Friday 10 February 2012

Greeks put off decision on austerity


Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected.
I hope it happens this year. Greece is in a position to open to doors of liberation to all of us, everywhere. -- MCR




This is a posting from 2 days ago
Postponed Due to 'Political Suicide'
Flag of Germany Burned, Could This be a Trigger?


7 February, 2012


Greece bailout talks that were postponed on Friday to Saturday, then Saturday to Sunday, then Sunday to Monday, then Monday to Tuesday. They have been postponed again, this time for a reason that makes perfect sense "Political Suicide".


As thousands of Greeks walked off the job in a general strike on Tuesday to protest stringent new austerity measures, there was a growing sense that the country was reaching a critical point in its efforts to survive the debt crisis. 

Greek political leaders postponed for yet another day a decision on an austerity package — including 20-percent cuts to base pay for workers in private companies and a loosening of public sector job protections — in exchange for the billions in loans Athens needs to prevent a default in March. With elections looming as soon as April, the parties fear that they are essentially being told to commit political suicide to save the country.

If that indeed is the case, analysts here say, it is not clear what will replace them, making Greece a potential laboratory for a volatile mix of austerity, populism and social unrest.

Not that the old order, widely derided as corrupt and inefficient, is likely to be deeply mourned.

For most Greek voters, the two larger parties participating in the fragile tripartite coalition of Prime Minister Lucas Papademos — the Socialist Party and the center-right New Democracy — were already drained of political capital before the debt crisis by decades of self-interest and corruption. That has now been capped by two years of unrelenting austerity that has hurt most Greeks but has ultimately failed to revive the system, or even change it in any significant way. 

With unemployment at 19 percent, businesses closing, credit scarce and the proposed new wage cuts expected to further decimate the shrinking middle class, the hard left and extreme right are rising. 

With Greek popular anger at the country’s foreign lenders rising — a German flag was burned in front of Parliament at a demonstration on Tuesday — the Socialists and New Democracy are treading a fine line: They want to push back against the troika enough to regain some political capital — and keep more Greeks from falling into poverty — but not push hard enough to precipitate a default.

If the Greek political leaders do not agree to accept the new austerity measures in the coming days, Greece will run out of time to complete a broader deal for the voluntary write-down of Greek debt before a bond comes due on March 20. If Greece cannot pay the bond, it will default, which could result in its leaving the euro zone, among other ill effects. 

Most Greeks say they have lost what little faith they had in the political system. “None of the parties we’ve been voting for have anything to offer,” said Vassiliki Karanasou, 42, an employee in a biscuit factory north of Athens who was participating in a demonstration outside Parliament on Tuesday.

Eventually, Will Come a Time 


Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected.

Flag-Burning Trigger

For Greece, "eventually" may be at hand. The only thing missing is a party leader willing to stand up and tell Germany to go to hell.

That is not a comment on the desirability of  telling Germany to go to hell, rather a comment that is likely to happen. However, the austerity measures imposed by Germany and the Troika cannot possibly work, even though the worker reforms are badly needed.

What is causing the revolt? The sad irony of this mess is the flag-burning and latest strike is over the one thing that is needed: work rule reform.

The flag-burning incident could easily be a trigger. 

All sides handled this very poorly straight from the get-go. Greece would have been better off defaulting 2 years ago and the EMU and ECB much better off to simply let it happen. Now Greece is totally and completely trashed, having agreed to austerity measures that cannot work and resisting work rule changes that can work, but only years down the road.


and from today



Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote

9 February, 2012
Germany's "Official Denial"

If you seek confirmation that Germany is actively trying to force Greece out of the Eurozone, strong evidence appears in the form of an "Official Denial"


German Chancellor Angela Merkel said on Tuesday she did not want to see Greece being forced out of the euro, warning that this would have "unforeseeable consequences."

"I will have no part in forcing Greece out of the euro," she said in response to a question from a Greek student at a meeting with young people in a Berlin museum.

"We don't do it to make things difficult for people, what would be our interest in doing that? But we want to reach a point where Greece can, with European help, live off its resources," said Merkel.

"Nobody wants to force reforms on them from outside," she said.

"Official Denial" Theory

For a discussion of the "official denial" theory, please see Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied)


Cede Budget Sovereignty Roadblock

Right in line with "official denial" theory, Germany started placing as many roadblocks as possible on Greece.


Unfortunately for Germany, French president Nicolas Sarkozy shot down the idea. However, Germany would not let it drop and two days ago Merkel floated a similar idea disguised as a Spaghetti-O.

Spaghetti-O Roadblock


Schäuble Starts Salami Tactics

In addition to the Spaghetti-O loop, Eurointelligence discusses the "Salami Roadblock".

According to Financial Times Deutschland, Wolfgang Schäuble now wants the Bundestag to vote only on a fraction of €30bn out of the total cost of the second Greek rescue package of €130bn. He is supported by the finance ministers of the Netherlands and Finland who met as part of the secret meeting AAA-rated ministers. The reason for this unexpected move is that the coalition has reason to fear that the general exasperation about the lack of progress in Greece made it uncertain that it would be unable to get the necessary parliamentary for the whole package. Also the coalition wants to keep up maximum pressure on Greece. In Brussels the Berlin, the move was greeted with surprise and irritation, the paper reports.

Finance Minister Wolfgang Schäuble Calls For Vote

Courtesy of Google Translate, please consider Finance Minister Wolfgang Schäuble Calls For Vote

Greece is waiting for € 100 billion - but in the coming days, the federal government wants to release a maximum of 30 billion. This announcement Schäuble irritates the Euro Group.

The federal government wants to delay the comprehensive aid package for Greece. Finance Minister Wolfgang Schäuble (CDU) announced in the coming days initially provide only 30 billion euros to cover for banks, which suffered a cut debt. The release of an additional € 100 billion envisaged for the salvation of Greece to the Bundestag will not until further submitted to a vote.

Greece should get even more money?

Thus, Germany could once again gain time - either to wrest Greece in the meantime, further cost-cutting efforts, or even prepare a subsequent bankruptcy

Greek Deal Done?

Earlier today we heard Greece accepted a deal. Not so fast. The Washington Post reports German FinMin: Greek deal on spending cuts appears to not yet fulfill bailout conditions
That title was the entirety of the article.


IMF Says No Deal


IMF SAYS IT'S NOT FORCING AUSTERITY ON GREECE AS TALKS CONTINUE - BBG
RICE SAYS IMF "WELL AWARE HOW DIFFICULT' IT IS FOR GREECE - BBG
IMF'S RICE SAYS IMF MINDFUL OF `HARDSHIPS' IN GREEK PROGRAM - BBG
RICE DECLINES TO SAY WHAT IMF SHARE OF NEXT GREEK LOAN WILL BE - BBG
IMF SAYS 'PRIOR ACTIONS' LIKELY TO BE REQUIRED BEFORE FUND OK OF NEW GREEK LOAN PROGRAM - DOW JONES


Read that first bullet point carefully. We now have an official denial from the IMF. However, it is of secondary importance because it pertains to austerity measures and not a eurozone exit.

Also read the last bullet point closely. Now the IMF is placing roadblocks.

Zerohedge jumps to conclusions regarding the last bullet point "By the way, dear US taxpayer, the IMF - that's you." 

My take: Congress is not going to allocate any money for this boondoogle. 

Greece Forcefully Seeking to Dump Greece

In spite of denials, it is quite obvious Germany wants Greece out of the Eurozone. However, France and other countries do not. The IMF appears to be siding with Germany, and that is a big change.

If there is a deal, don't expect it to last. Greek elections are coming up, and even if they halt those elections (quite likely if a deal is reached), Germany will simply place more and more demands on Greece as soon as Greece misses budget targets (almost immediately).

Why These Games?

Germany seeks to absolve itself of any guilt for what happens to Greece. It wants Greece to make the exit choice, while placing as many roadblocks as possible to force Greece to do just that.

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