Fear mongering campaigns to scare voters in Ireland and Greece . more likely tosucceed in Ireland than Greece but we shall see how this plays out !

http://www.guardian.co.uk/business/2012/may/20/eurozone-crisis-david-cameron-greek

A second Greek vote next month backing parties opposed to theEuropean Union's bailout package would be a decisive vote to leave theeuro for which contingency plans have to be made now, David Cameronwarned on Sunday in a dramatic raising of the stakes.

Speaking in Chicago after two days of talks with world leaders on the euro crisis, he said: "We now have to send a very clear message to people in Greece: there is a choice – you can either vote to stay in the euro, with all the commitments you've made, or if you vote another way you're effectively voting to leave." His remarks are in effect an attempt to make next month's vote a referendum on continued membership of the euro.

Cameron indicated that he wanted to make the threat of ejection from the euro credible by showing the Greeks that preparations are being made for their departure, a change of tactics after weeks of mixed messages from the European commission on whether such plans are being laid.

It is a piece of high-stakes diplomacy since his threat may either anger Greek voters, driving them into the arms of the radical parties, or act as a sobering warning that the end game is truly imminent and renegotiation of the EU-imposed austerity package is not an option.

Speaking in Chicago after a meeting of G8 world leaders, he said of the Greeks: "They can vote to stay in the eurozone and meet their commitments or they can vote to give up on their commitments and in effect give up on the eurozone.

"I think the point that was very clear from the G8 was that the eurozone has to put in place the most robust contingency plans for both eventualities."

The thinking of eurozone leaders had been crystallised by the two days of talks, he said. "The world is suffering from the continued uncertainty in the eurozone. So this decision point, the Greek election, has got to become the moment where all of the right plans are put in place to secure the future of the eurozone currency, the eurozone economy, and therefore help stabilise the global economy.

"It's not for me to say what Greek parties should and shouldn't stand on and how the Greek elections should work. But it's very important that everyone is clear that the choice Greece faces is maintaining its commitments and maintaining itself in the eurozone, or deciding that is not the path it wants to take. What would be bad for Greece, bad forEurope and bad for the world is if we just allowed the can to be kicked further down the road with an inconclusive outcome. What's required is decisiveness, strong action by all governments. This is a moment of clarity.

"There needs to be a resolution because it's the lack of resolution that's leading to a lack of confidence."

Cameron said he did not want to go into details about the contingency plans already put in place, but the European monetary authorities had a big role. One idea proposed by the Italian prime minister, Mario Monti, is for a European system of guarantees for bank deposits, a move that would require a degree of Europe-wide bank co-ordination never before seen.

Greece has about €400bn (£322bn) in external debts, which its government, banks and companies would probably pay only in part or in drachmas. The fear is that a Greek ejection would lead to bank runs across Europe.

Germany also ratcheted up the pressure when the Bundesbank president, Jens Weidmann, warned Europe's central banks not to increase their exposure to Greece because of political uncertainty there before the elections.

The crisis has been exacerbated by the revelation that the Spanish deficit is larger than previously feared, putting extra pressure on its struggling banking sector. Angela Merkel demanded that her Spanish counterpart, Mariano Rajoy, meet her in Chicago on Sunday amid worries that financial markets will turn on Spain after its belated recognition on Friday night that regional governments had blown an extra €4bn hole in last year's budget.

The French president, François Hollande, became the first European leader to suggest the Spanish banks clearly needed fresh capital. "It would surely be necessary that this recapitalisation be done with the European solidarity mechanisms," he said. Rajoy's conservative People's party (PP) government, however, is resisting what it sees as a humiliating move towards European intervention in Spanish banks.

"I can't believe that Mr Hollande said that, because Mr Hollande does not know what is the state of Spanish banks," Rajoy said before his meeting with Merkel on a riverboat in Chicago, where they were attending a Nato leaders' conference. Doubts about Spanish banks, increased by the recent nationalisation of Bankia, will see Rajoy's government name two independent auditors to value their assets on Monday.

EU leaders will meet at an informal dinner on Wednesday to discuss a growth agenda for Europe after Barack Obama said over the weekend that the continent needed something more than a universal austerity package to survive, including a willingness by Germany to do more, either by reflating its demand or by accepting the mutualisation of EU sovereign debt. Obama's own re-election hopes rest on the state of the US economy, and the prospect of months more uncertainty in Europe will do little to boost jobs in the US.

Cameron said: "I have great respect for Angela Merkel. She wants to make sure countries in the eurozone who have signed up to commitments meet those commitments. She's absolutely right to say deficit reduction is an absolutely vital part of getting the European economy back to growth and health.

"I think she did show some flexibility on what more can be done on the growth agenda and what more can be done to handle the risks inside the eurozone. As I say, I think the fact that we got countries like Japan, Canada, America round the table as well as Britain who are outside the eurozone but are affected by what happens inside the eurozone was helpful in bringing that important pressure to bear."

and.....

http://globaleconomicanalysis.blogspot.com/2012/05/fear-vs-anger-door-to-door-fear.html

Fear vs. Anger: Door-to-Door Fear-Mongering in Ireland on Merkozy Referendum; Expect Fear-Mongering in Greece as Well

Door-to-Door May Drive Irish Towards Yes Vote in Referendum on Merkozy Pact.

 In a hard-fought battle to convince Irish voters to back Europe’s unpopular fiscal discipline treaty, Ireland’s deputy finance minister has the task of convincing the leafy Dublin suburb of Templeogue.

Going door-to-door, Brian Hayes faces scepticism and occasional abuse. One constituent calls him “a waste of space”, another “just a yes man”.

“If Greece goes down we are next in the firing line. I know people who are trying to put their money into US dollars. We just don’t know what is going to happen here,” says Mr O’Reilly.

“This referendum is all about fear on the one side and anger on the other,” says David Farrell, professor of politics at University College Dublin. “Most people have no great deal of enthusiasm for it and will only vote reluctantly in this referendum.”

“The sight of soup kitchens in Greece on TV screens is concentrating minds,” says Mr Hayes, as he goes door-to-door hammering home his message.

The dominant theme of the campaign so far is a claim by the government that rejecting the treaty would bar Ireland from receiving funds from Europe’s new bailout fund – the European Stability Mechanism. Without this insurance policy, Dublin says, Ireland will struggle to exit its EU and International Monetary Fund bailout programme on schedule at the end of 2013.

“The government is scaremongering rather than arguing the merits of the treaty. Most people are opposed to this treaty but are scared out of their wits,” says Paul Murphy, a Socialist member of the European Parliament and prominent No campaigner.

Nothing bad can possibly happen if this treaty is rejected. Accepting more bailout funds from the IMF or ESM would be the absolute worst thing for Ireland.

Indeed, accepting funds from the Troika is one of the things that destroyed Greece, and it is pathetic that clueless, brainless, scare-mongering political shills for Brussels are now going door-to-door in an attempt to convince Irish voters the exact opposite.

Heading into the Greek June 17 national elections, expect to see door-to-door fear-mongering in Greece as well.