Guest Post: Austria's Green Party In Position To Kill The Greek Bailout Package

Tyler Durden's picture

Submitted by Toni Straka of The Prudent Investor

Austria's Green Party In Position To Kill The Greek Bailout Package

While EU leaders look forward to a multitude of emergency meetings until
July 20, when Greece has to pay back a government bond with a volume of
€6.6 billion, the fate of Greece's bailout may ultimately lie in the
hands of the Green party in the dwarf nation Austria.

Austria's Green Party sent an open (German language) letter to the country's chancellor Werner Faymann
on Thursday, threatening to boycott a vote in the Austrian parliament
where a 2/3 majority is needed for a change of the constitution that
would allow Austria to participate in the €138 billion bailout package
for the Hellenic peninsula. As a Euro member Austria has the obligation
to take part in the bailout that is hugely unpopular with

The Greens got 9.8% of the votes in Austria's latest elections, making
them the 4th biggest party in the five party Austrian parliament.

In their German language letter published on the party's website
the Greens demand 2 key adaptions of the bailout package from Austria's
socialdemocrat-conservative coalition government. The letter is signed
by Chairwoman Eva Glawischnigg, budget speaker Werner Kogler and foreign
policy speaker Alexander van der Bellen.

  • Firstly the Greens demand an obligatory inclusion of private
    creditors (that's the banks) and the regulatory introduction of an
    orderly default mode for bankrupt Euro members that shall be part of the
    final version of the legislature of the moneyless €750 billion European
    Stability Mechanism (ESM) that shall come to life in 2013 when the
    current European Financial Stability Facility (EFSF) will end. The
    greens explicitly noted that chancellor Faymann should inform the other
    Euro governments of their intention to block a constitutional change for
    the ESM if such measures are not taken.

This initiative finds my full support as it is clearly written on
the wall that the Eurozone will see more defaults than Greece only. This
was also indicated by Dutch central bank governor Nout Wellink last
week. He proposed to double the ESM to an almost unimaginable €1.5
Trillion. This sum may still not be enough as Greek debt currently stands somewhere between €310 billion and €467 billion.

Europe needs a clear framework for such events that are historically
much more frequent than politicians want to admit. In the last 2
centuries almost every European country has defaulted at least once. It
was a major political blunder in the creation of the Euro not to include
rules for those who turn out to be too weak for the Euro.

  • Secondly the Greens would support the issuance of Eurobonds by
    the European Central Bank (ECB) as proposed by outgoing ECB President
    Jean-Claude Trichet, arguing that this would strengthen European
    solidarity and could also help preventing another attack of speculators
    on bonds of single countries.
This second point is rubbish as such a Eurobond would raise
financing costs for the Euro hardcore comprised of AAA-rated Austria,
Germany, Finland, Luxembourg and the Netherlands. Sorry, there is no
solidarity among these populations with the book-cooks from the souther
European hemisphere and never will be. Why should Austrians or other
Eurozone inhabitants accept that Greek public servants retire with 53
years when their own politicians already discuss to push out the legal
retirement age past the 65 year limit applied in most Euro countries?


It has yet to be seen if the Greens will stick to their strategy and
really prevent the Greek bailout package as it it highly improbable that
the Eurozone will come up with a framework for sovereign defaults
before the deadline on July 20, when Greece will have to pay back a
maturing bond.


But they would very likely gain in popularity for the courage to stand
up against the worldwide political concept to fight debt with more debt.


The Greens in Austria are in dire need of a popularity booster as they
fell behind far right-wing party FPÖ in the last elections and are
soul-searching for a policy line that does not estrange their core
constituency of environmentalists and the young left that does not find a
home under the roof of the socialdemocrats.


Standing up against the financial tyranny of the EU would also help to
win back anti-EU voters which are currently lured by the two xenophobic
parties, the FPÖ (Freedom Party) - now leading in polls with 30% ahead
of the two coalition parties SPÖ (Social Democrats) and ÖVP (Christian
Conservatives) - and the BZÖ (Alliance for the future of Austria).


Occupying a critical position towards an undemocratic EU would break the
dam that only right-wingers publicly oppose the repressive regime of
the Moloch in Brussels that tends to overregulate every aspect of life
while salting away billions in taxpayer money by widespread subsidy


It would also help restore the image of an autonomous party favoring
liberal policies over Brussels' law-spewing machine that is increasingly
opposed by most Europeans except the politicians that live very well
from and with the EU.


Therefore I call on the Greens: Please give financial sanity a chance in the world and do not back down from your key demands.
It is now entirely in your hands to push Eurozone policies back on a
sound path. Bailing out Greek again will only lead to more expensive
bailouts as it delivers a bad example to the other budget sinners in the
Eurozone. Help stop the money printing madness arranged by a clueless
set of Euro politicians that will retire comfortably no matter what
happens instead of becoming a complicit partner in the robbery of
Europe's future.

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Popo's picture

Go Greens.  Stay strong.

But more importantly:

This isn't about Austria, or Germany, or France or Greece. It's about an extra-national entity called the "banking cartel" which is silently conquering the world with alarming speed and success  -- returning the middle-class to serfdom.  

Using national titles like "Greece", "Austria", etc. only confuses the subject with the now old-fashioned idea of nationalism.  

Nations are dead.  They are irrelevant now.  Show me one major nation that has not already fallen in this war.  This is about the cartel vs. the world.  And the world is losing, badly.


A Man without Qualities's picture

Fucking Austrians, always trying to cause trouble in Europe.  Fact is, any suggestion that private creditors should take haircuts will horrify the Austrians.  They have such massive exposures to eastern Europe, any risk of losses would be fatal to their banking system. 

The greens are experts at things like planting trees and industrial pollution, but they are very naive when it comes to things like fractional reserve banking.  One way or another, they will be taken care of and the parliament will pass the motion. 

Cdad's picture

Fucking Austrians, always trying to cause trouble in Europe.

Well, clearly they have no respect for the duck taped [ES contracts] and bailing wired [cheap SPR oil] rally the criminal syndicate known as Wall Street put together at 3:00 est yesterday.

Sheesh Austria...get in line and sell your future to Goldman already.

ElvisDog's picture

Gotta agree. There is some much Kabuki theatre going on in Europe these days that whenever someone talks tough I am unimpressed. I'll be impressed if they actually do what they threaten to do.

Oh regional Indian's picture

Precisely. The nation state has been nothing but a mirage for a long time now.

They are called the 'Ruling" parties for good reason.

Is that a lake I see......blessed be!


oogs66's picture

It sounds hopeful, but what are the odds that Austria doesn't approve? And if Austria doesn't approve, why would that be the death of it anyways? It really comes down to Germany, France, Netherlands, Spain, and Italy anyways, doesn't it?

Cassandra Syndrome's picture

Has to be "unanimous" for the Evil Union votes. Not that the wishes of the Proles outside matter.

i-dog's picture

"2/3 majority is needed for a change of the constitution that would allow Austria to participate in the bailout package  ...... As a Euro member Austria has the obligation to take part in the bailout"

I'd like them to explain how they could commit to the Euro while later requiring a constitutional amendment to adhere to Euro conditions!?!

Did they sign onto that back when they were drinking anti-freeze?

j0nx's picture

When will people get it: the pols and banks don't give a shit that these measures are hugely unpopular with the masses. They will pass them anyway. These people do NOT represent the masses. The sooner that people understand that then the sooner we can move on. Austria will fall in line just like the rest of Europe has. At least until some country grows a pair of balls and storms their capital and starts yanking corrupt politicians out of their seats and holding impromptu trials and sentencing. Then maybe this crap will stop. Maybe. Chances are if/when that does happen then you will see just how much like Arab countries that western countries truly are in their response to their people uprising. My money is that western response to a popular uprising will make the Arab response look like a girl scout camping trip.

Ethics Gradient's picture

Quite. And as I've pointed out before, when did a vote stop the Euro machine?

Oh regional Indian's picture

European UNION?
Only voluntary collectives can stay together. Personally, I cannot wait for these onerous systems to crumble.


Byte Me's picture

What system do you propose in place of the European Union?


ElvisDog's picture

I propose a feudal monarchy like in the good old days. There has to be a long, lost descendant of Kaiser Wilhelm that can take over the job.

Byte Me's picture

Unfortunately, the good old days were regularly punctuated by internecine wars, over turf, resources, belief and "mine's bigger than yours is".

Feudal monarchies -- feud..

jmcadg's picture

If they keep this as a nation on nation problem, I fear they will keep kicking the can. If it is exposed to the sheeple that it is banks against freedom, we have a chance.

Gordon Freeman's picture

Yeah, right. Austria gonna do the right thing, and kill this abomination...

Who the fuck are you trying to fool?? They'll cave--just like the Finns, just like the Irish, just like all of 'em.

They're all in the same fucking boat!!

Rynak's picture

Actually, neither the irish nor the finns did give in. Instead, they were simply ignored or rejected. The groups which reject the current course, have not changed their mind - they simply politically are not powerful enough to veto.

I've hinted at it a few times recently, but i'll say it again: Any country which even remotely wants to be worthy the "democracy"-stamp, should allow the population to veto any gov policy via direct vote. When it is possible to implement policies, which 80% of the population rejects, then there quite simply is no democracy. How many months ago would the bankster crap have failed, if populations could veto via direct vote?

kaiten's picture

Empty posturing, nothing else.


Move along, nothing to see here.

chump666's picture

Its the Germans...Austrian backlash is the pre-curser. Total taxpayer revolt brewing outta Germany.

Rynak's picture

You better hope that it will not happen, because when it comes to unrest, germans are trucks, not sports cars..... it takes a lot for them to revolt, but if they revolt, the premises for respecting authority have been undermined so much, that there is no quick repair.

gigeze787's picture

7:11 AM Another member of the ruling PASOK party hints he may vote against the fiscal reform plan necessary for continued EU/IMF funding for Greece, telling Bloomberg a 'no' vote is "the direction I am leaning." Combined with other defections, this would bring the PASOK majority down to 3.

citta vritti's picture

negotiating ploy - price of ‘yes’ votes now higher, especially for those still “leaning"

the not so mighty maximiza's picture

Come on Austrians, KILL KILL KILL. Austra-Hungary Empire RISE!!!!

Robslob's picture

I think most of these bankrupt countries are smarter than we all think.

Here is how it worked last time so doing it again gets even better:

1) Agree to severe austerity measures

2) Get more "free" money

3) Institute a few of those "austerity" measures briefly then stop

4) Spend all the "assignats" they give you before the clock runs out

5) Back to the bargaining table but this time with even more leverage

6) rinse and repeat steps 1-5

Cashboy's picture

I just do not understand this.
It is so obvious that even if Greece are bailed out this time, Greece will not have complied when the next tranche of money is payable in a few months. By then, surely Spain will be asking for financial help and then come March 2012, Italy will be bust. I actually expect Italy to pull out of the Euro and knock everyone anyway.
What is all the fuss about letting Greece go bust?
What about all the CDS (Credit Default Swaps)on Greek Bonds and Debts? Surely that will be interesting to see if they would be honoured....LOL

oogs66's picture

i think the 3 months is being bought so they can lean on the banks and ireland and portugal and try and come up with an actual solution during those 3 months that does involve real losses for the banks in order to create manageable debt levels

UK debt marsh's picture

Greens have 20 members out of 182. Government can pass this unless both of the other 2 non-government parties take the same line as the Greens. Non-story
Will be like Finland - nothing happened.

iNull's picture

Yawn. Wake me when the the molotav's crash into the limosines.

spanish inquisition's picture

Meanwhile, Franz Ferdinand awoke to a beautiful sunrise on the morning of June 28th. "I wish something interesting would happen in Austria for a change.." he mused as he shuffled off to his water closet to begin his day.

Dismal Scientist's picture

Nothing I like more than seeing Americans pontificate about Europe. Always value added. Thanks for playing boys. Now go get your shine box...

Europe's banking system is dead, its just that the life support machine has not been turned off. The politicians are vacillating between one of four choices, all of which are bad:

a) Disorderly default
b) Orderly default
c) Kick the can down the road
d) Greece leaves the Euro

Only option b) has any chance of minimising the fallout to avoid contagion. The others would either be disastrous, or suicide.

Wanna bet they'll go for option c) anyway ? You know they will try...

Reven's picture

Yet, by kicking the can, they make a disorderly default more likely.  They also make a future orderly default more painful.

jmcadg's picture

+1. But lets have a)

How amusing would that be. Finally we'd have something interesting to watch on tv here in the UK.

M.B. Drapier's picture

But d) is to all intents and purposes a default option too, yes?

oogs66's picture

I think b and that is why they lend another tranche to keep greece alive for 3 months, while the real negotiations on how much various holders have to lose goes on.

doomandbloom's picture

relax nothing will happen...banksta's in full control of this game

i-dog's picture

Indeed. Go get some popcorn during intermission and be back in your seats for Act III.

gwar5's picture

I hope somebody kills the Greek bailout. I pinky-promise to plant a tree and not eat meat for a whole week if the Green Party of Austria kills the bailout.

Unicorn Friendly: The Green Party should also consider the future benefits of CO2 reduction when the EU economy reverts back to circa 1911 output. Woolly Mammoths will come back if they kill the bailout.

iNull's picture

Fuckin' Belgians. Don't get me started on the fucking Belgians.

nathan1234's picture

The Austrians are wise.
They know they will get "Greeked" if the loan is given

PaperBear's picture

"It was a major political blunder in the creation of the Euro not to include rules for those who turn out to be too weak for the Euro."
A choice between incompetency and complicity.

Byte Me's picture

"the dwarf nation Austria"

Always wondered where the gnomes came from. Thanks for clarifying that datum TD.

Slin's picture

Funny the gReeks protest as if they are being robbed.  Meanwhile they rob Germany.  Professional leeches, a most favored son of the giant leech EU.  Grats to the Austrians.  Best mathematicians in the world, can read right through this fiat lie.  gReeks can't even count to ten, unless its from your wallet.