The First Defeat

ATHENS/BERLIN/PARIS (Own report) – Germany’s imposition of its austerity policy suffered a first serious defeat in yesterday’s Greek referendum. Over 61 percent of the Greek voters rejected an agreement with the creditors that would have provided for a continuation of the German austerity measures. This defeat is all the more serious for Berlin, because German politicians had massively interfered in the Greek referendum debate. The decision whether there will be new negotiations – and if so, under what conditions – must now be taken. Whereas many Greeks celebrated the rejection of the austerity dictate yesterday evening, German politicians declared that it is “difficult to imagine” new negotiations with the government of Prime Minister Tsipras (the German Minister of the Economy, Sigmar Gabriel). Greece is heading toward a Grexit and a “humanitarian catastrophe” (Martin Schulz, President of the European Parliament). Paris however is risking conflict with Berlin. Yesterday evening, the governing Parti Socialiste (PS) took a clear stand “against the austerity measures,” which has “shriveled Greece’s Gross Domestic Product and driven a large number of Greeks into poverty.” Today’s meeting between the German chancellor and the French president may produce the first decisions.

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Greece Changes Strategy: No Longer Demands Debt Write Off, Ask For Debt Exchange Instead

Guess who blinked first.

The ECB’s February 28th warning shot across the bow from the Troika, which is fully stacked with Germany’s Fourth Reich, sent a clear message to fall back in line. Apparently the current Communist Greek government wants to hold on to its power and not let the situation descend into utter chaos. What they’re probably waiting on is to see what options they have with their friends in Russia in hopes of throwing them a line.

Up until now, Berlin and Washington looked pretty solid as it overturned and took Ukraine away from Moscow’s sphere of influence. Now Russia struck back and has a piece of the EU.

 

Over a week after the new Greek government came to power, it has presented its first actual proposal of how it hopes to negotiate with Europe that does not involve the infamous “debt write off”, which as both Germany and the ECB have made clear, is a non-starter as it impairs the ECB’s balance sheet and leads to a loss of “faith” in the money printer, the legacy monetary system and so on. So instead of yet another debt restructuring, the FT reports that Yanis Varoufakis “would no longer call for a headline write-off of Greece’s €315bn foreign debt. Rather it would request a “menu of debt swaps” to ease the burden, including two types of new bonds.” Actually he still does, only he is not calling it as such. Continue reading