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There’s Brussels And Then There’s Real People
There’s Brussels And Then There’s Real People
Once again, a look at Greece and the Troika, because it amuses me, it angers me, and also because it warms my cockles, in an entirely metaphorical sort of way. The Troika members love to make it appear (and everyone swallows it whole) as if in their ‘negotiations’ with Greece all sorts of things are cast in stone and have no flexibility at all. Humbug.
First, another great piece by Rob Parenteau (via Yves Smith), who lays it out in terms so simple they can’t but hit the issue square on the nose. For Europe and the Troika, there’s Greece, and then there’s the rest. No money for the Greeks lining up at soupkitchens (not even for the soupkitchens themselves), but $60 billion a month for the bond market. The $200 million anti-poverty law – a measly sum in comparison – that Athens voted in this week is a no-no because Greek government has to ask permission for everything in Brussels first, says Brussels, no matter that that only prolongs the suffering. It’s not about money, in other words, it’s about power, and the Greeks must be subdued.
Both the financial and the political press have by now perfected their picture of Yanis Varoufakis as a combination of some kind of incompetent blunderer on the one hand, and a threat the size of Vladimir Putin on the other, while the rudeness of German FinMin Schäuble is not discussed at all. The media are no longer capable of reporting anything outside of their propaganda models. The ‘middle finger’ video turns out to be a fake, but who cares, it’s done its damage. Parenteau:
…click on the above link to read the rest of the article…
Europe Has A Modest Proposal For Greece: “Don’t Pay Wages For One Or Two Months”
Europe Has A Modest Proposal For Greece: “Don’t Pay Wages For One Or Two Months”
The Greek liquidity, pardon “cash flow” problems are so bad, not only Zero Hedge, but also Bloomberg has launched a daily maturity tracker of how much money Greece has to pay either to the IMF or to prefund T-Bill rollovers. This is what Bloomberg blasted out earlier today:
Greece is preparing for another week of hurdles that ends with a ~EU2b repayment on March 20. Most economists say that it will be difficult for Greece to get past end of March without fresh EU funds. Here’s a timeline of the most important events scheduled this week:
- Monday, March 16: Greece to repay about EU577m in IMF loans
- Wednesday, March 18: Greece’s debt agency PDMA to sell 13- week treasury bills
Which explains why as we reported yesterday, Greece passed a law to plunder pension funds, one which would allow the government to fully invest reserves of pension funds and other public entities kept in Bank of Greece deposit accounts in Greek sovereign notes.
None of this is news: that Greece will run out of cash absent another check from the Troika, pardon Instituions, pardon creditors, is clear. The only question is what happens after, if Europe indeed leaves Greece hanging.
Today, the Greek media is ablaze with just what Europe’s proposed solution to this issue may be. As Protothema and Capital report, the Troika proposed that Athens halt the payment of salaries and pensions for one to two months. This, according to Europe, would promptly tackle the problem of liquidity and find a solution to Greek problem of how to pay back bailout loan tranches to creditors when suffering from liquidity problems.
…click on the above link to read the rest of the article…
Greece Proposes To Become A Tax-Collecting Police State: Will “Wire” Tourists And Unleash Them As “Tax Inspectors”
Greece Proposes To Become A Tax-Collecting Police State: Will “Wire” Tourists And Unleash Them As “Tax Inspectors”
There were three notable items in the follow up, 11-page letter sent by Yanis Varoufakis earlier today to the Eurogroup, and its president “Jeroen.”
But first, by way of background, here is what happened as recapped by Reuters.
Earlier today Greece sent an augmented list of proposed reforms on Friday (see the 11 page letter attached below) but EU officials said several more steps were required before any release of aid funds. In the Yanis Varoufakis outlined plans to fight tax evasion, activate a “fiscal council” to generate budget savings and update licensing of gaming and lotteries to boost state revenues. All noble ideas, and all set to crash and burn since it has all been tried and failed in the country in which paying taxes is considered theft (by the government).
However, the expanded list of reforms arrived too late for deputy finance ministers and European Commission experts who met on Thursday to scrutinise it before a regular meeting of finance ministers of the currency area next Monday. “Whatever proposals emerge (from Varoufakis), they can’t be seen in isolation,” said a senior EU official, who declined to be named due to the sensitive nature of the talks. “They have to been seen in the overall context of all policy measures … There is no connection with the disbursements.”
One key condition for Greece to receive any more euro zone money is for Athens to reach an agreement with its three international creditors – the euro zone, the ECB and the IMF – on the implementation of reforms agreed by the previous government. Such talks have not even begun yet.
…click on the above link to read the rest of the article…
Throw Your Grandma Under The Bus
Throw Your Grandma Under The Bus
Before we get news in a few hours on the new proposals Greece is required to hand to its slavemasters today, Monday Feb 23, it seems relevant to point out one more time that what is happening to Greece is the result of political, not economic, decisions and points of view. One could argue that Greece is being thrown under the bus because it’s not – yet – deeply enough entangled and enmeshed in the global financial matrix. Just think back to a pointGordon Kerr of Cobden Partners made a few days ago on Bloomberg:
They [Greece] don’t have systemically important financial institutions dragging down their economy ..
In other words, Greek banks are not too big to fail. They could therefore be restructured – by the Greek government itself – without global contagion, certainly theoretically (it’s hard to pinpoint how this would turn out in practice, there are too many variables involved). And that is a major potential threat to other – European -banks, who A) could then also face calls for restructuring, and B) still have money invested in Greece. Just not that much anymore…
Bloomberg’s Mark Whitehouse showed in a piece over the weekend to what extent Germany’s banks pulled out of Greece since 2010. Thanks to the same bailouts that are now being used to try and force Greece into ever more austerity, budget cuts, depleted services and shy high unemployment.
…click on the above link to read the rest of the article…
Athens vs. Brussels: Greece Inches Closer to Renewal of Debt Crisis
Athens vs. Brussels: Greece Inches Closer to Renewal of Debt Crisis
The new government in Athens is intent on forcing Europe to change its approach to Greek debt — thus far in vain. A confrontation is brewing, and both sides stand to lose.
After new Greek Finance Minister Giannis Varoufakis had been repeatedly rebuffed on his introductory tour of European capitals, he opted for flattery and solicitation during his visit to Berlin last week. German Finance Minister Wolfgang Schäuble, Varoufakis said, had been an object of his admiration since way back in the 1980s for his dedication to Europe. He said that his host’s career, focused as it has always been on European unity, has been impressive.
Varoufakis went on to say that Germans and Greeks are linked by their experiences of suffering. Just like the Germans, who were yoked with the burdensome Versailles Treaty after losing World War I, his country too has been humiliated by agreements forced onto it from the outside. Both countries, he said, suffered from deflation and economic depression, the Germans in the 1930s and the Greeks today. “The Germans understand best how the Greeks are doing,” Varoufakis said.
Schäuble’s sympathy for Varoufakis’ plight was limited. Indeed, the German finance minister sees Greek demands for an end to the troika and for a renegotiation of previous agreements as an affront. “We agreed to disagree,” is how Schäuble summed up their meeting, a tête-à-tête that took 45 minutes longer than the one hour that had been scheduled.
Just one day prior to his meeting with Schäuble last Thursday, Varoufakis had been given the cold shoulder at European Central Bank headquarters in Frankfurt. ECB head Mario Draghi rejected virtually all of Varoufakis’ requests, including his demand for more leniency on debt repayments. That evening, the ECB opted to stop accepting Greek government bonds as collateral, a move which will make it even more difficult for banks in Greece to access liquidity. The move came as a surprise to Varoufakis. Draghi had told him nothing about it during their meeting that morning.
…click on the above link to read the rest of the article…
Behind The Global – Game Of – Thrones
Behind The Global – Game Of – Thrones
Greek PM Alexis Tsipras yesterday laid out Syriza’s stance, and from what I saw he didn’t pull even one punch. Despite all the suggestions from the financial press throughout the past week that Tsipras and Varoufakis reneged on campaign promises to seek debt write-downs, they didn’t, and never have – other than perhaps in semantics.
Which I don’t find the slightest bit surprising. I would have been very surprised if they had. The misinterpretation, and the faulty expectations, are easily explained through the fact that – most of – these guys are not politicians, which they very deliberately expressed in the way they dressed for their meetings with ‘Europe’s finest’.
They don’t see the ‘space’ career politicians see to negotiate away the mandate their voters have given them. For them it’s simple: we were elected on our program – which in this case happens to be to end the misery forced upon Greece by the European and Troika schemes -, and we’re not going to move away from that just because ‘the other side’ starts threatening us, or (a crucial difference in politics) because our voters may not vote for us again in a next election.
In their view, trying to scare Greece into even more submission, which is the overlying message emanating from Brussels and beyond, is entirely null and void because Greece can’t – and shouldn’t – sink any lower than it has. Very and refreshingly simple. No surprise there, but, at least on my part, just support and admiration. Syriza is fighting the fight many others don’t have the intellect, the chutzpah and/or the courage for.
…click on the above link to read the rest of the article…
Thousands Of Anti-ECB Protesters Gather In Athens In “First Greek Pro-Government Rally” – Live Feed
Thousands Of Anti-ECB Protesters Gather In Athens In “First Greek Pro-Government Rally” – Live Feed
In what is being described as “the first Greek pro-government rally”, thousands of people have gathered outside Greek Parliament in the infamous Syntagma Square to protest against a decision by the European Central Bank to restrict the eligibility of Greek bonds used as collateral from Feb. 11, rather than at the end of February. “ECB Chief Draghi chose to play Merkel’s game again and to blackmail the Greek people and the new Greek government,” is one of the charges being aired on the pro-SYRIZA quarters of cyberspace.
Live Feed:
…click on the above link to read the rest of the article…
ECB Pulls The Trigger: Blocks Funding To Greece Via Debt Collateral – Full Statement
ECB Pulls The Trigger: Blocks Funding To Greece Via Debt Collateral – Full Statement
Just what the market had hoped would not happen…
- *ECB SAYS IT LIFTS WAIVER ON GREEK GOVERNMENT DEBT AS COLLATERAL
- *ECB SAYS IT CAN’T ASSUME SUCCESSFUL CONCLUSION OF GREECE REVIEW
What this means simply is that since Greek banks are now unable to pledge Greek bonds as collateral and fund themselves, and liquidity is about to evaporate, the ECB has effectively just given a green light for Greek bank runs, as suddenly it has removed, both mathematically but worse politically, a key support pillar from underneath the already bailed out Greek banking system, (or merely a negotiating move to let Greece see just what kind of chaos this will create ahead of the big D-Day on Feb 25th when ELA could be withdrawn).
And now finally, after many years of investing in ECB repo collateral, pardon Greek debt, Greek banks finally will ask what the “fundamental” value of all that Greek government debt they bought really is. Judging by the Greek ETF’s reaction, the answer is lower.
The only question now is whether the Greek Central Bank, which the ECB said is now sufficient to meet bank liquidity needs (via the ELA which the ECB has not yanked… yet: it has given Greece until February 28 before this final prop is yanked and Greece is left to drown), is allowed to print Euros. If not, the Greek experiment at trying to stick it to Europe is about to crash and burn spectacularly.
…click on the above link to read the rest of the article…
Have A Little Faith In Blotto
Have A Little Faith In Blotto
What, Greece again? Sorry!! But I see a lot of things flash by that make me want to say something. Today it’s the alleged 180 that Syriza made on debt reduction, before that it was their alleged kow-towing to Brussels on Russia sanctions, and tomorrow it’ll be something else again. It’s all media formatted bite-size and pre-chewed chunks, but the Greece-Troika stand-off is anything but.
I have a ton and a half of respect for David Stockman, who earlier this week wrote: ‘Greek Finance Minister Yanis Varoufakis has the weight of history on his shoulders’, but I’m sorry, I can’t agree with that, Dave. Yanis, who I only know through the occasional recent email exchange, if he has any weight on his shoulders, it’s that of the Greek people. And it’s the weight of their future, not their history.
Stockman also hints that Greece should leave the euro, and perhaps that is true, I would certainly tend to agree, but that doesn’t mean, even if Syriza agrees too, that today is the day they should go public with it. A Grexit may even be their endgame, but focusing on it now could well backfire. After all, a Grexit could come in many different shapes.
I have confidence that Varoufakis and his people have thought this through, and thoroughly, and that they have a – longer term – strategy that not many people will be able to comprehend. A quality all good strategies have. And the other side has no such strategy: they have never entertained the idea that they could lose, so why strategize? Goliath never figured he needed one either.
…click on the above link to read the rest of the article…
Chaos, Fear, Panic Descend on EU’s Hallowed Halls of Power
Chaos, Fear, Panic Descend on EU’s Hallowed Halls of Power
According to Greek private broadcaster Mega TV, “You just killed the Troika” were the parting words that Eurogroup Chief Jeroen Dijsselbloem whispered into the right ear of Greece’s new Finance Minister Yannis Varoufakis at the end of what was clearly a tense meeting. Varoufakis’ response was a monosyllabic but no less emphatic “Wow.”
While Dijsselbloem’s statement verges on hyperbole – it’s hard to imagine that the Troika’s dreaded three-headed hydra could be slain by just a few harsh words from a Greek economist-turned-politician – it’s nonetheless a fair reflection of the atmosphere of chaos, fear and panic that has descended upon the EU’s hallowed halls of power since Syriza’s election victory last Sunday.
For the first time since the global financial crisis buffeted Europe’s southern shores, in late 2009, a country has voted in a government that refuses to play by the Troika’s rules. In just its first week of power Syriza provoked the Troika’s ire a number of times, by promising to raise the country’s minimum wage and state pensions as well as put a halt to much of the former government’s privatization program.
In fact, according to a statement by Varoufakis, Greece’s new government no longer wants to even have anything to do with the Troika. As the Greek dailyTovima reports, the message was clean, clear and aggressive:
…click on the above link to read the rest of the article…
It’s Greece vs Wall Street
It’s Greece vs Wall Street
On the one hand, I’ve written so much about Greece lately I fear I’m reaching overkill. On the other hand, there’s so much going on with Greece, and so fast, that I wouldn’t know here to begin. Moreover, I’m thinking and trying to figure what is what and what is actually happening so much it’s hard to stay focused for more than a short while before something else happens again and it all starts all over. And I’m thinking it must feel that way for the Syriza guys as well.
One thing I do increasingly ponder is that it gets ever harder to see the eurozone survive. In its present shape and form, that is. Damned if you do, doomed if you don’t, is an expression I’ve used before. It’s like this big experiment that a bunch of power hungry Europeans really get off on, that now all of a sudden is confronted with the democracy they all only thought existed in books of history anymore.
But if you take your blind hunger far enough to kill people, or ‘only’ condemn them to lives of misery, they will eventually try to speak up, even if not nearly soon enough. It’s like a law of physics, or like Icarus in, yes, Greek mythology: try to reach too high, and you’ll find you can’t.
What is Brussels supposed to do now? Throw Athens off a cliff? Not respect the voice of the Greek people? That doesn’t really rhyme with the ideals of the union, does it? If they want to keep the euro going, they’re going to have to give in to a probably substantial part of what Syriza is looking for. Or Greece will leave the eurozone, and bust it wide open, exposing its failures, its lack of coherence, and especially its lack of democratic and moral values.
…click on the above link to read the rest of the article…
Greece economy: Merkel rules out more debt relief
Greece economy: Merkel rules out more debt relief
German Chancellor Angela Merkel has ruled out cancelling any of Greece’s debt, saying banks and creditors have already made substantial cuts.
But Mrs Merkel told the Die Welt newspaper she still wanted Greece to stay in the eurozone.
Greece’s left-wing Syriza party won last weekend’s election with a pledge to have half the debt written off.
Its new finance minister has refused to work with the “troika” of global institutions overseeing Greek debt.
The troika – the European Commission, European Central Bank and International Monetary Fund – had agreed a €240bn (£179bn; $270bn) bailout with the previous Greek government.
But Finance Minister Yanis Varoufakis has already begun to roll back the austerity measures the creditors had demanded as part of the deal.
Meanwhile, EU economic and financial affairs commissioner Pierre Moscovici told the BBC’s Hardtalk that Greece had to honour its previous commitments, although he said he wanted Greece to remain in the eurozone.
…click on the above link to read the rest of the article…
ECB Threatens Athens With Bank Funding Cutoff If No Deal In One Month: February 28 Is Now D-Day For Greece
ECB Threatens Athens With Bank Funding Cutoff If No Deal In One Month: February 28 Is Now D-Day For Greece
As Deutsche Bank’s George Saravelos politely puts it, “Developments since the Greek election on Sunday have moved very fast.” And indeed, so far the new Tsipras cabinet, and here we focus on the words and deeds of the new finance minister Yanis Varoufakis, has shown that the market’s greatest hope – that the status quo in Greece will continue – has been crushed into a pulp (and so have Greek stock and bond prices) especially following yesterday’s most recent comments by the finmin in which he said that Greece “does not want the $7 billion” from the Troika agreement and that it wants to “rethink the whole program”, culminating with an epic exchange with Eurogroup chief Jeroen Dijsselbloem in which Greece made it clear that the “constructive talks” are over.
And suddenly the Eurozone is stunned, because what had until now been its greatest carrot when it comes to dealing with Greece, has become completely useless when the impoverished, insolvent nation itself says it no longer needs a bailout, seemingly blissfully unaware of the consequences.
So earlier today the ECB’s Erikki Liikanen, tired of pleasantries and dealing with what to Europe is a completely incomprehensible and illogical stance, one which is essentially a massive defection by Greece in the European “prisoner’s dilemma”, and which while leading to a Greek financial collapse and Grexit – both prerequisites to a subsequent Greek economic recovery unburdened by the shackles of the Euro – would also unleash a European depression, came out and directly threatened Greece that it now has 1 month until the end of February to reach a deal with the Troika, or else the ECB would cut off lending to Greek banks, in the process destroying the otherwise insolvent Greek banking sector.
And since only the ECB backstop has prevented a banking sector panic, the ECB is essentially betting the house, and the sanctity of the Eurozone (because after a Grexit all bets are off which peripheral leaves next) that the threat, and soon reality, of a bank run (at last check Greece had about €145 billion in deposits still left in its bank after JPM’s latest estimate of €15 billion in outflows in January) will finally force Varoufakis and Tsipras to sit at the negotiating table with the understanding that not they but the Troika has all the leverage.
…click on the above link to read the rest of the article…
How Do You Solve A Problem Like Syriza?
How Do You Solve A Problem Like Syriza?
First off, no, I don’t think Syriza is a problem, I just couldn’t resist the Sound of Music link once it popped into my head, as in ‘headlines you can sing’. I think Syriza may well be a solution, if it plays its cards right. But that still leaves politicians and investors denominating Tsipras et al as a problem, if not a menace. Now, investors may not need to possess any moral values – though things would probably have been much better if that were a requirement -, but you can’t say the same for politicians. Politics is supposed to BE about moral values.
And supporting Samaras and his technocrat oligarchy, as has been the EU/Troika policy, doesn’t exactly show a high moral standard. Not just because trying to influence an election is an no-go aberration (though it’s so common in the EU you’d almost forget that), but certainly also because of what Samaras and the EU have done to the Greek people over the past few years. And neither does it show in what happens now, where the Greeks, steeped in Troika-induced misery as they are, are labeled greedy bastard cheats.
Since the EU lies as much about Greece as it does about Russia, it’s only fitting that the former should speak out for the latter. And it’s deliciously easy: the EU wants to step up sanctions against Russia (because the Ukraine shelled Mariupol?!), but EU sanctions decisions require unanimity. Since Greek-Russian relations have historically been close, Syriza resisting ever tighter sanctions should be no surprise.
…click on the above link to read the rest of the article…
“The Barricades Are Down” Syriza Is Already Rolling Back Austerity “Reforms”
“The Barricades Are Down” Syriza Is Already Rolling Back Austerity “Reforms”
It didn’t take long for Syriza to start making changes in Greece. While these may be minor at the margin compared to the debt “issues”, as KeepTalkingGreece reports, Alexis Tsipras and his junior coalition partner Panos Kammenos pushed the Fast Forward button to restore a series of so-called “reforms”, that is austerity measures imposed by the country’s lenders, the Troika – among the left-wing reforms are: scrapping planned privatizations, scrapping fees in public hospitals and prescriptions, restore “the 13th pension” for low-pensioners and other actions that SYRIZA had promised before the elections. And the iron barricades in front of Parliament have been removed.
Iron Barricades
The first revolutionary move was conducted by alternate Minister responsible for Citizens’ Protection and Public Order. Yiannis Panousis removed the iron barricades in front of the Greek Parliament. The barricades were installed to protect the lawmakers from angry demonstrators after the huge anti-austerity protests from 2010 onwards.
…click on the above link to read the rest of the article…
