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The Only Good Deal For Greece Is NO Deal
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
The only thing that would really go towards beginning to solve the problems with Greece is for Athens to NOT sign a deal. The short version of why that is so: it would leave the EU intact for longer. And the ECB.
Neither have any viable future, but as they go down, they can cause a lot of damage and pain. It’s mitigating that pain which should now be our priority no. 1, the pain that will result from the demise of Europe’s institutions. But we see precisely zero acknowledgment of this. Anywhere.
All that attention for whatever comes out of yesterday’s, and today’s, and tomorrow’s Troika vs Athens talks is very cute and nice and all, and putting on a ‘phantom summit’ is hilarious, but in reality it’s all based on a far too myopic picture.
Maybe that’s what you get when you’re only looking at life as exclusively consisting of things that can be either bought or sold, which seems to be the way the entire world press interprets the negotiations, the only way they have of interpreting anything. But this is not about money.
There’s more to life than money. That is to say, there’s a lot more going on than those talks and the deal-or-no-deal results that may or may not emanate from them. To wit: If the past 5 months or so have made anything clear, it’s that the eurozone has no future at all, and the EU as a whole has very little.
There is no trust left between Brussels and Greece, and therefore at the same time also not between Brussels and Rome, or Madrid. Italy and Spain could be the next to receive a five-month treatment like the one Greece has had, and the people there sense it. Even if their present governments do not.
As I said a few days ago :
None of these institutions, IMF, EU, ECB, has any raison d’être or any claim to fame unless there is explicit trust in what they represent. That trust is now gone, and it’s hard to see how it can ever be recovered.
Whatever happens to Greece going forward, that is perhaps the biggest gain its dramatic crisis will gift to the rest of Europe, and indeed the world. Which therefore owe it a debt of gratitude, and of solidarity.
You know, we’ve heard it said that politics is about seeing ahead. Well, that’s just too bad, because if there’s one thing European politicians, to a (wo)man, show us these days it’s that they lack the ability to see ahead, even just beyond the beam in their own eyes.
These people don’t see ahead, they project ahead. They are under the self-reinforcing collective illusion that the future will bring what they want it to bring. They honestly think they have the power to control history. And control all of Europe. Their vision of the future is one that they look good in.
And that can in turn only possibly bring about mayhem. Or actually, as the Greece crisis tells us, it already has. Something the leadership in Brussels, Paris and Berlin will flatly deny, because, as Paulo Coelho once said: “Collective madness is called sanity”.
The more power they seek to gather in Brussels, the harder the resistance against them, and against that power, will become. But that is not going to stop them. Just read the report issued last week by the “Five Presidents: Completing Europe’ Economic and Monetary Union.
Brussels sees, projects, solutions to its problems exclusively in more Brussels. But nobody in Europe wants more Brussels. Nobody wants to give up more sovereignty, people instead want back what has been given away. Still, the myopic Five Presidents come with this:
Economic Union: A new boost to convergence, jobs and growth
• Creation of a euro area system of Competitiveness Authorities;
• Strengthened implementation of the Macroeconomic Imbalance Procedure;
• Greater focus on employment and social performance;
• Stronger coordination of economic policies within a revamped European Semester.
Financial Union: Complete the Banking Union
• Setting up a bridge financing mechanism for the Single Resolution Fund (SRF);
• Implementing concrete steps towards the common backstop to the SRF;
• Agreeing on a common Deposit Insurance Scheme;
• Improving the effectiveness of the instrument for direct bank recapitalisation in the European Stability Mechanism (ESM). Launch the Capital Markets Union
• Reinforce the European Systemic Risk Board
Fiscal Union: A new advisory European Fiscal Board
• The board would provide a public and independent assessment, at European level, of how budgets – and their execution – perform against the economic objectives and recommendations set out in the EU fiscal framework. Its advice should feed into the decisions taken by the Commission in the context of the European Semester.
Those “Five Presidents” (isn’t it telling enough that that Brussels counts five of them?) are Jean-Claude Juncker, Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz. Nice little team you got there. Politico referred to them as the “Five Horsemen Of The Euro’s Future”.
• Juncker, president of the European Commission, was one of the main architects of the chaos we now see, in a long stint as president of the Eurogroup, 2005-2013. For causing the mayhem he was rewarded with his present seat. Not an unfamiliar chain of events in the musical chairs game for career politicians in Brussels.
• Donald Tusk, president of the EC council, has only one claim to fame, but that still gifted him with his present position: he is a vocally rabid anti-Putin orator. They love that in the EU these days.
• Jeroen Dijsselbloem, the president of the Eurogroup who works hard to remain in that seat for another term, is an agricultural economist. Which is fine for telling us what strawberries should go for in winter, but not for defining policies with regards to for instance Greece. He’s so far outclassed by Varoufakis it can only lead to stupidity.
• Mario Draghi, governor of the ECB, is a Goldman Sachs man, and that’s all we need to know. He’s also one of the global class of central bankers who feel omnipotent after discovering the printing press. They will instead bankrupt their economies.
• Martin Schulz, the president of the European Parliament, is just another career EU tool. After 20 years of loyal heel-licking and brown-nosing, he was rewarded with the seat he’s now in. Nobody should be allowed to be in Brussels any longer than perhaps 5 years at the most. It’s the worst of all possible worlds.
Summarized: it’s incredible and insane that such a set of clowns can actually present a paper about Europe’s future. They all come with a huge agenda, and their own future is far more important to them than doing what’s best for Europe. As the Greeks know better than anyone.
A structure such as the EU, we’ve said it before, selects for the exact wrong people. Power is accumulated is non-transparent and only pseudo-democratic ways, and the accumulation continues unabated if left unchecked. A certain class of wannabe ‘leaders’ feeds on just that.
And now the only conclusion is that the EU as an experiment has failed. There is nothing anyone can do anymore to repair it, there is nothing that can be done to undo the damage. Trust is broken, and will never return. Pushing one nation into utter misery, for everyone to see. is all it took.
The only remaining question now is how to dissolve the union. But that of course is not what those whose income and status depend on that union want to even contemplate, let alone discuss. So who’s going to do it? Who’s going to do it for them? People in the street, that’s who. They’re the only option there is. National governments are not willing to perform that function for them.
To do what everyone should be able to see, should be done. Because if you look hard enough, it’s awfully obvious that the euro is finished. Perhaps not the EU, but that can only continue to exist if the entire structure built around and on top of it is thrown out the window, and if European countries start again from scratch to organize their ‘channels’ of cooperation.
If they stick to the present structure, that can only lead to nasty ugliness, because they are tied together in a union that constraints their freedom and their cultures far more than people are comfortable with.
Something that could always only ever have become clear in less prosperous times. Well, we have those. And with them the gaping cracks in the political edifice. As any builder will tell you, cracks in a foundation are a death sentence.
And those times have made painfully obvious that monetary union without fiscal union, or even political union, can not work. It never could. But a political union would never be accepted. European countries want to remain sovereign.
Anything else is unacceptable. The only reason the euro was ever accepted is that hardly anyone understood at the time that it would imply handing over a substantial part of sovereign powers to increasingly dodgy bureaucrats in Brussels and Strasbourg (well, Britain sort of understood).
In the Greek case, what we’ve seen is that the troika did not go into the negotiations on an equal partners basis. Although the EU is an equal partners union, that’s its very foundation. But it still could have worked, and the problems worked out, though only temporarily, if Brussels had resisted the temptation to turn the EU into a power game. Then again, a structure such as the EU exclusively selects for ‘leaders’ drawn to power games, removed from the everyday public scrutiny national leaders have.
The national leaders, it should be obvious, have also fallen into the power game trap. It is not hard to go out and play bully to a country like Greece, and kick it while it’s down. It’s not even hard to lure such a country, a small player when it comes to population and economy, into yet another trap: that of unpayable debts.
Certainly not if and when you can nominate technocrats to lead nations. Which Brussels has done in Greece, in Italy and in Spain. The problem with that is it’s a blind and unwinnable game in a set-up like the EU. Because the nations you attempt to force into submission, politically and economically, will always remain sovereign nations.
It’s a game you can’t win, because you can’t take over power forever in foreign sovereign nations. The EU has 29 of those. One day an election will take place in which the people will elect a government that seeks to protect the people’s personal and sovereign interests. And until you take away that option, you will never win the game, you will only cause a lot of misery. Again, in Greece this is duly noted.
We’re not entirely comfortable with the far right being the only side that thoroughly understands this, but we’ll take it; we have no choice. Besides, what happens on the left in Greece, Spain, and Portugal may yet balance this out. The crucial mistake the left makes is that so far it’s seeking to remain part of the Europe that Brussels is seeking to construct. Not a wise idea.
So we have Marine Le Pen who speaks most clearly about Europe, and who understands best of everyone in public office what is going on, or at least expresses it best:
Marine Le Pen: Just Call Me Madame Frexit
Marine Le Pen, a frontrunner in France’s 2017 presidential election, says a Greek exit from the euro is inevitable. And if it’s up to her, France won’t be far behind. “We’ve won a few months’ respite but the problem will come back,” Le Pen said of Greece[..]. “Today we’re talking about Grexit, tomorrow it will be Brexit, and the day after tomorrow it will be Frexit.”
Le Pen, 46, is leading first-round presidential election polls in France, ahead of President Francois Hollande, ex-leader Nicolas Sarkozy and Prime Minister Manuel Valls. She’s the only one of the four calling for France to exit the euro, banking on people’s exasperation with the Greek crisis and Britain’s proposed referendum on the European Union to win over voters.
“I’ll be Madame Frexit if the European Union doesn’t give us back our monetary, legislative, territorial and budget sovereignty,” Le Pen said. She’s calling for an orderly breakup of the common currency, with France and Germany sitting around the table to dismantle the 15-year-old monetary union. [..]
Even German Chancellor Angela Merkel has expressed concern about the level of support Le Pen will receive in 2017 and how that power might weigh on French economic policy. “She knows perfectly well that if France leaves, there’s no more euro,” Le Pen said. Although Le Pen hasn’t given a full, detailed plan of how she would lead her country out of the euro, she says she doesn’t believe France would be shut out of the borrowing market or rejected by investors as a result.
We shouldn’t need Le Pen to voice the obvious. But that no other ‘leader’, save for Nigel Farage, puts it into these crystal clear terms, does tell us a lot about all other European leaders. And unfortunately that includes Alexis Tsipras. Though we hold out some hope for him yet.
Here’s hoping he will not sign that deal, whichever it may be in the end, and thereby set in motion the disintegration of the unholy Union.
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Lifetime of serfdom to Western banksters, or some pain now and freedom in few years like Iceland.
It's not such a hard choice.
In 2008, Iceland experienced one of the most dramatic crashes any country had ever seen. Since then, its recovery has been just as impressive. Are there lessons to be learned? SPIEGEL went to the island nation to find out.
What happened in Iceland from 2008 to 2011 is regarded as one of the worst financial crises in history. It seems likely that never before had a country managed to amass such great sums of money per capita, only to lose it again in a short period of time. But Iceland, with a population of just 320,000, has also staged what appears to be the fastest recovery on record
http://www.spiegel.de/international/europe/financial-recovery-of-iceland...
Varoufakis is working for a "no deal" since his first meeting in Brussels. The Eurocrats and Schäuble consider him crazy or incompetent. But he is the master of the game: "No Deal"
Brussels and Berlin know very well what they're up against. A debtor who is working hard to find a way to default on the debt. That is quite the art form. I will give the Greeks high marks for their acting. Other than that though, it is pretty pathetic. The creditor side is forced to play along with it. There is absolutey NO trust between creditors and debtors. That is fact.
How can debt be negotiated or how can the debtor expect to get the last tranche when the trust is completely gone among the parties? Creditors don't have money to burn. It's a reach around anyway. They can just pay themselves and I believe they will do that.
Douchbank is the one to watch. Gave another warning shot off yesterday.
Berlin has to be more creative to show a way out. The introduction of a domestic parallel currency (Greek Domestic Euro GDE) would be a possibility. Government salaries and rents should be paid in GDE, taxes, tarifs and all domestic services could be paid in GDE. Domestic debt would be transfered to GDE. All foreign trade would continue in EUR and USD. After fixing EUR/GDE at 1 initially GDE would soon devalue helping to reduce government debt and expenses. one of these days we will end up there and Syriza would not have lied about not willing to leave the Euro!
Only possible with price controls for products sold in GDE, requirements both currencies accepted and someone backstopping the FX.
No controls! There would be GDE inflation. Advantage inflation reduces weight of debt and reduces real value of expenses.
Obviously that was his entrusted strategy from the moment 0, only for a lunatic no-brainier retarded fuck or psychopath fascist banker 1%er prick a deal basically enslaving the elders of the society and its present & near future young generation would have been seem as just and fair.
This is why the EU/USSA central banksters will never allow Greece to slip out of their death grip.
*AS I SAID* :) - before you Tyler :) LOL, few days ago that CNBC/Gartman said already
Gartman: Greece would be better off defaulting:
http://www.cnbc.com/id/102769162
Sino-russian alliance has a fresh forged steel-hammer ready to crush that fist :) ...
it also proves that mammoth, mega-giant social enclaves are not sustainable as administered trough a central enclave- agglomerating authority.
the stability, development and planning of the social enclave can be trusted only into the hands of the ones inhabiting it - a central enclave-agglomerating authority will always play favorites depending on the contextual interest.
Greece is already out. Subsequent meetings will address the days after Grexit. The back and forth is just pure entertainment for the masses.
Fat lady is singing in Greece and soon to be heard across Europe.
Done.
What kind of fool writes an article about "the trust being gone" in reference to these political entities?
I quit reading right there, but apparently nobody has informed Mr. Meijer that this whole drama is intended to create the mandate to "fix" the EU from the systemic flaw known as the lack of a fiscal union.
EU isn't going away. Like any set of chains, they will only continue to enslave as long as there is collectivism to support them. As proved by Lincoln, unions are insoluble.
Short the cunt down to parity and below....The Euro is toast.
I said this since day 1 of the fucking mosh pit of debt;
WAIT til one of the countries defaults.
The fucking count is what....Greece, Spain, Ireland, Italy, Portugal....and counting?
LOL
IT'S TOAST............
I'd go long Deutsch Mark if there was one...
The only currency you can hold long term is USD because it's still the strongest and most readily available. I'm not a fan of fiat but the USD, the Swissie and the DM (at the time) were the currency of the black markets across Eastern Europe. They're going back there.
In France they have de facto capital controls on how much you can transact in cash. That's a huge central banking and central planning fail. As if anyone would turn a customer away if they showed up with a couple suitcases filled with cash. Nobody would. The cash gets stored and the seller records the item lost, stolen or damaged. Shit, I shouldn't be talking here...
What's that game they played in "The Deer Hunter"? Russian roulette?
Yeah, like that. End the unholy union of the E.U.!
Back to sovereignty and local accountability.
And hang the banksters already.
http://rt.com/news/269206-us-imperialism-germany-minister/
Why should Greece be allowed to escape from the global economic rape camp? It's not like anyone else gets to escape from the hellish fate of being endlessly financially raped by the multinational corporate interests, why should they? Fuck them, let them be financially raped to death like the rest of us...
You make an interesting point. It seems they fucked themselves so vigorously leading up to this point that they might not realize/mind being, "...financially raped by the multinational corporate interests"
There is no good deal for Greece.....both roads will lead to hardship and poverty for a long while....I just hope the locals dont take out their anger on their tourists.....that is the only income they will have to help them get some sense of normal...or food..
NDX has 4 to 1 declining stocks, but thanks to financial engineering it is positive. Just focus all ammo on AAPL.
US DALLAH BABY!
The people of Greecw want to remain in the EU but also want an end to austerity. They are an idiot people then, failing to understand that a return to the past is a complete impossibility. There are two roads. One continuation of the present austerity and debt peonage streching far into the future, or two, an exit from the EU after declaring bankruptcy with the pain that will involve. Then Greece can redsign their monetary system and have it work for the people instead of the bankers and work towards properity,possibly within the rising Eurasian trading zone. Tsipras needs to quit playing the negotiating game from his position of weakness and make a decision and then take the Greek people with him or resign.
So Europe equals to austerity, how easy this idea imprinted to our minds.
I wonder if austerity is limited to european south or in a few years the whole europe middle class will become Bagladesh?
Put all the deal no deal stuff to the side for a minute -
I keep wondering where Greece will get the money to pay government workers & pension payments --
Without the ability to borrow they are at their end point.
I saw an interview yesterday - a few Greek people demanding no austerity.
I really wish the interviewer would have asked -
Where do you think the money should come from to pay for this demand?
The overwhelming sense of entitlement is sickening - someone owes me an easy life - someone must work to pay for the stuff I want for free - is so ingrained in these folks I don't think they have the ability to understand.
"Where do you think the money should come from to pay for this demand?"
The answer lies in the question. Learn where fiat currency comes from, and how it is currently disbursed; then apply some logic and a tiny smidgen of imagination, and you will have answered your own question. Until you do so, you are nothing more than an unwitting apologist for the slavers who own the global economic rape camp.
I have no imagination --
Please explain your post.
In your world could everyone just sit around doing nothing and have some magic fairy give them fiat currency and they would never have to work again?
Ok, let's begin with a brief summation of what our current system of debt-based fiat currency is and how it works. First, someone with good credit and income applies for a loan. Based on that credit rating and expected income, a loan is granted, packaged with other loans and turned into a financial instrument, usually a bond.
In the process, via a couple of quick bits of financial sleight-of-hand, the money needed to make the loan is then quite literally created out of thin air (aka "fiat" or "let there be") and given to the person applying for the loan. That person then has to repay not only the entire loan, but additional interest on the loan, and this all goes into the pockets of bankers who have done nothing other than play number games on financial ledgers. These people then go on to build the biggest buildings in every city.
Now, consider if, instead, as money was created it was evenly disbursed among the general population, without needing to be repaid. This could become the basis of a "basic income guarantee" that could, at the least, ensure that people could afford the bare minimum of food and shelter; if they want more then they would have to work for it.
But where does the value come from to back that currency? How about the same place that it comes from when fiat currency is being issued from banks to people with good credit and the means to repay it? "But that would cause inflation" you will reply, and yes, that could be a result if you were to print far more notes than there are goods and services to purchase with those notes; however, there are mechanisms that can work to throttle that, including taxes, which would put the money back into the general Treasury fund instead of the vaults of the international bankers.
I'm not saying this is the answer, but I am saying that these ideas and arguments are at least worth considering, and if anyone has better ideas I'm more than thrilled to hear them. There has to be no question that our current debt-based fiat currency regime is simply not working, and we need something better to replace it. I'm not an economist, but then again, so-called "economists" are the ones who have been cheerleading for unlimited free trade for decades, and I'm thinking we can all see the folly of that by now, so they're hardly the fonts of infinite wisdom they like to portray themselves as being.
Can we at least agree that an economy that doesn't provide at least a bare minimum standard of living for all, or a way to achieve that bare minimum standard of living, is a failure that needs to be changed? Because the current economy says "if you want to live, you need money, and if you want money you need a job." Then when people say "OK, I'd like a job please" the reply is "sorry, no jobs for you."
This is unsustainable, and simply saying things like "if only we practiced real capitalism" or "if only we had real free markets" does nothing and would do nothing to fix these problems when we have the extreme concentrations of wealth that we currently do. At this point I'm thinking maybe we could learn something from Norway, Finland, Sweden and Denmark when it comes to running our government, and I'm thinking we need to end the Fed and return the power of printing money back to the Treasury where it belongs.
When I got to basic income guarantee I realized you are an idiot so I stopped reading.
For the uk i think I coined a better term UKIT ! And for France it would be from us a big : "Allez vous faire foutre !" we are not very productive as you in neologism.
I would like see the Greeks final proposal before I write them off.
Which of the last 217 proposals?
It has been said in several ZH threads that the ECB doesn't really want to agree a deal with Greece because it wants Greece to leave the Euro, having privately realised at last that the EZ is an economic disaster and is built on quicksand, mixed in with chicken shit and dog poop.
Judging from the IMF's rejection of the latest, final-not-final almost penultimate proposals from Greece it looks like they too want Greece to leave.
It now occurs to me that maybe Tsipras also wants to leave the Euro despite all his foisty rhetoric aimed at palliating his electoral support.
If that is all true, what we are witnessing is a tip-toe-dance by all parties to achieve their common objective of Greece leaving the EZ but without any of them accepting the blame for it.
This would explain the agonising drama of never-ending meetings which achieve little to nothing because that's exactly what is intended.
Only when the music stops will the final outcome be known.
The ECB doesn't care about Greek people and only about the international banking system. They will throw every amount of "good" money after bad money, only to avoid Greek write offs on international banks balance sheets. Greek banks balance sheets don't have any Greek citizens deposits, all deposits come now from European agencies, Greekm government and the ECB. All false with the system.
The truth is that whatever decisions are made, all choices could lead to chaos
The bitter truth is that when Europe’s leaders set up the European single currency they set off into unmapped and dangerous territory. There are no safe routes back.
http://www.ft.com/intl/cms/s/0/a3a91496-18b8-11e5-8201-cbdb03d71480.html...
The idea behind this whole ZWO bankster enslavement cabal is to load up a country with more debt than they can ever repay, and then hold them captive and hostage.
The idea is to not let them off the hook and pivot to Eurasia or go independent like Iceland.
If you look at history there is a cycle where power gets centralised and that leads to it being abused which leads to revolt and decentralisation of power and then another cycle starts. Rather than keeping riding this merrygoround the smart option is to keep power decentralised as this leads to prosperity both at the corporate and the national level. Once we have hanged the banksters for their abuses this time around can we please try a decentralised approach where people are treated with respect.
As EU citizen I can't wait to kick out Greece from EURO zone and EU. They should never be there.
They have some strange attitude to live on money they don't have.
What ever the media serves you is the truth.