The Exact Moment Greece Will Leave the Euro

Phoenix Capital Research's picture



…the second Greek parliamentary elections in as many months came and went. While the media is making a big deal of the fact that the anti-bailout SYRIZA party didn’t win, the facts remain that the elections haven’t really accomplished anything of significance for Greece’s fiscal condition or the likelihood of it staying within the EU. 


What I mean by this is that while the game of political musical chairs in Europe creates the appearance of change, the fact remains that Greece is broke and that the only thing stopping it from facing systemic collapse is continued support from the EU, particularly Germany.


Put another way, the primary dynamic of Greece attempting to procure more money by either paying lip service to the EU or playing the financial terrorism card (“kick us out and the whole EU system will fall”) remains firmly in place regardless of who’s in office.

Indeed, the New Democracy party, which now has the majority in Greece’s parliament, (due to a loose alliance with the socialist PASOK party which has shown itself to be just as willing to join the completely anti-bailout SYRIZA party) is already calling for a revision to the Second Greek bailout’s terms.



Greece outlines plan to ease bailout burden


Greece wants tax cuts, extra help for the poor and unemployed, a freeze on public sector lay-offs and more time to cut its deficit under a plan likely to run into strong opposition at a European Union summit next week.


The new coalition government's programme, seen by Reuters on Saturday, reflected public pressure to ease the terms of a 130 billion euro ($163 billion) bailout saving Greece from bankruptcy but only at the cost of harsh economic suffering.


If implemented in full, the new programme would undo many austerity measures the country agreed in February to clinch the bailout package, its second since 2010.


Three key takeaway items from this development:


  1. Greek leaders, no matter what party they belong to, are unwilling to get Greece’s fiscal house in order (how many debt repayments and deadlines have they missed now?)
  2. The current Greek Government is formed via a very loose coalition, which could very easily fall apart, resulting in yet another election.
  3. Greece already wants a third bailout (note the additional €16 billion needed to cover the country’s financing needs).


In simple terms, at this point things have become truly farcical: Greece threatens, begs, and even lies in order to receive bailout funds only to then turn around and complete renege on the terms of the agreement. Indeed, we now have evidence that Greece was hiring more Government workers at a time when it was supposed to be implementing austerity measures:


            Greece breached bailout rules with staff hirings: report


Greece breached the rules of its EU-IMF loan agreement by taking on some 70,000 public sector staff in two years, undermining efforts to reduce the state payroll, a report said on Sunday.


To Vima weekly said the hirings in 2010 and 2011 were highest in local administration, health, the police and culture, where the number of employees actually increased.


This is extremely problematic for several reasons.


For one thing, this sends a clear message to the EU as well as the ECB and IMF that Greece is lying to their faces every time it promises to implement reforms. This doesn’t make for much political goodwill (note the survey quoted in the article below).


            Greek PM cannot attend EU summit due to surgery


German Finance Minister Wolfgang Schaeuble repeated this view Sunday, in an interview to newspaper Bild am Sonntag.


"It must now be the most important task of Prime Minister Samaras' new government to swiftly and immediately implement the agreed program without hesitation or asking, yet again, what the others could do in addition for Greece," German Finance Minister Wolfgang Schaeuble was quoted as saying. "The ball is in Greece's field; it is in their hands to achieve that Europe's citizens can regain trust. But this will only be achieved through concrete measures and actions."


The Sunday tabloid published a survey on Greece that it had commissioned with Italy's Corriere della Sera, Spain's ABC and France's Le Journal Du Dimanche.


In it, 78 percent of the Germans polled, 65 percent of the French and about a half of the Italians said Greece should leave the Eurozone if it fails to pay its debt.


EU political leaders and their respective citizenry aren’t the only ones realizing that Greek political leaders are a bunch of crooks; the Greek people are also beginning to realize that their political leaders are not looking out for their best interests or for Greece’s: only 20% of the Greek bailout money went into the economy, the rest went towards paying off Greece’s creditors (read EU banks) and the ECB.


As a result of this, Greeks are increasingly voting for the SYRIZA party which is completely anti-bailout, anti-Euro, and anti-austerity:



October 2009

May 2012

June 2012

SYRIZA’s % of Vote





As you can see, SYRIZA is rapidly gaining popularity amongst Greek voters. This is extremely problematic as it indicates that should the current, new Greek government fall to pieces (as it most assuredly will… the new Finance Minister just resigned after being in office for only one week), it’s quite possible SYRIZA will win whatever subsequent election takes places.


European leaders will be meeting this Thursday and Friday to discuss Greece and other issues. As the above articles headline reveals, neither Greece’s new PM nor its Finance Minister (they no longer have one) will be in attendance.


However, we already know from the headlines this morning that Angela Merkel will not agree to Euro bonds or any kind of shared deposit insurance if it means “joint liability” (read: Germany being on the hook for other EU members’ bank losses).


We also know that the ECB is not interested in buying more government bonds (it hasn’t for 14 weeks now). And the ECB has stated point blank that Greek negotiations will not begin with Greece “wish[ing] for more time.”


So, there is a relatively high probability that a Grexit will be coming sooner rather than later. It all boils down to one simple fact: the second the money spigot from the EU to Greece gets turned off, Greece leaves.


Consequently, the real question is: “when does Germany and the rest of the EU stop picking up the tab for Greece?” Judging from the above survey in which even the French and Italians now think Greece should leave the EU if it doesn’t start paying its bills, it won’t be long: Greece will need another €16 billion in financing if the EU accepts its request for another extension (yes, this would be the third bailout).


I believe we have at most a few months and possibly even as little as a few weeks to prepare for the next round of the EU Crisis. On that note, I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investments (both direct and backdoor) you can make to profit from it.


This report is 100% FREE. You can pick up a copy today at:


Good Investing!


Graham Summers



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ABELIA's picture

the elections haven't real settled anything of signification for Greece's fiscal consideration

JuicyGrabs's picture

He might not get the timing right but his analysis is pretty spot on. The whole EU will implode and drag whole world down with it. China entered into a freefall because of EU and chain reaction already started dragging Australia down with it.

Micheal Burry didn`t get timining right also back in `07 but he made the good call nonetheless, though many ridiculed him at the time. Whole financial system is on life support. Whole thing would just come crushing down like a tower of cards if not for monthly bailouts in some form or shape. Problem is both Europe, US and the world is running out of bailouts and will have to let it all come crushing down. Now they`re just buying some time for the right people to exit their positions while the muppets buy into the phony recovery stories.

GreatUncle's picture

"The exact moment when Greece leaves the euro, not if when."

When the banks are recapitalised enough to take the hit. At that point any government / bank will pull the plug saying "it was done in the interests of preserving the system".

All those with loads of dosh / investments in said banks will be fine now, just pity the poor people. Any other timing would sacrifice those with loads of dosh in the banks and that is not going to be allowed.

So simple ,it just cannot happen before then so as to secure the future for the top and their families.

Go measure the rate of recapitalisation of the banks to get a time line for when exit will comes and the economy to be allowed to go into freefall.

*Read between the lines if you want your position in all of this*.

XtraBullish's picture

Has anyone actually "clicked through" to see where Graham takes you? It is MARKETING SPAM 101 - and Graham - how do you post all of those "historic trades" as winners w/o one loss? You have been short forever and the market is well off the lows of 2009 so if you think I pay you one red cent for a track record that spans a brief meltdown Black Swan Event period, you are wrong.

You are better off putting your money in gold and silver (80%) and trading the S&P E-minis from an "opening short" set-up. The way these 'bots are algorithm-ized, every 2$ you lose shorting Facebook you make $8 on your pm's.

Fuck Tyler - why give this guy free advertising?

The Watchman's picture

on 3.... ready.... 1.... 2.... and nothing....

fiddy pence haff pound's picture

what about the government stuff for pennies on the Euro?

Once that's gone, then Greece is ready for exit.

How can you let a country walk without emptying its pockets first?

ddtuttle's picture

Greece is irrelevant.

The question is when is Germany going to leave the EMU?  That's the only event that even matters.

Why would they do that? Simple.  If the EMU goes along like it is now, there will be serial defaults with Germany picking up the tab.  In the end they will be so tapped out they will default too.

Or if there is a real Fiscal Union, the problems will be shared across all EMU countires until the whole thing defaults, taking Germany with it.  Collectively, the EMU is insovlent, so no matter how you shuffle the debts around the end will aways be the same: totally unacceptable to Germany. 

 Finally, if they just leave, their banking system is still healthy enough they won't have to default.  Put it that way to the German people, and the choice is simple.  They haven't quite come to that conclusion yet, but they will.

Of course, EMU without Germany will have to devalue first to par, then settling around $0.70.  But that's exactly what the doctor ordered! That will take a lot of pressure off Spain Italy and France and give them some breathing room to manage their debts.

The German banks will be relieved that they ONLY have a 30% haircut on EMU investments.  Germany's internal economy could switch to DMs at 1 DM:1 EUR wihtout too much disruption.  Germany will then have to print some DMs to keep their banks afloat, but they will succeed.   Even better it will keep the DM from appreciating too much.

Why does everyone think this so hard?


Vinz Klortho's picture

“If we hit that bull’s-eye, the rest of the dominoes should fall like a house of cards. Checkmate.”


i8emallup's picture

Germany will pay the tab as long as they are waiting for the Accounts Receivables for Mercedes, BMW, Siemens, ETC via Target2.

Skerp's picture

Methinks, the "solutions" are a bigger problem than the "problem".

Remarkably markets still tending up!

pashley1411's picture

Many people are predicting that Greece will not leave, because the cost of leaving is higher, and immediate, than the cost of keeping Greece in, so long as your perspective is merely the next bonus round.

In the event of Grexit, the chickens will come home to roost.  If anything, it shows that both the European political class and banking class will do anything, absolutely anything, to not acknowledge a loss.

Both bankers and politicians should be thought of as a dog I used to have, head came up to the table top.     At what point would wolfing down tasty vitals be worth the wack on the head?  As soon as I look away.  Both bankers and politicians are entirely without restraint, will take whatever they can get their hands on, and we are the greater dupes for letting them get so close to the table.

Dr. Kananga's picture

Greece leaving the Euro is like speaking of a drowning man 'leaving' the rescuer who swam out to save him. The drowning man always tries to climb on top, pulling the rescuer underwater, drowning both in the process.

Drown now or drown later seems to be case here.

eckart's picture

more nonsense from Phoenix

disappointed's picture

As usual Summers spends paragraph after paragraph defending a position after making a call that all his followers are again in the red from. Just fade every call he makes and make some real money. Or flush the turd and his subscription and be done with it

i8emallup's picture

Wait, Graham said he has made an astonishing 65 consecutive profitable trades.   This can be independently verified, right.  I know no one would make up lies just to get money.

Jack Sheet's picture

This has been almost completely ignored by the mainstream media.

Fuh Querada's picture

"The Exact Moment Greece Will Leave the Euro"??

You heard the man!

"So, there is a relatively high probability that a Grexit will be coming sooner rather than later."

"I believe we have at most a few months and possibly even as little as a few weeks"

Frigging  incredible predictions.

Oh, and why does JG Rickards (author of best selling  "Currency Wars") who is not exactly an idiot, broadcast continuously on his Twitter channel that "Greece is not leaving the Euro" ?

Doña K's picture

Greeks are waiting for others to leave first, incuding perhaps Germany

Zero Govt's picture

"EU political leaders ...aren’t the only ones realizing that Greek political leaders are a bunch of crooks.."

That's coming from EU political leaders (ie. a bunch of crooks)

The pot calling the kettle black ..what joyous hypocracy the EU is

Toolshed's picture

The author stated it quite clearly:

"It all boils down to one simple fact: the second the money spigot from the EU to Greece gets turned off, Greece leaves."

Perhaps you should try actually reading the full article before criticizing the author.......for the wrong reason at least.

SDS Trader's picture

One "simple fact" which isn't really correct. 

The second the money spigot from the EU is turned off, Greece will become (technically) insolvent and forced to default.  That's not the same as leaving the Euro.  Germany could leave the Euro and Germany would not default.

The author has proffered an incorrect answer to the question implicit in the title of his article.

CustomersMan's picture


Technically, the FED could just print up enough money, or not (in digital form) to buy Europe. Why go through all the machinations?

kikkoman's picture


as long as the money flows, Syriza is pro-Euro. (that's part of the twisted reason for those poll results.)

Only after that, they will be anti-Euro.

CustomersMan's picture


For an excellent article, that looks at the "Banker" actions with regard to Greece the last several years.



From VT 7/2/2012

The Final Greek Tragedy: Theft of a Nation by Bankers The Real Truth about Greece and the EU 


by Mike Stathis


In order to understand the progression of the economic and political chaos in Greece, one must review several key events from recent years, all while reading between the lines from official statements made by the global banking syndicate and their puppet politicians in both the EU and U.S.

First, I begin with my analysis of statements made by certain members of this crime syndicate after the April 2009 G-20 Summit. As you will recall, this meeting took place within weeks of the global equities markets having reached multi-year lows. Politicians and establishment economists from around the globe met to discuss their “solutions.”

At the time, consensus forecasts had concluded that the global economy would record a decline in growth; the first time in 60 years.

“At first glance, their [IMF] recent official forecast for a 1.3% decline in the global economy for 2009 seems to put to rest any thoughts that they have downplayed (either by incompetence or intentionally) the reality of the economic meltdown.

Despite the fact that this would be the first time in over 60 years since the global economy shrunk, their forecasts are overly optimistic and will be revised downward several times over. You can bet on it.

Continues at site...................Worth Reading



falak pema's picture

Summer time...and the living is Greecy! 

Vince Clortho's picture

Who needs Germany when the CBs have a printing press?

If we have learned any thing in the last four years, it is that printing is the solution for debt, and the more debt the better.

The heads of state bickering about solutions is just bad theater to give the commoners the impression that their leaders are dealing with the problem.

lakecity55's picture

Who will outdo Greece and demand more free socialist stuff?


Sudden Debt's picture

untill only olives are for free :)
the time when it gets REALLY socialist is when they confiscate church properties. VIAVA LA REVOLUTION!
and then it's to late.

Zero Govt's picture

the Church tends to hang to the right in politics does here in Spain where the Church and right have a history of shooting the educated to keep the peasants thick and 'manageable'

isn't it the same (game) in the American Bible Belt ?

Zero Govt's picture

the EU has been a socialst (parasites) feeding frenzy from its inception

asking for "more" is the only way ahead for this scum (just see Obummas 'new' election mantra of wanting yet more to spend having already broken all global spending records and come up with nought to show for it)

mjk0259's picture

Why does it bother you if Europeans vote to give themselves things like health insurance paid for by Europeans. Compare a train in Europe to US or an airport or a city. Compare Athens to Detroit. They are not so stupid.

Zero Govt's picture

MJK - i don't think voting is any way to award yourself healthcare or any other benefit in life. Those that do want someone else to pay for it. If you want a benefit go out and earn yourself into that position, it's the fastest surest route

Politicians promising to spend other peoples money to enrich you is no way to run society, as the history of Govt proves conclusively

Joe A's picture

Greece wants to renegociate the conditions because since last week Spain and Italy get goodies without conditions. That is pissing off a lot of people. Not only in Greece and Ireland but also economically healthier countries. We are all equale in Europe but some are more equal than others. In reality, Europe still lives in feudal medeval times.

spinone's picture

Did I miss it?  When is the exact moment?

Sudden Debt's picture

no date yet, it just getting " problematic" :)

SDS Trader's picture

And I thought it was just my eyesight going.  This sort of stuff is getting tedious. 

digitlman's picture

This week. No, next week. No, the week after that.

GS doesn't know, so every week the crisis will continue so he can keep peddling his newsletter.

lakecity55's picture

Perhaps he should post it all here, gratis, so that we might 'review' it.

Rasna's picture

Let me put that on my iPad calendar...

... Graham, says, that Greece, will, exit, the, Euro, exactly...

Wait a minute!

Tyler, you post these things frim Graham Summers just to fuck with me right?

vast-dom's picture

even a quadrillion dollar subscription wouldn't help....