Wolfgang Schäuble: Ask Not What Germany Can Do For You, Ask How Many Government Workers You Can Fire

Tyler Durden's picture

And it seemed like the most innocent case of detached retina ever. On Friday, newly elected Greek PM Samaras had to be rushed to the hospital due to the rather peculiar ocular complication, only to be followed promptly by the new Finance Minister Vassilis Rapanos fainting and also being given urgent medical care. Both are procedures that require a few hours of inpatient treatment. Yet judging by the implications these two freak occurrences have had, one would image that both patients are comatose and on the same ventilator that kept former Egyptian president Hosni Mubarak half alive, half dead a week ago. The punchline, however, is that this may be the only case of detached retina in modern history that costs a country €5 billion.

From Kathimerini:

"The health problems of Prime Minister Antonis Samaras and new Finance Minister Vassilis Rapanos this weekend are changing the government’s timetable and postponing the visit of the representatives of Greece’s creditors by a week, according to state-run TV. The hospitalization of the two very people the inspectors of the European Commission, the European Central Bank and the International Monetary Fund – collectively known as the troika – wished to meet, means that the latter had to put off their visit that was originally planned for Monday."

In other words, the Troika which was supposed to come to Greece tomorrow to evaluate what little progress may have happened in order to release more cash to the insolvent country, will not have to wait until after the latest and greatest European summit, where while everyone was expecting for absolutely nothing to be decided (and certainly not the European Federalist state which is the only development that can keep the Eurozone together), suddenly the very fate of Greece in the Eurozone is once again at stake and may be decided as soon as next Friday.

State television channel NET reported on Saturday that the troika will now arrive early next month, which is after the European Union summit scheduled for June 28-29 in Brussels.

This will of course postpone further the disbursement of the next loan tranche for Athens, that was due for June and amounts to 5 billion euros.

 

Given that Samaras and Rapanos will stay in hospital until Monday - the former in order to recover after an eye surgery and the latter for tests to establish the reasons of his fainting on Friday – it remains unclear whether Samaras will be able to travel to Brussels for the summit and when Rapanos will swear in as Finance Minister.

Well, the detached retina may have been a fluke, and surely anyone would faint when seeing the Greek cash ledger, but adding insult to injury, and making some wonder about the odd timing of these events, is that it is suddenly becoming public knowledge what was previously only whispered in dark corridors:  namely that Greece was pretending to be reforming in exchange for money that Europe was pretending to be paying Greek society.

An AFP report observes that "Greece breached the rules of its EU-IMF loan agreement by taking on some 70,000 public sector staff in two years, undermining efforts to reduce the state payroll, a report said on Sunday."

To Vima weekly said the hirings in 2010 and 2011 were highest in local administration, health, the police and culture, where the number of employees actually increased.

 

It cited a report from a permanent mission to Athens of the so-called 'troika' of international creditors, the EU, IMF and the European Central Bank, and data given by outgoing finance minister George Zannias.

 

An unidentified troika official told the daily: "While they legislated rules to reduce the number of civil servants, they were bringing people in through the window."

It appears that all those myths of austerity were just that (as we have explained time and time again): myths.

The official added that over 12,000 people were hired by local councils even as a cost-cutting initiative merging municipalities was underway.

 

Zannias' report to the new government coalition after June 17 elections allegedly reveals that although over 53,000 civil servants retired in 2010, the overall number of state staff was almost steady at 692,000 people, To Vima said.

 

In this case, most of the vacancies were filled immediately, the daily said.

 

Similarly, although another 40,000 staff left in 2011, the net reduction on the payroll was only 24,000.

 

By this time, Greece had promised to only hire one civil servant for every five that left.

 

But over 16,000 people were hired instead of the allowed 8,000, To Vima said.

 

The report came ahead of an expected EU-IMF audit starting on Monday.

And while it is true that the bulk of the Greek "bailout" money went primarily to pay Greek creditors and the ECB, a good 20% of the cash did make its way into the Greek economy... Somewhere. Perhaps soon someone will ask just where. Did the politicians in charge of the country in the past two years steal all of that cash as well?

What happens when the Greek society, now with absolutely no hope left, and more despondent than ever, finds out that its leaders once again betrayed it? Just how many Golden Dawn members will there be in the next government election, once this government too tumbles.

Tying it all together, however, and making sure that Samaras' cabinet is doomed before the ink of its formation documents is even dry, is everyone's favorite Schrodinger finance minister (Now you see a bailout, now you don't): Germany's Wolfgang Schauble who just told Greece for the final time: no mas.

From Reuters:

Greece's new government should stop asking for more help and instead move quickly to enact reform measures agreed to in return for previous bailouts from its European partners, German Finance Minister Wolfgang Schaeuble said on Sunday.

 

Schaeuble told Bild am Sonntag in unusually blunt language that Greece has forfeited much of Europe's trust during the sovereign debt crisis, as reflected in an opinion poll covering the euro zone's four biggest nations and published in the paper.

 

"The most important task facing new prime minister (Antonis) Samaras is to enact the programme agreed upon quickly and without further delay instead of asking how much more others can do for Greece," said Schaeuble, a close ally of Chancellor Angela Merkel and Europe's most powerful finance minister.

 

Greece's new three-party coalition government said on Thursday it would renegotiate the terms of the 130-billion-euro bailout deal that is helping the country avoid bankruptcy.

 

The coalition's platform particularly challenges euro zone paymaster Germany, which has offered to adjust the lifeline's terms to make up for time lost as a result of two Greek elections since May, but refuses to revise it radically.

 

In a separate interview on Sunday published in Der Spiegel news magazine, Schaeuble again ruled out any form of collectivised debt such as euro bonds and defended the German government's hard line on that.

 

"It's because you cannot separate the responsibility for decision-making from the liability," he said when asked why Germany was so adamantly opposed. "That's true for almost everything but especially when it comes to money.

 

"Anyone who has the chance to spend someone else's money will do that," he added, before telling the reporter: "You'd do that and so would I. The markets know that. And so from that point of view they wouldn't be convinced by euro bonds."

So while wild speculations about this and that and the other future of the Eurozone continue, here is the bottom line:

Germany will continue pushing every peripheral country closer to the brink (which helps Germany courtesy of increasing pressure on the EURUSD, which benefits the only real net exporter and mercantilism beneficiary in the Eurozone - Germany - by now only absolute economic dilettantes don't seem to understand this) until such time as PIIGS (and then all the other formerly core - here's looking at you socialist "fairness doctrine" entrants) come begging for any scrap that whoever is in charge of Germany will be willing to hand them, in the form of a Debtor In Possession loan of course, and thus accretive to Bunds. If that means presenting their gold to the German Cash4Gold pawn shop under the guise of a Redemption Fund or whatever it is called, so be it. Unless of course, everyone keeps demanding that Germany bail them out. In which case Merkel will just unpack that brand spanking new shipment of DEMs and be done with it.

The only winner out of this: Syriza's Tsipras who is sitting and cackling like a madman as everything is happening precisely as had been anticipated. Until the moment, that is, when he is elected to lead the country. At that point we are not sure whose life will be more of a living nightmare: his... or whoever is elected president in the US 2016 elections.

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jcia's picture

Fire them all. Only keep the government agencies that can manage their Balance Sheet to be kept at 0.

Skateboarder's picture

No one's going anywhere - just another drab episode of the Euro sitcom guys.

knukles's picture

They said they'd only hire one replacement for every five public servants who left.
True.
100% of the departures are classified as public servants while 100% of the hires have been classified as disabled retirees on holiday.

Just what the fuck do those irascible demanding Germans want?  The Greeks have fully complied with their end of the bargain.

Colombian Gringo's picture

Stupid Greeks deserve the German Dick in their mouths for re electing the same greek politicians. criminals  that brought them to this place firstly.

Skateboarder's picture

From what I understand from all the hullabaloo over the last few months it looks like Greeks are all ducks, and they have been sitting for a while.

UP Forester's picture

Funny all the news stories with cancer patients not getting meds, but the two highest mafioso get immediate treatment.

Funny.

sunaJ's picture

* - if - there are 2016 elections.

sablya's picture

What do you mean?  Obama will have the constitution changed so he can be elected God.

 

BTW, first time I've seen futures red in a long time.  Kind of refreshing to see.

Offthebeach's picture

You have to hire more people to manage the firing.

vast-dom's picture

for the final final final time...........ad infinitum.....and so it goes......wake me when the eurozone keels over please....

CrashisOptimistic's picture

"I can't see!  I can't see!"

Mr. Prime Minister, Germany has agreed to the next tranche of payment.

"I can see!  It's a miracle!!"

 

toady's picture

"I can't see, I can't see"!

"What's wrong"?

"I got my eyes closed"!

Rusticus's picture

While a detached retina is serious, it's his detachment from reality that is terminal.

mvsjcl's picture

"I can't see, I can't see"!

Not watching where the huskies go.

HD's picture

With our system of governmentology and cronyomics you must create larger government and hire even more workers to "study" how many workers to let go. After a few years the new "how many people should we fire" agency reports it can't do it's job without more funding and yet more workers.

Bureaucracies - government or otherwise, always get bigger until they are crushed by their own weight.

falak pema's picture

If you fire too many you kill consumption. Its a bitch to be in recession as the spiral gets worse. Devaluaton is the way out. Pronto!

Its time for the Germans to realise their banks and french banks are gonna get singed on this if not burnt. Next fire is Spain/Italy. That is the true divide between world depression and world depression squared or cubed. Or Nuked. The ECB has to go to Eurobonds one day and fiscal harmony before that. But time waits for no one and debt drowns even the best swimmers.

Wolferl's picture

No German cares about banks. Banks are irrelevant in Germany. They all can go to hell. If you want to blackmail the Germans you´ve got the wrong arguement. Try another one.

Sudden Debt's picture

ALL YOUR SAUSAGES BELONG TO US!!
That bun doesn't taste that good anymore HHMMM??

Tirpitz's picture

"No German cares about banks. Banks are irrelevant in Germany."

The major problem - besides them money houses being bankrupt - is that banks control the government. Entirely. Ackerman celebrated his 60th year of Earthly destruction right at the teet of the [M|F]erkel.

fockewulf190's picture

Exactly. Most middle class Germans care about their own wealth, and with interest rates for savings accounts at half a percent on average, many are bunkering their wealth into hard assets like real estate, gold, and cash under the mattress. Few Germans own stocks because many were burned over the last 10 years and now avoid the market like the plague. Unfortunatly, many own life insurance policies and are being raped by the fees and the crappy returns. Business here has all but disappeared

People hate banks here just like most other western nations do. The really rich and the elite think otherwise, but of course when the shit hits the fan, their asses are safe because they own a shitload of real estate, gold and have piles of cash...all over the world.

The Age of Useful Idiots's picture

LoL! Another Bild reader who thinks he has an opinion.

If your bluff is called and the 1.3 trillion (minimum estimated) exposure detonates with all the derivatives on top of that exploding too, you won't have banks, an economy or a job. But at least you'll still have the Bild articles about trannies to read. And a very competitive DM.

Keep underestimating your Frankfurt boys thinking they'll just go to hell but let you live happily everafter, riding into the sunset and all that. By the time you realise who Merkel is working for, she will be winning an Oscar in Hollywood.

Good luck.

TruthInSunshine's picture

Falak Pema channels Paul Krugman.

Hey, Falak - Let's say that your "when one is in an extreme debt hole, laboring under the weight of an unbearable tower of bills not yet paid, the best thing to do is rack up some more debt, and use it to hire useless and unneeded government hacks that produce nothing of value..." theory is even remotely non-insane.

If you're Greece or Spain (it will be Italy's turn in less than 5 months, and France's in under a year, maximum), where are you going to get the money to hire more government hacks so as to "stimulate the economy?"

Oh, that's right. You would need to have your existing debt forgiven, you would need to have a very wealthy and generous neighbor provide you with large transfers of wealth (extracted from their own citizenry), and you could then go on pretending that you (and your now far less wealthy neighbor) are not going to have to go through the same exercise 6 months, a year, 18 months from now, and henceforth and forevermore.

And that's because you didn't bother to cure the disease that put you into your critical condition in the first place, did you? And a big part of the cause of the disease that put you into your critical condition was excess spending, as in spending more than you made, including deficit spending on expanding an already bloated and inefficient government sector, right?

 

So....yeeeeaaaaahhhh.....

Hire some more government workers and everything will certainly work out.

The Age of Useful Idiots's picture

Your name should be TruthInCliches.

Here is an exercise for geniuses like you. Imagine debt as a big, heavy stone. You have trouble moving that stone. If you shrink, will it be easier to move it?

 

Think about it and come back to me.

icanhasbailout's picture

A country that is consuming more than it produces needs to kill consumption or produce more. And nothing kills production like government. Firing as many government workers as possible is what every government should be doing right now.

knukles's picture

You oughta drop a note to the predident and clue him in. 

icanhasbailout's picture

an asteroid dropping on this President wouldn't clue him in

savagegoose's picture

they already tried firing  more gov workers. and somehow ended up with 77k on the payroll

lol

 

IBelieveInMagic's picture

What do you mean we are not producing anything? Look at all this debt that we have produced!

CrashisOptimistic's picture

Why is ZH still getting this wrong?

THERE ARE NO MORE BANKS INVOLVED!  PSI exercise erased them out to 30 year paper that they wrote down to nearly nothing.  THEY ALREADY TOOK THEIR HIT.

Greek debt is now ECB, EU and IMF paper.  It is THAT they default on.  There are no "banks" to accept loss now.  They already did.

Tirpitz's picture

Somebody might be holding the 25% after that unexpected, ominous 75% haircut. The new debt received in turn, after all, is guaranteed, and if these folks get shafted once more, they might forget about the fun of losing other people's money and turn away. Just like the Norwegian pension fund did.

post turtle saver's picture

Furthermore, "somebody" has promised not to "do something" if their guaranteed 25% remaining is delivered as promised along with other "commitments" that were made to sweeten the taste.

If "somebody" gets shafted again then "everybody" is going to be in deep trouble.

sablya's picture

That's absolutely not the case.  The banks are the central issue because they are the entities which hold the worthless collateral for the loans that will never be repaid.  They have fractionalized themselves into black holes.  I suppose one could say that a black hole doesn't exist but that would be a mistake, just get too close and you will be sucked into the bottomless pit yourself.

pain_and_soros's picture

I thought Germany kicked Greece out of the Euro on Friday....

guess it just never ends...

Sudden Debt's picture

Greeks use the civil service employment to force the voting process in the elections.
So I wouldn't be surprised that the rise in civil employment was to kick out Syriza.

Same here in Belgium where 35% of all working people work for the government. So whenever a politicians comes in who proposes to cut down the number they never get the votes.
All the private sector employers lost 15% of their future pensions a month ago and the public servants got a 20% raise in their pensions... Go figure...

For every job opening in the public sector, 400 applicants show up.
In the privat sector, the first on to show up for the job gets it because it takes a few months more before another shows up.

For example:
Private sector employee gets a 950 euro pension.
Public sector employee gets a 2500 euro pension. 25% higher than their last salary....

France... The same!
There they even want to let everybody who ever made more than 1 million a year pay extra taxes on THE PAST 5 YEARS because they profit from the system the most? Now when that isn't enough, it will go down to 500.000, 250.000, 100.000, 50.000, 25.000....

Can you imagine? HEY REMEMBER 2008 when you had a salary and only paid 52% income taxes on it and 21% VAT on the rest!? NOW WE WANT THE REST YOU PROFITEER!!

Either way the private sector must feel guilthy and will be squeezed out for the public sector.

And in all of this... Not a single public sector worker will ever say : MAYBE THE PRIVATE SECTOR IS PUNISHED TO MUCH!

Never will they say this! They even alteady said that the contracts say that it's normal they get their annual raises!

Socialisme sucks!!!

I could have made twice if I ever worked for the government over here!
The salaries are a outrage! And the service in return?! WHAT SERVICE?!?!?
They're a bunch of nitwitz!!

DoChenRollingBearing's picture

+ 1

Sudden Debt!  You could be just as easily be talking about California.

And it looks like Belgium, like California, has no will to correct itself.  Now California wants the private sector pensions to become more like the state pension system, complete lunacy.

knukles's picture

What private sector pensions?
Nobody gets them anymore.

Plus, the Govt Acctg Stds Board is ruling that govt pensions will have to be accounted for like the few remaining private ones... thereby "vaporizing" the false high funding illusions.

Shit DoChen, I'll take a CalPers pension any day.
They're gonna be cut dramatically. 
I was warning my uberliberal CA public employee buddies about this many years ago and they said there was nothing wrong with the economy, tax receipts were never gonna drop, public funds were well funded in spite of what I told them about the accounting gimmicks etc., etc., etc.

Now they look at me like maybe I'm the one cause the shit.
Fuck 'em
They can caddy for me.

And even if the pension payments are cut, they still gonna be living high on the hogster.

fonzannoon's picture

The private sector pensions are all being off loaded onto life insurance companies. It will work out fine. Yup.

Sophist Economicus's picture

Every single government pension and social security payment will be met.    As will the ultimate redemption of every federal bill/bond.    The real purchasing power of those payments will make folks those folks cry, but the governments will have satisfied the letter of the law.    That is why the deflationists crack-me-up.    Heck, if they were right, folks on unemployment, social security and pensions would become tomorrow's winners.   Doubt it very much....

Bobbyrib's picture

I argue that there will be temporary deflation. I do still think the US will monetize the debt, but unless Ben starts to print and soon IMHO we will continue to experience disinflation. After that deflation will hit.

fonzannoon's picture

it's possible. i just want to win the war.

stocktivity's picture

...and the stupid Germans will end up paying for it.

Sudden Debt's picture

Every private worker will pay for it. For now we're all just telling joke about it but it won't last.

caimen garou's picture

you gonna put an eye out with that 5 billion mister!

dbTX's picture

Government worker is an oxymoron

magpie's picture

I don't know why the Greeks with their skills in fraudulent accounting and tax evasion have not mastered the art of revising employment numbers. But you can't be perfect.

mvsjcl's picture

They have. You should see the REAL numbers.

CatoRenasci's picture

In Staub mit allen Feinden Brandenburgs!