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Will The ECB Finally Use The Greek "Nuclear Option" This Wednesdsay?
This was not supposed to happen: by now the Greek insolvency "can" should have been kicked, and the Greek government, realizing the money has run out for both the government and the banking system, should have folded to Troika demands, and allow the Troika money to return repaying obligations to the Troika in exchange for more spending cuts.
Instead, the "game theoretical" approach of bluffing until the end, and beyond, has put both countries in a corner from which neither knows how to escape, and with the "final deal deadline" passing this weekend we now have quotes such as this from the EU:
- OVERTVELDT: GIVING IN TO GREECE WOULD UNDERMINE EU CREDIBILITY
while in an op-ed due to be published today in German newspaper Bild, German Vice Chancellor and Economy Minister Gabriel has been quoted as saying that ‘the shadow of a Greek exit from the euro zone is becoming increasingly perceptible’ and that ‘repeated apparently final attempts to reach a deal are starting to make the whole process look ridiculous, there is an even greater number of people who feel as if the Greek government is giving them the run-around." So time for another "final attempt" then:
- EURO WORKING GROUP SAID TO DISCUSS GREECE TOMORROW AFTERNOON
Meanwhile, Greece digs in over its red lines:
- GOVT SPOKESMAN: GREECE WON’T ACCEPT PENSION CUTS, VAT HIKES
And yet, in this climate of animosity between the IMF (which as a reminder walked out of talks last Thursday), and the Commission (whose amicable attitude toward Greece promptly soured over the past week), there is still one way Europe can promptly end the impasse.
As a reminder, on Friday when we looked at the latest Greek one-day outflow which saw another €600 million leave local banks, we said that "next Wednesday is when a non-monetary policy board meeting of the ECB non-governing council will take place in Frankfurt where Draghi and company will discuss the issue of guarantees of Greek banks and perhaps the proposal for collateral "haircut."
Earlier today, Deutsche Bank hinted at the ECB meeting as just the place where the ECB, which has until now stayed out of the ever more rancorous Greek spat, and in fact has buttressed may just invoke the nuclear option. From DB's Jim Reid:
The ECB non-monetary policy meeting is also scheduled for Wednesday. George believes that a lack of progress on Thursday should see a more formal deadline put on Greece, beyond which capital controls will be implemented.
Which makes us wonder: with both sides digging in and unwilling to budge, will Europe revert back to its strategy from day 1, namely creating a slow initially, then fast bank run in Greece, one which leads to gradual then sudden capital controls, resulting in civil discontent and disobedience and ultimately, a violent overthrow of the Greek government.
The best way to achieve all of that would be to use the aptly named Cyprus "blueprint" - after all, with the "successful" Cyprus capital controls already tested out, and with the Greece stalemate going nowhere and leading to a loss of credibility in the EU, it may be time for the ECB to do what it did on March 21, 2013 when it issued the following statement:
Governing Council decision on Emergency Liquidity Assistance requested by the Central Bank of Cyprus
The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.
Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in
place that would ensure the solvency of the concerned banks.
So will Wednesday see an identical press release issued by the ECB, only with "Greece" instead of "Cyprus"? Because with the ECB's emergency liquidity assistance already covering some 64% (call it two-thirds following the latest weekly outflows) of total Greek deposits...
... if there is one way to bring the Greek "crisis" to a grinding halt, it would be to give the Greeks themselves the "option" of regaining access to their now "capital controlled" funds if and only if they "choose" a different government, like any true democracy?
Considering that according to the latest poll, for the first time a majority, or 50.2%, of Greeks want the government to accept the creditors’ proposals to prevent the country’s bankruptcy, this may be just the catalyst to push the population over the edge and to tell Tsipras that Europe has won?
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Remember Tsipras's first meeting after being elected was with the Russian Ambassador. The pageant continues, but not necessarily with a script from the EU or the US.
Russia can't, and won't help Greece. They have their own problems at home.
Who in their right mind would shower a nation with fresh liquidity after they walked away from hundreds of billions in liabilities? If the Russians were so stupid to do this, I'd petition to have Putin thrown into a mental institution. Putin may be a gambler but he's not an idiot to loan a deadbeat nation billions unless he can secure the collateral with his own tanks. That's what is needed here.
If Putin backs Greece it will be for one purpose and one purpose only - to install a Russian airbase and a Russian naval base and to use Greece as an economic 'gateway' to the EU for Russian goods and oil/gas.
Who wouldn't want to invest in a nation newly debt-free and recovering? It's a great deal for the Russians.
oh they are not stupid-they would take a few ports or Military bases as collateral
fantasy-Russia is doing better than ever-and they are only a few Billion in debt. We are coming up on being $20 TRILLION in debt
Doubtful.
Why wait?
Latest I read is that the banks are going to be funneled Euros after a default.
http://finance.yahoo.com/news/ecb-keep-funding-lifeline-greece-135251027...
CHARITY
Well George which button should i press the Red one or the Blue one.
Come on Draghi, start it, market need new highs, or the financial markets will collapse worldwide. If you don't do, it will be now your fault.
The Greeks have elected themselves an irresponsible government, which favors somebody else subsdizing their lifestyle (who wouldn't, right?). SO, the EU wants more control/a little slice of tyranny. Greece should opt-out of the EU and try to become a fiscally responsible government with a new drachma. Chances are they wont (be fiscally responsible), but believe it or not, the biggest lose in this is BIG GOVERNMENT. Why? B/c if you are sufficiently fiscally irresponsible, nobody will pay to tyrannize you!
I believe Europe will give money to the Greeks. It's for survival and good for quantitative easing, ecb policies.
Correct. Because what is money anyway? Something you can conjure up in infinite amounts at the stroke of a keypad. If the ECB can conjure up 2 trillion Euros for QE purposes they can surely throw a few hundred billion Greece's way. After all, what's a little pocket change between friends?
Greeks are saying they want to come back to the table and resume "talks".
They still don't get it. Nobody wants to talk with them. They have nothing to offer. Even if they agreed to all the demands. They're bankrupter than bankrupt. Haircuts may have an effect in reviving their economy. But the fact is their economy doesn't function as other Western economies do. It's a shitshow on steroids.
Here is what is really going on. The IMF, the ECB, the EU, Germany and France are all drawing straws.
WHO IS GOING TO TELL THE GREEKS TO FUCK OFF?
IMF walked out. Is now saying they need to see haircuts. Juncker (EU) walked out. ECB says they can monetize all Greek debts after default. (IMF needs to write them off first). Germany's parliament is NOT GOING to throw out a 3RD bailout and the last tranche of the existing bailout is in question. France is in LaLaland. Trying to stay below the radar and keeping all options open. French will never take a stand either for or against.
SOMEONE NEEDS TO TELL THE GREEKS! Just running in circles is not going to accomplish the INTERVENTION.
I get that it is a very difficult task. Who would want to be the guy telling the Greeks what they need to hear so desperately and being remembered as the BIG SPOIL SPORT? Nobody wants the history books to make mention of that.
At the end of the day though. Greece defaulted a couple weeks ago in ernest. Highly unlikely they will pay "the bundle" at the end of the month. Not even likely they can continue to make payrolls and pensions.
The most awful alternative is if the players just let the Greeks bleed from the inside out and turn their heads away so they won't have to see the final act of this slow grinding drama.
Bottom line is the same though. Greece is broke. No fresh money. No extensions. Haircuts either all at once or in slow motion.
The Greeks deserve better! Just tell them the truth and give them their papers.
Irrelevant. Money is something peasants like you care about but is nothing but a method of control for the elites running the show that can conjure up any amount of money with the stroke of a keypad. What matters is control, control of people. The people at the top will NEVER allow Greece to slip out of their control. Never. Money is irrelevant. It's all about control.
Of course not. But Greeks won't be free whether their nation carries 35 billion or 350 billion in debt. Carrying 350 billion is completely impossible going forward. We all know that. Getting that number down to a manageable level is the challenge. Even a smaller number though is difficult for a nation where tax evasion is a sport and corruption is rampant all throughout government.
The Greek government being disposed of via violence or subversion is MUCH more likely than Greece being allowed to leave either the Eurozone or the E.U.
Much, much more likely.
Who says anything about them not "being allowed to leave"?
THEY DON'T WANT TO LEAVE!
What do you think this song and dance has been about since Syriza got elected? They can stay in the EU, they can even keep the Euro but they're not getting anymore money from the outside and they have to declare that they're defaulting.
Eventually either IMF or EU will declare them defaulted. How embarrassing. Greeks can't even be responsible for their own default.
Greek Fin Min Varoufakis believes the U.S. is responsible for the collapse of the world's economies. He uses a Greek mythological metaphor to explain... the Global Minotaur...
http://www.globaldeflationnews.com/the-global-minotaur-a-global-finance-...
Making friends everywhere now... You know how addicts respond after their fix has been shut off? They blame everyone under the sun for their own misery. The Greeks are not sorting this out themselves and that is what really pisses me off. I lost all respect for them. Sure, go blame the dealers. Blame the US financial sector when you're up against the wall. Why was none of that discussed over the last few months?
Why is Varoufakis NOT going after the Greek elite who made the deals with the banks in the first place and then syphoned billions off the top? They have a list of 2000 GREEK heavy duty tax evaders that they're not touching!
I would respect the man if he told his people to get ready for some rough time and encourage the people to get through this if they all work together.
None of that. Just blaming everyone and asking for more of other people's money. Fuck off, Greece.
That is a point I also wonder about Walküre, but then, the same is also valid for all other EU (EMU) members, no ?
Arrogant and incompetent fools like Fin Min Game Theorist Varoufakis are responsible for the collapse of the economy.
Greeks would do well to consult the ORACLE at DELPHI and look at the inscriptions at Apollo's Temple.
Over the entrances there were inscribed three maxims:
“Nothing in Excess”,
“Know Thyself”, and
“Go bail and ruin is at hand” that all would have seen and thoughtfully considered before entering the temple.
The oracle at Delphi is a figure of great historical importance that was, and still is, shrouded in mystery. She spoke for the god Apollo and answered questions for the Greeks and foreign inquirers about colonization, religion, and power. By her statements Delphi was made a wealthy and powerful city-state. The oracle was at the height of power around 1600 B.C. when Greece was colonizing the Mediterranean and Black Seas, but was stationed in Delphi from 1400 B.C. to 381 A.D.. Despite her long tenure it is still debated today how she received the words from Apollo, weather by hallucination or suggestion.
Varoufakis abviously does not believe in Greek mythology or it's great history, but instead wastes time on grant delusions like economic game theory, begging and acting like an addict.
Varoufakis is a hubristic conceited fool offending the Gods of ancient Greece.
WR;)
Germans getting nervous? LOL.
The LULZ will be epic when the off-balance-sheet derivative land mines blow up banks all across "responsible" "sober" Germany.
There will be no coup or violent overthrow of the Greek government. Either will result iin immediate expulsion from the EU. You have to have a democratically elected government at all times, no exceptions. You can't even have a temporary police or military government/junta.
That was long time ago... . Now you only need a "Maidan" democratic elected government... . I hope the Greeks did not forget the Colonels and even less how they got them !
Why anyone here rags on the Greeks is beyond me. Not because of what they've done or not done with their economy, but because they are the people currently in the best position to shove it up the Banksters collective asses. Why would you not root for them?
Because the GREEKS don't do it! They need to be told what to do. They need to be DEFAULTED on. Embarrassing!
Look at yourself, replying to every poster all bent out of shape over Greece. Stupid Germans in Dusseldorf still stupid.
The Greeks never learn, but then again neither do the Germans.
A little post from a Englander: https://hat4uk.wordpress.com/2015/06/15/fear-not-greece-there-are-always...
Has anyone made a comparison of Greek pensons and eigibiity to other European countries? Such a comparison would demonstrate the validity, or lack theeof, of Greek government "red lines."
@RMolineaux et al: Naked Capitalism site offers an extremely interesting and enjoyable (and long) thread on the current Greece-Syriza vs Troika situation:
http://www.nakedcapitalism.com/2015/06/did-the-media-and-greece-miss-a-m...
Thanks for the link. I had just recently read this item on another site. It is now clear to me that the Greek pension system, as currently structured, is completely unsustainable in terms of both the possibility of funding it, and in terms of the overall productivity of the Greek economy. I now conclude that the troika has bent over backwards to try to accomodate Greek demands, while the latter consist of arithmetically imposssible conditions that serve only for political demagogy.
Doesn't matter really all the Troika wants is to buy up Greece money producing state asset on the cheap like in Britain. That all it is! Just like the mob. they get you in debt and squeeze every penny out!
THIS IS ONLY ABOUT MAKING MONEY
Mr. Panos.....wisdom beyond his years..... https://www.youtube.com/watch?v=Zvl9N9GdraQ
Does a bear shit in the woods? Yes but Greece still ain't leaving the EU
I am curious to see how hard of a line they will take to Greece after defaulting.
How much of an asshole will the Troika be to Greece and the Greek people.
The French, Spanish and the Italians will be watching
I am curious to see how hard of a line they will take to Greece after defaulting.
How much of an asshole will the Troika be to Greece and the Greek people.
The French, Spanish and the Italians will be watching
" A violent overthrow of the Greek government ".
I'm sure that's what Troika would like to see happen, the Greek's turn on thier own.
I doubt it's going happen as long as they keep telling everyone to get stuffed, what they where elected to do.