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The Greferendum Shocker: Tsipras "Intended To Lose" And Is Now "Trapped By His Success"
Call it game theory gone horribly chaos theory.
It all started with a report by the Telegraph's Ambrose Evans-Pritchard, whose release of on the record comments by Yanis Varoufakis (which we noted was rather surprising) that Greece was contemplating a parallel currency and potentially nationalizing Greek banks over the weekend, was supposedly the catalyst that got the Greek finmin fired. As a reminder, this is what Varoufakis told AEP on Sunday night: "If necessary... issue parallel liquidity and California-style IOU's, in an electronic form. We should have done it a week ago." And this is what the WSJ said on Monday morning:
... the premier decided to act after Mr. Varoufakis told a U.K. newspaper late Sunday that Greece might introduce a parallel currency and electronic IOUs similar to those issued previously in California. Mr. Varoufakis quickly backtracked on his comments to the Daily Telegraph, but his prime minister had had enough, the people familiar with the matter say.
That was the first indication that the wheels had officially come off the Greek wagon.
Moments ago, we got confirmation of just that, when in another surprising twist it was again the Telegraph's Evans-Pritchard who reported that the Greek prime minister who decisively and unexpectedly pushed for a referendum on the last weekend of June, "never expected to win Sunday's referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control."
He got just that, and in a landslide vote at that even though "he called the snap vote with the expectation - and intention - of losing it."
Also according to the Telegraph, "the plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25th "ultimatum" and suffer the opprobrium."
He had good reason: according to another Varoufakis quote provided by AEP, "[the Troika] just didn't want us to sign. They had already decided to push us out." In other words, as we speculated in mid-June, the only question was who gets stuck with the blame, and when Tsipras called the referendum, he made it quite easy for Europe; it was even easier when Greece collectively voted "Oxi" to a referendum spun in Europe as one whether or not to remain in the Eurozone.
There is more: with Tsipras having already checked out it was a case of "after me, the flood"
This ultimatum came as shock to the Greek cabinet. They thought they were on the cusp of a deal, bad though it was. Mr Tsipras had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors' cartel of southern EMU states and had seriously misjudged the mood across the eurozone.
But it is what happened next that took everyone by surprise: "Syriza called the referendum. To their consternation, they won, igniting the great Greek revolt of 2015, the moment when the people finally issued a primal scream, daubed their war paint, and formed the hoplite phalanx."
Suddenly the stakes are even higher for Tsipras, who is "now trapped by his success." According to Costas Lapavitsas, a Syriza MP, "the referendum has its own dynamic. People will revolt if he comes back from Brussels with a shoddy compromise."
Ironically, that is precisely why the market soared today after it tumbled early in the morning, because it appeared that the Greek finmin was doing just: accepting a shoddy compromise. Of course, it wouldn't be the first time: the Greeks had come home with "compromise" deals on many previous occasions only to have Syriza tear them apart. And this time the stakes are higher not only for Tsipras but the entire party, which realizes it faces a mutiny by the people, mostly the young ones, those with little to lose, if some 60% of them voted against a deal "at any cost" just to see the government fall back to just such an outcome.
The Syriza MP Lapavitsas is correct when he says that "Tsipras doesn't want to take the path of Grexit, but I think he realizes that this is now what lies straight ahead of him."
In some ways Tsipras tried to backtrack: "The prime minister was reportedly told that the time had come to choose, either he should seize on the momentum of the 61pc landslide vote, and take the fight to the Eurogroup, or yield to the creditor demands - and give up the volatile Mr Varoufakis in the process as a token of good faith."
What would happen if Tsipras did decide to stick it to Europe, launch a parallel currency, sack the legacy central banker and nationalize the insolvent banks? We already laid out the key points previously but here it is again:
They would "requisition" the Bank of Greece and sack the governor under emergency national laws. The estimated €17bn of reserves still stashed away in various branches of the central bank would be seized.
They would issue parallel liquidity and California-style IOUs denominated in euros to keep the banking system afloat, backed by an appeal to the European Court of Justice to throw the other side off balance, all the while asserting Greece's full legal rights as a member of the eurozone. If the creditors forced Grexit, they - not Greece - would be acting illegally, with implications for tort contracts in London, New York, and even Frankfurt.
They would impose a haircut on €27bn of Greek bonds held by the ECB, and deemed 'odious debt' by some since the original purchases were undertaken by the ECB to save French and German banks, forestalling a market debt restructuring that would otherwise have have happened.
None of that happened, instead Greece is now in full chaos mode.
Events are now spinning out of control. The banks remain shut. The ECB has maintained its liquidity freeze, and through its inaction is asphyxiating the banking system.
Factories are shutting down across the country as stocks of raw materials run out and containers full of vitally-needed imports clog up Greek ports. Companies cannot pay their suppliers because external transfers are blocked. Private scrip currencies are starting to appear as firms retreat to semi-barter outside the banking system.
However, it is not just Greece which is sliding into total chaos - so is Europe itself, where the splits are becoming so obvious none other than the head of the German Institute for Economic Research said "What Is Happening Now Is A Defeat For Germany."
The entire leadership of the eurozone warned before the referendum that a 'No' vote would lead to ejection from the euro, never supposing that they might have to face exactly this. Jean-Claude Juncker, the European Commission's chief, had the wit to make light of his retreat. “We have to put our little egos, in my case a very large ego, away, and deal with situation we face,” he said.
France's prime minister Manuel Valls said Grexit and the rupture of monetary union must be prevented as the highest strategic imperative. "We cannot let Greece leave the eurozone. Nobody can say today what the political consequences would be, what would be the reaction of the Greek people," he said.
French leaders are working in concert with the White House. Washington is bringing its immense diplomatic power to bear, calling openly on the EU to put "Greece on a path toward debt sustainability" and sort out the festering problem once and for all.
The Franco-American push is backed by Italy's Matteo Renzi, who said the eurozone has to go back to the drawing board and rethink its whole austerity doctrine after the democratic revolt in Greece. He too now backs debt relief for Greece.
However, as if oblivious to these terminal developments within her own union, Merkel is already pushing onward and discussing plans for humanitarian aide and balance of payments support for the drachma: if there was any clearer indication that the Eurozone has been an abject failure, it would be the treatment of one of its member states as a 3rd world African banana republic even before it formally withdrew from its quasi-prison.
Some within Syriza realize that it is all coming to an end, no matter if the can is kicked one more time (which it increasingly looks like it may be despite the referendum's landslide vote):
Mr Lapavitsas said Europe's own survival as civilisational force in the world is what is really at stake. "Europe has not show much wisdom over the last century. It launched two world wars and had to be saved by the Americans," he said
"Now with the creation of monetary union it has acted with such foolishness, and created such a disaster, that it is putting the very union in doubt, and this time there will be no saviour. It is the last throw of the dice for Europe," he said.
... and yet, in the very end, the Greek prime minister who bluffed and unexpectedly won, now appears willing to concede just about everything to Merkel. Because even if the Telegraph's entire article is based purely on speculation, it doesn't explain the easy with which Tsipras seems to have folded not only on implementing reform as part of the harsher deal proposed by Merkel, but his admission that further debt relief now appears unlikely:
- TSIPRAS PLEDGES GREEK REFORMS AS PART OF ANY AID DEAL
- TSIPRAS SAYS GREECE SUBMITTED PROPOSALS TODAY
- TSIPRAS SAID MORE RESTRAINED IN REQUESTING DEBT RELIEF
And from the president of the European Council:
.@atsipras committed to present a new request for a programme within the framework set by the ESM Treaty, incl. strict policy conditionality
— Donald Tusk (@eucopresident) July 7, 2015
Because in the end money talks, in this case €120 billion in hijacked unsecured liabilities known "deposits" and politicians walk. As for those millions of Greeks who gave Europe the symbolic middle finger on Sunday, their reaction when they just find out they were sold down the river once again will be all that matters.
Yet in the end, Varoufakis' line may again be the most important one: "they had already decided to push us out." If true, then as Juncker threatened earlier not only will the last day for the Greek government be Monday, but so will the last day for Greece in the Eurozone.
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In other news a Russian military jet presumably flying without its transponders on kills two civillians in South Carolina......Oh wait a minute that was an American military jet.
Greek PM Tsipras has, in a very short period of time, developed a reputation for changing his story and saying different things to different people. His latest flip, however, may have something to do with statements by a former minister of defense and a group of retired military officers, just before the referendum, in which they strongly supported a YES vote. This suggests the possibility of a military coup attempt, aided from the outside. My source is three different web sites.
What a BS. If he intented to lose he would not have compaigned so hard for a No vote as he did. I think this Abrose fella had too many ouzos.
I agree, I think it hardly credible that they didn't expect to win the No vote. In fact they did a fair bit campaigning for it.
No this is another misderection from media/TPTB.
One thing that we can be absolutely sure about is that we need to hear three version of the story before reality is revealed.
I think the original game plan is still running, unless Nuland is indeed involved in another US Mafia effort in Greece.
These conspiracies theories make no sense.
And first of all, the "yes" never really stood a chance...
The size of the 'No' victory makes the poll saying the result was neck and neck pure rubbish, and shows that the poll was pure fantasy.
The poll was either a plant by the Greek govt to get the No voters out in greater force, or an inexplicable outlier.
I think it safe to say the Greek govt new the poll to be BS, if in fact it wasn't of their making in anycase.
In the mathematical world of polling you do not get 50/50 results one day and 63/37 result a few days later, such moves do not happen.
AND if it were true the Greek govt thought the close-call poll to be real then they would certainly not be out their campaigning the way they did in order to tip the balance their way. No it is obvious the first poll was a false plant. Ask any pollsster about the order of error that poll would have to have had given the final result.
AND if it were true that Nuland did a threat number on Tsipras, then the very best thing he could do is make a public television appearance to everybody, then out of the blue state that his life has been threatened by the USA and that a coup would be instigated if the Greek govt didn't follow instructions.
It would then make it difficult for the US to assasinate him, or start a coup. People all to ready now to believe the US would do this, so bad is their reputation now days.
Mr Lapavitsas could maybe open a fucking history book before he opens his gob. Stooge.
I agree with most in here who see this article as another propaganda attempt to discredit Tsipras in front of his people. It is beyond me why ZH would even post it without at least critically questioning its content. If anything Tsipras was naive and thought the Troika would sucumb once the vote was out, however, he forgot that these people are no democrats and don't care for referendums.
At this stage he has to demand a full blown debt cut of at least 30% or more and remain firm or else hold another vote on the future of Greece in the Eurozone. The US/IMF will back him because they don't want Greece to leave and some southernes such as Italy but even France are softening, this will increase presure on Merkel enormously...if she gives in though I could see Schäuble resigning and her popularity in Germany plumet. At this stage Tsipras has good cards he just needs to play them right and not cave in or he'll soon be prime minister no more. One doesn't hold a referendum, win it outright and then cave in without consequences! And hell get those IOUs ready before humanitarian aid is literally needed!
yes, it is a propaganda piece. fom AEP, "the Great Slayer of the EUR"
"he forgot that these people are no democrats and don't care for referendums"
a Greek referendum binds the Greek government, not the Finnish or Maltese or German or Portuguese or Spanish or Italian or Dutch or Irish, etc. governments
there is no "superstate" in Europe except in some people's dreams, and if there was one, a binding referendum would have had to be a eurozone one, wouldn't it?
I agree it is binding to the Greek government but the EU has a tendency to disregard such decisions altogether or see them at least as unfortunate if it runs counter to Brussels policies, and I assure you the mandate the Greek people gave Tsipras will be hard one to renegade on even if it eventually means leaving the Euro.
If anything you would need to ask Germans, Finnish and Dutch whether they want a third bailout program for Greeks or not, now that would be an interesting approach.
samjam7, come on, I took you as better informed then that: "if it runs counter to Brussels policies..."
Brussels? is flapping it's arms helplessly. because it has very little to say on all this anyway
it's Athens haggling with Berlin, Paris, Rome, Madrid, Lisbon, Helsenki, etc.
Haha ok I see you like writing down a lot of country names and cities, I for one prefer using the EU as a unit even if it includes several countries. But for clarification I wasn't just talking about the commission but also about the European council. In the future I will try to use those terms a bit more correctly for you. But it's good you point out that the haggling is with several states each one with different opinions, otherwise one would think the European council has but one view towards Greece, namely the German one which, as is becoming increasingly evident, is not the case.
I write the capitals because a lot of people see the EU as a superstate. sorry, it is not. and this very Greek crisis ought to highlight it
and I profoundly disagree with the assumption that it's Berlin that "calls all the shots"
btw, speaking of Berlin, where does your bear in your avatar come from? it appears slightly different from this one: Coat_of_arms_of_Berlin
Good observation, they are similar but it is this one.
https://de.wikipedia.org/wiki/Fahne_und_Wappen_des_Kantons_Appenzell_Inn...
Although I do not actually live in that very canton but close enough.
And as for who calls the shots, I think Germany just represents the hardline group towards Greece but it is by no means the only country it's just the most powerful figure in that group.
ah, one of the smallest states of Switzerland. and a divided state, to boot
and who calls the shots in Switzerland? Bern? "Appenzell Downtown"? or is there... confederate politics, in Switzerland?
cheers, have a good time
I see you informed yourself. In Switzerland it always depends who you ask, the more rural the region the prouder they become of their canton and the more distrust there is towards Bern and even worse towards Strassbourg. But I'm sure you're familiar with this concept from Bavaria...
I'm not that conservative, if it was up to some in Appenzell women's sufrage would still not be introduced by now. But they do live up to a very old principle of direct democracy with the Landsgemeinde and even though this may seem archaic to many, to me this is the basis of western Europe's prosperity, the involvment of citizens in matters related to state. That's why when I lash out against the EU it's not that I'm against it as a whole or that economic integration is bad I just don't like its undemocratic component. But I guess we could both have a long discussion on that ;)
Grüsse gen Norden!
One thing everyone seems to be overlooking here. There exists no legal means of exit from the Euro - yea, even from the EU as well.
These countries might huff and bluff all they want, but if Greece wants to remain in the Eurozone, there seems to be nothing that can prevent it from doing so. It's like having a misbehaved tenant who refuses to be evicted - he can't be evicted if there is no legal means for that. If Greece wishes, she can become a small festering unhealable sore on the forehead of the EU, a nasty, ugly sore that the EU has to look at every time she gets the courage to look herself in the mirror, a painful itchy sore she constantly has to scratch. Taken to extreme Greece could as well tell her creditors to take a hike - "I'm not paying, and I'm not leaving either - and whilse I'm at it, fuck you!".
The EU has dug themselves a hole they can't extract themselves from.
None of this wil end well for either Greece or the EU.
no, Greece can't be evicted
nevertheless, Greece does need, at a certain point in the near future, to reopen it's national banking system
either with a deal, in EUR, or without a deal, at which point it needs something different
the key is the ELA support from the ECB. except if Greeks find a new source of trust and bring back their savings to the Greek banks, that is
LOL LOL LOL
it's so damn funny to read the comments of this article
I've spent a lot of time here complaining on what Ambrose Evans Pritchard writes. often, his articles can be summarizend as this: "the EUR is the devil and will break tomorrow"
all, of course, to a public readership that craves for that
Referendums don't mean crap. Watch the aristocracy walk all over their subject's desires.
BS!
Does he look worried, http://rt.com/news/272314-greece-eurozone-crisis-tsipras/
Ambrose Evans-Pritchard establishment contrarian has his own conservative agenda for his bosses;
Sir David Barclay and Sir Frederick Barclay, British businessmen. In July 2004, they bought The Telegraph Group which includes The Daily Telegraph.Just follow the fiat!
http://news.goldseek.com/GoldSeek/1358543640.php
Ignorant propagandist total trash, the man begged the population over agaain to vote OXI, so did all his ministers non stop.
Why do you think words like "chaos" and "tragedy" originally derives from Greek - its history repeating
The Telegraph is a MSM type media. It often produces useful information, but also lots of shit.
Well, I can understand him why he doesn't want to go to russian hospital:
https://youtu.be/pHBzZisIuGs?t=8m38s
So much for russia "super-power" :D
ha ha ha
Tyler kindly ban this troll . His 4th account and he hasnt stopped trolling yet .
Correction: Russia saved Europe, NOT America. Secondly, either Greece will be free of the Anglozionists, or it will slide into civil war..they have been there before not so long ago. Tsipras is finished if he betrays those 61%.
This article is a low point for ZH.
Greece has made strange bedfellows and yet this "article" indicates Tyler needs a night on the floor.
Prediction for Tsipras
https://twitter.com/Viedoklis_lv/status/618722417486209024
You have busted your own cover videolkis_latcian shoeboy .
A lot of people seem to forget that a mere six months ago, BEFORE SYRIZA WAS ELECTED, the majority of EU and German officials were making noises that 1) they wanted to end the Greek bailout for good and 2) they thought the banking system was now sound enough that they could let Greece fall and everything else would survive. Then the Greeks elected a "hard left" government, and all you could see anywhere were comments about how it was unlikely that the EU could negotiate meaningfully with "radicals".
The Germans/EU never intended to complete a bailout deal with Greece this time around, no matter how sweetly they begged. This is reflected in Varoufakis' experiences. This is not an idiot or an "amateur", no matter how the economically ignorant aristocrats of the Troika wanted to paint him. That's probably why they wanted to get rid of him -- he isn't the kind of fellow you can play shell games with.
I don't know about Tsipras. He's a politician, not a "wonk". But as a politician he should have had a feel for the probable results of the referendum. And his government recommended a "No" vote. If he had wanted to swing the vote to "Yes" he could have taken more steps in that direction. His party firmly supported and publicized its recommendation of "No". Anyone capable of building a new party from scratch and taking hold of a government should have been in more control than that if he really wanted the "Yes".
Remember that at this level, everything we see from the outside is smokescreens.
A moment of brevity in a pretty dire situation:
This guy seems to want to help...
https://twitter.com/TheGreekBailout/status/618673099161120768
A moment of BRAVERY is something understood by the many, not the few
http://money.cnn.com/2015/07/13/investing/thisisacoup-greece-euro/
one correction...we do not beg...we simply give them enough rope to hang them selves.
If he wanted to lose how come he can't wipe that grin off his face yet.
He just can't believe how clueless these Eurofucks are.
Ha. Ordinary Greek citizens didn't imagine their government bureaucrats would ever allow things to get this bad. Now they are learning the hard way that a bureaucrat will do ANYTHING to protect himself & his feather bed job. Multiply that bureaucratic animal desire by millions and voila' it's just what it is now all over the world. U.S. banksters KNEW they could get U.S. bureaucrats to look the other way while they leveraged home ownership out of existence. The toxic bureaucracy complied. None of this happens anywhere without complicit bureaucrats.
and so tells you your media that you so gladly accpt to form your opinion...in reality we have a goverment that does exactly what we want...I understand this is impossible for yyou to grasp but hopefully in 2500 years you will, as you did with other philosophies of ours.
I don't buy that.
Well it seems I was wrong. It seems they really wante to loose to get further with this Farce. The suggestions they made seem to fit the last proposal they rejected and why they held an election. Maybe there's way more truth in: If electiosn would change something they would be forbidden.
How must any Greek feel now? Well so much about "democracy". Democracy sucks.
This article is a perfect example of the author using OPINION BIAS as thouth it were FACT when it says Tsipras never intended to win the referendum. One personsl OPINION from the TELEGRAPH is not in any way shape or form headline worthy unless of course you care more about ratings than NEWS. It's not news. It's a distraction.
This is the only major complaint I have about Zero Hedge. They are by far one of the best sources for market information I have in my arsenal and I thank you for that. But ZH is not perfect. They do seem to let articles like this one gat posted and it really makes ZH look like just another propaganda outlet when they do that. Same thing goes for policial articles that are not based on fact but rather just one persons opinion.
Every media outlet will have some kind of bias. ZH is no different. But it is important to be able to differenciate between opinion and fact if we are to claim that we are indeed critical thinkers. This article is not news. It's a headline based on one persons opinion.
The Thousand Year 3rd Reich lasted 12 years, 1933-1945.
The Thousand Year 4th Reich has lasted 15-1/2 years, 1999-2015.