"Horrified" Syriza Hardliners Back "Immediate" Greek Bank Nationalization, Euro Exit

Tyler Durden's picture

In “Democracy Under Fire: Troika Looks To Force Greek Political ‘Reshuffle’”, we took an in-depth look at the true motivation behind the hardline stance adopted by Greece’s creditors. In short, we’ve argued that the troika is determined to send a strong message to EMU member countries that threatening to expose the idea of euro indissolubility as fiction is not a viable bargaining strategy when it comes to extracting austerity concessions from Brussels. This became even more important after regional and municipal elections in Spain which betrayed growing resentment for the troika and strong support for Podemos, a progressive political movement that is, in many ways, ideologically aligned with Syriza. Here’s what we said last month:

It is becoming increasingly clear that the Syriza show will ultimately have to be canceled in Greece (or at least recast) if the country intends to find a long-term solution that allows for stable relations with European creditors although it may be time for Greeks to ask themselves if binding their fate to Europe is in their best interests given that some EU officials seem to be perfectly fine with inflicting untold economic pain upon everyday Greeks if it means usurping the ‘radical leftists.’ 

Less than a week later, Syriza hardliners called for a default to the IMF and a return to the drachma. The motion was defeated by just 20 votes, prompting us to contend that Greek PM Alexis Tsipras will need to ensure that any serious proposal presented to creditors is first cleared by Syriza’s more radical members because the only thing worse than capital controls and “Grimbo” (i.e. a slow motion train wreck) is the chaos that would ensure should Tsipras strike a deal with creditors only to see it fall apart in parliament amid raucous party infighting and the rapid disintegration of government.

Now, it appears as though EU officials aren’t the only ones drawing up plans for capital controls and Grexit because as The Telegraph reports, the far-left faction within Syriza is ready to transition back to the drachma. Here’s more:

The radical wing of Greece's Syriza party is to table plans over coming days for an Icelandic-style default and a nationalisation of the Greek banking system, deeming it pointless to continue talks with Europe's creditor powers.


Syriza sources say measures being drafted include capital controls and the establishment of a sovereign central bank able to stand behind a new financial system. While some form of dual currency might be possible in theory, such a structure would be incompatible with euro membership and would imply a rapid return to the drachma.


The confidential plans were circulating over the weekend and have the backing of 30 MPs from the Aristeri Platforma or 'Left Platform', as well as other hard-line groupings in Syriza's spectrum. It is understood that the nationalist ANEL party in the ruling coalition is also willing to force a rupture with creditors, if need be.


"This goes well beyond the Left Platform. We are talking serious numbers," said one Syriza MP involved in the draft.


"We are all horrified by the idea of surrender, and we will not allow ourselves to be throttled to death by European monetary union," he told the Telegraph.


Syriza's Left Platform has studied the Icelandic model, extolled as a success story by the International Monetary Fund itself.


"The Greek banks must be nationalised immediately, along with the creation of a bad bank. There may have to be some restrictions on cash withdrawals," said one Syriza MP.


"The banks will go ape-s*** of course. We are aware that there will be a lot of lawsuits but at the end of the day we are a sovereign power," he said.


Syriza has a strong ideological motive to strike at the financial elites. They view the banks as the nerve centre of an entrenched oligarchy that has run the country for more than half a century as a family business. Forcing these institutions into bankruptcy provides cover for a socio-political purge, best understood as a revolution.


Iceland is a tempting model for Greece, but the parallel can be pushed too far. The Nordic country seized control of its three big banks - Glitnir, Kaupthing, and Landsbanki - when the crisis span out of control in late 2008.

As a reminder, this year Iceland will become the first European country that hit crisis in 2008 to beat its pre-crisis peak of economic output. In spite of its total 180-degree treatment of nefarious bankers, the banking system, and the people of its nation when compared to America (or The UK), Iceland has proved that there is a different (better) option that western dogma would suggest: imprisoning the bankers and letting the banks go bust. Here's what happened next:

In any event, it's also becoming clear that Tsipras is indeed limited by party hardliners in terms of what he can propose to EU creditors, and while Syriza claims this is evidence of party unity, it more likely represents the fact that the PM is stuck between allowing Greece to exit the euro or facing a severe political backlash in the event he comes to parliament with a draft proposal that includes concessions on pensions and the VAT. Here's The Telegraph again:

The creditors argue that 'Grexit' would be suicidal for Greece. They have been negotiating on the assumption that Syriza must be bluffing, and will ultimately capitulate. Little thought has gone into possibility that key figures in Athens may be thinking along entirely different lines.


Tasos Koronaki, the party secretary, said on Sunday that attempts to split the party will fail. "The government will not enter into any agreement that is not accepted by the parliamentary group. We are more united than ever," he said.


Mr Tsipras faces a critical choice. If he accepts creditor demands, he may lose a large bloc of his own party and have to rely on the establishment parties to push the deal through the Greek parliament.


Such a course of action would render him a Greek version of Britain's Ramsey MacDonald, the Labour prime minister in the 1930s who enforced austerity and became the socialist figurehead of a Conservative national government.


MacDonald never overcame the accusations of betrayal by the Labour movement. He died a broken man.

One is reminded of the demonstrations staged last week by members of the Communist-affiliated PAME union who displayed a banner depicting Tsipras alongside his two predecessors with the phrase “We have bled enough, we have paid enough.” The implication was that Tsipras is nothing more than a pandering technocrat, a characterization the PM is keen to dispel. 

Ultimately then, Tsipras must decide how he wants history to remember his tenure as Prime Minister. Either he will be the leader who allowed Greece to crash out of the euro on its way to a redomination-driven economic collapse, or he will go down as the fiery advocate for change who caved under pressure and allowed the troika to stamp out democracy in the place where it was born.

*  *  *

Here's some bonus color from Barclays on possible political outcomes:

We have argued that the cost of a U-turn by Greek Prime Minister Alexis Tsipras – that is, accepting the Institutions’ terms of an agreement – is likely to be a divided party, including raising opposition from radical Syriza MPs and possibly from its junior coalition partner, the Independent Greeks. However, in our view, this is something that PM Tsipras could survive, politically. The chances of early elections would be high in this scenario, but the likelihood of Mr Tsipras to be re-elected seem fair, in our view, even without the more radical factions of Syriza.

Instead, under the alternative scenario of no deal with the Institutions, in all likelihood we believe Greek banks’ access to ELA funding could be frozen shortly after the end of the month when the programme expires, and bank controls to limit deposit outflows and transfers abroad would be required. In addition, this scenario would also mean a divided Syriza, with the more moderate members opposing the government´s decision not to reach a deal. We think a majority of Greeks would blame the government for the failure in the negotiations and the freezing of their deposits. In our view, PM Tsipras would be worse off in this scenario, and we think it is unlikely that the government would be able to survive it.

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Latina Lover's picture

Take advice from an arch Neocon Victoria Nudelman: fuck the EU.

BlowsAgainsttheEmpire's picture

Everything gets better when you show bankers the door.

MonetaryApostate's picture

I'm afraid this is a trend that is just getting started...

graneros's picture

Oh look another article on the "Grexit." What is this the 700th in the last hour? Get it through your brains folks The Greek people DO NOT WANT to go it on their own like Iceland. They WANT someone anyone to GIVE them money. Yes OK they'll call it a loan but what they mean is give me your money cause we don't want to do the things that are necessary to run our own economy or be bothered with things like paying back loans.

Now add the fact that the EU DOES NOT WANT to kick them out. If Greece goes the whole balliwick comes crashing down.  Which it will anyway but if they can get another 6 months of... yes can kicking, they will do it. The PTB in the EU know damn well once the first country gets kicked it is over. Once that first dominoe gets pushed, look out cause nothing will stop the inevitable clicking sound as each dominoe falls over in turn.

Bottom line Greece will get another "loan" and the world will be happy for 6 months or so at which time all this Bullshit starts up again. Count on it cause it can't work any other way. And by the way Russia will not save them.  Oh they may make some kind of deal giving them a ruble or two for bases and the like but no way will they treat them like a wild cat at the door begging for milk. There is quid pro quo when you deal with the Russians.  Like the mob you don't pay your bills on time your health will not be so good.

For all of you folks who keep asking for an armegeddon timeline I can't answer but I can tell you if I am wrong and the EU does kick Greece out then the clock will start at that point and you better seriously have a plan in place.

DonutBoy's picture

Yes - you are exactly right.  They will leave the Euro when they're kicked out, not before.  As is now obvious - they were never negotiating, just begging. 

greenskeeper carl's picture

I get it, the "iceland model" but Iceland is far from ideal. If you really want to limit(or eliminate) the power of bankers over your society, sound money is required. Money that cannot be conjured out of thin air on the whims of central planners. Iceland may have jailed the bankers, good for them, but they are still on a fiat currency controlled by the government. A gold standard keeps everyone honest. You must live within your means, and it cannot be created out of nothing. The abolishment of legal currency laws is also neccessary. An ounce of gold is an ounce of gold, and ounce of silver is an ounce of silver, rather it is an eagle, maple, APM, etc.


All greece is going to do is place themselves under the thumb of a different group of central planners who will stick it to the average citizens, every time, no matter what kind of promises their new socialist government makes.

Bumpo's picture

These articles always end the same way:  With Greece crawling back to the EU. I think its all very wishful thinking on the part of 'The Powers That Be'.  Sounds like Greece has already moved on from the Troika's 'last offer'. Greece's debt is not longer Greece's problem. its YOUR PROBLEM now.

strannick's picture

Russian cheap gas and manufacturing renaissance, or more getting butt f'ed by bankers. Should be obvious, but maybe they like it "Greek"

espirit's picture

Greece waited too long to follow the Icelandic model.

They owe their soul to the company store.

Whoa Dammit's picture

I just wish they would stop muttering around like effing Hamlet ("To be or not to be") and do something.

TwoShortPlanks's picture

Off Topic Post TSP has formed a second company, merging older communications with modern. For those who are interested in diversifying into one of the next boom technologies, here's a chance. http://twoshortplanksunplugged.blogspot.com.au/2015/06/second-company-es...

Oh regional Indian's picture

I think Greece is going to get a golden shower. Or was than golden dawn?

A new beginning? An old ending?

What if Greece is made the first state under direct IMF/UN stewardship....just to show the rest of us how good that can be....for all of us.

Our bene violent overlords.....

Joke. Come september....not so funny....

meanwhile, this. Zero One>


Shropshire Lad's picture

The big difference in Iceland is that the government is controlled by the people.  A whole different ball-game, even with respect to their "fiat" currency.

Jack Burton's picture

When polled, most Greeks say they prefer to stay in the Eu and keep the Euro. When confronted with leaving, they realize that with teh EU and IMF goes their only source of money. Greece's economy simply can't generate weath enough to pay for social services, pensions and health care. A Euro less Greece would have no capital and now way to get capital. It just proves, if you close down your economy in favor of EU imports, and then try and function on loans and book keeping tricks, you are fucked.

Bottom line, Greece has no plan or prospect for economic growth. In what way could Greece earn foreign exchange, or Euros except tourism and asset sales?

Nations with no economy, and all the social obligations of a European lifestyle, are never going to recover.

conscious being's picture

Ah Jack, tourism is a big big deal in Greece. If travel to Greece goes on sale via a new Drachma, people will be pouring in. Caveat assumes no major macro issue like world war or global economic collapse, but in that case they are f'd anyhow.

As I'm sure you know, Russia and Greece have a strong affinity. Greece is srategic real estate. At a crucial point in time, Russia offered support to Iceland. Of course they will, or already have to Greece.

No worries. Bring out the Drachma.

Augustus's picture

No need for a new Drachma to devalue.  Just lower the price in Euro.

Maybe just start using the devalued ruble to make things real cheap.

Oh regional Indian's picture

Greece is home to the Orthodox Church.

Russia too....

Many moves left in this game yet...

cephalo's picture

I logged in only to state that you are one well informed individual. Orhtodoxy is the key to the future on this planet.


Condition 1SQ's picture

If they're smart they'll leave the EU and turn Greece into the next budget Seychelles for reiting baby boomers.  If all you've got is pretty scenery and a great climate, well then whore it out if you absolutely have to keep your gubmint bennies.

TheFutureReset's picture

@Jack, do you have a recent poll? The one I think you are talking about is several months old, and likely to be inaccurate now.


Greece's situation is not as bleak as you say. True, they don't have enough money to continue their government programs. Good. When these shocks happen the govt is forced to shrink. When regulations, red tape, and taxes are not enforced, entrepreneurship thrives, new businesses start, the economy can break the bonds of malinvestment.

Of course, they won't be able to survive as they are now, as you say, but the situation changes quickly when the govt doesn't have any money or source of capital. Granted there could be govt violence against their own people, but if the troops aren't getting paid, they usually find other, more productive things to do.

Augustus's picture

If Tzipass was smart enough to admit that they cannot maintain the government programs, and reduce them to a realistic level, there would be a deal with the Euro lenders already.

He's not that smart.  He won't reduce the programs.  Things are going to change very quickly when the ELA is cutoff by the ECB.

HungryPorkChop's picture

I agree and don't think that Greece is going anywhere just yet.  We need a few moar stawk rallies based off Greek mythology that everyting is o.k.  However, if they do exit then expect a few months of calm before the storm hits. 

Maybe the new Euro rally cry will be:  Gentlemen, start your printers.


nmewn's picture

Sovereignty...lol...the second to last gasp of a scoundrel, the dipshit has zero concept of where "sovereignty" even comes from.

You know what the great thing is?

I now know that I'll live to see the day that all my ranting & ravings will come true. They want a cashless society, world fucking wide. No hard currency, no gold, no silver, no copper, no paper money, no checks, no "bad banks" only "good banks". They will come to us with one final plea:

"If you don't allow us to convert your savings into digits we control ALL OF THIS WILL COME CRASHING DOWN!!! No police, no firefighters, no 401k, no pensions...its all intertwined! Trust us. Your labor deposit will go into "credits" that you can access 24/7/365 with no fear of bank runs!"

And I'll be right here to say toldja so.

Fucking dumbass socialist pricks.

NihilistZero's picture

I don't think they'll get the cashless society, and I don't think they really want it. It's the same reason I find A Brave New World a more disturbing dystopia than 1984. The former was infinitely malleable while the latter required total control.

Greece will default at some point, and more than likely they'll sell out to Vlad and Gazprom to protect Greek Oligarch assets. The Greek people getting a better shake will he purely ancillary. The game will go on and the money power that resides above any of the individual banking interests will have already bet accordingly. Rothschilds and Rockefellers FTW as usual. The dystopia isn't coming, it's already here. There will always be just enough political change, war and economic swings to make the sheeple think it's a dynamic system. In reality the real owners, of power money and land, never really change. Bill Gates and Warren Buffet types will come and go, but the entrenched money and political powers will remain. Negative totalitarianism is to much work and is impractical to the real ruling class. The Maos and Stalins of the world showed that all it does is bleed the world dry. But if you create the illusion of freedom and prosperity you can loot the proles forever. Sure the sadistic fucks would rather we all live in shacks, but better to let us have a little bit if it allows them to live in palaces in the sky and blow a million dollars on a weekend in Macau.

We're gonna turn a deflationary corner soon, and after 15 yeah of total rape, the middle class will rejoice at getting SOME semblance of purchasing power back. Meanwhile the real owners will get a chuckle as they insider info short every market and watch the specuvestor-thought-they-were-1%ers lose everything. I'm picturing something similar to the early 90's. TPTB won't give a shit about you using cash because they'll be turning their cash holdings into assets during the fire sale. First by inflation, then by deflation. Same as it ever was...

TheFutureReset's picture

That is the belief that fueled the French Revolution. We are entering a similar period. There will be guiotines again. 

Crawdaddy's picture

Whether we get to have a front row seat to cashless in our life time is not yet confirmed but the NWO monkeys are sure as shit trying to drive the world off the cliff in order to get there. Odds are high though, undoubtedly.

nmewn's picture

Props to you both for thinking outside the box.

They have to find "a way" to hide their own ill gotten wealth (or convince enough useful idiots theirs is safe inside too) from "confiscation".

Self interest is, fundamental to this ;-)

BraveSirRobin's picture

Mathmatically, I do not see how Greece can pay off the debt. In time, default is enevitable. If the Russians and Chinese want to give the Greeks a bunch on money, they will end up lng it just like the Germans, French, and eveone elese wo have given Greeks money of the last couple of hundred years. Shysteing lenders is part of the Greek character. It's only the fool who lends them money. I takee opposite view here - they are not the victims. They could never have taken all that ney with any intention of ever paying it back.

Wolferl's picture

How the Greek can pay off their debt? Impose a one time 10% value tax on all assets in Greece and give the money to the creditors. It´s as easy as that.

disabledvet's picture

They have return to the drachma. They should nationalize the goldmine. Once you have worthless money the Bankers will be banging down the door to end to them.

Maybe not too many Greek Bankers of course...

Sudden Debt's picture

Greece can’t repay. That is the truth.

But Greece really doesn’t has any industry.

If you visit Greece, the only real economic activity is arround Athens and it’s not impressive at all.

So once out of Europe, Greece will be a 3rd world country for decades and they’ll soon turn into fascisme.

Their only chance was to stay in Europe as it’s their only source of income.


Greece will bow. Even if they only get 1 million euro’s a year, it’s more then their taxation will ever bring in.

Greece doesn’t even has money to print new currency!!!!

And imagine how the people will react when the handouts stop.

Wolferl's picture

The Greeks have more than enough assets to sell to pay back their debt. They just don´t want to repay the debt they have. They are just crooks and pathetic deadbeats who love to steal and betray others.


Greece IS a third world country. Ever was and ever will. There´s no place for them in a union of first world countries. So kick them out.

Winston Churchill's picture

i knew that 50 years ago Wolfy. Living in Athens for three months was more than enough.

Afghanistan with mod cons I used to call it.

seems You Germans barely did any due diligence, more fool you.

Now eat your shit sandwich, and enjoy.

Wolferl's picture

Due diligence? Lol. The reason we have that Greek pimple at our asses was that our US empire overlords ordered it. But you are right there are too much brain dead German grecophiles around here too.



greenskeeper carl's picture

ill try to keep this short....

almost every bit of money you gave to the greeks to 'bail their lazy asses out' went right back to your banks. You have been conned. Im not defending the greeks, they may well be lazy asses. But the money given to their govt during these bailout programs went into their treasury and right back out again, to douche bank, the IMF, and all the rest of the TBTF banks that loaded up on greek paper. So while you are being told that your money is going to pay the pensions of the lazy greeks, its really going to pay the bankers and speculators who bought up all that greek paper with the promise of EU QE before drahgi turned on the printer. Thats right, the vast majority of your bailout money came out of german taxpayer pockets, made a quick stop in greece, and then went right into your friendly neighborhood TBTF bank. You are paying for their record profits. All of this greek bailout BS is nothing but a roundabout bank bailout to keep them from becoming insolvent. and its being done at your expense.

Wolferl's picture

You just think you have a clue what is going on.

skepsis101's picture

thank you.  I couldn't have said it shorter.

skepsis101's picture

thank you. it couldn't have been said shorter or better!

BraveSirRobin's picture

Hmmm..... Back out all the debt from their GDP and tell me what's left?

If they quit the Euro, Greece will be the cheapest vacation and retirement destination in Europe. That's all that will happen. Then on the back of this, people will start lendng them more money for airports, vacation villas, hotels, roads, resturaunts, etc., then the Greeks will steal most of it and default again in a number of years. Wash, rinse, repeat.

walküre's picture

Have you asked any of them?

The Greek people DO NOT WANT to go it on their own like Iceland.

I read this everywhere and wonder, how does anyone really know what the Greeks want? They seem to be happy with how far Tsirpas has pushed the envelope.

Mass delusion is a powerful tool. Remember when Goebbels asked the hyped up Germans inside the Nazi rally if they wanted the "total war"? They all cheered "yes"!

Did the Germans really understand what that meant? Do Greeks really understand what any of this means anymore?

Do you understand it? I don't profess to know what the Greeks want!

There is NO upside. Every option is equally bad. Greeks are fucked one way or another. At least with a Grexit they have an opportunity to rebuild.


ross81's picture

just like all Republicans at the RNC would probably scream "yes" to bombing Iran, Russia & China...but they dont speak for all Americans, only the insane ones.

Jaspergers's picture


It's like saying that MOST americans wanted 8 years of bush followed by 8 years of obama...

The reason why MOST greeks want to kick the can is that MOST greeks are living hand to mouth (or worse) and won't survive what comes after a grexit even if, in the best case scenario, things only shut down for a couple months. It is difficult to think long term or think about sovereignty when you are hungry today (or tomorrow).

I live in greece and though I want a grexit and consider myself prepared for it, I know that it will get very ugly before it gets any better especially in Athens where ppl have forgotten how to live off the land.

daveO's picture

Like, the western banking mafia is any better? http://redefininggod.com/

BigJim's picture

Oh yeah, there's no 'quid pro quo' when you get favours/money from the West. They're just dying to help other less fortunate people!

snowlywhite's picture

"Get it through your brains folks The Greek people DO NOT WANT to go it on their own like Iceland." - and how did you reach this brilliant conclusion?


because in some poll they asked them if they want to keep euro or not? Let's see: was the question formulated like "do you want to keep the euro if you have to do... and list here all the troika demands"? Or was it simply asking "do you want to keep the euro?". As those two things are veeery far from one other. And in the 1st case, I seriously doubt those wanting to stay in the euro would be anywhere near majority.


though God knows why I bother responding to someone that's so juvenile as in thinking in terms of "the whatever people"...

ross81's picture

The Irish are another group that, like the Greeks, have been pounded with Euro propaganda day in day out for the past 20 odd years going back to the Maastricht Treaty (and before). It's at a stage where people have forgotten that life under the old European currencies was actually pretty good. The Irish Punt as an example was generally stable compared to other international currency. The Lira and the Drachma too suited the domesic economies of those countries. Nowadays though if you even suggested a return to the Punt around the dinner table, you will get strange looks, such is the power of Euro propaganda. And that propaganda of course extends beyond things like interest rates & currencies into issues such as the creation of a European Army.....you can see where this will ultimately lead.

Crawdaddy's picture

The Irish have got their gay marriage so its all good now. At least the Rome controlled part of Ireland. Not sure about the rest but they will likely not be far behind.

Moe Howard's picture

Yep, the big problem was solved. Now for those pesky little financial ones....