Smashing The Can Instead Of Kicking It Down The Road

Wolf Richter's picture

Wolf Richter

“No, absolutely not,” said European Central Bank President Mario Draghi when asked if the euro was in danger. “The euro is irreversible,” he added just as a whiff of panic began sweeping over the Eurozone. Everybody was supposed to enjoy their long vacation, and nothing important was supposed to happen. But, like a group of disruptive homeless guys, the ECB, the International Monetary Fund, and politicians have apparently gotten tired of kicking the Greek bailout can down the road, and they stomped on it instead.

Last week it was the ECB; it announced that it would no longer accept Greek government bonds as collateral, thus cutting Greek banks off from ECB funding. They will now be dependent on Emergency Liquidity Assistance (ELA) by the Bank of Greece, an unsustainable, risky measure.

Over the weekend, word seeped out that the IMF, having lost patience with Greece’s stalled reform efforts, would be unwilling to contribute more funds to the bailout. A huge blow. Vigorous denial by the IMF? Nope. On Monday, it only said tepidly that it would be “supporting Greece in overcoming its economic difficulties.”

Inspectors of the Troika—the EU, the ECB, and the IMF—are trundling into Athens today for meetings and inspections starting on Tuesday. Their final report will be the basis for the Troika’s decision in September to make the next bailout payment, or to let go. Politicians appear to be holding off on their final judgment until then. But they’re talking—and it doesn’t look good for Greece. Its demands to renegotiate the agreed-upon reform measures and then to delay their implementation has hit a wall of resistance.

“We won’t agree to any substantive change of the agreements we made,” said German Foreign Minister Guido Westerwelle. Economics Minister Philipp Rösler was “more than skeptical” that Greece could work out its problems. But any decision would have to wait for the final Troika report. “If Greece cannot meet the stipulations, then there won’t be any more payments,” he said. Greece would have to default, which might encourage it to leave the Eurozone. But no big deal: “Greece’s exit has long ago lost its scariness,” he said.

Giorgos Papakonstantinou, Greek Finance Minister from October 2009 until he was replaced by Evangelos Venizelos in June 2011, doubted the abilities of the Greek government to deal with the challenges and was “not optimistic“ that it could remain in power much longer.

Even the Big Kahuna, who is on vacation, and who’d pushed for these serial bailouts though they put deep rifts into her coalition government, lost patience with Greece. It leaked out that Chancellor Angela Merkel considered it “unthinkable” for her to beg the Bundestag for a third bailout package. And a third bailout package would be required if Greece’s demands for watering down the reforms and for delaying their implementation were met—they’d raise the costs by an additional €30 to €50 billion.

The next opportunity for Greece to default is August 20, when it has to pay the ECB €3.8 billion, which it doesn’t have. As Greece’s debt is now mostly held by public institutions, including the ECB, a default would cost taxpayers outside Greece dearly. Requests for emergency funding have fallen on deaf ears. So Greece could try to sell three- or six-month bills at astronomical rates, but most likely, the ECB will find a way to keep it afloat until a political decision has been made in September.

With Spain under fire, and with Italy—and thus the Eurozone as a whole—at risk, the perception is growing that the Eurozone might be stronger if it scuttled its leakiest ship. The surprise factor has long been wrung out of the system. Markets are ready. After a bit of chaos, there might even be relief. And that perception, if it gains the upper hand, will seal Greece’s fate.

Now the strategy is to prevent contagion. The temporary EFSF bailout fund is too small. What is needed is the larger firewall that the “permanent” ESM bailout fund will provide, once operational. Hence the enormous pressure on the German Constitutional Court to wrap up its review of the ESM and nod it through by September 12 [read.... Euro Desperation: German Justices already Buckled under Political Pressure].

By getting the Greek default over with, politicians and the Troika could focus on bailing out Spain. Unlike Greece, Spain is critical to the survival of the euro—and after Spain there is Italy, whose debt is huge, and even the ESM won’t be able to bail it out. All that remains is hope that contagion somehow stops before it gets to Italy. Hope, or a treaty change that would allow the ECB to buy sovereign bonds on a massive scale and bail out banks directly. The whole debt crisis would be over. To be replaced by a crisis of a different and more pernicious sort. Unlikely that the “northern” Eurozone countries would go for that.

But, but, but.... There are opportunities in Europe: mining. Europeans have a long history of it, yet dealing with regulations and eco-friendly groups has driven countries to switch to importing resources. Now record joblessness has refocused political agendas because mines can employ a lot of people! For investors, that’s exciting news. Read... Profiting from Europe’s New Gold Rush.

And here is yours truly in a conversation with Max Keiser on the Keiser Report, discussing bubbles, central banks, the Eurozone, NIRP, and “stupidity arbitrage” (video, aired over the weekend).

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Ghordius's picture

<sigh> "the Euro was imposed by the political classes of all the countries which have adopted it"

According to this scheme, every national law is imposed by the "political classes". Seriously, I don't know anymore why I bother posting here

zelter's picture

There are managerial elites in every modern European state as a simple result of modernity. These political classes, but not with a democratic mandate, chose to transfer the sovereignty of their respective peoples to a collective vacuum created via international law. This was done so that regime change via democracy becomes unlikely.

This action is illegal under the UN Charter (self-determination), UDHR (self-governance), and, for some states, their NATO charter.

This was an imposition and a powergrab. If it were not, and if it were just cosmic agreement, completely dissolving the EU wouldn't make a single political difference. You think it does, so you want it around.

Please explain the anti-European policies of the EU. Why the racial hatred against Europeans?

Ghordius's picture

1. technically, EU law is not international, it's somewhere in between. 2. I'm sorry, but the very principle of sovereignty means you can do whatever you want with it, including giving parts of it up - though per definition you are doing it in a temporary form. Selfdetermination does not mean you can't "marry", in fact it means you can "whatever". 3. "Cosmic Agreement"? Have you any idea how many compromises were necessary?

Anti-European policies of the European Union? Racial hatred against the European Race? Here you really have to help me: do you mean the Visa laws, the immigration laws or the marriage laws? I'm starting to suspect that you are talking about the Netherlands - a very complex tangle of issues. And a LOT of LIES. On many, many sides.

But please, indipendently from where you are from, reflect on this question: the way you feel. How common is it where you are? Or, to put it in political terms: is there a sizable minority that thinks and feels the way you do? A party, perhaps?

zelter's picture

1. The Lisbon Treaty was voted down in its Constitutional form. It is international law that state are bound to follow above and beyond national law (read: voted-by-citizens-for-citizens). No elected parliament can repeal directives whilst remaining in the EU.

2. Only when subject to an occupation policy is sovereignty given up like this. Leaving the EU under the current Treaties' rules is not an option due to the draconian conditions of asset-stripping and risks to national security. Moreover, opposition parties are faced with legal obstacles that citizens are forced to fork money for.

3. If compromises were necessary, then the story of volunteerism you peddle is gone. I'm not against compromises, provided it is a compromise between my government and the will of 26 other member states as expressed in national referenda. However, that's not the case. It's based on compromises between the radical, anti-white, unelected Commission and each Member State.

Yes. The European Union's position is that its subject indigenous groups do not have exclusive rights to land and territory that would enable them to thrive. It invites non-Europeans inside the Union, and has destroyed the fertility rate of the indigenous populations. The continued inflow of racial (as well as ethnic European) aliens, which would assure that my people will suffer demographic ageing and replacement, is something the EU will do its best to maintain.

My view is the majority view, despite the academic and political class holding otherwise. Political parties acting to fix the situation are illegalised through the EU, speech that would address the situation is criminalised through the EU. Political parties will regardless have no political effect until the EU is wholly removed, and any acting governments will stop those political parties from gaining prominence.

This is not a matter of immigration. I am an open-borders type--as long as the immigrants are my ethnic kin. It is a matter of foreigners, and of giving them the boot.

The question is simple: will the EU maintain a political regime--and a gang of sovereigns that gangs up on defectors--where the number of European births is expected to decrease yearly within the EU? Yes/No? Do you personally agree with the consequences of this course of action? Yes/No?

Ghordius's picture

you are opening a HUGE can of worms here and I have to go, so I'll post here my reply.

only very quickly: note that every member had to change the constitution or make a low for this "supremacy" - this is REVERSIBLE and has been done often

AND STOP USING THE TERM "SUBJECT" INDIGENOUS GROUPS IMMEDIATELY. who the FUCK is a subject? for sure not me and PLEASE don't think in those terms (or I'll go Spartacus on you)

now I seriously have to ask you: I have replied, I have ignored your insults, I have posted some stuff you might want to read and ponder, so please answer my question: what is your ethnic kin? Me, I'm a mix of Norman, Saxon, Frank, Latian, Catalan, Scot and other 15 ethnic groups that are roughly all "caucasian". Racially speaking, I have an impressive pedigree. But they don't give prizes anymore and nobody call me for stud duty.

Pardon me for saying so, but you seem to have a very narrow view on the acceptable race you want to see around you. You don't happen to live on an island, do you?

zelter's picture

This is not a huge can of worms. There is a race which rightwise lives in Europe, and also real, biological groups we can call ethnicities. These ethnicities used to have national self-determination, and nation-states were built based on the assent of those real people. Whether or not you are an all-European mongrel is irrelevant to this fact.

The EU has taken measures to make itself indispensable to its citizens. Denial of access to the common market is now a huge threat to all national securities of member states--it is not merely a "disadvantage". No one can just waltz off, and the EU leaders are unreasonable in letting anyone leave on an orderly basis. This is quite clearly a situation of encirclement.

Were it not for the EU and the creeping influence of the EU and other organisations internationalist in character, my government would not have taken the radical course it did. I am thus a hated subject to the EU, as the rest of my people. The EU does not even recognise European peoples as indigenous to Europe, because then, by international accord, would be forced to grant them rights as such.

My ethnic kin is well-defined, and a single one. You are dithering in denial--biological groups in Europe correlate with the indigenous within modern national frontiers. See any recent genetic study. However, I have no major problem with the presence of other Europeans in my country as long as (1) they do not have any rights to political power, although I'm open to further thought on this, and (2) if the indigenous population is not in decline, and the population pyramid is reverted to a healthy level. Neither can occur as long as the EU operates in or near my country and promotes its so-called "values".

You have an even narrower view, given its ubiquity in the media. The EU and therefore most governments and most TBTF institutions promote what amounts to the replacement of ageing Europeans with racial aliens of a youthful profile, and thereby our demise. I assume you are okay with that.

I also do not care if you roll out the "racist" epithet; I'll just note that mongrelists disgust me. Recently, a lovely Greek athlete was expelled from competing in the Olympics for a mere joke. This is the totalitarian society your friends have created: Greek athlete expelled from Olympics for racist tweet; and this is how scared you are of it falling down.

For the last time, I am not from the British Isles and happen to dislike everyone who inhabits that shithole. However, your rhetoric is standard EU trash of Brits not being like the rest of the Continent in blindly loving the EU. Hahaha no--it is hated by all.

Europeans are disappearing as a result of policy. Wiping out Europeans is not "pro-European", as EU scum and scummy supporters would have it.

Ghordius's picture


It IS a huge can of worms. And I would appreciate if you would stop to make assumptions on me, or on the narrowness of my views. Though I regret hearing that you dislike the Brits so much.

In my view, your feelings are valid. And yes, I agree with you, your feelings and political positions are NOT being satisfied by anyone, in europe. And this includes the Czech Government.

Let's not mince words. Your political view is hated by nearly all governments - and therefore by the council, and by reflection by the commission - and by very, very broad factions of the whole european society. Here, this is a very good example of the view propagated by the european left - including Czechs - against the Anti-Roma movements of the Czech Rep, Slovakia and Hungary. Note the call for laws in the three countries to protect the Gypsies, with the note "those three countries are the only ones in the EU that don't have discrimination laws". By the way, the Bohemian Cross on the uniforms looks really, really good.

And here  it's another good summary of how our dear european socialists see the situation, and here how the hope to do something here, where there was this wall being built in Usti, in Northern Bohemia <


Nevertheless, where is the truth? Here a mainstream view:

"In March 1991 estimates of the ethnic background of the country's population yielded the following: 81.2 percent Czech, 13.2 percent Moravian, 3.1 percent Slovak, and less than 1 percent each of the Roma, Polish, German, Silesian, Hungarian, and other minorities. Since these estimates the size and proportion of ethnic groups has changed to some extent, with some Slovaks choosing to relocate to Slovakia after the 1993 split and a number of Roma ("Gypsies") leaving the country due to widespread segregation, discrimination, and racist actions directed against them. In the year 2000 about 200,000 to 250,000 Roma were living in the Czech Republic, some 10,000 having left the country between 1997 and 2000."  

Here is the most comprehensive summary on migrations in Bohemia - and it is quite well researched, with good sources

Note that in late 1918, the Czechoslovak Republic had 10m inhabitants, with 67% Czech, frigging 30% Germans and of course all the other minorities. During 1945-47 2 millions Germans, Hungarians, Ukrainians, etc. were expelled, bringing the Czech percentage in the "Czech lands" for the very first time in history to the incredible never-before-achieved 94%.

But are you aware about the migrations of the 1948-1989 period? In 1976, the Czechoslovak Parliament was discussing the problem of the lack of a labour force. Not the first or last time. This is the period when the Chinese and Vietnamese started coming, by invitation of the government.

Compared to all those migrations since ever at this crossroad of europe, in 1990 the percentage of foreign nationals was miniscule, only to swell to 3.7% until 2007. And then, things got even more complex. I urge you to study it, you might find good stuff for your cause.


zelter's picture

You are completely wrong, Ghordius.

1) Most Czechs dislike Gypsies, and would have them disappear (together with the other aliens) if given the plebiscite and if they knew there were no diplomatic strings attached. The current system is maintained by repression rather than "openness" as it is advertised.

2) Both before and after the Velvet divorce, there were plans to sterilise Gypsies and expel aliens like the Chinese and Vietnamese back to their country of origin, together with their seed. These plans failed solely because of Western diplomatic pressure and interference. It was only due to that and continuing pressure that Czech politicians who fight for national self-determination are purged and political positions like this criminalised.

3) The Czechoslovakian government was always illegitimate and kept together only due to foreign pressure; the same type of foreign pressure that the EU exerts today. The importation of alien labour was widely unpopular. "Anti-racists" (i.e., anti-Czech and anti-white actors) who revel in finding racism in Czechs will spare no time pointing that out as if it means anything else than healthy instincts.

4) The first link you posted is of an organisation funded by the EU, not by chance, not by Czech donations. The EU funds Czech dissolution.

5) Even if I were to take your argument that the EU is all the governments, and thus all twenty seven member states are hostile to Czech livelihood, the EU serves to INTERTWINE those governments and create TBTF dependencies. Thus, the EU serves as a continental political gridlock against the Czech people, as against all other European peoples.

6) I do not care about supposed economic performance if Czechs are not around to enjoy it. Besides, the common market is a failure for the Czech Republic's economy. It would be far better if the EU were gone and if we could organise proper trade treaties with neighbours.

Ghordius's picture

3) this is totally beside the point, Czechoslovakia was agreed on in the aftermath of WWI and the 1918 revolutions in a way that pleased France, Great Britain and of course the US that was against the wishes of Germany, Austria, Hungary, Poland, the Czechs and the Slovaks. Soon 100 years ago. And don't tell me that the Warsaw Pact did not entail any sort of pressure. But again, in this alliance, members are encouraged to "own their shit" - as the Yanks say. Germans are still apologizing for their fascist regime. Just recognize that the non-elected, communist government of CS did import Vietnamese and Chinese workers. And the new is still doing it - and blaming "EU bla bla".

zelter's picture

I recognise that the former CS government imported foreign labour for perceived needs, and that the EU does for Czech dissolution. I do not recognise either of them as the result of a popular, democratic choice, and neither does most anyone else. Autocracy sucks.

I can give a brief history of the Czechoslovakia myself, but that's about it. A configuration that came about to encircle Germany. I see no reason why Germans should apologise for their economically and socially successful and mostly peaceful country. After all, Britain started the war by making Poland breach the Non-Agresssion Pact and attempting to encircle it. I do dislike Hitler a bit for hating the Czechs; I peg that as his biases as an Austrian. Nevertheless, his Germany reversed the trend of decline in birth rates that the EU-like Weimar dictatorship upheld. Hence: you should note that it is possible, and wonder why the EU is not doing it.

The Czech Republic is obligated to import refugees and illegal aliens (i.e. economically worthless people) due to the "Western Empire" and the EU specifically. Furthermore, it is laughable to claim that legal aliens like Africans would be here but for the one-way influence of Western elites. Without foreign interference, the Czech Republic would have been increasingly more Czech than the other way around.

Ghordius's picture

decline or increase of birth rates attributable to what? see below.

Ghordius's picture

2) yup. for the alliance, it's seen (see my answer to 1) as a kind of IQ or EQ test, or trigger. If you are "stoopid" enough even to talk about racial deportations, sterilizations etc., then the whole wrath of the Western Empire comes down on you. You seem to have either a big cultural gap to cross here or, again, have been overexposed to very strange propaganda

zelter's picture

I never talked about doing anything illegal, of course. Just what the EU does not permit. Which is to say, sovereignty, democracy, and the future existence of Europeans. I'll pass given the choice. Oh wait, no choice--I guess I'll wait for the chaos after this economic mismanagement.

You seem to live in fear of your empire and the EU.

Ghordius's picture

hahaha. it's the next options that are fearsome

zelter's picture

There are no worse next options for Europeans than the EU.

Ghordius's picture

OK, I'll try a as-neutral-as-possible, cynic, evil-eye, factual approach.

1) ok. let's assume you are right - there are many degrees between "wishing them to disappear" and "executing genocidal operations". Technically, your problem is one of the "not in my backyard" type. The question would then be "where else".

But the nature of your problem is diametrically opposed to the way the alliance your contry joined operates. Which is that citizens of the alliance are treated equally in front of law and society, and that cultural and genetic differences should not be held against anyone. What you are fighting is a cultural imperialism that goes beyond the political imperialism. To put it differently, in the two extremes we operate like this: someone oppresses someone else, we invade vs. someone oppresses someone else, we say "tsk, tsk, bad boy", they have the same rights as you have.

Nobody nowadays operates the way the Soviets did, btw.

And if not with the Gypsies, with whom do you want to populate this since-1947 empty backyard of yours that the Czech government is trying to fill it since then, first the communist and now the freely-elected? You would have to convince the Czech girls to marry very, very early and have twelve children. How many have you vs. your age?

zelter's picture

I have no problem with Gypsy culture or cultural differences, as I tend not to mind other people's business. Framing it a matter of culture implies that there is anything primarily wrong with Gypsies being in Europe other than not being Europeans, which is incorrect. That position is a fallback position installed by anti-Europeans to imply that Czechs living among Czechs in Czech land is illegitimate.

I do not understand most of your post, including the remark that Czechia was empty, nor the bit about free elections. Convincing is easy as long as a pro-Czech government is in power, and there is no organised higher power like the EU around. I have some children, and I'd like them to enjoy the possibility of having more (and having Czechs all-around is a good guarantee), which the EU denies. 

Ghordius's picture

see below, you stopped making sense to me

i-dog's picture


"the EUR has been adopted by frigging 17 countries. all part of this "imposition"?"

Disinformation. ALL countries joining the EU ("for open trade and free travel between members"!) are REQUIRED to have a plan to join the EZ/Euro. The fact that many joined the EU and are now either dragging their feet on the Euro -- or outright rejecting it -- confirms his language, not yours.

The fact that many electorates were not happy with their [captive] governments even joining the EU (how many had referenda, eh?) further contradicts your repeated assertions.

"how the bloody commission is commissioned and who commissions it "

Straw man. ALL national governments in the EU are infiltrated by -- or outright headed by -- stooges of the central planners. Some have been elected in the past few years by promising one thing during their election campaigns and then completely reversing their position after being elected ... ask the Irish, the Spanish, the Greeks, the Americans, the.......

The mechanisms of all constitutions differ widely from actual practice ... ask the people of "The People's Republic of China" and the people of the "Democratic People's Republic of North Korea".

Question: How much do you know about the views of the educated middle class of each EU country?

Ghordius's picture

my white-pelted friend, if this is true then why does the British Pound still exist? The "requirements" for a "plan to join the eurozone" is just this: an other example for our european love for plans. I reject this "forcing" in the same way as all the talk of "dominate" and such. It's a club. Dragging feet forever is an art and a sovereign right, here. Yes, they reject it, when they want. Period.

If I were the head of government of an EU country outside the eurozone, I would plan to join, but wait to see where the next shoe drops. And the dear parliament that appointed me would anyway have to vote on the matter. And go back to be elected or not.

Which brings me back to the currency grid. I presume you know by now by position of why the small and medium producers in the eurozone wanted a common currency, particularly since 1971 and the end of gold-exchange backing. Trade with dozens of FX is hell, though it does wonders for the banks.

No, I won't claim I know all the views of all educated middle classes. I do try. But education would start with knowing - for example how the EU is structured - i.e. as clubs of sovereigns, something I find in the whole EU except in the UK and until short ago Ireland.

Industries like tourism have a very good grasp of "why the EUR". In many countries I find industry workers that understand why, when they know that many of their parts are going to be assembled elsewhere and understand price calculations (they do study them because their wages demands depend from them). People at the many commercial fairs we have on the continent all understand why.

Democracy is always a bitch. We have countries that don't allow referenda. It's a pity. We have countries with the most absurd parties. It's a pity. But they are sovereign countries. They have to find their way.

I know, I have already posted this link, but look at the ratifications table here, and you'll see who has to say yes or no. Mostly parliaments. It's not perfect, but it's nearly the best system I know (and yes, the Swiss have a better one).

Note the Royal Assents. And the Presidential Assents. Note the primacy of the Parliament in Greece, Sweden and Bulgaria. Note how in Belgium 11 frigging bodies have their say. Note the Irish Referendum and it's result.

falak pema's picture

don't rile him he might go for his gun like in the man who shot liberty valance. And then he'll ask you : what  do you know about John FOrd movies?

PS : See! He set his I-dog on u! Told you! Just like in DIsabledvet's youtube below!

disabledvet's picture

this is a VERY big deal:
Does the Administration even know what the IMF is for? "not when it comes to our buddies" apparently.
Here's my personal take on the progress at dealing with the crisis to date. (the Old Lady is Greece btw.)
"come and get your bailout Fido!"

NotApplicable's picture

Lincoln proved conclusively that unions are insoluable, and he only had to kill 5% of the population to do it.

I wonder how many Hillary and her NATO friends are aiming for?