Greece Welcomes Its New European Overlords - Juncker Warns "The Sovereignty Of Greece Will Be Massively Limited"

Tyler Durden's picture

The Greek indigents huffed and puffed, broke a couple of marble plates from Syntagma square, striked for a few days (or is that stroke?), and achieved nothing. In the meantime, their government just sold off the country to European banking interests. But don't take our word for it. Take the word (on those very rare occasions when it is actually telling the truth) of Eurogroup chairman Jean-Claude Juncker who just told Focus magazine that "The sovereignty of Greece will be massively limited." And just like DSK's innocence was effectively granted 2 days after Christine Lagarde was made new head of the IMF (we still are waiting for the IMF to have a statement on the recent DSK developments), so Juncker's stunning disclosure comes not even 12 hours after the 5th Greek bailout package has been released. Per the Guardian: "Juncker's interview appeared just hours after Eurozone ministers signed off the fifth tranche of last year's bailout, worth €12bn. The payment must now be rubber-stamped by the International Monetary Fund (IMF) and pushed through by 15 July in time to meet several bond repayment deadlines. Agreeing the latest IMF payout, on 8 July, will be an early task for Christine Lagarde, the new IMF boss, who starts work in Washington on Wednesday." One wonders how different, it at all, DSK's probanker stance would have been had he still been the IMF head.

Per the Guardian:

Juncker said Greece needed to adopt a process similar to the Treuhand agency, used by Germany to sell off 14,000 former East German firms between 1990 and 1994 – even though Treuhand failed to deliver any profit, oversaw huge job losses and eventually closed its books with a deficit.

But he did appear to acknowledge that the Greeks were hostile to foreign officials appearing to take charge: "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone."

Athens, together with European leaders and the IMF, must now start work on a second €110bn bailout for Greece, which must be finalised by September and is likely to include private-sector involvement.

In the meantime, and in the purest definition of insanity, Greece is now "fighting" record debt with even more record debt:

The European commission conceded on Saturday, after the two-hour Eurogroup teleconference agreed the fifth tranche payout, that any plan to cut Greece's debt of 160% of economic output would be at risk of being derailed by internal unrest or external economic conditions. Growth just one percentage point below expectations, it said, would push Greece's debt to 170% of GDP, and rising, past 2020.

For the first time, the commission's report also discusses debt restructuring, including a possible 40% "haircut" – a forced reduction in the value of Greek bonds – which would devastate Greek banks and, the report warns, could reverberate on Ireland, Portugal and Spain.

Which means that European bankers will only have a few months in which to pick Greek bones dry and buy up various islands, before the charade ends. For their sake, however, we hope they realize that buying "assets" or even islands in a nation, that now loathes everything to do with a "united" Europe, a "united" currency, and the banker klepto-oligarchy, will need substantial fortifications and firepower, for when the tide inevitably turns and Europe realizes it was it that has been fooled and has been throwing ever more good money after bad, as the locals seek to reclaim not only what is rightfully theirs but determines that Greek Odious Debt is about 100% of total debt outstanding.