Sunday, 26 August 2012

The Greek crisis

Letting Greece Twist In The Wind
Wolf Richter

24 August, 2012

With impeccable timing, it seeped to the surface that a group of ten experts at the German Finance Ministry is studying ways to deal with a Greek exit from the Eurozone. Though rumors about a “Plan-B” had been circulating for months, the leak provided details. A Finance Ministry spokesperson clarified helpfully on Friday, rather than denying it, that the group has been in existence for over a year. Impeccable timing because it happened as Greek Prime Minister Antonis Samaras was arriving in Berlin for his begging and charm expedition. German Chancellor Angela Merkel must have smiled. The heat was on.

They should be soul mates, Samaras and Merkel, both belonging to conservative parties. But during the prior government when he led the opposition, he fought tooth and nail against her sacrosanct structural reforms. So their schmooze on Friday must have been quite something. But at the press conference, she said, “I want Greece to remain part of the Eurozone.” And she knew of “no one in the governing parties who doesn’t want that.”

Yes, she said that! Despite the onslaught of politicians in her government who over the past months promoted Greece’s exit—even hours before the meeting, on ZDF’s morning TV show. Maybe Merkel didn’t watch it. “We cannot provide more money,” Volker Kauder, Chairman of her CDU/CSU parliamentary group, told Germans nationwide. And Greece’s exit, he added, would be “no problem for the euro.”

Nevertheless, she soldiered on: “Commitments must be kept.” And warned, “Words must be followed by deeds.” She was “deeply convinced” that the Samaras government would do “everything” to solve the problems, but any decision would have to wait “for the Troika report.”

Ah-ha. Inspectors the EU, the ECB, and the IMF will spend much of September combing through Greece with a fine-toothed comb to come up with a report, the big report, the one that would determine if Greece deserved more bailout billions. The report would be so big that every politician, even Merkel, could hide behind it. No one would want to be the one to kick Greece out. But the faceless Troika report issued by a triple-layered, non-democratic bureaucracy could take the heat [read.... Greece Prints Euros To Stay Afloat, The ECB Approves, The Bundesbank Nods, No One Wants To Get Blamed For Kicking Greece Out].

She laced her speech with meaningless expressions of support but didn’t commit to anything. It was a good beginning, she said, but much work remained to be done—sounding like a broken record.

But she can’t change her tune easily. In a poll released on Friday, 72% of Germans were against giving Greece the third bailout package that would be required if Greece were given more time to implement its reforms; 67% were against giving Greece more time, and 61% thought Greece should return to the drachma. So a switcheroo would be costly for her.

We’re a very proud people, and we don’t want to be dependent on borrowed money,” Samaras said when it was his turn. “We don’t want more money. We need time to breathe.” Then he lamented the “toxic declarations” by a “high-ranking politician”—a jab at vice-Chancellor Philipp Rösler, Volker Kauder, or any of the others. How could they publicly discuss that Greece would revert to the drachma? That’s why no one wanted to invest in Greece. It was rendering the privatization of state-owned enterprises impossible. Greece needed investment, not austerity, he said.

So Merkel grabbed his balls and yanked: She’d been reading the Greek tabloids..., she said—the papers that had been depicting her with Hitler mustache and Nazi uniform—as if to say, look, this is politics ... tit for tat. Then she jabbered about “two realities” in Germany and Greece that would have to be brought back together.

He deemed the discussion “especially constructive.” For Merkel, it was “intensive.” In other words, they hadn’t agreed on anything. Samaras packed up his bags empty-handed. Nothing would happen before the Troika report. And then Merkel could hide behind it. She has been on record from day one that she wanted Greece to remain in the Eurozone. No one could blame her. Greece would run out of money, default, and revert to the drachma on its own. And voters couldn’t blame her for throwing more of their money at Greece to keep it in the Eurozone another year or two. So maybe she’d hang on to power, something almost no head of state has been able to do in the debt crisis.

Yet, hope is once again gushing through the system that the debt crisis could be wished away by a nod from Merkel, a wink from the Bundesbank, or a click of the mouse at the ECB. But in Greece there has been an incident....  Euro Optimism Surges, A Greek Tax Revolt Flares Up: It’s Decision Time, Again.

Merkel and Hollande sidestep Greece's plea for breathing space
Angela Merkel and Francois Hollande pledged to keep Greece in the eurozone, but offered Greece no immediate relief from its current regime of painful austerity measures.

25 August, 2012

Francois Hollande, the French president, said that Greece must stay in the eurozone but must first prove it is determined to overhaul its economy so Europe can do its part and move on from the debt crisis.
Following talks with the Greek prime minister, Antonis Samaras, on Saturday, Mr Hollande said that "Greece is in the eurozone and Greece must stay in the eurozone".
But, he cautioned: "It still has to demonstrate the credibility of its programme and the willingness of its leaders to go the whole way, while doing it in a way that is bearable for the population."
Once these commitments, which are not only financial but about structural reforms that the Greeks want, have been ratified by parliament and confirmed, Europe must do its part,” the French president added.
However, Mr Hollande side-stepped Greece's request for more time to implement the harsh austerity measures its creditors insist upon.

As part of a €130bn bailout package from the EU and IMF, Greece has committed to sweeping reforms and some €11.5bn of cuts in 2013 and 2014. But, it is thought that Mr Samaras wants two more years to make the cuts.
The Greek prime minister has used interviews with German and French newspapers over the last week to call for more time to meet the targets set out under the bailout agreement, saying Greece needs some "breathing space".
But neither Mr Hollande nor the German chancellor, Angela Merkel, have responded directly to that request.
After talks with Mrs Merkel on Friday, the German chancellor pledged to keep Greece in the eurozone, saying she was "deeply convinced" that the new Greek government was “doing everything to solve the problems. But, she refused to address Greece's plea for more time.
Germany's finance minister on Satuday reaffirmed his opposition to giving Greece more time to carry out promised reforms. "More time generally means more money and that very soon means a new [bailout] programme," Wolfgang Schaeuble told the Tagesspiegel on Sunday newspaper.
Mr Hollande indicated that any decision on delays for Greece must wait for a report next month by the "troika" of Greece's debt inspectors
"We've been facing this question for two and a half years, there's no time to lose, there are commitments to reaffirm on both sides, decisions to take, and the sooner the better," he added.
Addressing Mr Hollande's concerns about Greece's commitment to reform, the Greek prime minister said his government will meet its obligations.
Of course we need to make an effort,” said Mr Samaras. “We can keep our promises and goals, reduce our deficit and debt, accomplish structural reforms.”
The Greek leader also dampened talk of the nation potentially exiting the eurozone, saying: "Many say Greece won’t make it, that it can’t stay in the euro. I came here to say Greece will make it, it will stay in the eurozone."
Separately, Der Spiegel reported on Saturday that Mrs Merkel had called for a new European Union treaty to further integration, but was facing lukewarm interest from her European partners

Migrants protest Greek wave of racist attacks
Over 3,000 immigrants flocked to the center of Athens to protest the wave of xenophobic attacks sweeping Greece. Racist violence has seen a marked increase in the wake of the financial crisis, with NGOs condemning police indifference to the attacks

25 August, 2012

Thousands of protesters marched on the Greek parliament in Athens in one of the largest anti-racist rallies the capital has ever seen. They carried banners emblazoned with the slogans "No Islamophobia" and "Neo Nazis out!"
Some protesters brandished banners implicating Greek far-right party Golden Dawn, which has been accused of inciting xenophobia and racial violence.
Golden Dawn MP Ilias Kasidiaris attacked the Greek government for allowing the rally to take place.
The constitution protects gatherings of Greeks and not of foreigners,” he said in a statement.
The protests follow a countrywide police crackdown on illegal immigration in Greece. The Greek government provoked immigrant ire after rounding up hundreds of undocumented immigrants in the town of Corinth and holding them in a nearby military camp. The move sparked protests from residents and local authorities, rallying against the creation of a detention center in the town.
"We will do everything possible to prevent such a disaster," Corinth's mayor Alexandros Pnevmatikos told Skai TV. "We don't want the camp, which is in the center of the city close to densely-populated neighborhoods, to become a holding center."
Pnevmatikos threatened to cut the camp’s water supply and rubbish disposal if the 350 migrants held there were not released.
Far right supporters of Golden Dawn clashed with police outside the army camp on Thursday and hurled bottles at a deputy who had come to visit the camp.
The nationwide campaign to curtail illegal immigration has been dubbed "Xenios Zeus" after the ancient Greek god of guests and travelers. The Greek authorities have thus far arrested thousands of illegal immigrants.
Police turn blind eye to racial violence
Greece’s minister for public order announced on Thursday that a special unit would be created within the Greek police to combat the “phenomenon of racist violence.” The move came after several rights groups criticized Greece for its failure to curb the rise in xenophobic attacks.
Human Rights Watch released a report last month condemning Greek police for their failure to act of cases of racial violence.
"Migrants and asylum seekers spoke to Human Rights Watch of virtual no-go areas in Athens after dark because of fear of attacks by often black-clad groups of Greeks intent on violence,” said the report.
The document also implies collusion between Golden Dawn and local police forces in connection with the attacks.
The extremist party denies any connection to the racial attacks sweeping Greece.
Last month Golden Dawn spokesperson Ilias Kasidiaris said that immigration was a government conspiracy to turn Greece into “a wretched protectorate inhabited by subhumans, with no conscience, with no country, with no national culture.”
One of the party’s solutions to immigration is to mine areas along the Greek border where high concentrations of immigrants cross into the country.
Golden Dawn currently has 18 seats out of 300 in the Greek parliament and has seen a rise in popularity in the wake of an increase in unemployment and crime levels.

The Unvarnished Truth About Greece

24 August, 2012

While Belize is comfortable buggering bondholders, the Greeks (following this morning's headlines) remain beholden to their euro-zone overlords - having survived a few more months on the back of reach-around 'bailouts' and ponzi-financing - all in the effort of providing more time for the 'rest of Europe' to figure out how to handle the 'Athens moment' that is surely coming. With September and October critical 'event-rich' months, Patrick Young, of DV Advisors, provides the clearest and least 'rose-tinted' perspective on where Greece has been, where they are now, and where this will all end. From the forged application for euro-zone membership to Oz-like fantasies of growth and austerity targets that remain pipe-dreams (and are constantly being missed), the bold Irishman in this brief clip explains "Greece has not done anything to really help itself, missed every deadline its been given" and the PM's comments on their 'spectacular come-back' clarifies the 'utter delusion' among the Greek political class because "Greece is bankrupt; full stop; game over" and Merkel must agree to 'let' Greece leave the Euro (post Troika) - as the rise of civil unrest, since whatever new money flows their way exits right out the back door and never 'helps' the people, is inevitable.

Especially following these mixed headlines (via Bloomberg):


  • Alexander Dobrindt, general secretary of the Christian Social Union, said he sees no way around Greece leaving the euro area, Bild am Sonntag reported, citing an interview.
  • Dobrindt sees Greece out of the euro in 2013
  • Greece should receive EU support when it leaves the currency union and have the option of returning: Dobrindt

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