The reason Jean-Claude Juncker is so “suprised – if not angry” about news involving a bankruptcy for Greece? Because Greece is attached to the Euro:
note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 16 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money and quasi money circulating within their own borders
So the Greeks can’t conduct monetary policy on their own, and fiscal policy has been largely handed over to others as well because they have to adopt inflation policies and government spending policies across the Euro-zone for the privilege of using the Euro and piggy-backing off of France & Germany’s credit ratings.
If Greece declares bankruptcy (their annual deficit is 12.7% of GDP and total debt outstanding is 113% of GDP), this puts tremendous pressure on the Euro to devalue. The Eurozone is a basket case of countries all using one currency while the US is just one basket case country. In my mind, there’s no real good reason the Euro should have appreciated as much as it has. So through that lens, the Euro’s rise this year has been totally unjustifed.
The government in Greece has been given until January to provide TPTB in Brussels a Stability Pact, but what if they miss the deadline? What will the Euros do then?