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Guest Post: Why Syriza Will Blink
Authored by Anatole Kaletsy, originally posted at Project Syndicate,
Once again, Greece seems to have slipped the financial noose. By drawing on its holdings in an International Monetary Fund reserve account, it was able to repay €750 million ($851 million) – ironically to the IMF itself – just as the payment was falling due.
This brinkmanship is no accident. Since coming to power in January, the Greek government, led by Prime Minister Alexis Tsipras’s Syriza party, has believed that the threat of default – and thus of a financial crisis that might break up the euro – provides negotiating leverage to offset Greece’s lack of economic and political power. Months later, Tsipras and his finance minister, Yanis Varoufakis, an academic expert in game theory, still seem committed to this view, despite the lack of any evidence to support it.
But their calculation is based on a false premise. Tsipras and Varoufakis assume that a default would force Europe to choose between just two alternatives: expel Greece from the eurozone or offer it unconditional debt relief. But the European authorities have a third option in the event of a Greek default. Instead of forcing a “Grexit,” the EU could trap Greece inside the eurozone and starve it of money, then simply sit back and watch the Tsipras government’s domestic political support collapse.
Such a siege strategy – waiting for Greece to run out of the money it needs to maintain the normal functions of government – now looks like the EU’s most promising technique to break Greek resistance. It is likely to work because the Greek government finds it increasingly difficult to scrape together enough money to pay wages and pensions at the end of each month.
To do so, Varoufakis has been resorting to increasingly desperate measures, such as seizing the cash in municipal and hospital bank accounts. The implication is that tax collections have been so badly hit by the economic chaos since January’s election that government revenues are no longer sufficient to cover day-to-day costs. If this is true – nobody can say for sure because of the unreliability of Greek financial statistics (another of the EU authorities’ complaints) – the Greek government’s negotiating strategy is doomed.
The Tsipras-Varoufakis strategy assumed that Greece could credibly threaten to default, because the government, if forced to follow through, would still have more than enough money to pay for wages, pensions, and public services. That was a reasonable assumption back in January. The government had budgeted for a large primary surplus (which excludes interest payments), which was projected at 4% of GDP.
If Greece had defaulted in January, this primary surplus could (in theory) have been redirected from interest payments to finance the higher wages, pensions, and public spending that Syriza had promised in its election campaign. Given this possibility, Varoufakis may have believed that he was making other EU finance ministers a generous offer by proposing to cut the primary surplus from 4% to 1% of GDP, rather than all the way to zero. If the EU refused, his implied threat was simply to stop paying interest and make the entire primary surplus available for extra public spending.
But what if the primary surplus – the Greek government’s trump card in its confrontational negotiating strategy – has now disappeared? In that case, the threat of default is no longer credible. With the primary surplus gone, a default would no longer permit Tsipras to fulfill Syriza’s campaign promises; on the contrary, it would imply even bigger cutbacks in wages, pensions, and public spending than the “troika” – the European Commission, the European Central Bank, and the IMF – is now demanding.
For the EU authorities, by contrast, a Greek default would now be much less problematic than previously assumed. They no longer need to deter a default by threatening Greece with expulsion from the euro. Instead, the EU can now rely on the Greek government itself to punish its people by failing to pay wages and pensions and honor bank guarantees.
Tsipras and Varoufakis should have seen this coming, because the same thing happened two years ago, when Cyprus, in the throes of a banking crisis, attempted to defy the EU. The Cyprus experience suggests that, with the credibility of the government’s default threat in tatters, the EU is likely to force Greece to stay in the euro and put it through an American-style municipal bankruptcy, like that of Detroit.
The legal and political mechanisms for treating Greece like a municipal bankruptcy are clear. The European treaties state unequivocally that euro membership is irreversible unless a country decides to exit not just from the single currency but from the entire EU. That is also the political message that EU governments want to instill in their own citizens and financial investors.
If Greece defaults, the EU will be legally justified and politically motivated to insist that the euro remains its only legal tender. Even if the Greek government decides to pay wages and pensions by printing its own IOUs or “new drachmas,” the European Court of Justice will rule that all domestic debts and bank deposits must be repaid in euros. That, in turn, will force a default against Greek citizens, as well as foreign creditors, because the government will be unable to honor the euro value of insured deposits in Greek banks.
So a Greek default within the euro, far from allowing Syriza to honor its election promises, would inflict even greater austerity on Greek voters than they endured under the troika program. At that point, the government’s collapse would become inevitable. Instead of Greece exiting the eurozone, Syriza would exit the Greek government. As soon as Tsipras realizes that the rules of the game between Greece and Europe have changed, his capitulation will be just a matter of time.
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Greeks may have a back door plan for the EU. The Greeks have been using the back door for quite some time now.
The game may already be over… EUR up around $.08 against USD in a month.
Next stop $1.20 ? Then $1.40 ?
We all should have known what was coming as soon as the MSM started predicting parity before the end of the year.
Greece defaulting years ago in 2010 would have been the best scenario for the Greeks possible. The problem now in Greece is political in nature -- not just financial, although both play their part.
The political issue stems from the population & THEN the political-class in Greece, not the other way around. What I mean by that is, the Greeks, as a people want overwhelmingly to remain part of the EU and the Eurozone, however they also want overwhelmingly to end austerity and return to the growth of 2002-2009 that they once knew. Regrettably, Syriza promised both solutions for them, even though they are mutually exclusive.
Syriza cannot buckle and bend the knee to Brussels without violating their mandate for the elections. Moreover, they cannot give the EU the bird and default without violating their mandate.
No matter what happens, Syriza looses, and upon capitulating irrespective of what happens should resign and allow for new elections to be called. This is where their jr. coalition partner could come in quite handy calling a vote of no confidence.
If Greece keeps austerity/stiffs pensioners and resigns, then Golden Dawn is up next.
If Greece gives Brussels the finger and tells them to go sodomize themselves, then the next government will be New Democracy.
My guess is Syriza stiffs their own people for the sake of the Banks, and the EU keeps them in power as dealing with Golden Dawn would be a PITA.
Doesn't this overlook the possible intervention of Russia and China both of whom may see good geo-political reasons to "Invest" in Greece?
Greece is too much of a basket case for Russia or China to fund. Russia will buy concessions from Athens (and piss off USA) abnd China will buy fire-sale assets (fancy a port anyone?) but they'll not backstop their mega-debt - they're too smart for that.
Throw those pathetic Greeks out of Europe already.
What fucking sense does this "siege strategy" make to break Greece when there's nothing left to get from them!!?
It's like laying siege to a run down dump!
And so what if it would force Syriza to exit the Greek government?
It's stupid.
Henry Kissinger 1974
“The Greek people are anarchic and difficult to tame. For this reason we must strike deep into their cultural roots: perhaps then we can force them to conform. I mean, of course, to strike at their language, their religion, their cultural and historical reserves, so that we can neutralize their ability to develop, to distinguish themselves, or to prevail; thereby removing them as an obstacle to our strategically vital plans in the Balkans, the Mediterranean, and the Middle East.”
Dä Kissinger´s Heinz vo Fädd hods hald voll drauf.
Out of 100 of your last posts 80 of them have been "Throw those pathetic Greeks out of Europe already." or some variation of such. I think I speak for everyone when I say: SHUT THE FUCK UP ALREADY!
Should just print some euros. Not the ecb, Greece. Put on your big boy pants and act like a sovereign. Best way to default is to default the box.
Politically, if the Greek Governement had decided to leave the Euro, the dead-end situation the EU is conducting them into would be the decisive event to turn Greek public opinion, and collective ethos, into breaking up with all attachment they may still have with the euro, as the Greek pseudo-money, and maybe even leave the EU.
If that's the case, the event depicted in this article could be something veriy different than a victory (for the EU).
It depends on the real intentions of the Greek Government and, having seen the recent developments, it would be bizarre if they swallow the euo-pill, having the Sino-Russian apparent support.
Yeah that too..
the Greeks are entitled to run their country any damn way they want.
Its just that as part of the EU, their decisions have consequences to the other members. If anybody in the EU had an ounce of common sense and an honest bone in their body, Greece would never have been allowed to join, or politely asked to leave years ago
The fact that that hasn't happened yet speaks to the inherent criminality of intent in Brussels
So the EU prefers Golden Dawn to Syriza then?
of course - the G.D. goes hand in glove with the Ukrainazis
Greece's future is similar to Zed's future ballcocked and gagged over a barrell in the "Zed's Dead/Bring out the Gimp" Pulp Fiction scene. See below:
https://www.youtube.com/watch?v=tVRPz6-Tkww
The purpose of debt is not its repayment, it is the domination of the debtor. They may well crush the defiant adminstration, but they know they will not get blood from a stone. They simply want to crush the defiance and make it a lesson for all the rest who are bankrupt. If you want to stay in power, promise anything the ask.
COMPLY.
It's more than just breaking them, they want all traces of sovereignty to disappear. That is the mandate of the NWO, it's the same goal as they have for the USA and every other country. The BIS is balls deep in making this happen. Greece stopped privatizing (read firesale) their assets which royally pissed off the NWO folks. They want total submission and to take away any chance of a country re-organizing and self determining their future. They are using a different tactic for the US because we are different people with a much larger population. They have spent the past decades watering down our culture via open borders, dumbing down our schools, shoving the LBGT agenda down our throats, Red vs Blue divisory tactics etc, etc. Anything to break up the homgeneity of our culture so that we are disarmed as a populace and unable to come together to fight off this attack against us. I think they have succeeded.
They will leverage the overpopulated United Nations statistics to kick the can further. Elite inbreeding will maintain a positive 2% growth model within the den of theives.
/sarc
Groundhog day
+100 Nailed it. SSDD
Seek, off topic, but what is your take on the 144,000 during the end times?
there were 12 major Gods in ancient times each ruling its tribe of earthlings
each of the 12 has a quota of taking 12000 earthling to his original planet
The 144,000 are to be interpreted metaphorically.
The 12 tribes symbolize the church, spiritual Israel. Not to be confused with ancient Israel, or modern “Israel”.
The 144,000 you are speaking of are found in Revelation 7:4-8 and 14:1.
PROOF #1:
To determine whether the number is literal or metaphorical, consider the context:
“Do not harm the land or the sea or the trees until we put a seal on the foreheads of the servants of our God.” – Revelation 7:3
Is that “seal on the foreheads” literal? Or is it metaphorical? The Bible answers that in Exodus 13:9; Exodus 13:16; Deuteronomy 6:6-8; Deuteronomy 11:18
In these verses, the seal, or “mark” is clearly metaphorical, not literal. There was no literal mark or seal on the forehead in ancient Israel.
Now let’s look at prophetic scriptural instances of the “Mark”: Ezekiel 9:4; Revelation 9:4; Revelation 14:1; Revelation 20:4; Revelation 22:4; Revelation 20:4
In every one of these instances, reading the context, the “seal”, or “mark” is metaphorical, not literal.
SO- we establish that the “seal”, or “mark” in the Bible is always metaphorical, not literal.
THEN- why would we conclude that the 144,000 are literal?
Keep this in mind- if verse 3 is metaphorical- why would we interpret verse 4-8 differently?
Now, taking a look at verse 4-8:
PROOF #2:
To determine whether the number is literal or metaphorical, consider the other Bible verses that name the 12 tribes of ancient Israel:
The list of the 12 tribes listed in the Old Testament (Ancient Israel- Genesis 29:32 - 30:24 and Genesis 35:18) differs from the 12 tribes listed in Revelation.
That is due to the fact that the 12 tribes in Revelation are used to symbolize the church- spiritual Israel:
For example: Paul is speaking to Christians in Gal 6:16 as he says, “And as many as walk according to this rule, peace be on them, and mercy, and upon the Israel of God.”
In addition the book of James is written to Christians, but they are called the 12 tribes: “James, a servant of God and of the Lord Jesus Christ, to the twelve tribes which are scattered abroad, greeting.” – James 1:1
The church today is the “Israel of God.” We are the “chosen people” of God today. We are spiritual Israel. We are the seed of Abraham.
Gal 3:27-29: “For as many of you as have been baptized into Christ have put on Christ. There is neither Jew nor Greek, there is neither bond nor free, there is neither male nor female: for ye are all one in Christ Jesus. And if ye be Christ’s, then are ye Abraham’s seed, and heirs according to the promise.”
We must understand that Revelation is a book of symbols. Many OT symbols are used to describe something about the church. The 12 tribes symbolize the church, spiritual Israel- and shows that we are his chosen people today.
There are countless other proofs, but for the sake of brevity, I’ll leave it at that unless you want more proof.
i have to admit that that is a good explanation. You can't get a bigger metaphor than revelation. But the only proof you should give a damn about is proof that God is still alive, also gives a damn and hasn't lost his or her or its mind. Arguably an abusive father is better than an absent father as they are still putting food on the table if you get my drift. Unfortunately the best proof of his existence is the polluted book of the KJV and its derivatives. sorry got off topic there a bit
I see proof everywhere that God exists.
It is impossible to see the eternal through a myopic, temporal lense.
God makes the sun shine and the rain fall upon all of his creation- both wicked and upright.
It is due to the fallen state of mankind, that free will is most often used selfishly, rather than selflessly.
That is where the blame lies regarding the evil in the world.
This shall be corrected soon- all part of God's eternal plan.
Well, maybe that God did exist at some stage. Something was set in motion but that is all. Arguably given enough time humans will create robots that have the ability to recreate themselves one way or another. Humans may have been wiped out from ebola version 2 or whatever and we could have written some cool stories etc about how we built the robots, but that is not much evidence that their creators will take them off to good robot nirvana when their solar panels rust out. The old testament in general gives us the impression that God is one angry... well, you know what, until he decided to have a son, give him a bit of a kicking and then decided to get all lovey dovey. If I had kids but then effectively abandoned them but did leave them a book about life you wouldn't think I was much of a father, even if relatively speaking they were brain damaged and could not comprehend what I could comprehend.
It is up to you, and you alone, to use your free will as you wish.
The end results of your choices will determine whether you perish, or live eternally.
The Old Testament foreshadowed the New Testament.
YHWH, the Father, allowed the Israelites to be a testimony for posterity that mankind can not save themselves. He gave them the Law of Moses, to prove that they could not obey it. Not one human, except for Jesus Christ, the Son of God- could keep that Law, which required sacrifices to atone for sin.
So Christ fulfilled that Law forever- by performing the ultimate sacrifice- Himself. All of our sins are now atoned for, forever- as long as we put faith in Jesus Christ and His sacrifice on our behalf.
God's loving plan towards His creation, mankind, was fulfilled in this.
Yes, all of us are indeed "brain damaged", as you put it. In other words, we are fallen, sinful, in need of redemption.
"For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life." - John 3:16
That is the truth, tooktheredpill!
The truth i should seek huh? You sound like you were raised a Christian but don't make much of an argument. It's hard for a brainwashed person to realise that they are brainwashed. Maybe as a potentially insane person I don't realise that I am insane.
Groundhog day
I'm not here to argue- the truth was made known by Jesus Christ.
The first step is realizing that you are not 100% sane- none of us are.
Being raised nominally "christian', and searching for the truth so as to become Christian- are two different things.
The former has the potential to lead to the latter.
In the end- there's only one way:
"Jesus answered, "I am the way and the truth and the life. No one comes to the Father except through me." - John 14:6
Wow, you worked amazingly hard on that convoluted poppycock. I'd rather just believe the Bible for what is says:
1 And I looked, and, lo, a Lamb stood on the mount Sion, and with him an hundred forty and four thousand, having his Father's name written in their foreheads. 2 And I heard a voice from heaven, as the voice of many waters, and as the voice of a great thunder: and I heard the voice of harpers harping with their harps: 3 And they sung as it were a new song before the throne, and before the four beasts, and the elders: and no man could learn that song but the hundred and forty and four thousand, which were redeemed from the earth. 4 These are they which were not defiled with women; for they are virgins. These are they which follow the Lamb whithersoever he goeth. These were redeemed from among men, being the firstfruits unto God and to the Lamb. 5 And in their mouth was found no guile: for they are without fault before the throne of God.
Revelation 14 King James Bible
And what, exactly, is your point?
That you should ignore the context- not only of Revelation- but of the entire Bible- in support of your pre-conceived notion that Revelation is to be taken literally?
What of all the Scriptures that prove the mark, or seal on the forehead is metaphorical? I linked to these above- did you even bother to look them up? Or are you too lazy, even though the links are provided?
Here is more proof you are deceived:
FURTHER PROOF:
Just a few verses down- in Revelation 14:14-20- What of the sickle, the grapes, the winepress, and the blood rising as high as the horses’ bridles? Are these literal too?
https://www.biblegateway.com/passage/?search=Revelation%2014:14-20
NO- They're obviously metaphorical!
EVEN FURTHER PROOF:
What of the Beast out of the Sea, and the Beast out of the Earth of Revelation chapter 13?
https://www.biblegateway.com/passage/?search=Revelation%2013&version=NIV
Are they literal, too?
NO- They're obviously metaphorical!
Explain your convoluted reasoning- how you jump from metaphorical, to literal, to metaphorical- with no scriptural support. You do it because that is your pre-conceived notion.
You are deceived- you believe in convoluted poppycock.
Wake up, open your eyes.
The author of this article is right: Greece lost much of its leverage when it didn't take the "Argentine" option to default and then offer a percentage of the balance due in a new bond issue. Back then, they had some cash to work with. Now they don't.
Privatization of everything Greek to satisfy the claims of largely European bamkers will turn Greece into a colony and its people indentured servants. Syriza has played a game with the devil. They should have known the consequences.
Greece, as a country and all its financial institutions within, should declare bankruptcy. The government should nationalize all the banks, set price controls, and capital controls, and try to make a deal with another devil: Russia. Greece could control the transit of all gas coming out of Turkey, regardless whether it comes from Russia or Azerbaijan, or Iraq, because all that gas goes through Greece. If the Russians loan them $5 Billion now, with the understanding that zero dollars of that goes to satisfy any foreign debt, the Greeks will have enough money to keep the wheels of government and the economy going for a while.
But, unless or until they can pay back the Russians, they should understand who their patron is and support the Russian agenda in Europe.
"But what if the primary surplus – the Greek government’s trump card in its confrontational negotiating strategy – has now disappeared? In that case, the threat of default is no longer credible. With the primary surplus gone, a default would no longer permit Tsipras to fulfill Syriza’s campaign promises; on the contrary, it would imply even bigger cutbacks in wages, pensions, and public spending than the “troika” – the European Commission, the European Central Bank, and the IMF – is now demanding. "
Assumptions and guesses... What fun!
I think I feel like making some assumptions and guesses too!
I assume that achieving the primary surplus may still be possible.
I assume that Greece will squeeze people that owe taxes harder.
I guess that Greece will be forced to nationalize it's banking system: both to examine the accounts for tax evasion by the citizenry and corporate depositors -as well as the banks themselves, to seize unpayed tax levies outstanding where ever they are stashed in the Greek banking system if they are still held therein, and to direct any and all banking profits directly into the government coffers as has been done with a plethora of other govenment ministries and institutions...
I guess that some/all govenment employees and social services payments recipients and govenment pensions payments recipients and/or govenment contractors might be issued Euro denominated IOUs that will be declared legally redeemable as or in lieu of genuine Euros at face value by decree of the Greek govenment.
Should I keep making assumptions and guesses as this author does??
IMHO, I think that I am actually much better at making assumptions and guesses than the author of this post is...
Indeed, let's only allow absolute truths, let's not speculate. Let's trust Greece's numbers (Bureau of Lottery), and not even assume they could be wrong.
March on!
Problem is the banks have no money - so nationalising them gains sod all. Everyone in Greece with wealth has moved it out of the country - they're not stupid. The people can see the bankuptcy coming even if Syriza / EU are in denial (IMF seems to have woken up by trying to back out of the Troika). My daughter works in Athens - all her cliennts (shipping firms) have their money elsewhere, and are ready to move their businesses if the Govt gets heavy or raises taxes.
When you and the author assume, you make an ASS out of U and ME.
Leave NATO.
When the expected retaliation comes, frame it as a threat of invasion and declare all debts null-and-void and declare a corporate tax heaven for all comanies with 100 emloyees in Greek-based offices.
Who the fuck cares? What does Greece produce? From what I have seen their women are not atractive, so, honestly I don't care.
SH
1. The Troika obviously and most of the 500M citizens of the EU.
2. A lot. see Top Greek Exports
3. From what you have seen... from what I have seen one cannot see Greece from your porch in Arkansas. The women are mediterranean and latin. Obviously that minor detail has just gone whoosh! ... right over your head.
You´re cluless. Most of what Greece exports was imported in the first place like oil. They are even a net food importer. All they have is a small pharma industry, but even that is tiny on an international scale.
Oh, and Greek woman are not latin at all, because they are Greek. You´re an uneducated idiot.
Their mustaches look Latin.
Unlike Ukraine with picture beautiful blond women, Greece can export .. olives .. and .. uh .. wait .. let me work on this list for a while ..
What does Greece produce?
A good point. Greece does not produce enough to support itself. One-third of its workforce is on the public payroll. Anyone with a transportable skill (or even decent English) has left the country, leaving only the old, the young, the unskilled, and government employees. Taxes are very high; waste and sinecures are rampant.
Nathan Lewis has the best prescription for Greece that I have seen:
http://www.newworldeconomics.com/archives/2015/032615.html
As for the women, you're right; few look like that Marina Sirtis in 'Star Trek', but they are intelligent and funny. One recently told me that public workers in Greece get a bonus if they are at work on-time. (Yes, that's how bad it is there.)
No more hope for "Grexit"...Right?
prolong the misery will you??
The legal and political mechanisms for treating Greece like a municipal bankruptcy are clear. The European treaties state unequivocally that euro membership is irreversible unless a country decides to exit not just from the single currency but from the entire EU."
And that is precisely what the Greek government will do.
It has no choice; it is broke, and cannot pay its debts. No "surplus" would've lasted long anyway, even IF Syriza had done as this squibb's author suggests.
It really is the EU that needs to come to its senses here. NO ONE forced the EU to accept Greece's original membership application, and CLEARLY, the loans made to Greece had to be made with the knowledge that Greece's problem was one of lack of national income, and NOT just an excessively-generous social structure. If the EU didn't know that up front, it should have.
It's also worth noting that EU states have, and continue to outsource important income-producing jobs to the third world, without the slightest regard for the needs of its own membership. If the EU actually cared about the well-being of its member's citizens, it could've outsourced some of those industries/jobs to Greece, instead of incessantly browbeating a nation in the same kind of economic trouble as a great many others. It (the EU) did not impress this message upon the corporate interests within its sphere of influence.
The fact is, Greece is, and has been, in trouble for a long time, and EVERYONE knew this. The EU is NOT going to create a Somalia in the heart of Europe, and regardless of who is at the helm of the Greek government, Greece will NOT improve it's future GDP prospects without new industry. A bankruptcy would be even MORE senseless than the troika's "muscle man" mentality has been thus far.
Greece should file for divorce tomorrow, and take its chances on a new life apart from the miserable EU.
What's over...is over.
m
This is why I said default years ago while they still had a semblance of an economy and social structure- at that time say 2012 - the EU was in no position to retaliate.
They will still default - this is forgone - but now they & EU are looking at a failed state at one of history's major fault lines.
Guess you gotta stop the vampire earlier, rather than later, or you will be too dead or drained to ever hope to recover from the assault. In the vampire myth, they hypnotize their victims, and the victim finds pleasure in the bite/sucking, until they are almost dead. Only then do they struggle.
Gosh, boys and girls. In our story, who is the vampire?
Hint: It starts with a B and ends in ster.
Lol this author's assessment is elementary at best. There is only one option print drachmas.
There is another nuclear option. Athens, quite legally, prints Euro notes .... print a truck load of 500 Euro notes... (300bn should fit in one or two trucks) ..... drive the trucks to Brussells ... and in a blaze of media .... hand them over to the ECB and say 'debt paid'..
Now that would expose the insanity of what 'fiat' currency with no discipline really is. As a PR move, it would play directly on the fact the public has no real understand of monetary systems.
I would bet that at least 90% of the world would believe .. "Ah ... the greeks HAVE repaid their debts"
For extra confusion, print those notes with an X prefix ..... :-)
greece can not prin teuros. only ECB can do that
Greece prints Euro banknotes with an "Y". Greece produces €5, and €10 for the Eurozone and in 2013 printed €20 notes.........
You are simply wrong.
Each Euro country prints it's own notes. My comment about printing them with an "X" prefix is just a windup ... Greece is probably not allowed to do that because of fine print in some treaty. However, if they did, the notes would have the same "value" as German printed Euro notes.
In it's physical form (notes/coins) the Euro is not truly fungible. If the Greek government printed some more notes (which they are allowed to do), this fungibility issue would rapidly become visible to everyone.
Good point. The serial number appears to be the key to the entire system:
http://en.wikipedia.org/wiki/Euro_banknotes
Each banknote clearly indicates the country of original printing. Since the banknotes are distinguishable by serial number, they cannot be considered to have the same value. If we view a banknote as representing a debt by the government involved, the serial number tells us which country or bank originated that debt.
The German-printed notes will probably end up being more valuable than the others, for people who believe that German debt is lower risk than Greek, Italian, or Spanish.
If I were European, I would be spending my Greek banknotes and hoarding my German ones.
They could flood the black market and local banks with officially printed EU counterfeits and sit back and watch as hilarity ensues. The ECB might have to shut down the whole banking system to remove all those notes or reissue new bills, either way it would put a big hit on the ECB's credibility if it happens.
Some things are missing from the mix.
What happens in Greece, sets a precedent for the rest of the countries in this same fix, the little PIIGS, remember?
They are really gonna just sit around and be cool while all the populations of all these countries "replace" their leaders with people who will be more compliant with the bullshit? Just let everyone blow up and tear the places apart?
And what bullshit is that?
To pretend they are going to tighten up (be austere), and take on more debt, while the Troika pretends to cut them more slack and checks?
Really?
Really?
I think the truth is they don't know what to do, so no one will agree to anything.
Default has already happened. It is the credit event they are GAMING us about.
"I think the truth is they don't know what to do, so no one will agree to anything.
Default has already happened. It is the credit event they are GAMING us about. "
I thing everyone involved knows only ONE thing: what they don't want to do, which is actually accept debt defaults and declare the credit events triggering the CDS and destabilizing the whole edifice of pyramided Derivatives and Counterparty Risk.
Of this I am certain: the ISDA membership/Transnational Banks sure as hell do NOT want to call in their own unpayable debts to each other and try to take the sword to the Gordian Knot of Tens of Trillions of Dollars interlocked unbacked Derivatives exposures.
Nobody can cover or rely on anyone else to cover. The 'Lehman event' of 2008 that Ice9'd the commercial paper, money markets and interbank lending markets proved this without a doubt.
To destabilize the Derivatives stack is to court mass economic suicide; a finance industry exinction level event. They will do anything to avoid it: accounting fraud, theft, larceny, pay exorbitant bribes aka regulatory capture, naked short selling, market interventions, falsified quarteries, sell unbacked securities, etc., etc.
They will lose everything if the pin is pulled.
If the system collapses the Banksers know they will be hunted down and strung up...
They should have dutifully taken their fucking losses, kept the system intact via debt deflation, and lived to see anotehr iteration of the old scheme; but, the greedy motherfuckers were too greedy and blew it.
The question is, who's the dumb fuck AIG's who insured these
swaps and are they spread out enough to hide their bankruptcies?
The speculation in this article about insufficient tax revenues to support wage and pension payments is not based on any facts and does not appear to be insightful. Predictably Greek would have faired better without the payments to its creditors in 2015 and the known figures do not suggest that revenues were insufficient to cover domestic expenses. The leverage of the Greek government is the damage a GREXIT might cause to the EU always provided the government is politically and administratively indeed strong enough to make a GREXIT happen. Therefore it is still highly likely that the EU will provide additional debt to Greece against some minor concessions. Most likely it won't be long before we talk about 400 billion Greek debt. Yet there remains a low risk of a black swan rising.
The Greek people know that things are bad and going to get worse. They are all trying to not pay taxes. It is a kind of game with them, a macho thing to not pay. The greeks have to vote to get out of the EU. The way their government is set up, they must have a confidence vote for some big dicision like that so it is up to the greeks to get out or not. None of our suggestions telling them what to do will make a difference. So sit back, enjoy the show, something will happen sooner or later. In the mean time ....
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Pull the bandaid off already! Greece is kaput. Admit the obvious. Take the medicine and move on. Pretending otherwise is childish.
Sorry, but this isn't a matter of blinking, caving or brinkmanship. Greece has been insolvent for years and any settlement that hides that fact will amount to a gigantic version of what the IMF did last week - loan Greece some more money to service the IMF debt that it already owes. And it will have to be a pretty big loan form the EU countries to kick the can down the road much further.
Perhaps Greece will try to sell some or all of its islands - which will drop in value as soon as the sales start.
That's the whole point of the excersize to begin with, get real assets in return for the fucking paper the BIS printed off in their basement. As soon as the Islands, shipping industry, etc., are sold off then what? The Greeks will be completely at the mercy of the BIS for everything they need to survive and thus are totally enslaved. Game, set, match.
Actually a pretty good post on the topic by ZH. Comments....meh.
Perhaps you will take the time to rebut the counter argument here......
https://hat4uk.wordpress.com/2015/05/15/debt-crisis-anatole-kaletskys-pa... :
Sorry , can't get that link to paste completely.
Just because Vichy DC & Cabal friends & Co own the $$$$$$$$$ and Euros and are able to dictate who gets saved doesn't mean every country in the west isn't insolvent.
Portugal , Ireland and Spain , all insolvent must pay into the kitty to pay Greece's Debt despite being unable to pay their own interest on debt.
France too must cough up i believe 17.5% of Greece's Debt, Germany 30%.
Contagion is a Bitch.
The ONLY Hope for Greece is to pivot East or die trying.
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Nonsense from Kaletsy.: "...the European authorities have a third option in the event of a Greek default. Instead of forcing a “Grexit,” the EU could trap Greece inside the eurozone and starve it of money,"
In this dreamworld of the living dead in the EU where nothing is what it seems, the Greeks themselves can simply default and then exit the EZ. They don't need permission from Brussels. So the idea that Brussels can "trap Greece inside the EZ" and starve them into obedience is nonsense.
"European Court of Justice will rule that all domestic debts and bank deposits must be repaid in euros"
only, the ECJ does not have such power.
Why would Greece leave the Euro? They get funding and money for nothing, debt restructuring etc. The paying party should leave.
About a year ago I made a bet with a young German, that Germany would bail out before Greece did.
We'll see.
you will be wrong
It won't be the first time.
But you must admit that it makes perfect sense for Germany to stop propping up this mess?
From Germany's point of view? Have you looked at Euro value lately compared to 2008? Have you looked at how much Germany pays to service its own debt compared to 2008? Have you looked at German export growth because of the weak euro?
the Greeks are entitled to run their country any damn way they want.
Its just that as part of the EU, their decisions have consequences to the other members. If anybody in the EU had an ounce of common sense and an honest bone in their body, Greece would never have been allowed to join, or politely asked to leave years ago
The fact that that hasn't happened yet speaks to the inherent criminality of intent in Brussels
all of this assumes there are no other players in the game besides GR and EU, right?
Exactly what does Greece or Syriza have to gain by a capitulation to the Eurogroup? Nothing. Syriza will have to go back on every election promise they made and Greece will continue in the pain for all foreseeable future.
Yes, Greece cannot exit the euro without exiting the EU and that is exactly what they will have to do with all the problems it entails. Syriza doesn't have to take the blame for all the ensuing problems if they conduct a plebiscite asking the people to authorise the government to do so, making it explicitly clear that ending austerity is not possible while remaining in the euro. If the people vote for ending austerity by doing whatever it takes, they have the mandate to do so. If the people reject the government stand, they can resign, call for fresh elections and let someone else deal with it.
Of course part of the Gamesmanship here is the idea that if Greece exits euro then the EU will will kick them out of EU. Just cause its written on a paper doesnt mean it has to happen. The ECB threatens that its all or nothing but The EU would likely decide that they dont want to unravel their Empire just because the ECB is unravelling theirs. They would find an excuse to keep Greece in EU when it leaves euro. The Games go on - who will have the courage to call the bluff?
if they conduct a plebiscite asking the people to authorise the government to do so,
The EU would never allow a Referendum, look what happened last time!
the best option for greek people - Greece should default and stay in eurozone
Tsipras and Varoufakis have at least one trump card in their sleeves:
The support of the greek population.
The EU has proven to be ruthless monsters.
Killing sick people and elderly, destroying society. Just for the money and power.
The greek got the message. The EU wants to rule over the European peoples, not corporate with them as an united family.
These guys are completely fed up with those EU-tyrrants.
...and will win.
And putin will gain influence.
And the EU will go under.
The Greeks should hire tour buses and free one way tickets to Victoria Coach Station in London to export their people to Cameron Island and welfare
The Greeks could get rich by staying in the EZ and just charging a toll to Africans and Arabs to enter the EZ.
Pay back their debt with immigrants.
Hahaha.
Jokes on you, Europe.
not corporate with them as an united family.
Surely - Co-operate?
There is no legal mechanism in the Maastricht treaty for any member to leave the EU.... so the premise that the EU can force a member to leave because it leaves the Euro is also wrong. If a member defaults like Cyprus did, the the ECB can take some actions such as they did with the agreement of the government. If on the other hand, the Govt of Greece does not agree, then things get pretty messy... But my guess is that this govt will let the ECB and the EU take over the banks and do the dirty work for them... in this way, they can blame the ECB and the EU and win the next elections
There is a mechanism for leaving the EU - its in the Lisbon treaty. Its been well examined in the UK who are hoping to start the process of leaving in 2017. Takes 18months from notification of intention to leave to final exit.
Takes 18months from notification of intention to leave to final exit.
They rewrote those rules, now need to ask other members permission, called QMV!
http://t.co/1HhnvYsoyU
So what's Brussels gonna do? Sue!!!For what?
There is no legal mechanism in the Maastricht treaty for any member to leave the EU...
Yes there is, it's called QMV. The new rules state that a Nation wanting to leave must ask the other 27 members for permission. From these, that country would need 72% of the vote and those countries that said 'yes', would need their populations to add up to 65% of the EU population. There's also a 'Blocking Vote' which requires a minimum 4 countries.
This is how they have managed to keep the UK in, though the majority don't know it yet, because the UK or any country, under present criteria, would never meet QMV!
http://t.co/1HhnvYsoyU
If this is true, Syriza and the U.S. Tea Party (which is hardly a political party) should copluate and birth a baby.
They can name it Liar Liar Pantsonfire.
In mid June Mr. Tsipras meets with Mr. Putin in Moscow. The BRICS and the AIIB are the new kids in town and that will become very evident very soon.
It aint over until Varoufakis says it's over!
We must put china ans russia in side this equation. This players can change everything inside euroland. Europe is week it's matter of time befor it's collapse.
" or “new drachmas,” the European Court of Justice will rule that all domestic debts and bank deposits must be repaid in euros."
Stupid fuck.
What the fuck makes you think the Greeks would give a flying fuck what the ECJ says, a bunch of crony corrupt parasites that that are nothing more that the Mafias conciliar.
If you base your fucking deluded crap on what the Greeks can and cannot do on those fucking no marks telling Greeks whats what you are living in a fantasy
Reads like EU psyops.
Once Greece is out of the euro it can follow the US / UK approach of having its CB print all the extra money it needs, lend it to the banks who then buy up government bonds, used as collateral for more funny money.
For internal transactions it doesn't matter whether they are denominated in euros or anything else and money printing is simply a reliable tax on everyone's financial assets, more reliable than the current Greek tax system.
Sure some people who currently get paid relatively well in euro won't be able to afford imported goods. Big deal, how much can Greece actually afford to import now?
The notion that the European Court of Injustice is going to then force Greece to keep paying everything in euros it doesn't have is nonsense. The Greek government will give them the 2 fingered salute and what's the ECI going to do, jail the Greek government? The ECI knows this and will find some way to acknowledge reality -- unless Germany is determined to force Greece out of the EU, not just the EZ. But that flies in the face of the intention to have an ever-expanding EU, so won't happen.
Stupid article. With them out of the emu, they can print you moron. Pay all the wages they want. All they have to do is get China/Russia to recognise the new currency. Why do you think they have been invited to the brics and the link to the turkstream. And no, once gone, the eu will implode quickly due to PIS demands.
How many time I need to repeat it. The last five months show that Syriza is a controlled opposition steered from Soros headquarters and Broookings institution under quiet acceptance of ECB.
The facts.
1. Government has no control over third biggest Army in EU, biggest Army per capita, no military cuts whatsoever, they even buying useless shit from US as we speak.
2. Government has no control over police, no cuts in pay or benefits no prosecution of rampant civil right violations by police against leftist parties and groups.
3. Government has no control over prosecutors and judges, only ONE investigation, related to theft of national treasure, of people connected to oligarchs and foreign banks was open while Syriza members made over thousand requests for investigations.
4. Government has no control over banks. It’s obvious because of ECB but Syriza members requested thousands of reports on banking activities or requests to stop oligarchs from repatriating their stolen wealth abroad, no response.
5. Government has stolen retirement money and practically reneg on immediate election promises regarding increase of employment, while paying off senslessly troika gangsters against their own stated policies and election promises.
6. Government did not nationalized state assets sold to foreign investors for peanuts as declared in their own stated policies that obtained parliament vote of confidence.
7. Government did not use Russia leverage in NATO context and did not worm up frozen relationship with Turkey as extremely strong bargaining chip in current geopolitical situation potentially weakening of NATO southern flank.
8. Government did not do as promised and did not release prisoners of tax debt, small business owners and other individuals devastated by economic crisis.
I stop here but that’s no all.
The Syriza violated their own political manifesto hundreds of times during last 5 month proving that it is a fake political entity negotiating cash deal for their own leaders while collapsing their own country.
It’s pure political theater for “benefit” of raped Greek peasants.
As I said before on ZH no Greek blood on the street no true revolution against EU totalitarianism, disguised as brotherly love.
What this article misses is that if Greece leaves the EU then they do have years of known (free trading) before suffering any ill effects from leaving the EU, and despite their small economic size countries neighbouring Greece will still be desperate to maintain trade on good terms.
But it is true, they've been waiting for a bailout for a long time now, but the Troika are just waiting for the Greek government to collapse and a more friendly one to take its place. Either Syriza wakeup to the fact that they are politically dead if they stay in and break their political promises, but they can at least blame the EU if they are "forced out" and get a mandate from the people for a new set of promises. Greece leaving the EU won't kill it, but it will fatally weaken the Eurozone so much that when the next downturn arrives (and its coming!) the Euro will be certain to break up.
But Greece is one of the countries bribed with "development grants" to stay in the EU, which explains why they stay in despite the economic damage it is causing. Now if the UK as one of the main funders of these grants pulled out then all of a sudden we'd see Greece and others much less interested in the EU project, so we can expect this issue to pop back up if the UK exit's in a year or two.
Meanwhile in other news ISIS takes Ramadi - what a joke.
With Zero as our CiC, we might as well start making Abrams tanks with reverse only and flowers out of the barrel.
It's useless to speculate on what will ensue, when so many conflicting interests are engaged, statistics fixed, parties lying through their teeth, keeping their last trump cards anxiously up their sleeves. Surprises are bound to happen.
Let's wait till June 5th, when the next payment to IMF is due, and see if Varoufakis can press enough blood from Greece's ancient stones, or from the Chinese Wall? If not, things will escalate quickly. Don't forget the military and NATO.
The system cannot crash now, half uf the U.S. Middle class has not been fleeced yet.
A PhD in economics and "game theory" was needed for this?
How much is your fee, Yanis?
Communists... only god knows what are they really thinking about.
The Greek government needs to figure out who they fear most.
Being assassinated by the banksters if Greece leaves the EU.
Or being hung by the populace for selling out the country to the banksters.
Not an easy decision.
Nice comment. Better than the whole dame stupid article. Waste of time!
How dumb do people get?
1. Greece is BROKE!!!! BROKE!!
2. More credit line and loans don't help a person or COUNTRY who are up to their eyeballs in debt.
So........put simply this article is MORONIC!
Only hope is for default, total restructuring of debt (asset stripping - not much left + it would set a terrible precedent for the PIS) or shift to BRICS/Russia for economic development (do business/make money - seems like nearly all of Europe except Germany have no clue of capitalism).
Interesting that this stupid article does not present a scenario where Greece introduces a new ccy, devalues it by over 50% through a couple of stages and then continues to rebuilding its economy. Right now, its just a ZOMBIE nation!
You can't get blood from a turnip and beating a dead horse is useless. Increasing pressure often end with an unanticipated result.
The Greecs have to go back on their donkeys. They should have never changed them to Porches.
It is difficult to see what Syrzia are waiting for: a legal procedure for unwinding from the EU could be it. The Contagion risk is irrelevant - those seven Central Banks will take the other side of any offer. Greece has no particular advantage from being in the EU right now, and any further penalization by the EU of Greece is unlikely to alienate Syrzia from the people; if anything, it would enhance the preference for a Drachma. Which should already be near 80-90%. ..the current output of Greece is not useful in contemplating the future - it may become a developing country, but it would be a highly-educated developing country, so Loans and FDI would not be a problem. Granular - what do the banks do with their books - Euros to Drachma should they fight in court, would they be Nationalized, would the people place deposits elsewhere. ..the EU system has assets as well as a market it would lose, but what does Greece have to lose. The EU cannot ordinarily re-negotiate the outstanding Bonds because those have been hypothecated. The problem is the deriavitives-market - that was the known seven years ago - the banks have done nothing about it. Fine, if the Banks and the EU can't do that, then really,.. it's a waste to see an entire system crash, but, hey, it doesn't work.
If the greek government was smart (but let's be honest, there arn't many smart guys in politics anymore....maybe Putin) they would have used the last months to secretly print up a new currency and not paid the loans but bought gold instead. Imagine, a new currency at least partly backed by gold. The EU, EZB and IMF would soil their panties!!!
All hell breaks loose the second the unions can't pay their members. The people will riot against the unions if that happens so expect the unions to organize the people to riot against the Greek government first. Watch the pensions and worker benefits funds.
The author fails to recognize that if driven hard enough, Greek society will radicalize even more and turn to Russia and China for survival. And FUCK the EU.
You are saying that like it's a bad thing
The problem with Greece is that it's filled with Greeks.
You can stick them anywhere in the world with a moderately functioning Govt. and they'll do fine.
On the subject of running a govt., it's an entirely different matter. The opportunities to 'make a little' are too great for them to resist. Not much different than anyone else, except that Greeks have elevated corruption to an art form on par with the Golden Age sculptors.
The US admire the Greeks and emulate them at every turn, but it's mostly contained at the highest levels rather than the more 'democratic' style of the Greeks.
"On the subject of running a govt., it's an entirely different matter. The opportunities to 'make a little' are too great for them to resist"
This can be said of all Governments, none more so than the US, who consider running the Fed Res, more important than running a government. Or the UK who appear to be 'laundering' everyones dirty money!
Greece has the backing of Russia and will not be drawn into commiting further austerity on her people. The EU are no doubt waiting for the US to collapse the 'dollar', what else was the purpose of 'granting' them 4 months?
In the mean-time, the ECB goes round buying up Assets with 'paper' that will soon be worthless, but they'll have the assets?
I wouldn't count on Greece blinking. They can't afford to remain part of the EU no mater how much (or how little) it costs. Yanis Varoufakis, the new Finance Minister of Greece, has a very interesting view of how the current global economic problems developed and why they continue to get worse instead of better. He calls it the Global Minotaur...
http://www.globaldeflationnews.com/the-global-minotaur-a-global-finance-...
Don't be condescending to Greece --
If Greece defaults, it would leave both the euro and the EU. Don't think they're stupid and haven't thought of this. So the EU couldn't force it to stay in and submit to a Detroit-style slavery. They just need to find enough cash to get through the hardest period as they become sovereign again. The Syriza government has probably been aware of this from the beginning, again they're not idiots, and of course they couldn't have defaulted right away in Jan since they didn't yet have the confidence of the population. Now after 4 months they have it and they're in a position to default and tell the EU to go to hell. The only question is where will the new loan come from... Russia? Probably...
They do not need to blink... They're happy with the payment arrangements :-)
The big assumption is that they (those that worship money) think money matters over sovereignty and dignity.
I think The Greeks will blame The Troika et al not Tsipras & Co. They probably will and the scumbag elite will have engineered another conflict/ war.
They should have defaulted in January when they had more cards in their hand. If they have any money left they should just pile in to silver with leverage lol. That'll shit the banks up....