Mark Grant On The Greek Annexation
Submitted by Mark Grant, Author of the Financial Commentary: "Out of the Box"
"He also said that the European Commission, the EU's executive arm, would be installing its own officials at Greek ministries to provide technical assistance and monitoring on a permanent basis on the ground in Athens."
This is a quote from the article attached. I think it can be now said that Greece has been annexed by Europe. There is a separate article today where Germany is going to send some of its tax collectors to Greece. As Germany is refusing to increase the funds for the ESM or the EFSF; the IMF is demanding it as a precondition of additional aid. The G-20 meeting appears not to provide any further funds for Europe until Europe has provided more themselves. It is getting down to a "shut-up or put-up" moment for Germany as there is obvious serious dissension in the German Parliament on the next round of the Greek bailout package and also difficulties in the Parliaments of Finland and the Netherlands.
My advice is to put all of the headlines aside because they are not accurate. No deal has actually been struck and there is just the possibility of one at present. The PSI is also nowhere near certain. There has certainly been a proposal made with innumerable and probably impossible conditions to be met by Greece including a demand for a Constitutional change, which under the current Constitution, cannot even be voted on until 2013. I often wonder if Europe really wants to bail Greece out or if Germany is not forcing so many conditions that they are trying to have them exit the Euro on their own so the Germans are not seen as the Lord High Executioner; to quote Mr. Gilbert & Sullivan.
[ZH: close - Germany is likely hoping that Greek creditors holdouts, as discussed here a month ago, will block the PSI transaction, and as a result push Greece into insolvency. This would achieve the German goal, and further shift the blame on "evil speculative hedge funds" (we can already see the Nancy Pelosi statement), who however will receive assurances from the proper channels that nothing bad will befall them even as they are blasted in public.]
The debt payment of March 20 looms for Greece while the IMF now says they will not discuss their part of the Greek loan until March 13. If the IMF only funds $17.4Bn as suggested by the German Finance Minister then the Eurozone will have to come up with even more money which no nation in Europe has yet approved. At then end it is going to get quite messy in my opinion with so many forces converging at the March 20 juxtaposition. You may hold what opinion you like about all of this but I urge caution and some additional cash on your table as this may not play out how anyone expects it.
"Very few beings really seek knowledge in this world. Mortal or immortal, few really ask. On the contrary, they try to wring from the unknown the answers they have already shaped in their own minds -- justifications, confirmations, forms of consolation without which they can't go on. To really ask is to open the door to the whirlwind. The answer may annihilate the question and the questioner."
Global Finance: EU's Rehn: G-20 Must Provide Roadmap For Extra IMF Contributions
2012-02-25 18:06:48.508 GMT