PIIGS Go To War: Spain, Portugal Slam Tsipras' Accusations Of "Conspiracy Plot" To Overthrow Greek Government

Just when things seemingly couldn't get any stranger in Europe, we open a whole-new bizarro chapter.

Back on February 1, when the negotiations, or rather posturing, surrounding the Greek bailout extension was at its peak, we reported something peculiar: of all the countries in Europe, it was none other than France, seemingly tired of walking in Germany's shadow, that announced it was "prepared to support Greece" in its debt negotiations.  "France is more than prepared to support Greece," French finmin Sapin said, adding that Greece’s efforts to renegotiate were "legitimate." Sapin urged a "new contract between Greece and its partners."

Of course, this quickly led nowhere because as everyone knows, France is irrelevant in Europe and only Germany's opinion matters: Germany, which only agreed to a Greek bailout extension, when all of Syriza's demands were crushed, and the Tsipras government is not merely a shell of its pre-election promises, and in many ways, just a continuation of the previous Samaras regime. As such, the Frencsh support of a Greek debt writedown, understandable since it is none other than France whose socialists will one day sooner or later require a comparable debt negotiation, was duly noted... and promptly ignored:

However, what was even more peculiar is that it was the financial peers of Greece, the other insolvent PIIGS, particularly Spain and Portugal, who exist only thanks to the goodwill of the ECB buying up their bonds (or else watch as their economies implodes overnight once the "sex and drugs"-boosting facade of their GDP is stripped away) that took a far more hard-line approach toward Greece, and in fact were just as harsh on the Greek debt renegotiation proposal as Germany itself.

Yesterday Tsipras made clear his displeasure with the betrayal of what were formerly his socio-economic insolvent equals quite well-known, when he accused Spain and Portugal on Saturday of "leading a conservative conspiracy to topple his anti-austerity government, saying they feared their own radical forces before elections this year."

As Reuters reports, in a speech to his Syriza party, Tsipras turned on Madrid and Lisbon, accusing them of taking a hard line in negotiations which led to the euro zone extending the bailout programme last week for four months.

"We found opposing us an axis of powers ... led by the governments of Spain and Portugal which for obvious political reasons attempted to lead the entire negotiations to the brink," said Tsipras, who won an election on Jan. 25.


"Their plan was and is to wear down, topple or bring our government to unconditional surrender before our work begins to bear fruit and before the Greek example affects other countries," he said, adding: "And mainly before the elections in Spain."

This is not surprising: after all as previously reported, Spain's new anti-establishment Podemos movement has topped some opinion polls, making it a serious threat to the conservative People's Party of Prime Minister Mariano Rajoy in an election which must be held by the end of this year.

Rajoy went to Athens less than a fortnight before the Greek election to warn voters against believing the "impossible" promises of Syriza. His appeal fell on deaf ears and voters swept the previous conservative premier from power.


Portugal will also have elections after the summer but no anti-austerity force as potent as Syriza or Podemos has so far emerged there. In an interview published before Tsipras made his speech, Prime Minister Pedro Passos Coelho denied that Portugal had taken a hard line in negotiations on the Greek deal at the Eurogroup of euro zone finance ministers.


"There may have been a political intention to create this idea, but it is not true," he told the Expresso weekly newspaper.


Passos Coelho aligned himself with euro zone governments which have called for policies to promote economic growth but without trying to walk away from austerity as in Greece.  "We were on the same side as the French government, with the Italian and Irish governments. I think it's bad to stigmatize southern European countries," he said.

It's bad, but the very next day both Spain and Portugal rushed to cry in Brussels, when both nations demanded that the EU "arbitrate" and respond to Tsipras' allegations, in the process essentially validating his accusations. The same EU which orchestrated the entire farce to begin with.

As Bloomberg reports, "Pedro Passos Coelho and Mariano Rajoy request response from EU after Greek premier Alexis Tsipras said that the two southern European countries were trying to cause the downfall of his government during recent talks, a spokesperson for Rajoy, who asked not to be named citing govt policy, says by phone." Portugal, Spain sent a letter on the matter to the European Council and the European Commission

To be sure, none of this will result in either government retracting its statements (especially since Greece now only has rhetorical "conquests" to fall back on having given up all leverage to German by admitting it is unable to quit the Eurozone, i.e., the biggest trump card, and bluff, it may have had), but it will lead to even more animosity, only no longer between the European "North" and "South", but among the Peripheral nations themselves, as the political bickering redirects anger from Merkel and the ECB, and toward other Mediterranean countries. Perhaps just as Merkel wanted from the beginning.