By Mark Grant, author of Out of the Box
“Oliver” returns to the stage in Athens
“It's him that pays the piper.
It's us that pipes his tune
So long, fare thee well
Pip! Pip! Cheerio!
We'll be back soon.”
-Oliver, Be Back Soon
The focus has shifted. The all seeing orb is now focused on Spain but it may well turn back to Greece soon. The loan money is exhausted again and the Greeks have elections lined up on Sunday, May 6 which is coincidentally the same day of the French run-off elections. To answer the question of at what point Greece might leave the Eurozone and return to the Drachma is relatively simple; it will be the day when the European loan spigot is shut off. Greece will pander, promise and proclaim until that point and then they will say, “have a nice day and thanks for all the fish.”
The Greek banks announced total losses of $37.22 billion on Friday. The Hellenic Financial Stability Fund had been loaned $33 billion by Europe and so that money is now all gone and additional debt of $4 billion have been taken on at the ECB as the scheme to protect the German and French banks and now the balance sheet of the ECB continues. Some of the conditions for all of this are earmarked in a leaked report from the European Commission. These include a 15% cut in private sector wages and a Germanic imposition of a collective bargaining scheme along with a mandated privatization of all Greek power utilities.
Last Friday, Poul Thomsen, the head of the IMF’s Troika team stated that Greece would not meet its targets once again and that he was not sure if Greece would fulfill any of the conditions that had been proscribed by the IMF. Later on the same day the head of Pasok and the former Finance Minister did a TV interview in Athens where he stated that Greece had not emerged from the crisis and that it could still exit the Euro and return to the Drachma. Then in a rejection of everything the Troika had demanded so that Greece could receive additional funds he said that Greece would not accept any new taxes nor will they cut salaries or wages from the present levels. So there you have it; they got the money and now “ta-ta and bye-bye and a little more Ouzo if you please.”
So after the Greek elections what are we likely to find; a new play brought to you live on the Athens’ stage. A Greece that has returned to its own currency and most likely not in the Eurozone at all unless more money is given. The recently issued new Greek debt; worthless or close to it. The old debt now held at the IMF, the ECB and the EIB; worthless or close to it. A wonderful show and a whole host of characters and a play that we will never forget.
Why should we break our backs
Stupidly paying tax?
Better get some untaxed income
Better to pick-a-pocket or two.
-Fagin, Oliver