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

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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.