Posted on 06/28/2015 6:08:54 AM PDT by Kaslin
Edited on 06/28/2015 6:23:59 AM PDT by Admin Moderator. [history]
Greek Prime Minister Alexis Tsipras and his party Syriza have just screwed the pooch, and royally so. Tsipras has just done something so colossally idiotic and childish that perhaps Greece deserves its impending economic collapse for having elected someone so incredibly stupid. Greeks have suffered six years of chronic recession and endless rounds of debt negotiations, but this will all seem like a walk in the park compared to the poverty and civil chaos about the engulf their country.
Tsipras, the leader of Syriza (“Coalition of the Radical Left”), went on national TV at one in the morning on Saturday to announce his decision to torpedo Greece’s economy and the future of its people. Tsipras and his fruit-loopy Marxist finance minister have conducted four months of talks with Greece’s creditors trying to unlock more bailout money and bargain for yet another reduction in its outstanding debt. They’ve known all along that this Tuesday, June 30 was the drop-dead date for reaching a deal.
And all along they have been counting on blackmail to squeeze the rest of Europe for concessions. Syriza is garden variety liberalism on steroids, a party whose entire electoral appeal was “vote for us, and we’ll somehow convince the rest of Europe to cancel our national debts, and don’t worry, you can still receive your government pension at age 50.” And Tsipras’ basic negotiating stance has been, “give us more money, or we’ll declare a default, leave the eurozone, and laugh while your financial system collapses.”
Well, Angela Merkel and the finance ministers of fiscally responsible Germany, the Netherlands, and Finland failed to be intimidated this time by scare tactics, and repeatedly urged Tsipras to bargain seriously and in good faith, and accept some simple reforms of Greece’s corrupt economy in return for continued financial assistance. Bolstering their resolve was the growing realization that if Greece defaults and leaves the euro, it won’t cause any great systemic or irreparable damage for the rest of Europe (Greece is a measly 3% of the eurozone economy and its debt have to a large extent already been written off a uncollectible.)
Time was rapidly running out, and Tsipras waited in vain for the rest of Europe to blink first. And when Merkel and company failed to flinch, Tsipras decided to try a gambit whose idiocy defies belief. He announced that Greece will hold a national referendum on July 5 to approve or not the relief package Europe is offering.
First of all, Greece has debt payments due on Tuesday, which can’t be stretched out any longer, unless its creditors submit to this outrageous new bit of hustling, and they’ve made it clear they aren’t. So unless Tsipras climbs down immediately and accepts a humiliating political defeat (which he won’t) Greece goes into default in a few days. And Tsipras gives his creditors no reason to believe he is merely looking to give a new deal democratic legitimacy since he has said he will urge voters not to approve one.
And a referendum on such a complex matter can hardly be organized within a week. Tsipras and Syriza were elected to conduct negotiations and ultimately make the difficult decisions required. This referendum is not only pointlessly idiotic, it is an act of supreme cowardice. Obviously, Tsipras is hoping to save his political career. Either Greece defaults on Tuesday, and he will loudly claim that Europe was unwilling to wait “for just a few days more” for Greece’s voters to decide, or if against all the odds Europe gives Tsipras one more extension, and the voters take his advice, and Greece defaults a week later, he can claim it was “the democratic will of the people.”
Tsipras and Syriza are in for an unpleasant surprise on Monday morning. The European and U.S. markets may dip for a few days, US Treasuries may rally by twenty or so points in a knee-jerk “flight to quality,”, but there won’t be the financial panic they are counting on to soften up their creditors. At the end of the day it will be the people of Greece who suffer. And then it will be up to the Greeks to finally decide whether they want to live in a failed Balkan state like Serbia, or whether they want to toss out Tsipras and Syriza, pick up the pieces and begin the hard work of transforming Greece into an honestly run, economically stable, fiscally sound country. I believe they will, and when they do, and elect a responsible government, then Europe will be all but too happy to help Greece back on its way to its rightful place in Europe.
Socialism once again leaves it’s mark.
The Soviet Union and East Bloc died...thump...the Soviet Union and East Bloc died...thump...the Soviet Union and East Bloc died...thump...the Soviet Union and East Bloc died..
Related:
ECB Freezes Greek ELA, Varoufakis Tells BBC “Looking At Imposing Capital Controls, Closing Banks”
http://www.zerohedge.com/news/2015-06-28/varoufakis-tells-bbc-looking-imposing-capital-controls-closing-banks-ecb-freezes-gre
The Greek Butterfly Effect
http://www.zerohedge.com/news/2015-06-27/greek-butterfly-effect
Eurozone Rejects Greek Bailout Extension: All Bailout Programs Expire On June 30, Referendum Moot
http://www.zerohedge.com/news/2015-06-27/eurozone-rejects-greek-bailout-extension
Grexit would actually benefit Greece in the long run. With return to the Drachma, Greece would boom as a low cost tourist destination. Ordinarily, fuel purchases would be the major issue, but Vlad will probably be willing to subsidize that in exchange for a friend in Europe.
Germany will be hurt by the Exit, as the Euro will increase in value without the drag of Greece. That will cut into German exports. That’s why Merkel has been fighting for a deal, and why the Greeks figured they had her in their pocket. It’s LaGarde that’s been holding the line with the Greeks, for reasons that aren’t entirely clear - perhaps just the old French - German rivalry.
A good analysis, I’d say. If Tsipras is counting on all manner of chaos and panic in the EU, he’s badly mistaken.
Quite a few of my English-language students work in the international finance sector, and the general consensus is that Greece has been effectively contained; the fallout from a Greek default would be limited.
One of them, an accountant, she ran the numbers and noted that a Greek default would cost Germany $1 billion per year for the next 40 years.....and while that sounds like a lot, she reminded that German GDP is about $4 trillion per year.
One billion? Like she said, “The German government spends that much on toilet paper every year. They won’t miss it.”
They'd better hurry...
I look at the Greek situation this way.
Greece has a lot of debt because of its socialist system and the corporate elites, banking elites, political elites of the EU want to take over and control Greece so the debt owed to them can be managed.
THE KIND OF CORPORATE ELITES, BANKING ELITES AND POLITICAL ELITES THAT ARE SHOVING AMNESTY, OBAMACARE, TRADE DEALS, COMMON CORE AND GAY MARRIAGE DOWN AMERICA’S THROAT ARE TRYING TO HOLD GREECE BY ITS THROAT.
WHOSE SIDE SHOULD I BE ON?????????
I’ve had it with the corporatists and maybe the only way to stop is for the Left and Right to join in a national unity government.
RINO Pro-Corporate Elite media stress the Leftist leadership in Greece but don’t tell you that the Greek government includes the “Independent Greeks” who are conservative and anti-EU. The Greek Defense Minister is a conservative member of the “Independent Greeks” party.
The Leftist Prime Minister and Rightist Defense Minister are supporting the fight against the EU.
In this country we will end up like Greece some day with those crony capitalist elites demanding we pay up.
What will we say then?
I SEE THE CORPORATE ELITES, BANKING ELITES AND POLITICAL ELITES OF THE UNIPARTY AS THE ULTIMATE ENEMIES OF ALL HUMANITY RIGHT NOW AND IF GREECE CHOOSES TO FIGHT THEM, WHY SHOULD I GIVE A .......
I've read that Greece's original application for joining the euro was a complete fraud and they were in no way close to meeting the fiscal requirements to join. That should serve as a warning for any who want to form a North American monetary union. Both the United States and Canada could be harmed by fiscally irresponsible neighbors to the south.
It doesn’t matter whether these LIBERALS, SOCIALISTS and COMMUNISTS are Greeks, Europeans, Americans or any other country, the fact that their way of governing will never work has never entered their minds. All of them believe that if they just just “TWEEK” it here and “TWEEK” it there, it has to work. Their biggest come on, is they will “GIVE” the people all the money they need to live, as long as the people keep electing them. The only ones to blame are these very stupid people that voted them in.
Screwing the pooch? Isn’t that up next on the SCOTUS docket?
good job
pejorative and biased article.
Greece will leave. It will be traumatic. They will begin to recover, putting the lie of Brussels out for all to see. Others will follow.
Putin might soon lose a Navy base in Syria so maybe his friendliness to Greece has the goal of establishing a substitute Navy base there..?
no, there are not corporate elites, there are corporations
corporations are the economy. corporations provide everything especially income
the enemy is liberalism and liberals. if the liberals are gone, there can be good life
Tourism is 17% of their economy. Basing your economy on what guys did 5,000 years ago is no sane model.
The reason to doubt this analysis is found here:
“... toss out Tsipras and Syriza, pick up the pieces and begin the hard work of transforming Greece into an honestly run, economically stable, fiscally sound country. I believe they will, and when they do, and elect a responsible government....”
That’s nearly the definition of magical thinking.
Fair enough.
Looking at the chart, I didn’t realize that Slovakia has so much exposure - more than Germany in percentage to GDP terms.
No wonder the Slovaks are steamed about this!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.