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Following "Soft" Capital Controls, ECB Threatens Greece With ELA Cut Even As 1 Million Workers Go Unpaid For Months

Tyler Durden's picture




 

Things for insolvent, cashless Greece are - not unexpectedly - getting worse by the day.

Following yesterday's shocking decree that the government will confiscate local government reserves and "sweep" them into the central bank to provide the country more funds as it approaches another month of heavy IMF repayments, earlier today Bloomberg reported that the ECB would add insult to injury and may increase haircuts for Greek banks accessing Emergency Liquidity Assistance, thus "reining in" the very critical emergency liquidity which has kept Greek banks operating in recent weeks as the bank run sweeping the domestic banking sector has gotten worse by the day.

ECB staff have proposed increasing the discounts imposed on the securities banks post as collateral when borrowing from the Bank of Greece, the people said, asking not to be named as the matter is private. While adjusting these so-called haircuts hasn’t been formally discussed by the Governing Council, it may be considered if Greece’s leaders fail to quickly convince euro-area finance ministers they can reform their economy and secure bailout funds, one of the people said. Greek bank stocks slid.

According to Bloomberg, the ECB staff proposal lays out three options to reduce central-bank risk: "the scenarios envisage returning haircuts to the level before late last year, when the ECB eased its collateral requirements for Greece; to set them at 75 percent; or to set them at 90 percent. The latter two options could be applied if Greece is in an “orderly default” under a formal ECB program or a “disorderly default,” CNBC said, without further elaborating on those terms."

Any reduction in ELA availability would be devastating to Greece, where depositors continue to pull cash from banks accounts to the tune of several hundred million euro every week, and the central bank "seeks to match the outflow with ELA. The Bank of Greece keeps a buffer of around 3 billion euros of ELA allowance in reserve, to give it time to react to a possible bank run, one of the officials said."

Any reduction in this buffer would lead to a self-fulfilling bank run prophecy and accelerate the deposit flight to the point where the local banks are forced to halt operations, and Greece is forced to replace the "soft" capital controls already rolled out with "hard" ones.

To restrict or veto ELA funding, which is provided at the Greek central bank’s own risk with consent from Frankfurt, a two-thirds majority of the Governing Council is necessary. A growing minority is opposed to continuing to provide the assistance indefinitely, one of the people said.

And while the date of the next ECB governing council is May 6, the locals aren't waiting around: as the following chart shows, the prices on Greek government bonds just tumbled to a record low.

 

The Greek sovereign debt isn't doing any better:

 

Meanwhile, the reality is that for a majority of the Greek population, none of this really matters because as Greek Ta Nea reports, citing Labor Ministry data, about one million Greek workers see delays of up to 5 months in salaries payment by their employers. The Greek media adds that about 45% of salaried workers in Greece make no more than €751 per month, country’s old minimum wage; which also includes part-time workers.

So will the Greeks just ignore macro developments as their country slides into insolvency oblivion? Perhaps not: according to the latest Skai TV poll, fewer than half of Greeks, or 45.5%, said that the government's strategy in negotiations with creditors is correct, down from 55.5% in late March, and a plunge from the 72% in early February.  Also notable: the number of Greeks who say the strategy is outright wrong rose to 39.5% vs 27.5% in late March, and 22.5% in early February.

If and when wages are withheld long enough, and the bank capital controls are officially enforced, and when the majority of the population finally turns soure on its idealized image of the new "radical left" regime, and demands a new government, only then will the Troika succeed. Or rather it will succeed only if the Syriza government is replaced with another one made up of former Goldman employees and various Troika-friendly technocrats.

If the replacements come from the neo-nazi Golden Dawn then all bets are off.

 

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Tue, 04/21/2015 - 08:44 | 6014026 Seize Mars
Seize Mars's picture

Wait 'til they stop paying kops.

Tue, 04/21/2015 - 08:46 | 6014033 Haus-Targaryen
Haus-Targaryen's picture

The ECB cannot cut off Greek banks from the ELA.  If they do they guarantee the failure of the Greek Banking system, which would trigger a GREXIT. 

Unless the Greeks give in (I find that really likely) or the Germans give in (I find this unlikely as the Spanish will be doing this EXACT same thing next year) -- the best thing they can hope for is the default of the Greek state, and "finess" the treaties to allow the ELA to keep flowing the entire time.  

Tue, 04/21/2015 - 08:52 | 6014044 Latina Lover
Latina Lover's picture

If the Greek political leaders had any integrity, they would default. Unfortunately, in their defence,  I'll bet they and their families have been threatened by the banksters.

Tue, 04/21/2015 - 08:55 | 6014048 Looney
Looney's picture

One million unpaid workers in the country of 10.8 million? This is a glimpse into OUR future here, in the US.

Looney

Tue, 04/21/2015 - 09:05 | 6014075 NoDebt
NoDebt's picture

This whole situation reminds me of the old phrase "you can only piss down a hole for so long."

Tue, 04/21/2015 - 09:17 | 6014109 DeadFred
DeadFred's picture

What is the Greek word for zombies?

Tue, 04/21/2015 - 09:19 | 6014120 NoDebt
NoDebt's picture
vrykólakas
Tue, 04/21/2015 - 08:57 | 6014053 Haus-Targaryen
Haus-Targaryen's picture

I would tend to agree.  

I always wondered why they changed their opinion so quickly a fwe months ago.  This always came into my mind as the only logical answer.  

The other possability I kept thinking about was they actually believe in the EU.  
The first I find more likely than the second.

Tue, 04/21/2015 - 09:23 | 6014134 victorher
victorher's picture

Latina, you are completely right. Months ago it was clear that there is no other honest decision than call for new elections and talk the people the truth: we failed, we promised you not more punishment because we trusted in extract more money from our european comrades, but they said no and we have to choose between dignity with dracma or serfdom with euro.

But not, politicians are totally unable to say one, only one, truth. They have prefered to worsen the situation, to steal money from pensions and now from local authorities, while banks were running out of money and all the nation is poised to collapse. Kicking the can is the only thing they know to do.

Take advice from Greece, at the end of the day every western government is going to do the same. 

 

Tue, 04/21/2015 - 13:00 | 6014959 Latina Lover
Latina Lover's picture

Well said, thank you for your informative comment.

Tue, 04/21/2015 - 09:31 | 6014159 HenryHall
HenryHall's picture

>>> If the Greek political leaders had any integrity, they would default. Unfortunately, in their defence,  I'll bet they and their families have been threatened by the banksters.

Sadly, so very true.

Tue, 04/21/2015 - 10:22 | 6014351 Escapedgoat
Escapedgoat's picture

You put "Political Leaders" and "Integrity" in the same sentence, two terms which in today's world are  an OXYMORON.

Tue, 04/21/2015 - 08:57 | 6014056 Arius.
Arius.'s picture

"If they do they guarantee the failure of the Greek Banking system, which would trigger a GREXIT. "

 

common genius, dont tell me, you still dont get it thats what the end game is ... let me give you another clue: isnt about greece, is about what comes next .... timeline?  let just say october or so ...

Tue, 04/21/2015 - 09:00 | 6014066 Haus-Targaryen
Haus-Targaryen's picture

I have no idea what you are attempting to say. 

Tue, 04/21/2015 - 09:05 | 6014074 Arius.
Arius.'s picture

there is a script from where Schwable and the rest of the crew take the lead.

what you are saying is not possible because it will cause Grexit IT WILL happened because that is the end goal.

However, this is just the start ... more to come in October ... clear enough?

Tue, 04/21/2015 - 09:09 | 6014081 Haus-Targaryen
Haus-Targaryen's picture

If you have some inside information, I'd love to hear it. Maybe send it to the Tylers. 

Tue, 04/21/2015 - 09:17 | 6014108 Arius.
Arius.'s picture

it is called critical thinking ... either you have it or you dont.  there are many pieces of info that you can put together, if you pay attention.

 

this kind of information is on a "need to know basis", dont expect anyone who knows anything to say it, unless it is time to do so. 

Tue, 04/21/2015 - 09:22 | 6014135 Haus-Targaryen
Haus-Targaryen's picture

So you're a Mouth Breather who picked October out of thin air.

Tue, 04/21/2015 - 11:45 | 6014671 Winston Churchill
Winston Churchill's picture

He may well be a mouth breather, but his schedule seems about right looking at the

larger picture, ie IMF reforms, and needing a big bad dog to round up the sheeple.

Tue, 04/21/2015 - 10:12 | 6014305 indygo55
indygo55's picture

Yup. Elul 29.

Tue, 04/21/2015 - 08:54 | 6014046 kizell
kizell's picture

My thoughts precisely.   I'm not getting worked about any capital control development until this happens.  Because when it does, the only security for the state will be military forces, and when they start revealing themeselves, we see how much weight this crisis can carry for the eurozone.  Specifically,  we will see just how much/little Draghi can do.

Tue, 04/21/2015 - 08:59 | 6014065 geno-econ
geno-econ's picture

Good point. However, more to the point, is the Greek military on a seperate defense budget and will it be affected by drastic cuts and delays in salaries to soldiers , Generals and supply of wine and rations ?  Traditionally, when things get out of hand in Greece and elsewhere, the military steps in.  So the question of the day is where does the military stand in this so called austerity ?  Anyone know ?  In addition the Greek Orthodox Church has been silent--- so far.

Tue, 04/21/2015 - 09:07 | 6014077 kizell
kizell's picture

It will be interesting to see how that works out.  I doubt cuts to the military would happen though.  The grexit would happen before cuts were made there imo.   But if they do cut salaries, I can think of a few high ranking officials that better leave the country asap.

Tue, 04/21/2015 - 09:57 | 6014243 NoTTD
NoTTD's picture

"Greek military"  is an oxymoron.

Tue, 04/21/2015 - 08:47 | 6014034 101 years and c...
101 years and counting's picture

if you're greek, and you still have "money" in the bank, shame on you.

Tue, 04/21/2015 - 08:47 | 6014035 Fun Facts
Fun Facts's picture

The ECB Dick Tatorship

Don't want to work on Maggies Farm no more

Tue, 04/21/2015 - 08:48 | 6014036 Hype Alert
Hype Alert's picture

They're just going to keep kicking the Greece can down the road until people will be so tired of hearing it, they will cheer when it finally implodes.

Tue, 04/21/2015 - 08:49 | 6014038 Chuck DeBongo
Chuck DeBongo's picture

OK, I get it! Greece is up a certain creek without a certain instrument. Let's take it as read that they are going to default in some form or another. What I think would be of more interest is what the knock on effect would be.

 

For instance, in the event of a Greek default, whose derivatives would be hit and how hard would they be hit? How many of the Greek citizens have taken their money out of banks and kept the liquidity under their control? How many Greeks are buying gold and silver? That kind of information would be interest; if only to see if our predictions of where people will put their cash are correct or not.

 

Let's be honest, people outside of Europe (i.e. our friends in the North America and Asia) are using this as a microcosm to what would happen if a bigger economy (i.e Japan, China, the United States, etc) has a similar default or economic trouble. It's a good way of preparing for the event we all believe will happen. I've done pretty much all the preparation I can do. All I can do now, is sit tight and hope my prediction was correct. But you lot still have more time than me. Use it well....

Tue, 04/21/2015 - 09:44 | 6014198 SmallerGovNow2
SmallerGovNow2's picture

Look at Argentina, Venezuela, and Brazil to see what happens...

Tue, 04/21/2015 - 08:50 | 6014041 MajorFall
MajorFall's picture

With all the conflicting news on Greece, I don't have a clue as to what the end game is anymore...

Tue, 04/21/2015 - 08:58 | 6014060 elegance
elegance's picture

They will bankrupt them but still keep them in the Eurozone.

Tue, 04/21/2015 - 09:49 | 6014210 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

That is my assessment as well.

Tue, 04/21/2015 - 08:51 | 6014042 Spungo
Spungo's picture

I still don't understand why they can't cut spending and pay down the debt as aggressively as possible.

Tue, 04/21/2015 - 08:59 | 6014061 kizell
kizell's picture

This is not America.   The Greek government does not have a large supply of tax receipts to work with.  To put it another way, the Greek people have little to offer in the form of productive work for meaningful tax collections. 

Tue, 04/21/2015 - 10:26 | 6014373 Monty Burns
Monty Burns's picture

Agreed. But just goes to show that the standard of living they enjoyed on borrowed money was unsustainable.

Tue, 04/21/2015 - 08:51 | 6014043 NoWayJose
NoWayJose's picture

The Great Irony is the attempt by the ECB to stimulate the EU economy by pumping out unlimited free money - while at the same time it is shutting off the taps to Greece!

Tue, 04/21/2015 - 11:04 | 6014538 Woodyg
Woodyg's picture

once greece and all the other small southern euro countreis adopted the euro as their currency it was all bakedin the cake at that point.

greece gave up their monetary soveriengty and the result is what is happening now-

the economic hitmen have plundered the easy "foreign" countries - now they're moving on to the western countries - one by one starting w greece -

but don't worry greece - germany and the banksters just want All the Assets such as  the nice pretty islands and of course the utilities...

give away your soveriengty to the western bankster - Great Idea!

Tue, 04/21/2015 - 08:56 | 6014051 LawsofPhysics
LawsofPhysics's picture

LOL!  All these self-proclaimed "leaders" and "officials" grow more irrelevant by the day...

tick tock motherfuckers...

Tue, 04/21/2015 - 08:57 | 6014057 juggalo1
juggalo1's picture

At what point would a redenomination to the drachma the less painful method?  Seriously, this has been painful for years, and there is no sign to an end of it.  Just take back your currency sovereignty, and tell them this is what you will pay.  What will they do?  Invade?

Tue, 04/21/2015 - 09:18 | 6014113 NoDebt
NoDebt's picture

The question is, painful for WHO?  Please don't tell me you're looking at this from the point of view of the average Greek citizen.

Tue, 04/21/2015 - 09:23 | 6014143 Peter Pan
Peter Pan's picture

Yes, they will invade, but instead of doing it themselves which would seem barbaric they will get Turkey to do it for them.

Tue, 04/21/2015 - 09:02 | 6014068 cherry picker
cherry picker's picture

There is a possibility there is another threat looming over them, one which has military written on it.  But not to worry, Greece is a member of NATO and if there is military involvement we can count on another war to feed the armament manufacturers, creating employment in far off lands.

Tue, 04/21/2015 - 09:03 | 6014071 Joe A
Joe A's picture

"A growing minority is opposed to continuing to provide the assistance indefinitely, one of the people said."

That is still far away from the 2/3 of the votes needed to veto the funding. This is just fear mongering by the ECB.

Tue, 04/21/2015 - 09:07 | 6014079 FMOTL
FMOTL's picture

Even on ZH the words Golden Dawn are always prefixed "neo-nazi". I,m curious , do Golden Dawn describe themselves as "neo-nazi" or "nazi" ? Or are they actually just "nationalists" ? Are nationalists automatically described by everyone else as "neo-nazi" these days ? Seriously , i,m just trying to keep up with officially approved speech by everyone else (even ZH ??).

Tue, 04/21/2015 - 09:36 | 6014170 Peter Pan
Peter Pan's picture

My friend you have to understand that even though Golden Dawn might not have committed any crimes, the fact that they parade themselves they way they do, salute the way they do, dress the way they do and so on, does not endear them or create any sort of real respect. Any support they have rightly received from the people is not based on people believing in them but largely as a result of people being fed up to the back teeth by the mainstream parties.

Tue, 04/21/2015 - 12:54 | 6014937 FMOTL
FMOTL's picture

Ah thanks for the reply Peterpan and Mr Goat, I was genuinely curious, but is,nt this sort of thing a natural and belated (to late )reaction to the cultural genocide of native European peoples through forced immigration that none of us consented to and we are even forced to pay for through involuntary taxation and welfare

Tue, 04/21/2015 - 09:53 | 6014226 Escapedgoat
Escapedgoat's picture

For your satisfaction there are Here pictures of themselves,

and you can make your own mind about them.

On the other hand the question is how do they exist ? ....I mean  WHO FINANCES  them?

And when you follow the money the answer may NOT surprise you.

My advise ? the classic  FOLLOW THE MONEY.

Tue, 04/21/2015 - 12:26 | 6014827 nicxios
nicxios's picture

Shipowners who yearn for the days of the junta.

Tue, 04/21/2015 - 09:09 | 6014083 exartizo
exartizo's picture

The EU is obviously trying to force regime change from the bottom up, applying the screws gradually, until the electorate clamours for the replacement of Syriza.

Tue, 04/21/2015 - 09:11 | 6014089 Peter Pan
Peter Pan's picture

So does Greece do a 300 Spartan move and resurface somewhere down the track both morally and financially victorious or does she sell her soul, her people and her land for a few more breaths of air?

History and disgruntled citizens have never been kind to traitors.

Tue, 04/21/2015 - 09:14 | 6014099 youngman
youngman's picture

If you have not got paid in over 7 months..I would say you have lost your job....jus sayin

Tue, 04/21/2015 - 09:21 | 6014131 Peter Pan
Peter Pan's picture

It is heart breaking to see peope get up and go to work despite not being paid, simply in the hope that one day they will be paid the full amount owing. This surpasses even the feudal rate of $8 per hour in the USA.

If Europe wanted to throw Greece out of the Euro they would have done so long ago. Their real purpose is to strangle her and her people into submission. It's that simple. Once Greece submits to the saddle she will be joined by others as well.

Tue, 04/21/2015 - 09:24 | 6014144 spoonful
spoonful's picture

Since the Syriza government came to power, it seems like one day Greece is playing hardball with the troika and the next day they are conciliatory.  The problem is they don't know if they're coming or going.  They try to walk a fine line in the middle of the road so they can go with the troika or with a Grexit as circumstances dictate, but you know what happens to someone walking in the middle of the road - they get splattered by oncoming traffic.  Looks like that indecision is coming home to roost.     

Tue, 04/21/2015 - 09:31 | 6014157 p00k1e
p00k1e's picture

Not paid for months?   Free food in prison.

Tue, 04/21/2015 - 09:31 | 6014158 Watson
Watson's picture

If the ECB wanted Greece outside the EUR-system, they would not, quite recently, have _increased_ ELA lines.

This is a bluff.
The only way Greece defaults is if _it_ (Greece) annouces that it is not paying.

Otherwise, by one means or another, Merkel will ensure that enough EUR's pass through Greek accounts for a default to be avoided.
I think few people truly appreciate how deeply Merkel holds her United States of Europe dream, and therefore the lengths, and amounts of German taxpayer money, she will spend to keep that dream alive.

I repeat: it needs a Greek politician to say 'we will make no more payments'.
Otherwise, somehow, EUR (or possibly German guarantees of EUR) will be made available to Greek creditors.

Watson

Tue, 04/21/2015 - 09:38 | 6014179 vote_libertaria...
vote_libertarian_party's picture

"said that the government's strategy in negotiations with creditors is correct"

 

What is their strategy?  Every 2 hours they alternate between saying "everybody will get paid back" to "F*** you, we are defaulting and starting over".

 

With that Finnish election Sunday EU bailout looks less likely.

Tue, 04/21/2015 - 09:41 | 6014188 Die Weiße Rose
Die Weiße Rose's picture
Greece facing 'Lehman moment' as debt costs soar

As Greece's stock market plunges and borrowing costs soar, analysts warned the country could be facing its "Lehman moment" as it faces bankruptcy and more financial chaos.

Greek bank stocks fell dramatically on Tuesday and its borrowing costs rose sharply following news that European Central Bank (ECB) staff were mulling contingency plans for both an "orderly" and "disorderly" default by Greece, sources told CNBC.

Read MoreECB staff mulls plans to curtail bank funding

A default could lead to Greece leaving the euro zone—something that closely-watched investor Mark Mobius said could herald the "beginning of the end" of the single currency bloc.

"If there was an exit of Greece from the euro, that would be an amazing event for Europe. It would mean the beginning of the end and that would not be a happy picture," Mobius, executive chairman at Templeton Emerging Markets Group, told CNBC.

Markets are also nervous—the yield on Greece's benchmark ten-year bonds rose to 13.619 percent Tuesday, up from 13.334 percent at the open. Meanwhile, as investors digested news of ECB staff mulling plans to curtail bank funding, shares of the National Bank of Greece fell 8.2 percent, Piraeus Bank slipped 11.2 percent and Alpha bank was 3.8 percent down.

Further weighing on market sentiment was the news on Monday that the Greek government had ordered state bodies to send idle cash reserves to the country's central bank as it scrambled to cover its funding needs.

Greece faces further debt repayments to the International Monetary Fund (IMF) and ECB in the coming months, as well as its own domestic wages and pensions bill, and could struggle to meet its debt obligations.

Eurostat reported on Tuesday that Greece's debt-to-GDP ratio was 177.1 percent at the end of 2014, the highest in the European Union.

Beginning of the end?

The ECB has keenly sought to downplay the chances of Greece leaving the euro zone, with central bank chief Mario Draghi saying he was not even considering such an eventuality. While on Monday, ECB Governing Council member Ewald Nowotny told CNBC that a Greek exit would have less impact now than it would have had two years ago.

However, Tuesday's news signals that officials were considering all eventualities in the ongoing crisis.

Greece has received two international bailouts under the auspices of the ECB, IMF and European Commission, worth a combined 240 billion euros ($256 billion). Its second bailout was extended by four months in February in order to give the Greek government more time to enact reforms. Those reforms are still under discussion, however, and a last tranche of much-needed aid has not been released to Greece as a result.

As concrete reform plans remain elusive, one analyst said that Greece could be heading for its own "Lehman moment," referring to the bankruptcy of U.S. financial firm Lehman Brothers, which is widely thought to mark the start of the global financial crisis.

"Time is not on (Greece's) side," Naeem Aslam, chief market analyst at Ava Trade, said in a note Tuesday.

"There is only one beat playing and it's keeps on getting louder—that Greece will default on its debt and (there is) a strong possibility exist that they can be kicked out of the euro. We maintain our view that such an activity cannot be without its consequence and could bring a much bigger episode of uncertainty than the Lehman crisis."

Read MoreGreece's fate hangs in balance amid contagion fear

As the impasse over reforms between the Greek government—which opposes introducing more austerity measures—and the bodies overseeing its bailout program continues, BCS Financial Group's Edmund Shing warned Greece was playing with fire.

"You wonder if the Greek government actually really understand the risks and the fire that they're playing with in pushing to the brink, it could be so easy for them to go too far," the global equity portfolio manager told CNBC Tuesday.

Read MoreWhat would a Greekdefault look like?

"I think Mohammed El-Erian (chief economic advisor at Allianz) put it very well when he talked about an accidental exit (of Greece from the euro zone)—not that they mean to leave the euro zone, but actually they might be forced out through an accident of circumstances."

Shing added that Greece needed to compromise during negotiations over its bailout and reforms and that European lenders would be happy to extend an "olive branch" to help Greece if so.

—By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld

http://www.cnbc.com/id/102604629

Tue, 04/21/2015 - 09:41 | 6014190 Seasmoke
Seasmoke's picture

Who needs their Military. Just put on a thong and leap on a table. Game Over. 

Tue, 04/21/2015 - 09:52 | 6014223 CHC
CHC's picture

Greece just needs to declare itself insolvent (bankrupct) and see what happens.  They have to realize - know in their gut - that they can NEVER, EVER pay off their debts.  The EU is nothing but a swarm of blood sucking leeches. 

Tue, 04/21/2015 - 09:55 | 6014235 NoTTD
NoTTD's picture

Heil Golden Dawn!

 

Let's get this Hellbound Train out of the station.

 

https://www.youtube.com/watch?v=jJnhdBpoBKM

Tue, 04/21/2015 - 10:01 | 6014263 Die Weiße Rose
Die Weiße Rose's picture
Greek mayors blast minister over cash raid

Over in Athens scenes of pandemonium have erupted as local municipalities gather to discuss what is being described as the government’s “outrageous decision” yesterday to sequester spare funds from local authorities.

Meanwhile in Brussels, EU officials have just revealed that Greece’s lenders (the ‘institutions’, formally known as the Troika),have been pushing for such a move.

Helena Smith reports that mayors attending an emergency meeting of the Central Union of Greek Municipalities (KEDE) hurled abuse at the deputy finance minister Dimitris Mardas when he announced that the “internal loan” would be enforced “for at least two months.”

“Is this your democracy?” protestors were heard saying. Media outlets quoted several of the mayors as telling Mardas:

“the money is ours and we will do with it what we want.”

Municipalities are demanding that the order be immediately revoked.

The Bank of Greece has been told to take these cash reserves with immediate effect, to help cover Greece’s looming debt repayments and wage and pension bills.

KEDE, which is expected to meet in emergency session for several hours yet, says it will hit back with a series of protests and demonstrations and take the case to Greece’s Supreme Court, the highest tribunal in the land.

Meanwhile in Brussels, EU officials have just revealed that Greece’s lenders (the ‘institutions’, formally known as the Troika),

have been pushing for such a move....

http://www.theguardian.com/business/live/2015/apr/21/gazprom-ceo-heads-t...

Tue, 04/21/2015 - 10:17 | 6014323 gcjohns1971
gcjohns1971's picture

When you make a policy, a formal policy, of paying people to work only with 'other people's money' you have to realize what happens when 'other people's money' runs out.

I feel sorry for the Greeks.  The easy way out is an illusion.  The problem is that there are too many parasites in the the Athens government, and elsewhere.  It is impossible to 'get healthy' while ignoring how Greece 'got sick'.

Elections only change the names of the top parasites.  The solution is to get rid of the whole parasitical system. 

Then you can use whatever money you want to, and it will make no difference.  The parasites in Greece are the Greek Government, and the Greek banks...in that order.

The REAL TRUTH is that when one person gets something for nothing, another must get nothing for something.  The result is less 'something'. 

Normal working Greeks are getting 'Nothing for something' because other Greeks have gotten 'Somthing for Nothing'.  It is that simple.

Tue, 04/21/2015 - 10:36 | 6014418 Die Weiße Rose
Die Weiße Rose's picture

Greece is doing a reverse Robin Hood...

they are robbing the poor municipalities of their last funds -

when in fact they should rob the World Bank and IMF and Troika -

and give to the poor municipalities and people in need for funds.

what sort of left socialist Government is this ?

If I was Greek Finance minister, I would just tell the Eurocrats what they wanted to hear and then take another few billion off the IMF & Troika,

then hire Goldman Sachs as Tax consultants and get them to cook (balance) the books. Then I would sue Germany for War Reparations.

there, problem solved!

WR;)

Tue, 04/21/2015 - 11:01 | 6014524 gimme soma dat
gimme soma dat's picture

I can't fathom being expected to go to work for 5 months and hope I get paid at the end of that time.  Like someone above said, you're unemployed.  Or a slave.  

Tue, 04/21/2015 - 11:57 | 6014709 Jack4952
Jack4952's picture

I read several  articles a few months ago that many towns is Greece are using "local currencies" because of a shortage of Euros. (The same has occurred in parts of Italy.)

Greeks that wish to remain in the Euro are either: (1) Politicians or other government employees; (2) Pensioners who receive their payments in Euros; or (3) the totally insane.

 

The Greek government, which has to borrow mone to make INTEREST payments, can NEVER pay off its debt. ANd under international commercial law, "That which is impossible is unlawful." Thus, under international commercial law, the Greek government would have a lawful justification for fefaulting on all its debts.

 

Of course, it would have to deal with a LOT of "pissed off" creditors, some of whom directly or indirectly control large armies, etc. But, when you have no money, you have no money.

Tue, 04/21/2015 - 12:02 | 6014727 another_brick_i...
another_brick_in_the_wall's picture

Complete BS!

Tue, 04/21/2015 - 12:40 | 6014874 nicxios
nicxios's picture

These municipilaties are full of corrupt assholes. That's where the real votes-for-jobs horse trading takes place. Central Union of Greek Municipalities (KEDE) , they got their bribe cash money taken away from them. Oh boo fucking hoo. There are events of national importance unfolding and they're playing the usual petty politics. Fuck them. For the Greeks who are out of work and never traded their votes for a fuck-all public job masturbating out the window all day--Take those assholes and lock them in their Union buildings and set them on fire.

And if Syriza continues the tradition, burn their asses too. 

Tue, 04/21/2015 - 13:02 | 6014951 nicxios
nicxios's picture

In fact get rid of all these municipal scumbags and replace them with regional citizen assemblies. This is the budget, discuss, vote. A governor is appointed as the executive in carrying out the assembly decisions. Any corruption is dealt with swiftly and appropriately.

You got fucking assistants to the mayor with villas near the sea and sons set up with businesses that win nice contracts from the state. Are these fucking clowns for real? Fucking throw them all out. Throw them into the street and let the unemployed homeless use their villas.

Tue, 04/21/2015 - 12:52 | 6014914 Catalonia
Catalonia's picture

I think even on ZH people are underestimating the effects of a Greek default. This is what I think could happen:

 

1. Greece defaults on most of its debt and introduces new currency (IOUs)

2. Portugal, Spain, Italy start pondering whether to follow Greece

3. The euro starts losing ground as reserve currency

4. Germany (and maybe the Netherlands and Finland too) call referendums on the euro

5. The euro is abandoned "en masse"

6. Some bizarre places such as Slovenia retain the euro for a little longer, thus becoming tourist hotspots for coin collectors and EU nostalgics.

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