Nathan McDonald for Sprott Money [11]
We may all be witnessing the beginning of the end of the European Union. For years, experts have stated that it is unsustainable for Greece to stay in the European Union. For years, those experts have been proven wrong.
The assumption has been correct in the fact that Greece is bankrupt and is bringing down the collective of remaining members in the union. They have been correct in stating that it is a ticking time bomb.
What they failed to realize, was how far the bureaucrats in Brussels were truly willing to go in order to keep their vision of a unified Europe together. No matter the cost or the price tag.
Therefore, I will be very surprised if tomorrows meeting will change this reality. Greek finance Minister Yanis Varoufakis makes his debut in the European Union tomorrow. He comes with guns blazing, as he and his party are seeking a massive easing in austerity measures placed on them by foreign financial lenders, including the EU and the IMF.
They are making demands, demands that the EU has been resistant to accept thus far. They know the cascading effect that it will have on the European banking sector. An industry that is already being punished by the crumbling Russian economy, and is in a much more dangerous situation than many would like to admit.
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Yet, will the EU be able to resist their demands? Will they allow Greece to leave the EU and ultimately default on its debt? It is doubtful. These unelected leaders will do just about anything to stay in power and continue until their dream comes to fruition.
Given this, it comes as no surprise to hear that the European Union is considering buckling under Greek demands. They are hoping for a decision to be reached by Monday.
The European Union and Western leaders are beginning to change their tune, given the recent threat uttered by Greek Defense Minister Panos Kammenos, who stated that Greece has a “plan B”, should the EU not ease austerity measures and offer additional aid. Reuters [12] reports:
“What we want is a deal. But if there is no deal - hopefully (there will be) – and if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source,” he told Greek television show that ran in to early Tuesday. “It could the United States at best, it could be Russia, it could be China or other countries,” he said.
The last thing Western officials want, is for former allies to change alliances and switch to what they consider “the other side”. Most notably, being Russia, who Western leaders are in the midst of potentially bringing to their knees due to the crippling low price of oil and economic sanctions.
They know that if they do not meet Greek demands, or at least somewhere very close to what they are asking, then Greece has a strong possibility of turning to Russia for aid. The true issue with this, is a fact that I’ve pointed out in the past. It only takes one member of the European Union to veto sanctions. A tool, that the EU has been using to keep Russia in check, due to its involvement in the Ukraine and Syrian wars.
If aid is not given, Greece will be forced into the waiting arms of Russia, who will be more than happy to assist the Greek people, in exchange for an ally in the EU, which is currently something Russia greatly needs.
EU officials cannot allow this to happen, it will force them to remove Greece from the EU, which could lead to a chain of events that would send the EU spiralling out of control, crushing their dreams of a unified Europe and all that they have worked towards, for decades.
Nathan McDonald for Sprott Money [11]