Monday, June 29, 2015

Never On Sunday

Greek Odyssey
Εμείς δεν χαμήλωσε το βλέμμα, αλλά έδωσαν τη ζωή μας για να σώσει την Ελλάδα, όταν η μοίρα της κρεμαστεί σε κόψη του ξυραφιού.

We did not flinch but gave our lives to save Greece when her fate hung on a razor's edge.  
--  Cenotaph at the Isthmos

The current Odyssey of the Greek economy and its citizens can be summed up thus: The world's economy was given a 9.0-Richter Scale shock in 2007 - 2008, courtesy of the Bankster class. In the fall of 2009, Greece revealed that it had been understating its annual budget deficit figures for years -- meaning it's National Debt was also large -- then, approximately 175% of its Gross Domestic Product.

Greece was then shut out from borrowing in the financial markets -- and by the spring of 2010, the country looked as if it might have to declare bankruptcy. That could destabilize other EU countries whose internal finances were also shaky -- Portugal, Italy, Spain;  France wasn't far behind. Iceland's economy had already imploded, and Ireland's was preparing to.

The European Union was created as a cooperative structure based on trade, a single currency, and a European Parliament to speak with one voice to the rest of the world. It was the only way Europe could maintain political and economic sovereignty as a whole, against economic juggernauts like the United States, China, and the former Soviet Union (i.e., "Putinlandia").  The Bankster-created financial crisis threatened, by destabilizing the economies of weak members like Greece, to blow the EU apart, and its political leaders (Germany's Chancellor Angela Merkel most prominently) were determined not to allow that to happen.

Per the New York Times, "To avert calamity, the so-called [T]roika — the I.M.F., the European Central Bank (ECB), and the European Commission — issued the first of two international bailouts for Greece, which would eventually total more than ... $264 billion." There was other money at stake, too -- loans to Greek businesses and institutions, principally from German, and French, banks.

But taking the Troika's bailout money meant Greece had to accept austerity measures -- deep cuts in government spending (reductions in government pensions, government workers), and steep tax increases. Greece would also have to restructure its economy by reducing the size of its government, curbing tax evasion, and "making Greece an easier place to do business".

This last included such things as maintaining a high VAT rate on business being done in the offshore Greek islands, and selling ownership in the country's electric utility, and its principal port of Piraeus, to Oligarch vultures "investors". The Greeks weren't wild about any of it, needless to say.

Austerity was insisted on by EU leaders like Die Eisen Kanzellerin Angela -- because the "PIGS" (and that's the term which the press in more economically sound, core EU countries referred to them) -- EU members Portugal, Italy, Greece and Spain -- had been "profligate" and irresponsible spenders during the Go-Go, "Lil' Boots" Bush years of shadow banking and Derivatives fun.  

(Even during this current crisis, it's interesting to note how the English-language media of core EU nations [BBC, Deutsche Welle; Financial Times; France24], portray the Greeks as being the architects of their own misfortune, 'coming back to the ECB with an outstretched hand' for more money, unreasonable in negotiations, with broad hints that they should just take their Austerity medicine and stop whining because it's all their fault.)

And because they had been imprudent and foolish, Austerity was what they would have to accept before their stern, Northern European uncles would give them a loan. Accepting harsh measures would mean a financially stronger EU in future, its proponents said. The problem, of course, is that austerity utterly and completely fails to do what it claims to do -- stimulate private economic growth and lead to a slow return to higher standards of living.

Greek national unemployment rose to 25% (fifty per cent, for people under 25) and stayed there. Pensioners were forced to live with less. Businesses failed. After 2010, there were five separate "crises" when the Greek government might default on payments to the $264 Billion they had been loaned. Each time, the Troika restructured the terms of those repayments -- and each time, demanded further austerity controls be instituted. 

I've barked about this current situation before. Ultimately, the Greek polis revolted, and replaced a succession of Center-Right governments (which had supported Austerity) by electing a majority of Leftist Syriza party representatives to the Greek parliament. Alex Tsipras, the Greek Prime Minister, and his finance minister, Vanis Varoufakis, have attempted to restructure their $264 B debt with the Troika -- they want to reduce or eliminate the austerity controls; the Troika has said no.

There will be a default on loan payments owed to the ECB today (not so big a deal, but a symbolic, Rubicon-style line crossing). This coming Sunday the Greeks will vote to accept the EU/Troika's terms to restructure their $264 B debt and its austerity controls (a "Yes" vote), or to vote "No", which will most probably lead to the fabled "Grexit". We'll see.

This isn't the harbinger of doom that some believe it to be (I could be wrong; Dogs can be); this isn't Ragnarok or even October of 2008. There will be a sell-off in equities (which I'm sure hedge fund managers are positioning themselves to take advantage of), but people are still partying like it's 1979.
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MEHR, MIT ANGELA - HOO HOO HOO! AUS GEMACHT:
 As default looms, Merkel rules out more negotiations with Greece

(Reuters)  German Chancellor Angela Merkel ruled out new negotiations with Greece until after it votes on a proposal from creditors, leaving virtually no hope left to avert a midnight default despite a plea from Athens for a last-minute bailout extension... euro zone finance ministers called a conference call (1:00 a.m. EDT) to discuss the Greek request.

Merkel said there could be no new negotiations until after a July 5 referendum that Greek Prime Minister Alexis Tsipras has called on an offer made last week by creditors, which Tsipras has told Greek voters to reject. Tsipras, who says the creditors' proposals ... would ruin Greece, responded with a counter-proposal requesting a two-year deal covering funding support and debt restructuring, an issue the lenders have so far been reluctant to tackle.


[Note: The Greek government has requested an emergency disbursement from the European Stability Mechanism (ESM), set up after Greece had received the $264 B in bailout loans from the European Central Bank and which, technically, should be available to the country. It's more complicated than that, and would drag all negotiations between the Greeks and the Troika back to square one, but they did ask and now have been told No.]


... one well placed Eurozone official [said] there was "no way" euro zone finance ministers would release funds in time for the IMF payment [today, June 30th]. Merkel, whose country is Greece's biggest creditor, made clear she believed time had run out. "This evening at exactly midnight Central European Time the program expires. And I am not aware of any real indications of anything else," she told a news conference. She later said Athens would be to blame for allowing the bailout program to expire.
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MEHR AUCH, MIT "NUN WAS IST AUCH SCHON WIEDER LOS?" HOO HOO HOO!, usw.

(Note: Man, this is like Liveblogging.)

(Reuters) A defiant Prime Minister Alexis Tsipras urged Greeks on Wednesday to reject an international bailout deal, wrecking any prospect of repairing broken relations with EU partners before a referendum on Sunday that may decide Greece's future in Europe.

Less than 24 hours after he wrote a conciliatory letter to creditors asking for a new bailout that would accept many of their terms, Tsipras abruptly switched back into combative mode in a television address.

Greece was being "blackmailed" ... "A 'No' vote is a decisive step toward a better agreement that we aim to sign right after Sunday's result," he said, rejecting repeated warnings from European partners that the referendum would effectively be a vote on whether Greece stays in the euro or returns to the drachma.

... The head of the currency zone ministers' Eurogroup, Jeroen Dijsselbloem, said he saw "little chance" of progress after Tsipras's latest comments ... However even if negotiations do restart after the referendum, Germany and others made clear that any talks on a new program would have to start from scratch with different conditions.

... "[The current Greek] government has done nothing since it came into office," German Finance Minister Wolfgang Schaeuble said in a speech in the [Landstag] in which he accused Athens of repeatedly reneging on its commitments.

... [In Greece] Of those polled before the announcement of the bank closures, 57 percent said they would vote "No" against 30 percent who would vote "Yes". However among those polled after, the "No" camp fell to 46 percent against 37 percent for "Yes".

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