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Greek "Scarecrow" To Terrorize Spanish, Portuguese Elections
Last week, after the Greek parliament legislated away the country’s sovereignty, PM Alexis Tsipras executed a cabinet "reshuffle" aimed at ridding his government of "radical" leftists who oppose the conditions attached to the country’s third bailout package.
The move was confirmation of what we’ve said for months. "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," we argued in May.
That’s a nice way of saying this: EU officials are determined to effect political change in Athens because i) Syriza, as it existed before last week simply wasn’t receptive to EU demands around fiscal discipline and stepped up austerity, and ii) allowing the new Greek government to push back forcefully against the troika risked emboldening political sympathizers in Italy, Spain, and Portugal.
In short, "come hell, high water, or 'Grimbo,' the EU was going to extract its pension cuts and VAT hikes from Tsipras, and not because anyone seriously thinks it will make a difference in terms of putting the country on a 'sustainable' path, but because the EU simply cannot afford for Syriza sympathizers in more economically consequential countries like Spain to get any ideas about rolling back austerity (of 'fauxsterity' as it were) and using EMU membership as a bargaining chip."
With recent events having confirmed everything we’ve said about the troika’s intentions to usurp the democratic process using financial leverage, the question now turns to whether Brussels’ hardline negotiating stance and, more importantly, Germany’s steadfast refusal to discuss "classic" debt writedowns in the face of pressure from the Christine Lagarde (who can’t decide if the IMF is the "good" cop or the "bad" cop), has had the intended chilling effect on other anti-austerity political movements across the EMU.
As noted last week, Nacho Alvarez, economic policy chief for Podemos (the ascendant, anti-austerity Spanish political party led by Pablo Iglesias), was careful to differentiate Spain’s situation from that of Greece in what certainly appeared to be an effort to play down the idea that talk of Greek debt relief would cause Podemos to seek re-profiling for Spain. Via Bloomberg:
Greece and Spain are 2 different economies that require different strategies, Nacho Alvarez, said Tuesday in Madrid.
Alvarez says Greek deal is not a failure for Podemos, but for Europe.
Alvarez says change doesn’t necessarily mean restructuring of public debt.
Fast forward to Monday and it’s readily apparent that Iglesias understands precisely what took place in Greece. Again, from Bloomberg:
Creditors Tried to Carry Out a Coup on Greece, Podemos' Iglesias
Creditors tried to bring Greece to its knees and enforce a new "Versailles Treaty," Pablo Iglesias, leader
of anti-austerity party Podemos, said Monday
Iglesias says he has a lot of sympathy for Greek PM Alexis Tsipras
Tsipras succeeded in bringing debt relief to negotiating table: Iglesias
Iglesias says Spain situation is different to that of Greece: "Our problem isn’t external debt, creditors or Germany, it’s the Spanish oligarchy"
This is merely obfuscation (while Spain's debt-to-GDP ratio is considerably lower than that of Italy and Portugal, to simply suggest that the country has no "problem" with external debt, creditors, or most importantly, Germany is to overstate the case) and willing obfuscation at that. With elections just around the corner, Iglesias isn't keen on provoking Brussels (or Berlin) - yet.
But the real question is whether or not the ATM lines, empty shelves, and gas station queues in Greece have had their intended psychological effect on Spanish (and Portuguese) voters. In other words, the question is whether the troika has succeeded in undercutting the democratic process outside of Greece by indirectly strong-arming the electorate. Bloomberg has more on the periphery's "spooked" voters.
* * *
From Bloomberg
Syriza’s White Flag To Spook Voters Beyond Greece
What happens in Greece doesn't stay in Greece.
The capitulation of the ruling Syriza party as well as the critical condition of the Greek economy should scare voters away from parties advocating similar policies elsewhere in the euro area. As hope turned into disillusion, any political contagion effect is now set to play against more extremist movements. That's especially true for Spain and Portugal where general elections will be held this year.
The financial contagion from the recent Greek showdown was limited, judging by sovereign yields remaining near historical lows across the euro area. But what about the political contagion? The combination of high debt, sluggish growth, low inflation and austerity fatigue has boosted the popularity of pro-default parties in many euro-area members.
The victory of Syriza in January put political risk back on investors' radar and raised hopes for parties advocating a similar anti-austerity, pro-default policy agenda in other euro-area countries. One only needed to pay attention to the loud cheers and applause that greeted Greek Prime Minister Alexis Tsipras as he entered the European Parliament last week to see the breadth of the Greek leader's appeal. Supporters included those from Spain's left-wing Podemos party, the anti-establishment Five-Star Movement in Italy and the right-wing National Front in France.
In this context, the Greek negotiations were not only an arm wrestling match between Greece and its creditors. Economics aside, ruling parties acting as creditors didn't want to miss the opportunity to pull the rug from under the feet of their own opponents at home by humiliating Syriza in Greece. The will to send a clear message was all the stronger as Spain and Portugal — two former ailing euro-area nations — will hold general elections later this year.
Podemos, one of Syriza's closest allies in Europe, managed to win — in coalition — the city halls of Madrid and Barcelona during May's local elections. And it is polling quite close to the two traditional center-left and center-right parties for the general elections that will take place before the end of December. This explains why Spanish officials took a hard line against Tsipras during the negotiations: giving ground to Syriza in Greece would have meant giving ground to Podemos in their own backyard.
Now, Podemos as well as other similar parties will probably suffer from Syriza's retreat. While the hardcore of Podemos voters will read the outcome as an even stronger need to change the economic and political order in Europe, the more undecided voters will probably look twice at the Greek economy — held in stasis by bank holidays and capital controls — before risking voting for Podemos. What happened in Greece will probably act as a deterrent.
And there's little doubt that the traditional parties across the euro-area will use the Greek situation as a political scarecrow. Not only in Spain.
* * *
(A troika public service announcement: voting for "radical" leftists may lead to capital controls)
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smh This isn't going to end until people start "eliminating" the people in power and anyone who says "hey, let me take charge". We don't need it!
maybe they should have a referendum first HAHAHAHHAHAHAHAHAHAHHA
The Greek party that was elected to do the job they said they wanted to do, didn't, simply as, they betrayed the voters and went against the OXI voters in a referendum they called.
Was there ever a doubt? Hollande will try to fuck the French like Y-Anus and co fucked the Greeks. However, the French will not rollover so easily.
What changed about the French recently that I must have missed? The French are world class roller-overers.
Sandwich bet. The French will have a general stike. No garbage pick up....metro service....nada. The French are the original EBT crowd and take their free shit seriously. The French part of Canada is a prime example....they bitch and complain...and will shut the fucker down if they do not get their way.
The French believe that it is there God given birthright to get shit for free. This is akin to most Americans views on gun ownership.
Merkel et al will have to find away to fuck over the French with a deal that seems pro free shit when it is anything but.
That would be a very long term bet, but I'll take it.
The Greeks depended 70% on their government for jobs, hand-outs, pensions and other entitlements, and they're still gonna get bent over.
The banks doesn't care about internal welfare promises. They want their fucking money. And if you can't give them that, they'll take your soverignty. Banks can't be bargained with. They can't be reasoned with. They doesn't feel pity, or remorse, or fear. And they absolutely will not stop, ever, until you are dead.
I am not suggesting the Free Shit Army of France will win but they will make things awfully difficult. Maybe, Germany exits the euro? Who the fuck knows. All I know is the French will shut the fucker down. It could cause an end to the free shit. Germany could just say...fuck you guys...keep your fucking Euro and thanks for coming out to play. The Germans just need to have a new currency that is not overly valued. Maybe, they can talk to their friends at the SNB to slam the fuck out of the new German mark. Crazier things have happened.
What if you kill them first? Will they stop then?
Probably...it's an idea.
And you can bet that they'll be back.
+1000 for that Terminator quote.
https://www.youtube.com/watch?v=zu0rP2VWLWw
Germany can't subsidize most of europe. The inefficient free loaders will eventually have to change their ways or the euro must break apart..
Mmmm, I don't know about that.
"Hollande is the former spokesman for ex-French Prime Minister Lionel Jospin, another committed globalist who attended the Bilderberg Group" and they elected him.
They're all on the same path, voting the same kind of people. At this point, the Eurozone looks like Dante's Inferno: "All hope abandon, ye who enter here".
Hey Francois Hollande....better burn the midnight oil and read everything you can about game theory. The French will shut the mother fucker down with general strikes faster than you can say Bonjour mes amis.
The lesson learned:
no elections are needed, when you talk to EU.
Hey, Mitsubishi just apologized for using American POWs as slave labor during WWII. Maybe we can expect an EU, ECB, and German apology to the Greek people - in about 70 years!
seems about long enough of a timeframe for them to admit who was really responsible for 911
that said, its been over a hundred and they still havent admitted that the federal reserve act never passed
(unless "passing" means "declared to have been law" without the sufficient votes, like many other "important" "bills")
The worthlessness of fiat is palpable.
The first out of this madness will be one of the best survivors in the long run.
I would think the first out would ideally be geographically isolated, with a good source of geothermal energy.
These southern European nations are all vassal states now. And it wouldn't be much of a vassal state be if those pulling the strings couldn't change its leadership at will.
The vassal states knew the rules when they enterd the euro union, in order to compete, efficiencies in private industry and governance would have to be made. The headlines of the time from the Euro Technocrats, Greenspan and FED, the financial media (WSJ/The Economist etc) along with academia and economists proclaimed that the digital era had arrived, impovements in productivity and government efficiencies would lead to a rising standard of living for everyone.The great moderation was here. The poor little dears(vassal states) knew what the game plan was when they voted for inclusion. Being an idiocracy is no excuse and not Germany's fault. Time to put up or shut up. Germany can not subsidize the entire southern part of europe. You see Scarlett money really does not just grow on trees.
If a state is incorporeal, how does a state know something? Certainly I don't imagine ordinary Greeks sitting in cafes talking about a Great Moderation. Most people have nice ordinary lives and aren't as sad as economists and technocrats, read neither the WSJ nor The Economist. I thank God for that, for those small mercies. So the only idiocracy I see is the political class and the pig men that give them their orders. Everyone else has to suffer, be it Germans or Greeks, all will be thrown under a bus in the totalitarian EU.
And what happened to moderation part by the way? Must have outsourced that to another planet.
Up arrowed you. and basically agree with you, and we in the US are no different. I sort of disagree about the ultimate responsibility of the idiocrcacy. (although your analysis about ordinary people is true) If we the people do not wake up and start educating and discussung the issues that matter instead of the simple parroted mantras from the MSM or are to lazy to think about anything besides the latest reality TV show then the outcome is clear, and now very present. Perhaps what is needed is discussions in Greek cafes about economics,their culture and the need to reform a national ethos that embraces bribes,tax evasion and unsustainable socialism and that leads to a greater economic divide. Otherwise Democracy is Dead and then it just is what it is..We are racing to a totalitarian existence..
Considering the numbers Podemos is polling are in absolute freefall... Game,set and match Germany.
The polls just happen to be too likely what TPTB wants them to look like, to be just a serial co-incidence.
Give Merkel and her Fourth Reich bullets. Forget talks, elections, law, democracy. It's bullets or slavery.
this is a good example of linear thinking. the idea that squashing Syriza in Greece will squash other movements. If TPTB try capital controls in more countries eventually they will have revolution on their hands. Its just human nature.
Thank god Schaeuble took up break-dancing.
Must be my mood today, but I laughed so much coffee came out my nose and I wasn't even drinking any.
Since the radical left - without quotes - has no knowledge of money and finance and of course does not know the exit to the conundrums created by the Eurozone, the move to humiliate Syriza is quite educational.
The radical left does not need the establishment to be humiliated - they humiliate themselves consistently and repeatedly. Their handling in Greece was absolutely pathetic.
this is a simple IQ test for people living in Portugal.
Get your assets out of the country's banks, and off-shore now. It's that simple. Need we say any more?
The banks have now opened in Greece. But laughably Greek bank customers are not able to repay their loans early with their deposits nor take out new loans. Debt really is a Dirty word!
It costs 10 Euros to drive to the closest ATM is Greece. Many are shut down.
And when you get THERE - you can only withdraw 60 Euros.
These people might as well start trading gasoline vouchers, chickens, and cucumbers.
Lesson for greeks and all other "proletariat mobocracies" =
Socialism is socio-economic CANCER - it WILL kill everything productive.