Wolf Richter www.testosteronepit.com [6]
On June 17, when Greeks try once again to choose their next government, they may decide their country’s fate—or not. One thing is for sure, whichever parties will be able to form a coalition government, they will push for more bailout billions, but this time, forget the conditions, the structural reforms, the austerity. Just give us the money. And however much we want. They’d watched how Spanish Prime Minister Mariano Rajoy had asked for a bailout ... after reassuring everyone with utmost sincerity and for the longest time that neither Spain nor its banks would need one.
Not a detail escaped the Greeks when, after the bailout meeting on Saturday, Rajoy proclaimed victory, saying he’d been offered €100 billion, no strings attached. That’s what Greek politicians wanted to hear—and they jubilated; the yoke of German-imposed structural reforms and austerity had been broken. It didn’t matter to them how much German, Finnish, and EU officials protested that that’s not how they understood the agreement; there were, in fact, lots of strings attached, they said, which makes you wonder if there was even an agreement.
But that sliver of hope, false as it may prove to be, hasn’t stopped the ongoing run on Greek banks. Companies and individuals have long been transferring practically every euro that wasn’t nailed down into foreign countries, and they have been stashing emergency funds under mattress or in boxes—for fear that euro accounts would be converted to drachmas over some weekend in the near future. And the few euros that still remain behind might be pulled out right after the election, if push came to shove. Greece is effectively being bled dry by its own people.
So the bailout Troika has put the Greek banking system on a transfusion. Lifeblood in the amount of €18 billion arrived last week. More money is available through the ECB’s Emergency Liquidity Assistance, which lends money via national central banks to local banks. However, the ECB has shrouded in mystery for how long and to what extent it would be willing to keep the transfusions going, worried apparently about throwing good money after bad.
And scams are cropping up to take advantage of the desperate need for funds that banks can no longer provide. On Tuesday, police arrested [7] three men and a woman, part of a gang whose members—posing as ministry employees, civil engineers, and architects—offered individuals and businesses access to large amounts of EU money to fund business projects, equipment purchases, or solar-voltaic installations, all logical hot-buttons in the EU realm of subsidies. For a fee. The racket had been going on for two years, and police estimated that they’d been able to con over €350,000 out of some gullible victims. Because, even in chaos, people seek opportunity.
And so Greece’s election may not decide the country's future in the Eurozone, but may simply prolong the extortion racket to keep the money flowing, freely this time, and in liberal quantities—efforts that the Troika may consider distasteful and brush off with disdain. But it’s not even certain that the winning party will have enough votes to form a governing coalition or that any parties could agree to form one. In which case, a third election would be required, a possibility that Antonis Samaras, leader of the conservative New Democracy, called “suicidal.”
Tourism, Greece’s second largest industry after the shipping industry, took another hit as tour-bus drivers went on strike; owners demanded that drivers take a 50% cut in pay on top of the 20% cut they’ve already suffered! And Greece is the model for Spain and Italy. Read.... Everything is Getting Gummed up in Greece [8].
And here is the hilarious but brutally truthful video from down-under comedians Clarke & Dawe that in 2.5 minutes summarizes better than anything else the entire Eurozone debt crisis. [9]