Greece will NEVER recover under Europe’s brutal austerity plans – IMF’s shock warning

Greece’s bailout programme is not credible, says the IMF (Getty)

 

GREECE may never recover from its deep recession and financial crisis thanks to the brutal austerity measures demanded by its European creditors, the International Monetary Fund (IMF) has warned.

The debt-laden country has been set ambitious economic targets by the European Commission and countries such as Germany, which are not “credible” and will hamper growth, according to the Washington-based organisation.

Only through a “Herculean effort” will Athens be able to meet the demands of its creditors, and through slashing spending in vital services that will derail Greece’s long-term prospects, said the fund. Continue reading

Greek crisis: surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras

Are you starting to see the bigger picture yet? Yesterday it was Cyprus, today it’s Greece. Tomorrow it could be France, Italy and Spain.

 

You have not anchored Germany to Europe,… You have anchored Europe to a newly dominant, unified Germany. In the end, my friends, you’ll find it will not work.

– Margaret Thatcher

The Fourth Reich has landed.

 

German and French leaders press Greek leader for guarantees over austerity measures in what an EU official describes as ‘extensive mental waterboarding’

European leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc.

A weekend of high tension that threatened to break Europe in two climaxed on Sunday night at a summit of eurozone leaders in Brussels where the German chancellor, Angela Merkel, and President François Hollande of France presented Greece’s radical prime minister, Alexis Tsipras, with an ultimatum. Continue reading

Greece debt crisis: German plan demands €50bn of state assets is transferred to external fund

Fiscal hawks among Greece’s eurozone creditors are taking an openly firmer line with Athens, including a proposal that Greece transfer €50bn of state assets into a fund to be managed by an external agency.

The plan appears in a paper from the German finance ministry and calls for either the transfer of state assets or a temporary “time-out” from the eurozone. Continue reading

Tsipras played his last chips

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By calling for a referendum on 5 July on on the series of austerity measures demanded by Greece’s creditors in exchange for a bail-out plan, Greek prime minister spread distrust among Eurozone partners and put his country on the brink of economic disaster.

Prime Minister Alexis Tsipras played his last chips and the country is already experiencing the results. If he has come to terms with the idea of Greece returning to the drachma then you can see some logic in his tactics – not for the country, not for its people but for him personally. If not, then he will have to pull a U-turn before it’s too late.

Tsipras will need to address the Greek people and admit that he played his last chips as he did because that’s what he thought they wanted and then explain the losses and gains of his strategy. He will have to muster up the courage to accept whatever proposal is presented to him as a solution of last resort. And this will take a lot of courage. Continue reading

Greek debt crisis reaches ‘DEFCON 1’ as savers pull €400m in ONE DAY and markets plunge

PANIC has descended on Greece as the debt-stricken country careers out the eurozone – with savers pulling millions in cash while investors continue to flee financial markets.

The Greek Prime Minister today blasted Athens’ European Union creditors who he said were trying to “humiliate” and “strangle” Greece into making proposed spending cuts in return for bailout cash.

Alexis Tsipras confirmed that talks have completely stalled, with the two sides in total stalemate over austerity measures. Continue reading

Power play: Why is Greece flirting with the Russians?

Fear is running amok yet again that the cash-strapped Greek government will default on its loans to its European partners and the International Monetary Fund. While its fate is still unknown, one thing has become clear this week: Greeks are scrambling to find assistance from wherever they can find it—its own government’s coffers, and even with overtures to Washington and Moscow.

A signal of how dire the situation is: The far-left government passed an edict Monday requiring public agencies to turn over idle reserves to the Greek central bank to help plug fiscal gaps. In addition, come Friday, the euro zone’s finance ministers are likely to throw a tantrum once again when they meet in Riga, as Greece has yet to come up with a list of acceptable economic reforms.

Continue reading

Italy could need EU rescue within six months, warns Mediobanca

Italy is likely to need an EU rescue within six months as the country slides into deeper economic crisis and a credit crunch spreads to large companies, a top Italian bank has warned privately.

Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.

“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” Continue reading

Germany Demands More Control Over Greece

Germany will allow Greece the extra time it wants to pay off its debt, in exchange for more control over Greece spending, according to a paper leaked to the Financial Times.

Greece’s creditors are agreeing to give the nation an extra two years to pay off its debts, according to several media reports. The extension will cost €16 to €18 billion. But the German proposal would subjugate Greece to tough conditions in return. Continue reading

Germany and Merkel hold Europe’s fate in their hands

The once-divided city of Berlin now has the task of holding Europe together and, for Chancellor Angela Merkel, this will require a difficult balancing act.

Angela Merkel does not do trick or treat. She does slow and steady – not shock and awe.

But over the past year or so, she has made greater efforts to reach out to countries where strict austerity measures are being imposed to persuade them that yes, she does care. Germany cares.

And she is trying to make the same case to her core constituency. Continue reading

Beware: Germany Is Growing Resentful and Angry

Stop for a moment and think about this crisis from the perspective of the average German. Since 2008, his nation has been saddled with the unpopular, high-risk, hugely expensive task of rescuing Europe. The Germans didn’t ask for this. And they certainly aren’t responsible for the chaos. Neither the German government nor its people have taken on suffocating debt or spent profligately on frivolous comforts. The Germans don’t take long siestas, work six-hour days or pay themselves annual bonuses for simply turning up to work. To the contrary, the Germans have worked hard, saved their money and wisely lived within their means. Yet,Germany is expected to endure tremendous risk and make major sacrifices to rescue its neighbors. It’s already forked out tens of billions in bailouts, and is on the hook for tens of billions more. By the time it’s all said and done, Germany will cover more than one quarter of the total bailout.

For what? Germany’s European counterparts are thankless, frustrated, unrepentant—and in many cases, openly hostile.

Viewed from this perspective, one can understand why Germans are frustrated and resentful.

The troubling question is, where will the anger and resentment lead?

Just a few weeks ago, no mainstream German politician openly spoke about the possibility of Greece defaulting and exiting the eurozone. That has now changed. Following Sunday’s election in Greece, where anti-austerity, anti-German parties made huge gains, German hostility has boiled to the surface. On Monday, Klaus-Peter Willsch, the budgetary expert for Chancellor Angela Merkel’s Christian Democratic Union (cdu), stated that Brussels needs to “make Greece the offer to leave the eurozone in an orderly fashion, without leaving the European Union.”

The disdain of the German public is less diplomatic. “Germans are now predominantly of the opinion that they would be better off if Greece left the eurozone,” said Carsten Hefeker, a professor of economics and an expert on the euro at the University of Siegen. “Nothing is in writing,” said Guntram B. Wolff, deputy director at Brussels research group Bruegel, “but people really are clearly and openly talking about” Greece leaving.

Sense the frustration and resentment.

Herribert Dieter, an analyst with the German Institute for International and Security Affairs, says preparations are already being made in Germany for Greece to default. “The mood in German government circles has become a little less enthusiastic, to put it mildly,” he stated. Dieter cited the example of Finance Minister Wolfgang Schäuble, who stated last Friday that membership in the EU “is not compulsory, it’s voluntary, and Greek society has a choice.” Schäuble’s remarks are a “good reflection of the changing mood of German policy makers,” stated Dieter.

“You can’t be a member of the club and disregard the rules,” he said. The Germans love rules and organization, structure and discipline—it’s one of their many admirable national traits. Problem is, the rest of Europe doesn’t have the same penchant for discipline and structure, at least not with finances. This is a recipe for confrontation, especially considering Germany has the political and economic might to air its frustration with meaningful actions.

The Germans are tired of bailing out Europe and getting nothing but complaints and hostility in return.

Die Welt continued: “Every country still only debates within its own national borders, because there is no European public sphere. Germany’s joint liability for the precarious finances of the countries in crisis remains a one-way street because the Germans can’t manage to adequately assert their positions, interests or the significant efforts they’ve made.” There’s a justified yet highly dangerous tone of resentment in that last sentence. Germany wants European integration. But it’s realizing that the EU in its present constitutiondoes not work.

“Whoever ends up governing Athens, it must be made unmistakably clear to the new leaders that they’re welcome to venture out on their own, but if they want to take advantage of the financial help from the donor countries and remain within the eurozone, then they must adhere to the stipulations already laid out” (ibid). In others words, Germany should not compromise substantially. “The German citizens are certainly not prepared to finance Greece’s vacation from reality,” warned Die Welt.

To the contrary, many Germans increasingly desire to give Greece a harsh lesson in reality!

Understand. This is not a personal assault on the German people. As I’ve noted, one can easily identify with their frustration over their reckless, thankless neighbors. Nevertheless, their welling resentment is an alarming, deeply sobering trend. You’re human; you know where resentment and anger ends. It culminates in rash, emotional decisions, in fractured, contemptuous relationships, and, often, in violence and conflict. And when it comes to Germany, history reveals a unique tendency for deep-seated national resentment to end in intense conflict.

The more intense the resentment among Germans toward their European counterparts, the more they’ll condone Germany getting tougher and stricter with Europe.

The more upset the Germans grow with Europe’s dissension, the likelier they are to demand a strong, decisive leader to whip the Continent into line.

Watch closely, and remember. It’s not the anger and resentment of the Greeks or French or Portuguese that ought to overly concern us. The nation we need to be most concerned about—and watching constantly with a critical eye—is Germany. Together, history and Bible prophecy warn that there is nothing more frightening than a German nation experiencing the convergence of deep-seated national resentment and unchecked political, financial and military power.

And Germany today has both, in excess.

Full article: Beware: Germany Is Growing Resentful and Angry (The Trumpet)

‘Eurozone austerity measures to spark uncontrollable protests’

An economic commentator says the harsh austerity measures implemented in the Eurozone are likely to provoke massive protests in the bloc, which could be beyond the control of the ruling elite

So as long as the governments in Europe continue to beat the drum of austerity measures, it will reflect in high unemployment because effectively what you see is that when there is austerity measures, the government is not spending money, the unemployment register increases, when people are unemployed they are unable to pay their taxes, they do not have enough money to buy products in the economy so it becomes a very circular situation and we the demonstrations in most of the European countries on the Labor Day, strikes in France, in Spain, in Italy, in UK and most of the other countries.

So the recession is really here to stay, I think, and all these measures which are being taken, the fiscal measures, the fiscal difficulties that are being faced by Eurozone countries will not go away by austerity measures.

This is not just [what] I as an individual economic commentator [am] talking about; most of the analysts, most of the fair-minded commentators are really talking about this particular issue, that the more we want to implement austerity, the more difficulties the Eurozone economies will face. There is no doubt at all in my mind about this.

Full article: ‘Eurozone austerity measures to spark uncontrollable protests’ (Press TV)

Detroit Isn’t Back, It’s Broken

The Tigers and Lions may be serious playoff contenders and Eminem may still be making hit records, but the city of Detroit is still on the brink of disaster. The Detroit Free Press reports:

On the same day Detroit officials delivered to the state a new proposal aimed at saving the city from fiscal collapse, Detroit’s financial review team declared that a severe financial emergency exists in the city.

The report may lead Republican governor Rick Snyder to appoint an emergency commission to once again bail out the desperate city. Detroit officials and residents are fuming at the prospect of the austerity measures needed to save the city from bankruptcy.

Residents cried racism and warned of mass unrest if the state intervenes. Of the 100 public comments, only one person delivered a reality check to the audience. His job title may have saved him from the hostile crowd.

“Detroit is nothing but pollution, crime, garbage and murder,” said Michael McMahon, a resident and cage fighter, eliciting boos and insults from the audience. “I believe in cuts, layoffs and firings. If they can’t get the job done downtown … I say fire them, send someone else from Lansing and clean up this mess.”

Full article: Detroit Isn’t Back, It’s Broken (Washington Free Beacon)

The Transatlantic Future

In view of this year’s US presidential elections, German government advisors have diagnosed major tensions in relations between Berlin and Washington, which have arisen because of the USA’s grave economic difficulties demanding inevitable drastic austerity measures. It is also uncertain how long the dollar will be able to maintain its exceptional global status. According to an expert of the German Council on Foreign Relations (DGAB), it had already become apparent at the last G-20 Summit that “the enormous power of the US” had “noticeably diminished” because of its economy’s chronic weaknesses. The US government will therefore continue to apply pressure on Germany and the EU to increase the importation of US products and insist on a much stronger participation in military interventions. Because of its harder line toward Beijing, Washington can also be expected to formally or informally seek to expand NATO’s range to Asia – to encircle China.

A Lost Generation

Washington’s chronic economic problems are the cause for the current dislocation in its relations to Berlin. Josef Braml, a scientific advisor to the USA/Transatlantic Relations Program at the German Council on Foreign Relations (DGAP), writes in a recently published analysis that, since 2008, the financial and economic crisis has hit the USA very hard. The unemployment has risen sharply. Because of its insufficient training in “often dilapidated educational institutions,” the younger generation, is incapable “of sufficiently contributing to the GNP.” Apprehension is spreading “that the youth of today could belong to a ‘lost generation’.” A “small elite” takes a “disproportionately large slice of the income pie,” while “very many must be satisfied with very little.” Of all the OECD member countries, only Mexico and Turkey have a wider social gap. Approximately 46 million US-Americans, particularly those in the Afro-American and Hispanic communities are living below the poverty line. “One-third of the Hispanic homes suffer under a lack of food,” reports the DGAP expert Braml. This desolate social situation is also worsening the country’s economic perspective. “If it is true that two-thirds of the US economy is generated by consumer demand, in other words by private consumption, then this social imbalance is very bad for economic recovery.”[1]

Full article: The Transatlantic Future (German Foreign Policy)

Europe to Seize Greece’s Gold

According to the fine print of a treaty signed on February 21, the European Union now has the power to seize Greece’s gold reserves. The modifications the EU is forcing into the Greek constitution vest Greece’s creditors, mainly European banks and the European Central Bank, with the authority to take gold from the Bank of Greece.

“This is the first time ever that a European and probably an O.E.C.D. state abdicates its rights of immunity over all its assets to its lenders,” said Greek Member of Parliament Louka Katseli, who drew attention to the potential gold seizure.

Full article: Europe to Seize Greece’s Gold (The Trumpet)

Greece secures new bailout, but recovery still in doubt

One month’s worth of funding is all this is good for. Another five ‘bailouts’ won’t make a difference. Greece is on borrowed time, literally. They will either default in orderly fashion or capitulate sovereignty in exchange to stay afloat, effectively becoming a German satellite nation.

Eurozone finance ministers have approved a new EUR130-billion bailout package for Greece. While the fund allows the country to meet debt payments next month, analysts say the threat of Greek bankruptcy remains.

“This deal is coming with very strong strings attached. Greece will now be put under very strict surveillance,” said FRANCE 24 journalist Frederic Simon by phone from Brussels. “A mechanism is being put in place to monitor each and every installment which is going to be disbursed under this new programme.”

“Effectively this means Greece is being placed under some sort of international trusteeship. This is the price that Athens has to pay to avoid bankruptcy,” Simon said.

Full article: Greece secures new bailout, but recovery still in doubt (France 24)