This page has been archived and commenting is disabled.

EU Exit Will Now Be "Threat To Those Who Don't Behave The German Way," BofA Says

Tyler Durden's picture




 

While the Greek "compromise" deal may have averted an outright economic collapse in Greece in the short-term (although one would be hard pressed to describe the current situation on the ground as anything other than a depression) and may for the time being allow EU officials to cling to the notion that the euro is "indissoluble," the fraught negotiations that took place over the weekend in Brussels laid bare for all to see the unbridgeable gap between EMU nations. 

If there were any doubts about who runs the show, German FinMin Wolfgang Schaeuble erased them on Sunday by pushing through a term sheet that effectively strips Greece of its sovereignty on the way to seizing state assets and relegates its people to perpetual debt servitude. If this is the meaning of a currency "union", it’s not entirely clear why any state would want to be a part of it. 

With the birthplace of Western civilization now completely beholden to the politicians who control the purse strings, BofAML and Deutsche Bank are out with some brief, but poignant commentary on what the future holds for the currency bloc.

* *  *

From BofA

Temporary exit: think twice

Although the idea seems to have been dropped, the draft of conclusions the Eurogroup circulated to the Heads of State contained a temporary exit from the Euro as an alternative to a deal. Exit from the currency block is now officially something that can be used as a threat to those that don’t behave the German way. More importantly, it can be temporary which, in principle, would make it more feasible relative to a permanent one. This is a bad idea in our view. It would mean the return of convertibility risk to spreads in the medium run. If the idea of an exit was bad, a temporary one is even worse. The ECB would be there as first line against contagion in the short run. But we had argued in the medium run a move towards more integration would be needed. If we have learned something today is that there is little appetite for more integration. 

From Deutsche Bank

After a truly unprecedented 17-hour Euro leaders summit, a deal has been finally struck on Greece. The agreement sets the framework around which Greece can avoid an exit from the euro. The Greek government is required to deliver against an incredibly detailed set of conditionalities to receive aid, a signal of the significant lack of trust between the authorities and its creditors.

On the negative side execution risks remain high and the new agreement will further increase pressure on the economy as well as possibly leading to the creation of political parties more explicitly against euro membership in Greece in the future. The last six months' crisis has exposed weaknesses in the Eurozone's governance framework that will likely reverberate for months and years into the future.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 07/13/2015 - 08:40 | 6305445 LawsofPhysics
LawsofPhysics's picture

Roach motel, hotel california, etc.  the Germans finally took over europe without firing a shot...

Mon, 07/13/2015 - 08:44 | 6305463 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

What pulled the EU through the darkest moments of 2012 was the political will of the member states to keep the historic European integration project on the rails.

Whether that political will still exists after Germany's glorified coup on Syriza remains to be seen. 

Mon, 07/13/2015 - 08:47 | 6305476 NoDecaf
NoDecaf's picture

Hang the bankers

Mon, 07/13/2015 - 09:20 | 6305662 NoDebt
NoDebt's picture

I think there may have been a miscalcuation in all this.  Zee Germans were so preoccupied with making it painful for Greece to leave the EZ/EU they ended up making it too painful to stay as well.

Next country in line will know they need to exit quickly and quietly in the middle of the night BEFORE their country is picked clean.  Who the hell would want to stay in knowing that's the "template" for how they will be treated?

Mon, 07/13/2015 - 10:29 | 6306036 Antifaschistische
Antifaschistische's picture

nailed it noDebt.

What has happened in the last month has made 18 Euro countries (19 - Germany) begin to ask themselves very very seriously how they will diversify themselves against the Euro Debt (Merkel) risk.   You know...without any doubt that this is now being discussed in 18 countries.

Is this what you wanted Germany?   You're driving nails in the Euro coffin...

Mon, 07/13/2015 - 10:43 | 6306110 thepigman
thepigman's picture

Uk will now dump the euro:-)

Mon, 07/13/2015 - 12:10 | 6306540 Relentless
Relentless's picture

??

UK isn't on the Euro

Mon, 07/13/2015 - 11:39 | 6306383 Thenardier
Thenardier's picture

See how the Krauts enjoy the gift that keeps on giving...their own Greek colony nanny state, to which the Germans will feed, clothe, educate, ect cradle to grave for eternity...Hell, maybe the Greeks won.

Mon, 07/13/2015 - 08:47 | 6305477 Haus-Targaryen
Haus-Targaryen's picture

We can only hope not.  

With any luck, Syriza will get throw out, Golden Dawn voted in & the real fireworks can start going off.  

Mon, 07/13/2015 - 08:53 | 6305504 asteroids
asteroids's picture

If you have a long view of history, something like this is inevitable. Tsipras is a two face that sold out his country for what? A famous Greek said "I have nothing, I want nothing, I am free". Greeks today, and tomorrow, are slaves.

Mon, 07/13/2015 - 08:54 | 6305513 XAU XAG
XAU XAG's picture

Europe should be renamed.............................TITANIC

 

And Greece is the Band!

Mon, 07/13/2015 - 08:46 | 6305446 Headbanger
Headbanger's picture

Sieg heil!

Fucking block heads...

The Germans  colonized Greece financially much like England did with its conquests back in he day by taking what commodities they could get and selling them high value added finished goods

But Germany has fucked itself cause  nobody wants to go into debt to buy their shit after seeing Greece get killed.

Mon, 07/13/2015 - 08:54 | 6305514 WestVillageIdiot
WestVillageIdiot's picture

And maybe we can put to rest some of the nonsense about the Treaty of Versailles and how poorly the Germans were treated.  Nobody ever discusses the Treaty of Brest-Litovsk when discussing draconian agreements.

Greece is getting ready to sign Brest-Litovsk II.

Mon, 07/13/2015 - 08:59 | 6305533 Headbanger
Headbanger's picture

Yeah it was very harsh against the Russians at the time but it had some lasting good results after it was nullified when Germany lost WW I

https://en.wikipedia.org/wiki/Treaty_of_Brest-Litovsk

 

"The treaty was effectively terminated in November 1918, when Germany surrendered to the Allies. However, it did provide some relief to the Bolsheviks, already fighting the Russian Civil War, by renouncing Russia's claims on Poland, Finland, Estonia, Latvia, Belarus, Ukraine and Lithuania."

Mon, 07/13/2015 - 08:41 | 6305449 JustObserving
JustObserving's picture

Everyone knows that Greece is being made an example of.  Defy the banksters and you will pay.

If Greece had defaulted in 2010 when its debt was around 110 billion euros, the losses would have fallen on the banks that had foolishly lent the money without proper due diligence or risk management. This is what should have happened in a market economy: those who foolishly lent extraordinary sums to poor credit risks take the resulting (and entirely predictable) losses.

The Greek Government currently owes 323 billion euros — almost three times as much. The debt rose 213 billion euros, during 5 years of IMF-imposed “austerity” — the Greek depression

http://www.globalresearch.ca/how-fascist-capitalism-functions-the-case-o...

Mon, 07/13/2015 - 08:47 | 6305475 XAU XAG
XAU XAG's picture

@JO

 

5 years time almost a Trillion then!

 

it's only zeroes on a computer LOL

Mon, 07/13/2015 - 09:01 | 6305545 LawsofPhysics
LawsofPhysics's picture

The truth is that "banking and finance" has "evolved" to the point where there is no real collateral requirement for money creation/"loans"....

 

No more risk for these useless paper-pushers as they can always dump losses on the taxpayers...

Bankers and financiers are nothing but overcompensated middlemen between the computer/printer (where "money" is now "created") and the producer/consumer in the real economy.

The problem is that these same bankers/financiers own the taxpayer's "representation"/government...

Under the bill of rights and declaration of independence, it is now everyone's duty/responsibility to stop paying taxes...
"That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness"

The greeks are the only people actually doing the right thing...

Mon, 07/13/2015 - 09:17 | 6305634 LawsofPhysics
LawsofPhysics's picture

Yes, evolve or die.  My favorite from Otto...

"The great questions of the day are not decided by speeches and majority votes, but by blood and iron."

Mon, 07/13/2015 - 09:29 | 6305702 astoriajoe
astoriajoe's picture

perhaps "...by speaches and majority votes, but by ones and zeroes."

 

Mon, 07/13/2015 - 10:12 | 6305956 Thenardier
Thenardier's picture

LOP, Bismark would have cringed at the idea of the EU...here he had just unified Germany from its numerous kingdoms (Prussia, Wurttenburg, Palatinate, bavaria, etc) and the stupidity of believing that one could organize Europe with its heterogeneity into a monetary union would be indefensible.

He was always good for quotes. here's another:

"An appeal to fear never finds an echo in German hearts."

Take that Tsipras!

 

Mon, 07/13/2015 - 10:53 | 6306169 Ghordius
Ghordius's picture

are you talking about the same Otto von Bismarck that founded the Reichsbank in 1875 and brought all those German kingdoms into a currency union?

Mon, 07/13/2015 - 11:36 | 6306363 Thenardier
Thenardier's picture

Germans only..no Froggies..Now we have Franks, Gauls, Danes, Swedes, Volga Bulgars etc..aint the same Ghord.

Mon, 07/13/2015 - 08:42 | 6305456 Panic Mode
Panic Mode's picture

Deutsch Bank -- king of Greek junk bonds and derivatives exposure.

Mon, 07/13/2015 - 08:56 | 6305522 ShorTed
ShorTed's picture

That is until the ECB and national central banks relieved them and the frog banks of all that shit paper and gave it to their tax donkey citizenry.

Mon, 07/13/2015 - 08:45 | 6305467 Blopper
Blopper's picture

Stop the bluff.

There will be NO GREXIT ever.

 

EU is needed by the Rothschilds (master to all the EU politicians) as a European regional control currency and sovereignty.

 

So stop the bluff.

I've called your bluff countless times already.

Mon, 07/13/2015 - 08:51 | 6305493 Blopper
Blopper's picture

Some people giving me the thumbs down must be very jealous that I have been right all the while and will continue to be right until the end regarding NO GREXIT.

 

LOL

Mon, 07/13/2015 - 09:18 | 6305632 NotApplicable
NotApplicable's picture

It seems that even Tyler has failed to note how the timeout is nothing but the operation of Hegel's dialectic. Germany has just gained far more power in this instance than Greece has ever lost.

The Euro is still not reversible, but they want everyone to fear that outcome. For good reason.

Mon, 07/13/2015 - 09:18 | 6305647 shovelhead
shovelhead's picture

I'm sure your mom is suitably impressed by your brilliant prognostication skills.

Mon, 07/13/2015 - 08:46 | 6305472 Racer
Racer's picture

Germany you are now closing in on the US as one of the world's most hated bully

Mon, 07/13/2015 - 09:11 | 6305607 LawsofPhysics
LawsofPhysics's picture

Be honest, Germany is an American puppet.

Mon, 07/13/2015 - 08:47 | 6305474 Blopper
Blopper's picture

And stop any further bluff.

There will be NO -XIT of any EU member country ever.

Not until the end of the Rothschilds dynasty.

Mon, 07/13/2015 - 08:47 | 6305478 VW Nerd
VW Nerd's picture

I thought the Greek people voted to exit the Euro??  What happened to that??

Mon, 07/13/2015 - 08:48 | 6305483 JPMorgan
JPMorgan's picture

The Fourth Corporatocracy Reich. 

Mon, 07/13/2015 - 08:49 | 6305490 BoPeople
BoPeople's picture

It has captured and enslaved Europe without taking a shot. No heroism here, folks, just treachery and parasitism.

Mon, 07/13/2015 - 08:49 | 6305486 Blopper
Blopper's picture

There will be NO GREXIT ever.

There will be NO - XIT of any EU member country ever.

 

I dare you.

I FUCKING DARE YOU!!!

Mon, 07/13/2015 - 08:57 | 6305496 Brazen Heist
Brazen Heist's picture

The EZ is a German racket.

NO need for standing armies anymore, the 4th Reich is a cyber-financial empire. Such is the future of warfare - cyber and financial terrorism. Same shit, different theatre.

Amateurs like Syriza need better game and bigger balls to take the plunge. The Euro only works for the Germans and Northern countries. The South needs out, including France.

Mon, 07/13/2015 - 08:52 | 6305500 Whoa Dammit
Whoa Dammit's picture

The world would be a much better place if governments were not allowed to borrow money.

Mon, 07/13/2015 - 08:59 | 6305536 Aquarius
Aquarius's picture

Hitler lost WWII but not before massive gross destruction - loss of lives and devastation; how many millions died? Perhaps 30 to 50 millions.

This WWIII being pursued primarily to stop the collapse of the global and western Banking system, will take far more lives and is just getting warmed up. Austerity, they call it.

They actually mean: starvation, torture, death and appropriation of assets; just as in WWI - WWII etc.

Schauble is just a "True Believer" and is totally f*cking "clueless" like the rest that sit around the tables of decisions.

WWIII leads to the next  Dark Age (Q4 2015) and perhaps an Ice Age as the Global Ecosystem deminishes - as it has done many times before - and while this "proto-Human" (so-called elite "leadership" -  which nobody in their right mind would follow anywhere) which could offset the coming adversities, they prefer to wallow in their own wet-dreams, fantasies and subjective agenda and pile suffering upon we the unwashed..

Get a Life: markets are gone: Investment has gone. Now, it is about you and family. Learn to live with it or perish. You can, of course, continue to believe the bullsh*t but please do so at your own risk - such is life.

For whom do the Bells Toll?  - They Toll for Thee.

(mileage varies)

Ho hum

 

Mon, 07/13/2015 - 09:04 | 6305562 monad
monad's picture

Moar drama.

Mon, 07/13/2015 - 09:05 | 6305567 PirateOfBaltimore
PirateOfBaltimore's picture

Whether or not you're paying banksters, taking on more debt than you can afford, combined with a massively socialist economy incapable of producing anything the rest of the world cares about besides tourist destinations from their glory days, will get you where Greece is.

 

Name one thing Greece produces that is high-value.  When I think Germany, I think Mercedes, BMW, Volkswagon, Siemens (to name a few).  

Perhaps they should take Germany's lead in this respect.  Seems as though the EU picked up bankrupt Greek assets in a firesale.

Mon, 07/13/2015 - 09:08 | 6305589 Joe A
Joe A's picture

It is ironic and sad to see that a country that devastated a continent twice in the span of 40 years and that killed millions in an industrial manner (they are good at industrial things, these Germans) is now boss in Europe and bullies everybody into submission. Especially when you think that Germany had 50% of its WWI and WWII debt forgiven by, among others, Greece.

Germany realy runs the risk that other countries' people will hate it again.

Mon, 07/13/2015 - 09:22 | 6305669 wholy1
wholy1's picture

From [ultimate] failure twice to rule by bullets and bombs, now succeeding as banksters.

From the sacking of Rome TWICE to the "Sach-ing" of Europe.

Is it Goldman "Hacks" or Deutshebank that has the highest leverage of derivatives?

Huns driven to dominate by whatever means necessary.

 

Mon, 07/13/2015 - 09:28 | 6305699 shovelhead
shovelhead's picture

Say whatever you want about the Germans...

But everyone around the world knows what Blitzkrieg means.

Mon, 07/13/2015 - 09:11 | 6305603 Town Crier
Town Crier's picture

Wolfgang ("Mr. Potter") Schaeuble: "I'm tired of playing nursemaid to a bunch of gyros eaters!"

Mon, 07/13/2015 - 09:18 | 6305644 LawsofPhysics
LawsofPhysics's picture

Fine, then cut the fuckers loose already!!

Mon, 07/13/2015 - 09:37 | 6305741 Manipulism
Manipulism's picture

They rammed the Teuro down the throat of the germans.

Reunification AND the Euro or no reunification.

They all thought this way they could controll the germans and participate from their wealth.

Blame the victim.

Mon, 07/13/2015 - 09:53 | 6305825 Son of Captain Nemo
Son of Captain Nemo's picture

Germany's nostalgic roadtrip back in time...

Guess the German people don't remember or were severley brainwashed by their American and British occupiers on what happened to them between 1945 and 1961?...

Germany while you still have time throw these fucking bums out of your yard and declare all foreign military bases on your own soil "illegal" -before it's too late!

Mon, 07/13/2015 - 09:53 | 6305826 PocketHedge
PocketHedge's picture

A temporary exit allows the Eurosystem central banks to avoid dealing with huge accumulated TARGET2 balances. It's unclear how or if one would settle those.

Mon, 07/13/2015 - 09:56 | 6305840 Krumnoltzwitsky
Krumnoltzwitsky's picture

I have to admit that I was actually expecting Greece to get kicked out this weekend, but I was proven wrong.

For those of you who don't know, the EU is going to be one of ten super-regional governments that will be imposed on the world when the New World Order comes into being. This is the whole list of super-regional governments that will be formed:

1. North American Union (sorry you Yanks and Canucks, but it's going to happen)

2. European Union (eventually it will have all European nations that weren't part of the Soviet Union)

3. South American Union

4. North Africa & Middle East

5. Sub-Saharan Africa

6. South Africa, Australia, New Zealand and Oceania

7. The nations formerly of the Soviet Union

8. Japan (yes, I know it's by itself, but ask the elites why they want it like that. I don't know personally)

9. India and South Asia

10. China, East and South-East Asia

(This was told to me by a person who knows and is good friends with some of the elites.)

So expect to see more national consolidation and nations losing sovereignty over the next few years.

Mon, 07/13/2015 - 10:40 | 6306070 jmc8888
jmc8888's picture

At this point they might as well change the currency name to the Gero.

Mon, 07/13/2015 - 10:42 | 6306096 Dr. Nick Riviera
Dr. Nick Riviera's picture

Professor Richard Werner: "The other half of the chief economists, like me, recognised that a single currency would be introduced, no matter how nonsensical the economics, since it was a political project. They agreed with me that it was going to be a disaster. I asked the chief economist of what was then the fourth largest German bank: “If you think so, why don’t you speak up about this? You are forecasting gloom and doom, but I don’t see any reports by you or your bank about it.” His answer was shocking: He said that there had been clear instructions from the boards of all the large German banks to their staff that no report on the abolition of the D-Mark and the introduction of a European single currency that was in any way negative was allowed to be published. The economists in the private sector had been muzzled by their bosses. The same I heard from journalists. So the German media only quoted the rigged reports from the banking economists."

https://professorwerner.wordpress.com/2015/07/10/hallo-welt/

Mon, 07/13/2015 - 12:42 | 6306725 chogopogo
chogopogo's picture

Und ist auch gut so!

Do NOT follow this link or you will be banned from the site!