With a Greek default, shortly followed by a Grexit, a collapse of the “irreversible union” (but… but… “political capital“), and ultimately the end of the latest European monetary union experiment (the latest in a long and illustrious series of prior failures) now seemingly imminent, the blame game has begun. As the NYT noted overnight “the recriminations that would then fly would be so bitter that they would inflict a second round of damage.”
But who is really to blame? Continue reading
Greece’s spiralling debt crisis saw cash withdrawals total €400m on Monday. While anxiety varies around Athens, few Greeks see benefit in leaving the euro
“Everybody’s doing it,” said Joanna Christofosaki, in front of a Eurobank cash dispenser in the leafy Athens neighbourhood of Kolonaki. “Our friends have all done it. Nobody wants their money to be worthless tomorrow. Nobody wants to be unable to get at it.”
A researcher in the archaeology department at the Academy of Athens, Christofosaki said she knew plenty of people who had “€10,000 somewhere at home” and plenty of others who chose to keep their stash at the office. Was she among them? “If I was, I certainly wouldn’t tell you.” Continue reading
The European Commission braces for a “state of emergency” in Greece, fearing social unrest and a break-down of basic supplies
Greek premier Alexis Tsipras has accused Europe’s creditor powers of trying to subvert Greece’s elected government after five years of “pillaging”, warning in solemn terms that his country will defend its sovereign dignity whatever the consequences.
The defiant stand came as the European Commission lashed out at the Greeks and warned that the country would collapse into a “state of emergency” unless there is a deal to avert a financial crash.
Kruen, Germany: The European Union’s exasperation with Greece burst into the open on Sunday when its chief executive rebuked leftist Prime Minister Alexis Tsipras and warned that time was running out to conclude a debt deal to avert a damaging Greek default.
In unusually sharp terms, European Commission President Jean-Claude Juncker accused Mr Tsipras of distorting proposals by international creditors for a cash-for-reform agreement and of dragging his feet in offering an alternative.
He urged Athens to put its own ideas on the table swiftly to enable talks to resume on the sidelines of an EU-Latin America summit on Wednesday in Brussels. Continue reading
Athens takes creditor by surprise, saying it will bundle together €1.6bn of debt payments due to International Monetary Fund and settle up on 30 June
Greece has moved closer to default and possible exit from the eurozone after telling the International Monetary Fund it would not be making a debt repayment of €300m (£219m) due on Friday.
A crisis that has been going on for more than five years entered a new phase when Athens surprised the IMF by saying it intended to bundle up four payments in June totalling €1.6bn and make them all at the end of the month.
The move came as the Greek government reacted angrily to what was seen as an ultimatum from its creditors – including the IMF – that demanded further austerity and unpopular reforms to VAT, pensions and wage bargaining as the price for €7.2bn in fresh financial help.
The bank runs are already seen as a foregone conclusion by the Greek government — and are already happening, which is why you see a war on cash. This is also occurring not only in Greece, but other nations. If cash is irrelevant banks cannot go broke because there is no physical liability owed by these same banks.
Please see the following posts for examples in the war on cash:
Greece is completely out of money and time is running out to save it from bankruptcy.
The cash-strapped country urgently needs an €7.2billion (£5.6billion) bailout loan to stay afloat, but so far it has been unable to reach an agreement with EU creditors over the terms attached to the cash.
Until Greek and European leaders reach a lasting solution to the crisis, Greece’s future inside the eurozone looks highly uncertain and a so-called ‘Grexit’ a strong possibility.
In the short-term Greece faces a number of debt repayments in June to the International Monetary Fund. Continue reading
Earlier we detailed reports that The IMF was preparing a contingency plan in the event of a Greek default, and furthermore that Andrea Merkel was under increasing pressure to “let Greece go,” and now, as Eurogroup ministers begin to gather for today’s crucial ‘deal-or-no-deal’ meeting, Die Welt reports The Troika has 4 scenarios for Greece – one positive and three increasingly negative ranging from the need for further bailouts to paying staff in IOUs and issuing a parallel currency.
While Austria’s Hans Jorg Schelling sticks to his statement that:
“There’s nothing to it The Plan B was not discussed..”
In a clear stab at the NATO and EU, the Socialist government in Athens is actively negotiating with Russia to purchase Moscow’s S-300 anti-missile system and its service package.
Greek Defense Minister Panos Kammenos confirmed the news on April 15 in the wake of a visit to Moscow by Greek Prime Minister Alexis Tsipras. Continue reading
It has been a very disturbing 24 hours for Greece.
It all started during yesterday’s surprisingly short, just one hour long Eurozone finmin meeting in Riga, where Yanis Varoufakis not only got the most “hostile” reception yet being called “a time-waster, gambler, and amateur“, but for the first time one minister openly said that maybe it was time governments prepared for the plan B of a Greek default. This happened after Jeroen Dijsselbloem slammed the door on Varoufakis’ proposal for early cash after partial reforms. Continue reading
In the midst of the dramatic showdown in Brussels between the new Greek government and its European creditors, many Greek depositors—spooked by the prospect of a Greek default or, worse, an exit from the euro zone and a possible return to the drachma—have been pulling euros out of the nation’s banks in record amounts over the last few days.
The Bank of Greece and the European Central Bank won’t report official cash outflows for January until the end of the month. But sources in the Greek banking sector have told Greek newspapers that as much as 25 billion euros (US $28.4 billion) have left Greek banks since the end of December. According to the same sources, an estimated 900 million euros flowed out of Greek banks on Tuesday alone, the day after the talks broke up in Brussels, sparking fears that measures will be taken to stem the outflow. On Thursday, by mid-afternoon, deposits had shrunk by about 680 million euros (US $773 million).
“If outflows reach 1 billion euros, capital controls might need to be imposed,” said Thanasis Koukakis, a financial editor for Estia a conservative daily, and To Vima, an influential Sunday newspaper.
If Greece is forced out of the euro in acrimonious circumstances – a 50/50 risk given the continued refusal of the creditor core to acknowledge their own guilt and strategic errors – the country will not only default on its EMU rescue packages, but also on its “Target2” liabilities to the European Central Bank.
In normal times, Target2 adjustments are routine and self-correcting. They occur automatically as money is shifted around the currency bloc. The US Federal Reserve has a similar internal system to square books across regions. They turn nuclear if monetary union breaks up.
A Greek default – unavoidable in a Grexit scenario – would crystallize these losses. The German people would discover instantly that a large sum of money committed without their knowledge and without a vote in the Bundestag had vanished.
A look at possible scenarios if Greece defaults and leaves the Eurozone:
2. Bank runs
Regular citizens will empty their bank accounts before they converted into a new currency worth less than the previous one. The government may impose a freeze on withdrawal and banks from other countries that have lent to Greece could also collapse. Continue reading
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)