Troika Wants To Strip Greece Of Defense, Auto Industries, Greece Balks: The Troika-Greece Can-Kicking Toxic Loop

Tyler Durden's picture

While the world awaits with bated breath until the moment that Greece can no longer afford to pretend it is solvent and has to apply for its third bailout from Europe, or else threaten to take down Deutsche Bank and its tens of trillions in gross derivatives, the world has to listen to the constant jawboning from the Troika which for the past nearly 4 years continues to express its displeasure with Greece, and yet still provides every Euro of funding the imploding country requests. In the latest iteration of this charade, the Troika has apparently flexed its muscles and made it clear that if Greece wants to receive the next round of cash, it will have to shutter the state-owned Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO). In short: shut down the domestic defense and auto industries, and we'll talk. Oh, and if as a result you have to import your guns and cars from Germany (whose generous funding has kept you afloat so far), and have to take out Deutsche Bank loans to pay for them, so be it.

From Kathimerini:

The heads of the troika mission in Greece are due to return to Athens at the beginning of November, it was revealed on Tuesday as sources in Brussels insisted that the country’s lenders would not back down over their demands for further fiscal measures and the closure of Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO).


The Greek government has balked at suggestions it may have to find as much as 2 billion euros more than it has planned in savings next year. However, EU sources told Kathimerini that the troika does not consider the draft 2014 budget reliable. Greece’s creditors believe the plan overestimates tax revenues and underestimates social spending.


As a result, the troika wants to thrash out more measures with the Greek government, ensuring that the deficit target for 2014 will be met. The European Commission, European Central Bank and International Monetary Fund agree with Athens’s positions that any extra savings should not come from “horizontal” cuts to wages and pensions.


The precise amount needed to cover Greece’s fiscal gap next year will not be assessed fully until the current troika review is completed. This requires Greece to meet the milestones agreed with its lenders, such as rounding off the first phase of a public sector mobility scheme. EU sources noted that Greece could survive without receiving its next loan tranche until spring, thereby underlining that the troika is not in a rush to complete the review.


With regard to EAS and ELVO, Greece’s lenders do not believe it is possible to save the two state firms as they are a drain on public finances, in contrast to other European countries, where companies in the defense industry are profitable.


Athens has been in contact with the European Commission over the past few days to respond to queries about its plans to keep the firms afloat. The government believes that it could turn EAS into a profitable company with two years. EU sources said Brussels had heard similar pledges from Greek governments over the past 20 years.

The last snarky sentence was from Kathimerini, not us.

And of course, all of the above would be dramatic if it wasn't quite clear apriori that this is merely the latest iteration of the kick-the-can closed loop, best summarized by the schematic below.

h/t @GreekFire23

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buzzsaw99's picture

One more step toward the final solution.

Vampyroteuthis infernalis's picture

"in contrast to other European countries, where companies in the defense industry are profitable."


   I worked in an Italian defense industry corp and it was not profitable. This statement is pure propaganda!

LawsofPhysics's picture

Any "industry" that relies on government/taxpayer monies for income is by definition not profitable.

knukles's picture

Just tell em the car business is electrifying and they know Elon Musk and that the defense shit is for the children. Lotsa money available from DC
And tell DC that they can all vote Dumbocrap....that'll seal the deal

Peter Pan's picture

Unfortunately everyone everywhere that can is hanging off the government's teet for sustenance. 

skistroni's picture

Indeed, these companies are bottomless pits, losing money every year, and the workers are guaranteed a salary permanently regardless if there are orders or not. There is no other way that it could come through.

And BTW, we ARE buying military stuff from the US and from Germany already, and a former Secretary of Defense just got a life sentence for bribery. 

As it was from the beginning, it's the German and American banks and industrial groups that receive the money which Europe "hesitantly" lends to Greece, so that we can pay them. When they realise they can't extract more, they'll just drop us in the gutter. We're so fucked that freedom isn't as attractive a prospect as it sounds. 

Peter Pan's picture

The former secretary of defense who got "life imprisonment" will be about in 2-3 years so don't believe that punishment has been handed down.

These companies don't have to be closed.....they just need to be sold to a Greek company that can run it properly. They must of course acquire it without strings in relation to employees and wage rates.

Peter Pan's picture

This is not always correct and sometimes you would not want them to be profitable. For example, the police, defence, education etc.

czardas's picture

I laughed when I saw the headlines.  Having lived there awhile I can testify Europe is the most defenseless continents on Earth. They couldn't even act against genocide by a ragtag band of thugs within their own borders (US had to do it of course). Everyone has slashed defenses to the bone in the vain hope the rest of the world is as nice and friendly as they are.  They're transferring everything into the social welfare state and still creating massive, mounting debt.  Who is going to defend Greece - Italy, Slovenia, Hungary, Spain?  LOL

CrashisOptimistic's picture

That is not quite the right question.

Perhaps a better one is "Who is going to be fool enough to conquer them and take on those costs?"

If they had oil, they'd be conquered and the conquerer would let the low lifes starve, but they have no oil so there's nothing there to conquer.

czardas's picture

See me in 20 years when Europe is rapidly shrinking and aging and further denuded.  The surrounding African and Asian nations will be overflowing with extra tens of millions.   Invaders rarely act rationaly - if so they wouldn't commit their own citizens to death for an insane idea.  Germany had all the living space she needed and the top economy on the continent. What possible reason could she have to enslave her neighbors?  

The point is that wishes do not make reality.  As much as we'd like to believe the rest of the world is as depicted on NPR - nice, mannered, educated friendly and concerned about individual and property rights, that is not the reality.  Perhaps rising living standards will bring an end to tribalism, religious persecution, ethnic favortism and murder for theory.   I doubt it but it's worth a try. 

CPL's picture

The single item that made it possible to extend human life beyond the age of 50 just won't be available and it's a problem that gets solved with the absence of it.

Don't count on heart meds being around much longer.

Joe A's picture

"They couldn't even act against genocide by a ragtag band of thugs within their own borders (US had to do it of course)."

Really? While the EU trojka at the time tried to prevent a civil war in Bosnia, the US simply encouraged the muslems in Bosnia to declare independence while everybody knew that that would lead to civil war, which it did. In the end the Dayton agreement was implemented which was almost a copy of proposals as put forward by the EU (EC at the time).

y3maxx's picture

WW3 is on our doorstep today friends.

Saudi Arabia is breaking Diplomatic ties w/ America.

This could be the "Black Swan/Arch Duke Ferdinand" Moment/Event which leads to WW3.

America cannot/will not, allow the US Dollar to lose its world currency reserve status.

Look for a Key Assassination to mark the moment.

Sudden Debt's picture

If reality was a movie... the audience would leave their seat because IT ALL TAKES SO FUCKING LONG!!

Sean7k's picture

Their intelligence chief is "threatening" to diminish ties. Not the same, hyperbole much? WWIII? Over Syria? The zionists will let us know when they want WWIII to start. 

CPL's picture

Depends if the Earthquakes that have been occurring since the 21st haven't broken anything important.  Then there are the approaching food shortages there, it wasn't a good year for Israel farming wise.  Plus the weather patterns changing in the area to allow for monster Tornadoes.  Winter is air, mixing with heat, quick pull on an updraft and a funnel with the power of all the nuclear arsenals on the planet drops from the sky shredding everything in it's path.

Israel is going to be busy with other things.

scraping_by's picture

The right wing governments of Israel, like any other right winger, sees war as a solution to all situations.

I mean, the military reasons for the Lebanon invasion were lame. The Palestinians were leaving the camps and becoming everyday Muslims. The parties in the civil war were starting to talk. Invasion, mass murder, and power politics were the last thing Israel needed.

But it did get people talking about something other than the dismantling of the Kibbutz system.


CPL's picture

Right now the place is such a mess that you would think everyone would be doing the sensible thing and sitting down and pooling ideas instead of lobbing bombs at each other.  Water distribution, food, land reforms.  Lebanese wheat is sold in Mecca and Jerusalem and Ottawa, they have the identical problem as everyone else.  Cheap energy going away.

CPL's picture

Pick the stage you are at:


  • Denial
  • Anger
  • Bargaining
  • Depression
  • Acceptance

Now understand that WW3 won't happen, it can't with a Nuclear reactor situation in about 46 spots on Earth about to kill 90% of you whether you want it or not due to maintenace issues. 

So who gives a fuck about the dollar.  The world needs a stable, SAFE, method of currency that isn't a manipulated piece of bear shit so it can conduct it's daily business.  Guess what, that is not the USD. 

Look around you.  Does this look like paradise?  Does it look like everyone is at their potential because of the paradigm of fractional reserve banking and it's half wit child the USD?  Not in a million years.

Bitch, piss and moan all you like about whatever you like that would be your business.  But the world right now needs more stablity than offering a bunch of pampered fucks hookers, blow and palaces.  Because if it doesn't get done and fixed, there will be no opportunity for anything.  So lead, follow or get out of the way.  This is coming like Christmas.

Dewey Cheatum Howe's picture

WW3 is going to be a guerilla style war. The composition of the fighting forces will be proportional to resource/energy available to keep it functioning. Efficient, ingenous and fast on your feet is going to be the equalizer.

CPL's picture

This isn't the first time in history people have had the same delusional idea. Ever met a Vandal?  As in the Germanic Gothic tribe the Vandals? 

You never will.

They thought very closely along those lines of guerrilla style warfare.  Or banditry, because that's what that is.  It's not Robin Hood, it's thuggery. 

The vandals inbred, delusional blood line lasted about thirty years and they were butchered to the last child to make sure that idea died with them.  No one would have bothered with them, but after burning down the library at Alexandria.  It was a situation that was stomped on hard and mercilessly to the point of removing an entire country region of people. 

You know who did it?  The Germanic tribes themselves, wasn't Rome or the Turks or even an Act of God.

Their own people cut their throats because the rest of the Germanic tribes were attempting to get farming and communities started after the collapse of Rome.  The continuous harassment by the free shit army (Vandals) hundreds of years ago drove them all to stand up and finish them off.

There have been free shit armies in the past.  This time will be no different.

Long seeds and new ideas for improving on processes to make is easier.  Short on weapons and bandits.

WOAR's picture

Never short weapons. Even if banditry has a life of only 5 years after the collapse, that is 5 years too long without a weapon to defend yourself.

Also, in a historical context, cultures like the Mongols were incredibly healthy due to how they lived. Being nomads on the move, living mostly off of game, milk, and proteins, is very good for the body. Farming is just a machine for calories.

So, be aware of people that wish to follow the example of the Mongols.

CPL's picture

Where are the Mongols now?  History.

BigJim's picture

Your history of the Vandals is unorthodox, to say the least

CPL's picture
  • German steel could be found in Ancient china. 
  • Lathe work from Ancient China could be found in Irish Jewellery predating Christ. 
  • Nutmeg indigenous to India is found in Mediterranean escarpments for no paricular reason but have been there long enough to change evolutionarily. 
  • If the Vikings were such terrors and sea faring folks, when did they stop to bother to invent the A frame house and calculate the needed roofing load to stop it from crushing it's inhabitants to death from snow weight while inventing canning and pickling. 
  • Why is it that tooth abscesses and broken hands killed as many people as heart attacks and horse accidents 100 years ago. 
  • Was Europe that 'dark' for 1000 years even though records show people only worked 160 days a year by both church and local religious agreement?

Are things in the right order of opportunity for the history that you learn to have actually happened? 

Ask yourself that.  Is what you read the only source of information on the subject, or is it sourced to offer justification somewhere else?  Or for something else.

Dewey Cheatum Howe's picture

The size of the environment eventually forces the conflict and in turn influences the tactics used. This time will be no different. Big bloated and corrupted squeezing everyone else left to death and the blow back is no new story either. It has nothing to do with banditry or righteousness, it is to keep from being flattened to death when big, bloated and corrupted is ready to pancake you against the finite wall of all systems.


CPL's picture

That takes energy no one has, I don't recall anything in the scriptures about full gas tanks and loaded rifles. Just with what you carry with you.

This economic situation has nothign to do with 'money' it has to do with oil.  Cheap, energy rich oil.  Most people will have more concerns and the world will seem infinitely bigger without reliable transportation other than feet.  Bikes brake and horses get sick/die.  I've owned both out in the sticks.  Although if you want to prepare for that, fill your boots.  You'll get bored of fucking around camping eventually and want to talk with someone who's principal concern isn't robbing/murdering someone.

Otherwise you trade one method of evil for another isn't fixing things.  It's the insanity of repeating the exact same mistakes and it's got to stop.  Right now, how we all live, that's the mindset that put us all in a shitty situation.

Does it bare repeating again and again and again?  No.  Just walk away.  These assholes want you to fight and people are willing to throw their lives away on fucking "money"?  You'd put yourself in harms way for another person's IOU?  Why? 

If you've got commitments to family.  It quite possibly the stupidest thing a man could do is go get himself killed in that situation.  There is no insurance in that situation for his family after the fact.  Who do you think will take care of them if you die?  Or are you so unimportant in the grand scheme of things that you consider yourself valueless to your family.  Real men stick by the people that depend on them and use their minds to solve problems.  Force is an option of last resort always and when it's used, leave no doubt that it's been applied.

scraping_by's picture

Not a free shit army the way American stooges scorn people on relief.

More like an LBO firm or a 'turnaround' hedge fund. Using combative methods for harvesting value others had built through labor and foresight. The original loot 'n scoot.

Romney the Scary Clown would have been Romney the Vandal Chief.

Paper CRUSHer's picture

The greek parliament....err Troika voted to cut/suspend funds to reich wing party golden step backward?

CPL's picture

The Trokia, a solution to a problem that never existed.  Champions of straw men and their economies everywhere.

ciscokid's picture

The Greeks should simply go out from the Euro ASAP.

Winston Churchill's picture

Thats what the Troika wants.Yet the Greeks keep bending over, and

don't even want lube anymore.

Dewey Cheatum Howe's picture

It is all about the pyschology of the Stalin and plucking of a chicken story.

B.J. Worthy's picture

Not gonna happen as long as the ECB is twirling the key to their handcuffs.

czardas's picture

You don't get it.  Greeks don't WANT to leave the Euro.   They realize it has been a disaster and STILL want to stay.  It's like Illinois and California electing the same goons over and over who have driven their states to pauper status.  We imply the populace is itching to tear down the Brussels's headquarters but the opposite is true - the vast majority of Europeans want to remain in the EU.  Yes, it makes no sense but the idea of the old national currencies (I loved using liras, francs, marcs, pesetas, drachmas) is fading quickly.  

SDShack's picture

Exactly right. The EURO continues to exist because all the parties want it to exist. The welfare states of the South get free money by just "promising" to get better. The export states of the North get free money that leads to a weaker Euro compared to their old sovereign currencies, so their exports are more profitable. It all hinges on FREE PRINTED MONEY. Nothing will change until one of the parties WANTS to get out. Greece ain't it. Italy ain't it. Portugal ain't it. Spain ain't it. The one real threat to the whole Ponzi scheme wasn't the PIIGS, it was lowly Cyprus. They could have brought the whole house of cards down, and it's why they were the recipient of real hardball tactics by the IMF, ECB and that forced Russia to step in. That was a real threat on a global strategic conflict and had to be neutralized. The EU won't make that mistake again... until it is forced to. It will happen eventually. The problem with playing brinkmanship everytime, all the time, is that you have to keep ratcheting up the brinkmanship or it doesn't have credibility. Eventually, something unexpected happens. All collapses have always been "unexpected" by the banks that should have always been the first ones to see it coming.

shovelhead's picture

You know those water wings look goofy and make you look helpless but it's still easier to use em than to learn to swim on your own.

Euros are Greek water wings.

SheepDog-One's picture

Soon they'll demand Greeks each fork over 1 of their kidneys and a lung.

LawsofPhysics's picture

"Laws" that cannot be enforced, are not laws at all...

Same as it ever was...

SheepDog-One's picture

Just like ObaMao care, 'law' that says you must purchase products from the Gubmint.....fuck them.

zaphod42's picture

Think you should check that out.  The Obamacare law says you have to buy from friends of the elected [insurance companies], and if you do not, you will be fined by the IRS.  Turns the IRS into a police force, IMO.  Not that it was much of anything else before.

The gubmint has the guns.  Or, ultimately they will shoot you.  It is an offer you cannot refuse.


Ivanovich's picture

If the Greeks continue to accept all of this without rising up and setting fire to the whole country in rebellion, then they deserve to reap what they sow.

BigSimes's picture

The Troika are getting a taste of the original 'Greek' style... If you're not sure what I'm thrusting at, it might be past your bedtime.

Devotional's picture

I have said it once and I will say it again - this BLIND allegiance to a failed union and monetary system will engulf and deliver us into poverty. Burn that EU flag, burn the bankers and behead the politicians. oh ... and time to ditch the mega welfare state too.

czardas's picture

See my comments above.  You are delusional if you think Europeans (or even Greeks) want to leave the EU.  They don't.  The idea of returning to the old currencies is barely discussed in Europe although it is quite popular in US web forums (lol).  They support the EU, the welfare state, peace and severe redistribution.  Of course, peace is illusory and redistribution lasts as long as there is wealth to fleece. 

CrashisOptimistic's picture

For the 15 xillionth time, Greece imports 400,000 barrels per day, every single day.  If they leave the Euro and print up some drachmas No One Will Sell Them Oil.

And then they starve when the shelves go bare.

They have no choice but to stay in the Euro.

zaphod42's picture

Minor problem, them staying with the Euro.  They cannot print Euros. 

Only the Germans can do that.


NOZZLE's picture

Just a minor Glitchez in the master plan that stated happy days are right around the corner.

TeamDepends's picture

Greece, your only option is to take the Icelandic path.