The ticking gets louder. Greece and Germany continue to exchange barely-veiled insults, and the nervier elements of the Eurocracy are beginning, belatedly, to bleat about the dangers attending on a possible “Grexit” from the Eurozone. Of course, this could all be play-acting but - like Putin’s recent nuke-waving - it is political play-acting of a dangerous and unpredictable sort. Yours from the Edge of Sanity, JR.
Tick-tock, tick tock … the Eurozone leaders and the Greeks have come to yet another agreement that they are agreed as to what their last agreement meant. This came about under pressure from German Chancellor Merkel and her “Caesar”, French President Hollande. It remains unclear what this means. The Greeks have agreed to produce yet another proposal within days. However, the Greek Prime Minister still says that the renamed Troika - “reviewing officials” or somesuch - have no right to impose policies on Greece that will press their economy further into recession. The Eurozone and Greece still seem to be singing off different hymn-sheets. Tick-tock, tick-tock … Yours from the Justus Lipsius bunker, Brussels, JR.
After a brief intermission to address the Alpine Air Disaster, the Time-Bomb may be set to start ticking today in Brussels as Greece is set to present another set of proposals for reforms/cuts or whatever to their Eurozone partners. Unfortunately, there is every indication that the two sides are still singing off different hymn sheets. All Greek proposals to date have, apparently, been very general, and have concentrated on reform of the tax system and a campaign against corruption, rejecting further cuts in public services and unpalatable measures such as the privatization of publicly owned industries and utilities - the Eurozone (proprietor A. Merkel) still appears to be insisting that both are necessary. While organ-grinder Merkel and her “monkey”, Hollande, continue to insist that they do not want Greece to exit - or self-exit - the Eurozone, there are increasing indications that German voters are increasingly confident that such an exit can occur without significant danger to the Euro Project as a whole. This is reflected in the other side of Merkel’s position, which continues to require the Greeks to impose further expenditure cuts and to privatize public assets (even at knock-down prices) in the interests of furthering an austerity-based “solution” to Greece’s economic problems. The problem is that if both parties hold their line, a situation could easily develop in which Greece’s continued membership of the Euro becomes a technical impossibility, leading to chaotic Greek debt default and its self-ejection from the Common Currency. And, whatever the German electorate, or Frau Merkel may profess to believe, nobody really knows how the situation might develop then. Not least among the imponderables is the effect such developments might have on the French and German banks who are actually holding all those Greek bonds.
Tick-tock, tick-tock … JR.
Ticking very loud at this stage. The Greeks still appear to be pfaffing around, promising to meet their next debt repayment deadline, but still failing to produce detailed proposals as to how they are going to achieve the “austerity” targets required by their out-bailers in order to secure the release of the required funds. The Evil Day is getting very close … Yours from Thermopylae, JR.
Tick-tock … Greek Prime Minister is in Moscow today, meeting the leader of Greece’s long-time “cultural connection”. This will not please the Eurocrats one little bit. Speculation seems to be that Greece has two objectives in this - obtaining some form of alternative funding that might free it from the grip of the Troika bailout, and securing an exemption from Russian counter-sanctions to allow Greek agricultural products (soft fruits, olive oil, tobacco) back into the Russian market. As far as the first is concerned, it seems highly unlikely that Putin the Terrible can afford the luxury of bailing out Greece at the moment, given the declining state of the Russian economy. As regards the olive oil etc., it will be interesting to see how Tsar Putin responds. A positive response could deliver a very cheap hit to the EU, causing no end of discord within the EU/NATO camp. Whether this would really be in the interests of Greece is distinctly questionable. We shall see … Yours from the Olive Grove, JR.
Greece plays the war reparations card again. http://www.theguardian.com/world/2015/apr/08/greece-germany-war-reparations-demands
I haven’t studied it, but I wouldn’t be surprised if the various agreements representing war reparations to Greece didn’t constitute fair value.
I wouldn’t be surprised if no war reparations following WWII were fair value.
For example, for what may be the worst case, I suspect that Japan didn’t make any, and certainly not fair, reparations to China before the communist success in 1949.
How does one value the appalling loss of life, liberty and property under the various Axis powers? (Or the same by the Allies in pursuit of their objectives, such as civilians killed and injured and their property destroyed in Axis and non-Axis nations, notably France before and after D-Day but also in other theatres such as North Africa where civilian casualties and property damage are routinely ignored by all combatant nations.)
Anyway, coming back to Greece now, its primary claim should be on Italy as Italy invaded Greece which resulted in Germany, with characteristic generosity to the Italians as in North Africa, coming in to rescue Mussolini from another overly ambitious military adventure.
But Italy isn’t a major player in the current pressure to force Greece to reverse generations of economic and fiscal incompetence and mismanagement, so Italy doesn’t get a guernsey in Greece’s demands.
Alexis Tsipras may not be the Messiah but, from the point of view of the Eurocracy, he is a Very Naughty Boy. Reaching out to Russia, embroiled in a sanctions war with the EU, is bad enough - but raising this business of war reparations in clear public view breaks a serious EU taboo. Not that issues such as this are unaddressed. However, this is usually done quietly, with as little publicity as possible, in order to preserve the façade of amity between the EU Member States. The Greeks have broken this taboo in the worst way - by using the reparations argument as a weapon in a very public slanging match, not least in circumstances in which Germany considered the matter “done and dusted”. This is the first EU Member State government - at least since General de Gaulle - that has refused to play the EU establishment game by the “rules”; and the “rules” are currently a lot more stifling than they were in the General’s day. Will this Greek stance help their cause ? Or the cause of the Euro ? Or EU “amity” ? Doubt it. Whether the Greeks see it or not, it appears to me that all it is doing is further alienating German public opinion, and making it more likely that Germany will countenance the exit of Greece from the Euro into the Outer Darkness. No doubt, this would occasion much Weeping, and Wailing, and Gnashing of Teeth among Greeks. In the longer term, they would probably be better off. Whether the same can be said of the rest of us in the Eurozone is distinctly questionable.
Meanwhile, Greece is due to pay back a paltry €450 million tranch of that part of its Troika debt owed to the International Monetary Fund today - and the Greek Finance Minister has given public assurances that this gale day obligation will be met. The economic “chatter” suggests that this can only be done by scraping the bottom of the Greek fiscal barrel. The term “looking for change down the back of the couch” is commonplace. What this seems to mean for Greece is raiding various publicly controlled funds (such as public sector pension funds) to make up the amount. Apart from the fact that this is yet another example of Greek “funny” accounting, it has the disadvantage that (unlike the change behind the couch), these funds will need to be put back in their proper place in the near future. Even if it works - within the next 6 weeks or so, further repayments of at least €2 billion are due, some, I think, to the EU. All this in the context that there is still no agreement for the continuation of Greek bailout funding; Greece is surviving day-to-day on European Central Bank “emergency funding”; and there are not enough “couches” in Greece to come up with €2 billion. Tick-tock, tick-tock … Yours from the Metaxas Line, JR.
I did not realize until rather recently that our local population of those with Greek ancestry actually dominate the local restaurant scene. The line sort of reminds me of that. 
This is an aside I S’pose, but my interest is in which Nation(s) move to exploit whatever Flap arises from the eventual outcome of the Greek question, and to what ends they work.
Is this part of a larger question about whether it was a good idea to admit various economically and otherwise weak countries to EU and or NATO membership, and whether maybe it’s time to thin them out on an economic basis, but which thinning out conflicts with strategic aspects of major Western European countries’ and US aims in the face of rising Russian expansionism?
Only in the reason behind the admission of the weaker States into the larger Conglomerates. On the one hand, they may have been allowed membership in order for the weaker State to learn from the Mentoring states in order to strengthen, and grow their economy, and become a full strength partner in the larger group. The other hand, their admission may have been encouraged by those who have an interest in the weakening of the group through the repeated draining of resources of the strong members to support the weak one(s) who in turn never seem to learn from their economic mistakes. There will in this case, come an inevitable crisis. Which crisis may be manipulated, and taken advantage of by those above mentioned interests for whatever purpose motivated them in the first place. You can pick the Villain of the month, Russian expansionism, Chinese subtle practice, or the ever popular mysterious Central Banking system wanting to control the World’s wealth conspiracy. Plus, there always seems to be a Vulture waiting to reap whatever spoils can be taken.
Tick-tock … Latest is that the Greeks seem to have made some sort of approach to the IMF to secure a deferral of the repayment date for the forthcoming tranche of their IMF debt - the small matter of €750 million. IMF chief Christine Lagarde has rebuffed the suggestion. Despite the string of deadlines, there appears to have been no progress whatsoever on formulating an actual plan to allow a new Greek “bailout” to be put in place. Default is now a real possibility, and the plug could be pulled as soon as the next Eurogroup meeting, due to take place in Riga next week - although it is more likely that an emergency Council of Heads of State and Government would be needed to deal with such an explosive matter.
Meanwhile, over in the Merkelbunker, tolerance for the continued antics of the Greeks appears to have run out. Germany now appears to believe that Greek exit from the Eurozone would now be less costly that continuing to bankroll the unco-operative Greeks. The view, apparently, is that sufficiently strong “firewalls” (unspecified) have been put in place to prevent the whole European banking system being dragged down in a post-Grexit panic. Just hope they are right.
By the way - it just occurred to me that Shakespeare’s play, “Timon of Athens” is about a profligate man who gives away his fortune to unworthy “friends”, then “defaults” on his debts (often to the same people). He renounces society, and ends up expending another fortune (gold, discovered in his misanthrope’s cave) to advance the destruction of the city of Athens which he has, in his bitterness, renounced. A play for our times, perhaps ? Yours from Fortress Frankfurt, JR.
“When Fortune in her shift and change of mood
Spurns down her late beloved, all his dependants
Which labour’d after him to the mountain’s top
Even on their knees and hands, let him slip down,
Not one accompanying his declining foot.”
- Timon of Athens, Act I, Scene I.
Not sure the Greek Finance Minister has brushed up his Shakespeare, recently … Yours from the Stoa of Athens, JR.
Latest from the Cradle of Democracy is that, in an effort to scrape together the cash required to pay the looming €750 million loan tranche, the Greek government has ordered local authorities to lodge their local reserves in the Bank of Greece. The local mayors and chairpersons are, understandably, less than amused, since it leaves them running on empty without at all relieving them of responsibility to maintain local services.
This situation is completely, absolutely bonkers. If it were possible to damage Greek public finances more than they have been damaged already, moves like this would do the trick. And, again (but even more urgently than was the case with public enterprise pension funds) this money will have to be put back soon, or public services will fall into chaos. And still, no sign of any new terms for a “bailout” to which both Greece and the “non-Troika” can sign up. It is understood that Prime Minister Tsipras and his core group of ministers may have seen enough sense to be willing to make some compromise - without, as the Finance Minister put it recently, “being compromised”. Their problem is that they will have to get any compromise past their less pliable ministerial and parliamentary colleagues, and it is by no means evident that they can do this. Meanwhile, the rest of the Eurogroup/Troika show no willingness to agree a further bailout without seeing “substantial” further reforms from Greece. Maybe everybody is playing “chicken”. Maybe some further “financial arrangement” will be patched together. But things are not looking good …Yours from the Church of St Jude (patron saint of hopeless cases), JR.
It hasn’t gone away, you know. For the last month, skirmishing and trench-raiding has continued across the “Tsipras Line”. The process seems to consist of Greece’s creditors repeatedly demanding concrete proposals to achieve concrete “reforms” (read further financial retrenchment), with the Greeks repeatedly responding with another programme of aspirational proposals, accompanied by resolute resistance to a meaningful concrete programme including such measures as pension and public sector salary cuts and privatization of state-owned commercial assets. Repeated exchanges of paper and consequent meetings in Brussels seem to have produced very little result. Last week, one of the major “Troika” creditors, the International Monetary Fund, got so fed up with the whole business that they withdrew their negotiating team from Brussels, indicating that they were in effect fed up with leaving their team sitting around the Berlaymont just waiting for something to happen.
Meanwhile, it is interesting to note that the Evil Empire of Brussels has shown some suggestion not of blinking, but at least of a slight trembling of the eyelids. This is probably because (1) the idiots have finally realized that there are some points of their position off which the Greeks are really determined not to be pushed and (2) that for all the talk of “firewalls” and so on, the Eurocrats really do not know what the effect a Greek exit from the Euro might have on the stability of the Euro currency and the European (not to mention global) banking system. There is also the possible political damage of driving an EU Member State into the welcoming paws of the Russian Bear. Minds have, perhaps, been focused by the timetable as it currently stands. The Greek government has taken the highly unusual step of using IMF rules to “roll up” its total June repayment commitments to that organization into an end-month payment; the amount owed then appears to be a whopping €1.5 billion. Worse, the Hellenes are due, in the course of the month of July, to pay (mainly EU creditors) some €6.5 billion. The Greeks have only survived this far on the basis of miracles of creative accounting (something that may come back against them later) effectively condoned by the EU and the IMF. The possibility of their finding an additional €8 billion seems completely fanciful, unless they are allowed to use Monopoly money for repayments. A “Grexit” from the Euro looms, and nobody knows where that may lead.
Many analysts still think that some fudge solution will be found, allowing the Greeks a second “bailout” that defers the fundamental problems of the Greek situation. Perhaps. However, with the overall burden of Greek debt still piling up behind the Acropolis, this may prove very difficult. Let’s hope that those “firewalls” really work, after all … Yours from the Merkelbunker, possibly Blinking, JR.
I was listening to a member of the Greek financial team when he was being interviewed a few days ago - they were of the opinion that all their creditors were bluffing and would back down - hmmm
Greece has lived beyond its means for too long and can’t keep doing it, present debts if paid off on time it will take decades at the rate agreed already - basically Greece wants another debt write off - European banks already did 50% write off in 2011, in 2011/2012 private creditors had to accept a more than 55% cut to the value of Greek bonds - despite that the debt keeps getting bigger -
The government promised what it could not do for the people of Greece - banking on a cave in of all creditors to solve their problems - but that will not help if they do not reform, something they promised not to do any more.
Its got to be a bit of a habit with nations living beyond their means, defaulting and having to have debt written off as they will never be able to pay it back - only thing is all they learn is borrow and borrow - it will be written off before we all starve or the country collapses.
In relation to some recent comments - some comments. Regarding leccy’s recent contribution, you are really pointing up the fact that, for some time, the Greek government and the “Troika” creditors have been involved in a “Rebel without a Cause”- style game of chicken, something of which the Greeks seem to have been aware, while the “Troika” was not, at least up to very recently. The Greeks really do seem to drive over that cliff if “necessary”; whether the Troikites are similarly willing remains to be seen.
Of course, rulers and states have greased the wheels of government through borrowing, if not from time immemorial, at least since the Roman period. This is justified on grounds of practicality; complex systems of government cannot easily match revenue with expenditure on a current basis. Even “expansive” borrowing is justifiable - so long as both borrowers and lenders are in agreement as to the terms on which the loans will be managed, and so long as both parties are realistic (or honest) about the prospects of repayment terms being honored. In practice, the history of state borrowing has been … rather patchy. One of the “patchiest” examples is that of Spain (properly, of the Spanish kingdoms) between 1480 and 1620. In this period, the Kingdom of Castile received a huge windfall - the acquisition of the Spanish New World in the Americas. The gold of Mexico was significant enough; however, the acquisition of the enormous silver resources of Peru were much more so. The Castilian/Spanish régime, starting with that of King Carlos I (Holy Roman Emperor Charles V) chose to use this bonus “expansively” in the most literal sense. Charles used the bonus to launch an expensive programme designed to secure his Empire in Germany and Italy, a programme continued by his son, King Philip II of Spain in the much more complex circumstances of the late-16th century (Netherlands revolt, wars with England, France, south German states, Switzerland …). In order to secure the cash-flow and liquidity, huge borrowings were required. These were mainly secured from bankers in the Spanish-controlled area of northern Italy - notably the Genoese state “Bank of St George”, that largely came to function as a Spanish state bank. Considerable resort was also had to “domestic” borrowing in metropolitan Castile and Aragon which, unfortunately, was ill-structured in such a way as to impede the roll-over of domestic debt that had become too expensive to service. The state’s ability to honor these debts often hung on a knife edge; if the annual treasure fleet from the Americas was delayed, unsatisfactory in yield or - worse - captured by English privateers, default threatened. And indeed it happened (actually, in the form of state bankruptcy), repeatedly. It is a tribute to the Mysteries of Banking that Spain continued, for a long time, to retain credit with the bankers (even the Bank of St George). In the end, however, by about 1620, the game was truly up. The King became increasingly dependent on actual current revenue to continue its efforts to maintain itself as a major European power, and the inhibitions put on this by the “constitutions” of the Spanish kingdoms largely strangled its ability to do this. No accident, then, that the “enlightened dictatorship” of the Count-Duke of Olivares collapsed, and Spain’s progressive decline as a European power began its long period of decline. Debt crises are nothing new; the Greek one is just lesser, and faster, than would have been the case in former times.
As regards the “fudge” that might save us from the “Time-Bomb” - the Troikists have set their face against debt relief. This is consistent with their attitude to the “Irish situation”. However, there remains the option of the “restructuring” of many of Greece’s loans - effectively kicking the debt repayments far, far down the road. Germany should be familiar with this concept; after all, Germany only recently completed its repayment of debts due to WW1 reparations, something allowed only by such “restructuring”. The solution to Ireland’s recent predicament also included a substantial restructuring of this sort. The difference between the situations of Ireland and Portugal is that those countries committed themselves to rigorous programmes of retrenchment and “reform” - the present Greek government has not. To be fair to them, their clear democratic mandate supports them in this. Of course, the Troikists, and the Eurocracy, have little or no regard for democracy. Impending testimony at Ireland’s parliamentary enquiry into our “banking collapse” (far, far more catastrophic than the fall of the Rupee) may throw further light on this.
It will be interesting to see how this plays out. Yours from the GrAnderson Shelter, JR.
Overnight, the ticking got louder. Tsipras is now accusing EU negotiators of making oppressive fiscal proposals, while the Eurocracy is accusing the Greek government, in effect, of lying to its electorate about the content of “negotiations”. A “Big Push” against the Tsipras Line threatens, perhaps imminently … Yours from the Nearest Bunker, JR.
Things looking really bad along the Tsipras Line. Still no concrete proposals from the Greek government. Further exchanges of insults yesterday. Also, the Governor of the Greek Central bank has, in an unprecedented move, publicly urged his government to sign up to the most recent proto-deal offered two weeks ago to avoid turmoil in the Greek banking and monetary system. Also, the European Central Bank - a powerful but hitherto generally silent partner (at least in public), in the negotiations has publicly warned that the Greek banks may be unable to open next Monday due to continuing outward capital flows. Chaos threatened, and who knows how far this may spread.
Actually, it is almost too late to arrive at any agreement at this point. Not only is the Greek financial and monetary situation already incredibly dire, but it is getting worse by the hour, as funds continue to flow out of Greek banks of all sorts. The idea that these banks will be forced to signal default over the weekend is entirely credible. Furthermore, even an interim bailout agreement (to carry the Hellenic Republic to the end of the year), the best that can reasonably be hoped for at this stage, would require votes of assent in the parliaments of a number of EC Member States, including Germany. This sort of thing takes time, and there is no guarantee that the parliaments in questions would assent. This is particularly true for Germany’s Bundestag, which contains more than its share of monetary hard liners.
From recent statements from the Greek government, they seem to have given up on generating what they view as an acceptable deal through the official negotiating channels. They are now hoping that continuing pressure at high political level will produce a result for them. Much of this hope centres on Chancellor Merkel who, clearly, hopes that some sort of deal can be done. However, while she is the most powerful leader in the EU, she has her own problems. Apart from the Bundestag and another “silent” negotiator, the Bundesbank (German central bank), she finds herself in the unusual position of being at odds with her principal lieutenant, German finance minister Wolfgang Schauble; all of these powers appear to have reached (or over-reached) the limits of their flexibility, and are now firmly on the “hawkish” side.
Whether Tsipras and his crew are right to trust in high-level political contact (in effect, high-level political blackmail), well, we will find out on monday, when a special meeting of the Council of the Eurozone states. It may actually be too late by then. But you never know - in the Evil Empire, anything is possible … Yours from the walls of Mycenae, JR.