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

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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
voters/taxpayers.

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
fraud.

 

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.