This page has been archived and commenting is disabled.
Greece at the Point of no Return
Wolf Richter www.testosteronepit.com
"The European Union is suffering under Germany,” Georgios Karatzaferis said on Friday. He is the president of the right-wing LAOS. With 15 members in parliament, the party is a minority partner in the coalition cabinet of party-less technocrat Prime Minister Lucas Papademos. Karatzaferis accused German Chancellor Angela Merkel of trying to "impose her will on Southern Europeans." He called the Netherlands, Austria, Finland, and Luxembourg "satellite states" of Germany. And he said that the center of the EU was no longer in Brussels but in Berlin.
But the true toxin in his outburst was the phrase: "I cannot accept this credit agreement." With it, he backtracked on his support for the austerity package agreed to amid flickers of hope the day before. And it pushed Greece a step closer to disorderly default and bankruptcy.
To avoid that fate, Greece must make a €14.5 billion bond payment on March 20, but it won't be able to unless it receives the next bailout payment, this one for €130 billion, a mind-boggling 56% of Greece's shriveling GDP. That payment process has to be initiated over the next few days, according to ratings agency Fitch, to give all countries and institutions involved sufficient time to deal with the administrative complexities of bailing out a country with taxpayer money.
On Thursday, for a few minutes at least, hope was flying high in the media: the three governing parties had agreed on an austerity package that included cutting the minimum wage by 22% and trimming the bloated public sector. But the fallout was immediate.
Deputy Labor and Social Security Minister Yiannis Koutsoukos, a member of the socialist PASOK, resigned in protest over the cuts in social programs; he hadn’t been informed about them, nor had anyone asked him, he said.
Unions called for protests and a general strike for Friday and Saturday. The measures throw the unemployed, retirees, and young people into misery, said Ilias Iliopoulos, head of the union for civil servants. "We will not accept that, there will be a social revolt."
Greece’s Police union threatened Troika inspectors with arrest. In a written declaration sent to representatives of the Troika, the union accused them of trying to overthrow democratic order in Greece, injuring national sovereignty, and robbing the Greek people of important goods.
The small tabloid Dimokratia featured Merkel in Nazi uniform (joe.ie). The headline, “Memorandum Macht Frei,” evoked the infamous text above the entrance of the Auschwitz concentration camp. And demonstrators burned a German flag in front of the parliament.
Friday, public transportation came to a halt in Athens. Leaflets were handed out with Wanted printed on them, offering a reward of €1 euro for the arrest of a "Troikan." Peaceful demonstrations were followed by violent ones where demonstrators threw Molotov cocktails and rocks at police, who responded with teargas and clubs. More ministers offered their resignation. And on Saturday, the Prime Minister warned of collapse if parliament failed to agree on the austerity package. For more on the rough politics of bailout extortion, read.... Greece’s Extortion Racket Maxed Out.
As the situation veers toward hopeless, it follows the step-by-step procedure laid out by Otmar Issing, former member of the Bundesbank and the ECB—a procedure that has been happening for months.... Kicking Greece out of the Eurozone.
The Troika hasn’t always played hardball. For two years, it sent billions of euros to Greece to keep it afloat for a month or two at a time—though Greece had systematically misrepresented its deficits and debt since before it acceded to the Eurozone. In return for the bailout billions, the Troika asked for reforms. The Greek government promised them but failed to implement many of them. Politicians, ministries, and agencies refused to go along. The Greek people took to the streets. The bailout billions went up in smoke. The economy got worse. And Greece’s refusal to wholeheartedly embrace these reforms exceeded Teutonic patience and willingness to throw ever more money their way.
So the Troika is letting Greece twist in the wind. At risk are €130 billion—many times larger than the smallish amounts with which it had been spoon-feeding Greece. If the payment were €5 billion, it would be made, if only to delay the inevitable another month. But €130 billion, 56% of Greece’s GDP, won’t happen unless all conditions down to the last iota are met, humiliating to Greece as these iotas may be.
The Troika decided to let the inevitable happen, it seems. Their impossible-to-fulfill conditions offer plausible deniability. Mekel and colleagues can say “afterwards” that they tried everything, but that Greece simply couldn’t follow through. And Greek politicians are already planning for the “afterwards" as well. For that hair-raising debacle, read.... Greek Politicians Dive For Cover.
»
- advertisements -
This Greek hard default is being planned for the current timing. Think about it. Rest of the world is slipping further into depression everyday. What a better scapegoat than to blame Greece for the future hardships when really the entire world is in economic trouble?
for want of a horseshoe the battle was lost; blame the messenger, who'll blame the horse, who'll blame the blacksmith, who'll blame his furnace!
We need scapegoats and false flags when we are like emperor without clothes.
A WOMAN and a horse were killed and another woman was seriously injured in an explosion in a hyperbaric chamber at an equine rehabilitation centre in Florida.
The explosion occurred just after 10am (2am AEDT) at the Kesmarc Equine Rehabilitation Center in Ocala, Florida.
Marion County Fire Rescue said the explosion happened in a hyperbaric chamber used to heal horses.
"There was actually a horse inside the hyperbaric chamber at the time of the explosion and it has been confirmed dead as well," Marion County Fire Rescue official Jessica Greene said.
The dead woman was identified as 28-year-old Erica Marshall, who was originally from England and had been working at the facility for about two years, The Gainesville Sun reported.
Sorcha Moneley, 33, from Ireland, was seriously injured in the blast and was flown to a nearby hospital for treatment.
Ms Moneley told officials who visited her at the hospital that the explosion occurred after the horse knocked down protective coating inside the chamber while kicking.
When staff attempted to shut down the equipment, the horse kicked again and a metal horseshoe ignited a spark, Ms Moneley said.
The explosion was so powerful people from miles around said it shook walls and rattled windows.
The back corner of one of the buildings at the rehab center was blown off, leaving jagged pieces of twisted metal strewn across the property, myFOXorlando.com reported.
"It's a partial building collapse, and the entire building has been determined unsafe," Ms Greene said.
The Kesmarc Rehabilitation Center opened in 2009 to aid the recovery and conditioning of horses. More than 100 horses were relocated after the explosion.
Lets face it, the only people that want a Greek Bail Out are the Banks. The same with the Tarp and all of the QE's. The only people that wanted that Bail Out were the Banks.
The People suffer greatly with the Bail Outs and the then over Taxation to pay for them.
Indeed, the name of the game with the banking cartel (e.g. the FED) is always bailout. Remember that and you don't need to know much more. For a detailed history of this "emergency" bailout game read "the creature from Jeckyl Island".
Only if you pay taxes....
I agree that the politicians will cover for the banks but only because they need to keep paying off their constituents. You expect that because they are all a bunch of corrupt, scumbag politicians. However, the so called victims who will get their entitlements taken away deserve it. Even in the USA, the baby boomers never paid for all the wars that were fought, medicare, medicare-D, no child left behind, mortgage subsidies, education and all the other vote buying goodies handed out on the backs of future generations. Let them all eat cake!
Non-boomer Lyndon Johnson started that trend. So don't put it all on the boomers for seeing that good Progressives welfare Vote buying scheme and running with it. They learned fast from the Depression Socialists and progressives: ie the Roosevelts and Wilson. The current entitlement mentality and the violence that comes and will come from it are baked in and frosted on the society and culture.
When the welfare checks no longer cash, gun ownership will be a highly prized thing.
Progressives are a problem But the neocon globalist, big government warfare state "conservative" heresy is preventing an alternative.
What is wrong with this story?
Greece has a populaton of less than 1/3 that of California (11mm vs 37mm). The proposed annual budget for California is under $100B. Greece calls itself a country and therefore can make war but other than that California provides all the services Greece does. Apparently it does so quite a bit more efficiently on a per capita basis. WHAT IS THE MATTER WITH GREECE? I am certain they have a few other expenses that Arnold never had (like UN dues) but the Greeks seem to be able to out spend those slackers in California by an order of magnitude. If I were Europe I'd say 'no more' without question. The ramifications of a hard default must be pretty severe for someone in power to even consider further funding.
California and efficiency do not belong in the same sentence unless you mean efficiently pursuing bankruptcy and a good screwing of American Taxpayers.
11 million people are causing this big of a problem? obviously not. that's like saying Connecticut is about to cause the collapse of the USA (without the hedge funds of course which makes what's happened even worse.) Simply put "Greece cannot cause this."
In Greece the rule of law has devolved.
The politicians make laws to apply taxes, but nobody pays them.
So services are promised, but no revenue is collected to pay for the services.
See also Spain, Portugal & Italy. And California.
For the record, Gov. Brown has just sent a $137B budget request for 2012-13
I see at least two things you missed..California does not pay for a military force like a sovereign and California does a good job of collecting taxes...
California also does not pay for social security or medicare. Those are paid for by the Feds, and they are big.
Also the Feds send tons of other money to the states for education, food stamps, roads, law enforcement, medicaid, and probably much more.
the military expense was implied in the war comment...and yes the whole income side is another issue..
Actually, i hope they give them the money because it means more printing in the end and that's always been good for my PM's :)
What's "good for" your PMs may increase the likelihood that they become someone else's PMs.
spot on
they will get enough money to make the bond payment
only so JPM,GS, BAC, Deutsche and Citi and AIG aren't required to pay out on CDS and kill the world economy.
Yep, all they need to do is find the grave of Alexander the great and hope there's enough gold inside of it to make the payments.
I just wrote a piece (on my blowg-ah) that ponders the ironicy that the amount of MF Global subaccount funds missing, when fractionally reserved, equal the Greek debt roll.
$1.6 billion (MF Global subaccount funds) x 9 (fractional reserve lending maximum) = Greek debt roll
Now where did the MF Global sub account $$$ go?
If they try to kick Greece out of the EU, for whatever that would actually mean, and force it back into a Greek Sovereign Currency....
I'd recommend all Greek people refuse to pay all Euro denominated credit to non-Greek creditors.
Greek Government then outlaws the seizure of domestic assets by foreign banking institutions
trying to start a war, are you?
It is kind of hard to yell 'Rise Up Angry' when the offence of the oppressor has been to loan you money.
I'm sorry but Greece just looks bad here. I'm sorry their situation is now so dire and their future so bleak but the whole world will soon be facing the problem of paying back money we borrowed ...so we could party! Greece just has to go first.
Many posters are so angry with the financial institutions they forget that the real culprit is Greece. She has been on the edge of insolvency for 20 years yet pushed through idiotic pension plans that were dead when they hit the wall. She probably thought of the EU as a US of Europe - where money from NY goes to NB if needed or TX sends funds to a general fund that ends up in CA. Greece voted for politicians who promised them they could live beyond their means. Period. I've said a zillion times, Southern Europe should cut free, devalue their currencies and return to the good old days of Sunday dinner at Grandmas with all the tourists.
100% bullshit.
If money wasnt all fraud you may be just shy of clueless.
Instead i think you are a banker, making as many bad loans out of self interest as possible, and now to blame someone else like a coward before your ass is handed to you.
Socialized crime inc. is still a crime.
Nice try though.
Your "reply" has absolutely nothing to do with what I posted. If I made a factual error, please inform. Otherwise, save the ranting for those who want to join in. And NO, I am not a banker. Jesus, talk about juvenile name-calling.0
What is NB?
Nota Bene? Beneficial aside.
Both parties are to blame...the corrupt politicians who cooked the books so that the could 'qualify' for more credit and the banks who looked the other way and gave them more credit knowing ful well they could never pay it back....where I come from they call that loan to own.
Perhaps it's 'loan to own.' Or perhaps the banks assumed that Euro fission was impossible. The greek people claim the very rich suborned the politicians to get contracts. We know the politicians took very large bribes on foreign-source contracts. But the greek people turned a blind eye to all this: "Ok, you guys at the top are robbing the state blind, but it's ok provided you give us fat pensions at a young age!" They thought this was a 1 + (-1) = 0 neutral deal. They, unlike the very rich who put their capital abroad, have been had, blinded by ignorance and greed joined to poor arithmetic skills. They have been left with a bankrupt nation. The very rich can just move to Lausanne. The very skilled can move to North America. It was a big skim operation by the Greek elites. The Germans know it. They aren't going to pay for it. The Greek elites don't really care. It's not their problem, just like US companies slowly moving headquarters, plants, growth...offshore. This neuters governments, which in turn are still left with the job of keeping the masses confused and docile. This is the game of the age, and big capital is winning it.
Gee ...
Why would anyone have poor arithmetic skills?
According to our elected officials, our public education
system delivers "world class" results./sarc
These would be the same financial institutions that made big loans to a known serial defaulter, and expect you to pick up the tab?
Culprit is as culprit does.
Banks = enablers in the Greek tragedy. Sorry, banks, take the loss. No sympathy here.
nor here.
Its kinda like the CA public employees who retire at 55 with 6 figure pensions and wonder why the hell they can't fund their government.
It's funny when the government employees put their money in a pension fund, but a lesser known fact is that state governments actually put TAXPAYER money in speculative funds too.... even going so far as hedge funds
It's funny when the government employees put their money in a pension fund, but a lesser known fact is that state governments actually put TAXPAYER money in speculative funds too.... even going so far as hedge funds
without Silicon Valley of course...
If they try to kick Greece out of the EU, for whatever that would actually mean, and force it back into a Greek Sovereign Currency....
I'd recommend all Greek people refuse to pay all Euro denominated credit to non-Greek creditors.
Greek Government then outlaws the seizure of domestic assets by foreign banking institutions
Does anyone know what America's actual financial exposure is in Greece? I am having an extraordinarily hard time believing that Greece is the Pandora's Box of economic destruction.
From what I've read, the exposure comes in the form of Big Five banks who wrote CDS's on Greek debt. As soon as those CDS's trigger (via default), our big banks will become insolvent
EXACTLY RIGHT!
Its the elimination of Fraud Inc, which hold all the secrets and skeletons of power.
Why else would they STILL be TBTF after 3 years - effectively gutting the rule of law and capitalism itself.
Now wheres that viper, krasting to tell us how good this is for you and me... Hopefully on the first plane back to europe.
The USA has exposure through its big banks in the low hundreds of billions. Not any where near the exposure of the European banks but enough to hurt. Another question is who is hiding the (CDS) weenie? I don't believe that the exact risk held by US banks in this matter is known (at least I do not recall seeing it on these pages.)
No worries there. The Helicopter can print that much in nanoseconds.
According to BIS the direct amount is USD9.2 billon