and a talk on free culture, respecting the day of reflection without reference to the election.

TARRAGONA Members of the groups AcampadaTarragona and “real democracy and” have remained concentrated in the Plaza de la Font, after spending the night there, very close to the exhibitors at the Fair Trade Fair and Ethical Banking held on the same site , and have displayed banners with slogans like “Stay, move the world.”

PAMPLONA Concentrates on the Plaza del Castillo, after yesterday moved from Town Hall, have achieved so far 4,000 signatures in support of the manifesto “real democracy now” and, during a day of reflection, the initiative has continued as normal and waiting to join the possible conclusion of a win tonight’s football team Osasuna.

SAN SEBASTIAN Hundreds of campers on the Boulevard have organized a human chain, children’s workshops and monologues called “comedy club” and its organizers have insisted that this movement does not want to be left alone “in the words and speeches”, as itsapproach is “moving to somewhere, not to complain.”

VITORIA A “yellow wave” of outrage have walked this afternoon by the Basque capital to protest peacefully by the current political and economic situation and “to promote a reasoned and responsible thinking of voting for conscious and consistent.” In the Virgen Blanca in Vitoria gathered more than 1,500 people who had previously participated in an impromptu demonstration that, in the Ertzaintza warning about possible complaints, eventually converted into a ride.

CADIZ In the Plaza del Palillero today have withdrawn all the posters hanging on the walls in a gesture of respect for reflection, and is scheduled in the afternoon a demonstration “without flags.”

PALENCIA A dozen people have been camping and thinking in circles in the Plaza Mayor, while in the town of Aguilar de Campo concentration left after receiving information about their pro ban the Guardia Civil.

AVILA The “angry” continue in the Plaza de Santa Teresa, glued to the wall, where thirty people were carrying signs saying: “Do not bother me, I’m thinking,” This democracy is our misfortune “or” More education and less corruption ”.

GALICIA In Galicia, the leisure activities and the absence of incidents of angry characterized camping. The share fell significantly from the busiest time on Friday evening, when more than 3,000 people. The main focus was Vigo, Santiago, A Coruña and Ferrol, where the movement is growing since Thursday, when they camped for the first time.In the square of Compostela Obradoiro the organizers prepared a full day of festive activities: body language, concerts, clowns and magicians were inserted in the spaces of reflection “, in which attendees asked not vote for any party. In Santiago, the relationship with the police was even “friendly” as some young people who went there Friday night. There was not even an official notice of eviction by the few agents who monitored the concentration. In other cities the police if they reported on the ban of these meetings.

PALMA DE MALLORCA The campers at the Plaza of Spain have spent the day thinking to define how to maintain the protest activity beyond the 22-M, have more detailed your organization to ensure the continuity of movement and there have been performances of musical groups.

LAS PALMAS DE GRAN CANARIA One hundred people spend a day of reflection in the park of San Telmo, which today has improved its infrastructure, expanding the area for food and information to citizens and established a nursery for children who join the protest.

SANTA CRUZ DE TENERIFE About 500 campers in the Plaza de la Candelaria have participated in a meeting, followed by a silent gathering to decide the future of this “race to the bottom” as the defining one of the young, while consolidating the operation of its new commissionsand legal, logistics, word, action, print and broadcast, and opens its system of child care.

With Youth unemployment by far the highest in Europe, a stunning 40% we understand the protests taking place in Spain. The lost generation is not taking this any more. This will put pressure on politicians and economic decision makers. Stay tuned. Stratfor on Spain.

Spain will hold elections in 13 regions on May 22, causing concern among some financial circles that the incoming regional governments will revise their budget deficits once they take power. This is similar to the December 2009 decision by the then-new Greek government to reveal that its budget deficit figures were grossly incorrect, a move that essentially sparked the ongoing eurozone sovereign debt crisis.

A May 17 Bloomberg report citing consulting firm Freemarket Corporate Intelligence indicated that Spain could have as much as 26.4 billion euros ($37.4 billion) in unreported regional debt. This would only add about 2.5 percent of gross domestic product to the total government debt, which stood at 60.1 percent in 2010 and was expected to rise to 68.1 percent by the end of 2011, according to the latest European Commission forecast. Spain’s total general government debt also is considerably lower than the eurozone average of 85.1 percent. The news still affected the markets, indicating investors’ current lack of confidence in the eurozone, and particularly in Spain, which is widely considered the next country in line for an EU bailout after the collapse of its housing bubble (although STRATFOR still sees Belgium as being in a worse situation, at least on paper). The news also is a reminder to financial markets of the transparency issues that have perennially plagued eurozone economies.

Spain is also currently the epicenter of  mounting youth protests. Spurred by the upcoming municipal elections, the M-15 movement, named for the initial protest May 15, has set up sit-ins and “tent cities” in a number of Spanish cities — a strategy that has led the media to draw parallels to protests in Egypt earlier in the year. The group, which does not favor any political party, is voicing its disenchantment with the Spanish government and protesting the country’s high unemployment rate. The protests are notable for being a youth movement launched without apparent political or labor union backing and thus dissimilar to previous European protests, which generally have been organized by labor unions. This is not necessarily surprising; the interests of labor unions decrying cuts to employment benefits and youths experiencing high unemployment often run counter to one another, as exemplified in the October 2010 protests in France, where the two groups protested together despite these differences.

Read more: Regional Elections and Protests in Spain | STRATFOR

With the protests getting more intense by the hour in Spain, and now the Greek PM opposing debt restructure, Europe seems in a rather chaotic situation. Markets will be jittery on Monday. Reuters reports;

Prime Minister George Papandreou ruled out a restructuring of Greece’s debt but declined to comment whether a softer “reprofiling” was on the cards, the state-run Athens news Agency (ANA) reported on Saturday.One year into its European Union/International Monetary Fund bailout,Greece is struggling with weak revenues and a deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered a euro zone crisis.”Debt restructuring is not under discussion,” Papandreou said in an interview in Sunday newspaper Ethnos, ANA said.Asked, however, to comment on whether a debt “reprofiling” was being considered, ANA quoted Papandreou as saying that the government “does not join the public discussion about such scenarios.”The chairman of the 17-country Eurogroup Jean-Claude Juncker acknowledged on Tuesday Greece may have to move toward a “soft restructuring” of its debt [ID:nLDE74G0PD], although the European Central Bank remains strongly opposed to such a move.

http://www.reuters.com/article/2011/05/21/us-greece-press-measures-idUSTRE74K1L320110521

Tens of thousands of Spaniards angry over joblessness protested for a sixth day on Friday in cities all over the country, and the government looked unlikely to enforce a ban on the demonstrations, fearing clashes.

Dubbed “los indignados” (the indignant), tens of thousands of protesters have filled the main squares of Spain’s cities for six days, in a wave of outrage over economic stagnation and government austerity marking a shift after years of patience.The electoral board ruled on Thursday that protests would be illegal on Saturday, the eve of elections when Spaniards will choose 8,116 city councils and 13 out of 17 regional governments.But Prime Minister Jose Luis Rodriguez Zapatero, who has failed to contain the highest unemployment in the European Union, at 21.3 percent, said he may not enforce the ban.”I have a great respect for the people protesting, which they are doing in a peaceful manner, and I understand it is driven by economic crisis and young people’s hopes for employment,” Zapatero said during a radio interview.He said the Justice Ministry was reviewing the electoral board’s ruling to determine whether it should stand.

PROTESTERS WILL STAY

“We are not going to budge from here,” said a 44-year-old unemployed man who declined to give his name, during an assembly at Puerta del Sol in central Madrid, where protesters reached an informal consensus to stay in the square despite the ban.The man was among hundreds who have camped out all week at Puerta del Sol. His wife and daughter join him every day and the crowd swells to thousands every evening. “Our next move is to spread this to the rest of Europe,” he said.Many protesters told Reuters that they are scared the police will crack down, but analysts said police action against the protesters would be a disaster for the Socialists.The protesters have called on Spaniards not to vote for the two main parties, the Socialists or the center-right opposition Popular Party.Spain has struggled to emerge from a recession, and the collapse of the construction sector and a slump in consumer spending have hit the young particularly hard — 45 percent of 18- to 25-year-olds are unemployed.”They can’t kick us out. The politicians won’t allow it, it’ll make them look bad right before the voting,” said Virginia Braojos, 32, a logistics technician who has come with three friends to the protests every night this week.

NOT A GAME CHANGER

The protests have drawn huge media attention, but will not change the outcome of Sunday’s elections, when the ruling Socialist party is expected to suffer heavy losses over its handling of the economic crisis, a prominent pollster said.However, the symbolic impact of the protests is huge and will make things even tougher than they already are for the increasingly lame-duck Zapatero, said Jose Juan Toharia, president of Metroscopia pollsters.”There will be an authentic cataclysm for the Socialists, who are going to head into general elections next year without a single stronghold,” Toharia said.The next general election is due in March, though some analysts say a Socialist rout could lead to an early election.The protest movement has captured the mood of many Spaniards who have been out of work for months and face a bleak future as the economy is not yet growing robustly enough to create jobs.While most protesters are young, organizing themselves through Twitter and social media, middle-aged and older people joined the crowds on Friday, frustrated with stagnation.

STICKING TO DEFICIT COMMITMENT

The risk premium on Spanish debt, as measured by the difference between yields on Spanish and benchmark German bonds, rose on Friday due to concerns that following the elections, new regional leaders will uncover budget shortfalls.Budget trouble in the regions would rekindle concerns about a fiscal crisis in Spain.Spain has been under intense market scrutiny since Greece, Ireland and Portugal were forced to accept EU/IMF bailouts. It is widely accepted that a bailout for Spain, the euro zone’s fourth largest economy, would stretch the European Union’s resources and political will to breaking point.The Spain/Bund spread traded at its widest since mid-January at around 239 basis points.Zapatero, who slashed government spending this year, promised there would not be a new round of spending cutbacks following the elections, but stressed Spain’s obligation to international markets to stick to its plan to cut the deficit.”I can guarantee there will be no more spending cuts after the May 22 elections (but) we are committed to the budget target. I insist we will meet this obligation because, if we don’t, markets and investors won’t finance us, and that would make things worse.”