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Is the Plan to Actually Have Greece Fail?

COMMENT: Pon­der­ing the con­tin­u­ing euro­zone mess and the enslave­ment of Greece, one won­ders if indeed the bailout(s) are designed to fail. The Finan­cial Times arti­cle below fea­tures com­men­tary from one observ­er who won­ders about that pos­si­bil­i­ty. (Kudos to “Pter­rafractyl” for research­ing that one for us.)

Cer­tain­ly, the plans to slash wages will inevitably depress the Greek econ­o­my still fur­ther. The pro­posed [manda­to­ry] reduc­tion in spend­ing on med­ical care and phar­ma­ceu­ti­cals will inevitably effect a qua­si-eugen­ics pro­gram, in which the elder­ly and infirm will be culled from the herd.

This is a way of effect­ing a Nazi-style purge of Greek soci­ety, and doing so dur­ing a von Clause­witz­ian-style “post-war.”

(As we have seen in the past, the Nazi eugen­ics laws and pro­grams were not only derived from intel­lec­tu­al schools regard­ed with great favor in the U.S. and U.K. [among oth­er places], but the pro­grams the Third Reich imple­ment­ed were cel­e­brat­ed by Amer­i­can and British intel­lec­tu­als.)

“Athens Told to Change Spend­ing and Tax­es” by Peter Spiegel,  Ger­rit Wies­mann and Ker­rin Hope [Finan­cial Times]; CNBC.com; 2/24/2012.

. . . . “The pro­gram is much, much more ambi­tious than eco­nomic reform,” said Mujta­ba Rah­man, Europe ana­lyst at the Eura­sia Group risk con­sul­tancy. “This is state build­ing, as typ­i­cally under­stood in tra­di­tional low-income con­texts.” . . .

. . . .Among the mea­sures that must be com­pleted in the next sev­en days are reduc­ing state spend­ing on phar­ma­ceu­ti­cals by 1.1 bil­lion euros; com­plet­ing 75 full-scale audits and 225 val­ue added tax audits of large tax­pay­ers; and lib­er­al­is­ing pro­fes­sions such as beau­ty salons, tour guides and diet cen­tres. . . .

. . . . Mr Rah­man said the scale and the speed of the reforms demand­ed raised ques­tions about whether scep­ti­cal euro zone lenders were set­ting up Greece to fail some­time with­in the next year.

“Even if one under­stands the polit­i­cal imper­a­tive, the pro­gram is being set up to fail as many of the tar­gets will be impos­si­ble to achieve,” he said. . . .

COMMENT: It appears that some cir­cles in Ger­many (and in some of the major finan­cial hous­es of Wall Street) are expect­ing the Greek bailout to fail and (at least in some cas­es) see­ing that as a good thing.

This rais­es more ques­tions than it answers, includ­ing the pos­si­bil­i­ty that some­one could make a great deal of mon­ey by buy­ing short on some­thing that would be expect­ed to plunge in val­ue if Greece defaults.

If a Greek default, per­haps in com­bi­na­tion with a Europe-wide reces­sion, were to send the U.S. econ­o­my into reces­sion, it would ben­e­fit the GOP can­di­dates. As we have seen in the past, the Repub­li­can par­ty is close­ly con­nect­ed to the Under­ground Reich and the post­war Nazi dias­po­ra.

The British and French are opposed to allow­ing Greece to go bank­rupt.

“Secret Ger­man Plans for Greece to Go Bank­rupt”; news.com.au; 2/20/2012.

. . . . The rum­bling calls for Greece to face bank­rupt­cy come amid fears that even this lat­est bailout will not be enough to stop the nation sink­ing fur­ther into debt.

Hence the secret plans for bank­rupt­cy.

Offi­cials say Greece’s pub­lic debt will still be 129 per cent of GDP in 2020.

Con­cern about con­tin­u­al bailouts has also reached Wall Street with rumours cir­cu­lat­ing that banks are prepar­ing for a “cred­it event” soon after March 20 — that’s finan­cial jar­gon used by cred­it agen­cies to mean a default or in even sim­pli­er terms some­one unable to pay their bills.

March 20 is the dead­line for Greece to pay  €14.5bn to cred­i­tors.

Inside Ger­many there are deep divi­sions over whether to con­tin­ue to sup­port Greece.

Bavaria’s finance min­is­ter Markus Soder said the sta­bil­i­ty of euro as a world reserve cur­ren­cy is more impor­tant than Greece’s wel­fare.

“It would be bet­ter if Greece stepped out of the euro,” he said.

Last week BankingNews.gr, a Greek lan­guage busi­ness news site claimed that “the actu­al posi­tion of Ger­many is that Greece should go bank­rupt.” . . .

. . . . French pre­mier François Fil­lon said it was “utter­ly irrep­son­si­ble” to put the idea of a Greek default into play.

While Britain’s For­eign Sec­re­tary, William Hague, said it would be a tech­ni­cal night­mare if Greece is forced out of EMU.

“They don’t have the old cur­ren­cy sit­ting in the vaults ready to dis­trib­ute. It’s not straight­for­ward to leave the euro. It was built with­out exits,” he told the BBC’s Andrew Marr show.

But could the Greeks kick them­selves out of the Euro?

It’s entire­ly pos­si­ble. In April Greece goes to the polls and there’s a chance the hard Left Syriza par­ty could form gov­ern­ment. . . .


14 comments for “Is the Plan to Actually Have Greece Fail?”

  1. That ‘old’ cur­ren­cy quote by the GB for­eign sec­re­tary is absolute­ly absurd. Dave, as you’ve said for years the EU was forged to allow Ger­many to get done what they could­n’t get com­plete­ly done near­ly 70 years ago.Doesn’t mat­ter if plans exist for Greece to fail or not-
    STILL we have vir­tu­al­ly unlim­it­ed lever­age via the shad­ow bank­ing sys­tem, in which there are prac­ti­cal­ly no hard assets back­ing the infi­nite lay­ers of debt cre­at­ed, and which when final­ly unwound, will cre­ate a cat­a­clysmic col­lapse of all finan­cial insti­tu­tions, where every bank is daisy-chained to each oth­er cour­tesy of mul­ti­ple lay­ers of “hypoth­e­ca­tion, and re-hypoth­e­ca­tion ” and who knows what else.

    Posted by bambi | February 25, 2012, 3:31 am
  2. She’s the queen of Europe”:

    Ger­many finds itself back in pow­er in Europe
    Ger­many is the unques­tioned boss amid Europe’s debt cri­sis and eco­nom­ic woes. But the turn­around has inspired dis­com­fort among its neigh­bors and among Ger­mans.

    By Hen­ry Chu, Los Ange­les Times

    Feb­ru­ary 27, 2012, 6:45 p.m.
    Report­ing from Berlin—
    For near­ly 70 years, Ger­many’s grand nation­al ambi­tion has basi­cal­ly been not to have one.

    After los­ing two world wars and car­ry­ing out a hor­rif­ic geno­cide, the coun­try set to work­ing its way back into the Euro­pean fold, con­tent to focus on rebuild­ing its shat­tered econ­o­my while duti­ful­ly leav­ing con­ti­nen­tal lead­er­ship to the likes of France.

    The plan has been a roar­ing suc­cess — so much so that, in one of his­to­ry’s great ironies, Ger­many today finds itself right back where it was­n’t sup­posed to be: dom­i­nat­ing Europe.

    As the region’s rich­est, most pop­u­lous nation, with con­trol over purse strings rather than panz­ers, Ger­many is the unques­tioned boss amid Europe’s stub­born debt cri­sis and deep­en­ing eco­nom­ic malaise. But the turn­around has inspired a fair bit of dis­com­fort and unease, not just among some neigh­bor­ing nations but also among some Ger­mans.

    “We have an ambiva­lent rela­tion­ship with pow­er,” said senior research fel­low Ulrike Guerot of the Euro­pean Coun­cil on For­eign Rela­tions in Berlin. “We’ve nev­er got­ten it right.”

    Poten­tial­ly the fate of the glob­al econ­o­my now lies in Ger­many’s hands as it heads the effort to keep heav­i­ly indebt­ed Greece (where peo­ple mut­ter about a “Fourth Reich”) from going under and pulling down oth­er Euro­zone coun­tries with it. On Mon­day, Chan­cel­lor Angela Merkel suc­cess­ful­ly steered approval for a $175-bil­lion Greek bailout through the Ger­man Par­lia­ment, a deeply divi­sive mea­sure for Ger­man tax­pay­ers who will foot more than half the bill.

    Even so, Pres­i­dent Oba­ma and oth­er world lead­ers are urg­ing Ger­many to con­tribute even more to a per­ma­nent Euro­pean bailout fund that might stanch the debt cri­sis — pres­sure that Merkel has so far resist­ed.

    The lead­er­ship role thrust onto Ger­many is turn­ing out to be a mine­field in many ways, com­pli­cat­ed by the nation’s past. Berlin is caught in a clas­sic damned-if-you-do, damned-if-you-don’t posi­tion, its every move fod­der for crit­ics eager to spot signs either of Teu­ton­ic bel­liger­ence or a fail­ure to exer­cise pow­er respon­si­bly.


    The plan that Europe is pur­su­ing to save the euro cur­ren­cy bears an unmis­tak­ably Ger­man stamp, with its insis­tence on solemn pledges of fis­cal rec­ti­tude, stiff aus­ter­i­ty mea­sures and pun­ish­ment for coun­tries that stray. This week, near­ly all of the Euro­pean Union’s 27 nations are due to sign a pact on fis­cal dis­ci­pline that was large­ly writ­ten in Berlin.

    Despite the grow­ing cho­rus of detrac­tors and indi­ca­tors show­ing that aus­ter­i­ty is stran­gling eco­nom­ic growth in ail­ing nations, Merkel has refused to yield, and no fel­low Euro­pean leader has been strong enough to over­rule her.

    “She’s the queen of Europe,” said Josef Joffe, edi­tor of the news­pa­per Die Zeit.


    Let them eat bakla­va.

    Posted by Pterrafractyl | February 27, 2012, 8:39 pm
  3. Point­less pain rains in Spain:

    Spain under pres­sure to enact more aus­ter­i­ty after 2011deficit comes in high­er than fore­cast

    By Asso­ci­at­ed Press, Updat­ed: Tues­day, Feb­ru­ary 28, 5:29 AM

    MADRID — Spain government’s faced height­ened pres­sure Tues­day to enact fur­ther painful aus­ter­i­ty mea­sures, after fig­ures showed the pub­lic finances in 2011 were in even worse shape than its already pes­simistic pre­dic­tions.

    The high­er than antic­i­pat­ed bud­get deficit is like­ly to spell yet more bad news for a coun­try that’s expect­ed to slide back into reces­sion at a time when it’s already reel­ing from a sky-high unem­ploy­ment rate of near­ly one in four — it’s even worse for young peo­ple with around half out of work. Spain’s banks are also under pres­sure, hav­ing suf­fered big loss­es when a prop­er­ty boom implod­ed.

    On Mon­day, the gov­ern­ment revealed that its bud­get deficit for 2011 came in at 8.5 per­cent of nation­al income. Though slight­ly low­er than 2010’s equiv­a­lent of 9.3 per­cent, it’s high­er than the 8 per­cent fore­cast the new con­ser­v­a­tive gov­ern­ment issued after tak­ing pow­er in Decem­ber. The con­ser­v­a­tives had already raised the fore­cast from the pre­vi­ous Social­ist government’s 6 per­cent.

    The high­er than expect­ed 2011 out­come is like­ly to ratch­et up the pres­sure on the new gov­ern­ment to announce more deficit-cut­ting mea­sures if it’s to get the bud­get deficit down to the stat­ed goal of 4.4 per­cent of gross domes­tic prod­uct this year, unless it gets some relief from the EU in the form of an eas­i­er 2012 tar­get.


    The gov­ern­ment recent­ly denied a news report that it had exag­ger­at­ed its unof­fi­cial esti­mate of the 2011 deficit so as to improve its chances of get­ting eas­i­er terms from the Euro­pean Union.

    Finance Min­is­ter Cristo­bal Mon­toro said the fig­ures showed that the gov­ern­ment was “not exag­ger­at­ing” with its ini­tial 8 per­cent esti­mate.

    The cen­ter-right Pop­u­lar Par­ty took pow­er in Decem­ber after scor­ing a land­slide win in Novem­ber elec­tions as Spaniards fed up with what is now a near 23 per­cent job­less rate pun­ished the pre­vi­ous Social­ist gov­ern­ment.

    The new gov­ern­ment has said it will present a new full-blown 2012 bud­get by the end of March. It is there that Spaniards can almost cer­tain­ly expect some degree of fresh, sting­ing pain.


    This is also a good point to note Krug­man’s con­stant reminder that it was a hous­ing bub­ble that wrecked Spain’s finances and, pre-cri­sis, Spain was con­sid­ered a mod­el coun­try in terms of bud­get dis­ci­pline. That’s some­thing most aus­ter­i­ty-addled econ­o­mists seem to for­get.

    Posted by Pterrafractyl | February 28, 2012, 9:30 am
  4. http://online.wsj.com/article/SB10001424052970203833004577249831718108646.html

    FEBRUARY 28, 2012
    S&P Declares Greece in Default

    Greece became the first euro-zone mem­ber offi­cial­ly to be rat­ed in default, 13 years after the sin­gle Euro­pean cur­ren­cy was adopt­ed to strength­en the Euro­pean Union.

    Stan­dard & Poor’s cut Greece’s long-term cred­it rat­ing to selec­tive default from double‑C. The move was expect­ed, as S&P said this month that it would con­sid­er Greece in default if it added “col­lec­tive-action” claus­es to its sov­er­eign debt, effec­tive­ly forc­ing all bond­hold­ers to accept a bond-swap offer­ing. ...

    Posted by R. Wilson | February 28, 2012, 10:50 pm
  5. As always, Mr. Wil­son, when view­ing S & P’s pro­nounce­ments, we must remem­ber that the firm is owned by the McGraw fam­i­ly and they are long­stand­ing mem­bers of the Bush milieu.

    With aus­ter­i­ty mania reigning–we might think of the com­pa­ny name as “the stan­dard is poor[er].”

    Posted by Dave Emory | February 29, 2012, 3:51 pm
  6. @R. Wil­son and Dave: Well, the Greek default could be worse...for JP Mor­gan and the oth­er banks that sold bil­lions in cred­it default swaps on that Greek debt. Not only do they get a chance to avoid hav­ing to pay out on all that default-insur­ance they sold (because it’s a weird “selec­tive” default), it’s the bank­ing giants’ own rep­re­sen­ta­tives that get to secret­ly make this deci­sion:

    How Greece Could Take Down Wall Street

    Pol­i­tics / Glob­al Debt Cri­sis 2012 Feb 24, 2012 — 12:40 PM

    By: Ellen_Brown

    In an arti­cle titled “Still No End to ‘Too Big to Fail,’” William Grei­der wrote in The Nation on Feb­ru­ary 15th:

    Finan­cial mar­ket cyn­ics have assumed all along that Dodd-Frank did not end “too big to fail” but instead cre­at­ed a charmed cir­cle of pro­tect­ed banks labeled “sys­tem­i­cal­ly impor­tant” that will not be allowed to fail, no mat­ter how bad­ly they behave.

    That may be, but there is one bit of bad behav­ior that Uncle Sam him­self does not have the funds to under­write: the $32 tril­lion mar­ket in cred­it default swaps (CDS). Thir­ty-two tril­lion dol­lars is more than twice the U.S. GDP and more than twice the nation­al debt.

    CDS are a form of deriv­a­tive tak­en out by investors as insur­ance against default. Accord­ing to the Comp­trol­ler of the Cur­ren­cy, near­ly 95% of the bank­ing industry’s total expo­sure to deriv­a­tives con­tracts is held by the nation’s five largest banks: JPMor­gan Chase, Cit­i­group, Bank of Amer­i­ca, HSBC, and Gold­man Sachs. The CDS mar­ket is unreg­u­lat­ed, and there is no require­ment that the “insur­er” actu­al­ly have the funds to pay up. CDS are more like bets, and a mas­sive loss at the casi­no could bring the house down.

    It could, at least, unless the casi­no is rigged. Whether a “cred­it event” is a “default” trig­ger­ing a pay­out is deter­mined by the Inter­na­tion­al Swaps and Deriv­a­tives Asso­ci­a­tion (ISDA), and it seems that the ISDA is owned by the world’s largest banks and hedge funds. That means the house deter­mines whether the house has to pay.

    The Hous­es of Mor­gan, Gold­man and the oth­er Big Five are jus­ti­fi­ably wor­ried right now, because an “event of default” declared on Euro­pean sov­er­eign debt could jeop­ar­dize their $32 tril­lion deriv­a­tives scheme. Accord­ing to Rudy Aviz­ius in an arti­cle on The Mar­ket Ora­cle (UK) on Feb­ru­ary 15th, that explains what hap­pened at MF Glob­al, and why the 50% Greek bond write-down was not declared an event of default.

    If you paid only 50% of your mort­gage every month, these same banks would quick­ly declare you in default. But the rules are quite dif­fer­ent when the banks are the insur­ers under­writ­ing the deal.


    It’s good to be the King:

    02/28/2012 | 04:36pm
    ISDA Pan­el To Review Greek CDS Trig­ger Query

    NEW YORK — A spe­cial com­mit­tee of the Inter­na­tion­al Swaps and Deriv­a­tives Asso­ci­a­tion has agreed to review recent devel­op­ments in Greece’s debt restruc­tur­ing as a poten­tial “cred­it event” that might trig­ger $3.2 bil­lion of cred­it-default swaps on Greece for pay­outs.

    The move may result in the coun­try being offi­cial­ly declared in breach of its oblig­a­tions to bond­hold­ers some­what soon­er than expected–even though Greece has­n’t failed to hon­or pay­ments and its restruc­tur­ing deal with pri­vate cred­i­tors isn’t yet com­plete.

    ISDA said in a state­ment Tues­day that, as sec­re­tary to the so-called Deter­mi­na­tions Com­mit­tee that decides such mat­ters for the CDS mar­ket, the com­mit­tee will hold a meet­ing at 1100 GMT Thurs­day to deter­mine whether to force pay­ers of CDS pro­tec­tion on Greek sov­er­eign bonds to com­pen­sate buy­ers.

    The Deter­mi­na­tions Com­mit­tee said Mon­day it had until 1700 GMT Wednes­day to either take up the request sent by an anony­mous par­ty to the com­mit­tee or reject it.

    The anony­mous request asked the com­mit­tee to con­sid­er whether moves that could force pri­vate investors to for­give 53.5% of the face val­ue of Greek debt, while the Euro­pean Cen­tral Bank got a bet­ter deal, con­sti­tutes manda­to­ry sub­or­di­na­tion that should allow hold­ers of CDS to col­lect com­pen­sa­tion.

    The ECB and nation­al cen­tral banks “ben­e­fit­ed from a change in the pri­or­i­ty of pay­ments as a result of the Hel­lenic Repub­lic exclu­sive­ly offer­ing them the abil­i­ty to exchange out of their eli­gi­ble instru­ments pri­or to the [pri­vate cred­i­tor] exchange and [expect­ed] imple­men­ta­tion of” the col­lec­tive-action claus­es, the request read.

    Under the 2003 Cred­it Deriv­a­tives def­i­n­i­tions pub­lished by ISDA, a change in the pay­ment pri­or­i­ty rank­ing of any oblig­a­tion, caus­ing its sub­or­di­na­tion, is one of the events in restruc­tur­ing that can trig­ger CDS for payouts–as long as it results from a dete­ri­o­ra­tion in cred­it­wor­thi­ness.


    The deci­sion mak­ers’ iden­ti­ties and their cre­den­tials are a close­ly guard­ed secret of the firms those indi­vid­u­als rep­re­sent and of the Inter­na­tion­al Swaps and Deriv­a­tives Asso­ci­a­tion, a trade body for swaps that con­venes a 15-mem­ber com­mit­tee every time such a deter­mi­na­tion is request­ed of it.

    ISDA’s Deter­mi­na­tions Com­mit­tee for Europe com­pris­es 10 vot­ing deal­er banks and five major invest­ment firms named by ISDA. A super­ma­jor­i­ty of 12 must agree for a deci­sion to be bind­ing on CDS held by par­ties who have signed up to be bound by ISDA pro­to­cols.

    The deal­er firms con­sti­tute some of the largest invest­ment banks in the world, and one com­mit­tee mem­ber rep­re­sents each. They are Bank of Amer­i­ca Mer­rill Lynch, Bar­clays Cap­i­tal, BNP Paribas, Cred­it Suisse, Deutsche Bank, Gold­man Sachs, J.P. Mor­gan Chase, Mor­gan Stan­ley, Soci­ete Gen­erale and UBS. Mean­while, the invest­ment firms are sim­i­lar­ly influ­en­tial: Blue­Moun­tain Cap­i­tal, Citadel, D.E. Shaw, Elliott Man­age­ment Corp. and Pacif­ic Invest­ment Man­age­ment Co.

    Posted by Pterrafractyl | February 29, 2012, 7:08 pm
  7. @Pterrrafractyl–

    Great work! When post­ing arti­cles, it would be a good guard against link decay to put the title of the work in the text on the site.

    That way, if the record is expunged online, it’ll still be here.

    Posted by Dave Emory | February 29, 2012, 8:27 pm
  8. @Dave: Good reminder. Link decay is an exam­ple of the 2nd law of inter­net ther­mo­dy­nam­ics. Infor­ma­tion gets lost for­ev­er. :-(

    Posted by Pterrafractyl | February 29, 2012, 9:27 pm
  9. I’m sure they were being com­plete­ly objec­tive:

    Greece Default SWAPS Don’t Have to Pay: ISDA
    By Abi­gail Moses — Mar 1, 2012 9:01 AM CT

    Default insur­ance on Greek debt won’t be paid out, the Inter­na­tion­al Swaps & Deriv­a­tives Asso­ci­a­tion said after it was asked to rule whether part of the nation’s $170 bil­lion bailout was a cred­it event.

    The group said the Euro­pean Cen­tral Bank’s exchange of Greek bonds for new secu­ri­ties exempt from loss­es being imposed on pri­vate investors hasn’t trig­gered $3.25 bil­lion of out­stand­ing cred­it-default swaps. ISDA’s deter­mi­na­tions com­mit­tee, includ­ing JPMor­gan Chase & Co. and Pacif­ic Invest­ment Man­age­ment Co., said the switch didn’t con­sti­tute sub­or­di­na­tion, one of the cri­te­ria for a pay­out under a restruc­tur­ing event.

    “The sit­u­a­tion in the Hel­lenic Repub­lic is still evolv­ing” and today’s deci­sions “do not affect the right or abil­i­ty to sub­mit fur­ther ques­tions,” ISDA said in a state­ment. The deci­sion is not an expres­sion of the committee’s “view as to whether a cred­it event could occur at a lat­er date,” the asso­ci­a­tion said.

    A swaps pay­out may still hap­pen if Greece uses col­lec­tive action claus­es on pri­vate investors who refuse to take so-called hair­cuts on their debt hold­ings, accord­ing to ISDA’s rules. Offi­cials includ­ing for­mer ECB Pres­i­dent Jean-Claude Trichet have opposed trig­ger­ing swaps because they’re con­cerned traders would be encour­aged to bet against fail­ing nations and wors­en Europe’s debt cri­sis.


    Posted by Pterrafractyl | March 1, 2012, 8:17 am
  10. Unex­pect­ed deficits = sanc­tions. The nEU nor­mal:

    Spain Warns It Will Miss 2012 Deficit Tar­get

    MADRID March 2, 2012 (AP)

    Spain’s prime min­is­ter said Fri­day that his reces­sion-rid­den coun­try will miss its deficit goal for this year, risk­ing sanc­tions from the Euro­pean Union.

    The announce­ment came as the gov­ern­ment report­ed more grim eco­nom­ic news: a big rise in claims for job­less ben­e­fits last month and a new fore­cast that Span­ish eco­nom­ic out­put will fall 1.7 per­cent this year, worse than the 1 per­cent fore­cast recent­ly by the EU and the 1.5 per­cent pre­dict­ed just weeks ago the Bank of Spain.

    Unem­ploy­ment — now at 22.9 per­cent — will hit an aver­age 24.3 per­cent this year, the gov­ern­ment said.

    Spain’s gov­ern­ment deficit will reach 5.8 per­cent of eco­nom­ic out­put this year, Prime Min­is­ter Mar­i­ano Rajoy said after an EU sum­mit in Brus­sels. That is much high­er than the 4.4 per­cent Madrid had promised to the oth­er states in the 27-nation bloc.

    How­ev­er, Rajoy said Spain still aims to cuts its deficit to 3 per­cent in 2013, which would bring the coun­try back in line with the bloc’s fis­cal rules. He did­n’t say how his EU coun­ter­parts react­ed to the high­er deficit, but insist­ed that he was com­mit­ted to aus­ter­i­ty.

    Rajoy’s acknowl­edg­ment does­n’t come as a sur­prise, as Spain sailed far past last year’s deficit tar­get. Instead of 6 per­cent of gross domes­tic prod­uct, the 2011 deficit reached 8.5 per­cent.

    How­ev­er, it puts Madrid on col­li­sion course with the EU and its part­ners in the euro cur­ren­cy union, which have focused on aus­ter­i­ty as the best way of fight­ing off a crip­pling debt cri­sis.

    Rajoy spoke in Brus­sels after a sum­mit of Euro­pean lead­ers. On the new deficit goal, he said “I did not con­sult oth­er Euro­pean lead­ers and I will inform the Com­mis­sion in April,” he said. “This is a sov­er­eign deci­sion by Spain.”

    In Madrid, Econ­o­my Min­is­ter Luis de Guin­dos announced the 1.7 per­cent GDP con­trac­tion fore­cast and said the econ­o­my will shrink in the first two quar­ters of this year and pos­si­bly in the third too, before start­ing to pick up. He blamed sub­dued domes­tic con­sump­tion, high­er oil prices and a slow­er world econ­o­my.

    He said unem­ploy­ment will rise over the short term as labor mar­ket reforms passed by the new gov­ern­ment take time to kick in and encour­age employ­ers to hire.


    “There is an issue of con­fi­dence at stake here,” Altafaj Tar­dio said. He added that the Com­mis­sion still wants Madrid to pro­vide details on why last year’s deficit was so much high­er than expect­ed — and what it plans to do about it this year — before the end of the month.

    The Com­mis­sion’s reluc­tance to give Spain more lee­way means the coun­try risks being slapped with finan­cial penal­ties of up to 0.2 per­cent of GDP.

    Posted by Pterrafractyl | March 2, 2012, 9:10 am
  11. German-Foreign-Policy.com has as recent piece on the ongo­ing pri­va­ti­za­tion push in the fina­cial­ly dis­tressed euro­zone areas. It looks like Deutsche Bank and Ger­man gov­ern­ment agen­cies are lead­ing the devel­op­ment of that push and the push is build­ing. This is get­ting absurd. It is once again worth point­ing out that cur­ren­cy unions (or any oth­er type of sove­r­ieng­ty-shar­ing agree­ment) just will not func­tion when the most pow­er­ful mem­bers can can­ni­bal­ize the economies of the weak­est mem­bers when they fall on hard times. It’s a seri­ous sys­temic moral haz­ard. To some extent this is a meta-crit­i­cism that applies to vir­tu­al­ly all of the eco­nom­ic sys­tems we’ve seen humans flail about with his­tor­i­cal­ly. But the for­mal­iza­tion of an inter­na­tion­al debtor’s prison — one that rewards inter­na­tion­al loan-shark­ing where the cred­i­tor makes mon­ey on both the debt bub­ble export splurge and the post-bub­ble-burst asset-seizures — has to be one of the more moral­ly haz­ardous eco­nom­ic par­a­digms we’ve seen. Legal­ized inter­na­tion­al loan-shark­ing is appar­ent­ly going to become an even big­ger part of the bat­tle­field glob­al com­mu­ni­ty of tomor­row.

    Pat­terned after the Treu­hand

    (Own report) — Ger­man gov­ern­ment agen­cies and the Deutsche Bank are push­ing for the pri­va­ti­za­tion of pub­lic prop­er­ty in the south­ern Euro­pean cri­sis coun­tries. In Greece, the state-owned for­eign trade pro­mo­tion agency “Ger­many Trade and Invest” (GTAI) acts as a “con­sul­tant” for the “Hel­lenic Repub­lic Asset Devel­op­ment Fund” (HRADF) which, since the end of March, has all the prop­er­ty titles on Greek state assets and is prepar­ing their sales. The HRADF is pat­terned after the Ger­man Treu­hand (Trust Fund), which is accused of hav­ing squan­dered the nation­al wealth of the Ger­man Demo­c­ra­t­ic Repub­lic (GDR) in the after­math of 1990. It is ben­e­fit­ing from the “Ger­man expe­ri­ence in the pri­va­ti­za­tion and restruc­tur­ing process of the new­ly formed Ger­man states,” accord­ing to the Ger­man Min­istry of Eco­nom­ics. The GTAI agency, which, in the search for new investors, is col­lab­o­rat­ing with its Greek coun­ter­part “Invest­ment in Greece” sees “attrac­tive invest­ment oppor­tu­ni­ties” in real estate and nat­ur­al resources, in water sup­ply, in infra­struc­ture and in the OPAP, the largest bet­ting and gam­bling com­pa­ny in Europe and Greece’s third largest enter­prise. The Deutsche Bank is par­tic­i­pat­ing in OPA­P’s pri­va­ti­za­tion. The bank has assist­ed in sim­i­lar process­es in oth­er coun­tries and accord­ing to its research team, com­pre­hen­sive pri­va­ti­za­tions need to be car­ried out all over Europe.
    Pri­va­ti­za­tion Expe­ri­ence
    The Deutsche Bank has par­tic­i­pat­ed in pri­va­ti­za­tions, imposed with­in the frame­work of the Euro cri­sis, also in Por­tu­gal. To receive finan­cial aid, Por­tu­gal, like Greece, was com­pelled to relin­quish pub­lic assets under Ger­man pres­sure. The Deutsche Bank was involved in the re-pri­va­ti­za­tion of the BPN, the Por­tuguese bank, nation­al­ized in the course of the cri­sis. The Deutsche Bank also served as a con­sul­tant for the ener­gy group Chi­na State Grid in its acqui­si­tion of the Por­tuguese REN pow­er grid group, as well as for the Chi­nese enter­prise, Three Gorges, in its acqui­si­tion of the Por­tuguese elec­tric­i­ty sup­pli­er, EDP. The Bank has also been active in pri­va­ti­za­tions in Great Britain. It assist­ed in the sale of the North­ern Rock Bank, nation­al­ized in 2008 when it was threat­ened with col­lapse, to the Vir­gin Mon­ey bank.
    Con­sid­er­able Poten­tial
    The Deutsche Bank con­sid­ers its involve­ment, as a con­sul­tant for the pri­va­ti­za­tion of state assets, as a lucra­tive busi­ness “Even though the top­ic has been on the eco­nom­ic pol­i­cy agen­da for at least twen­ty years, there is still con­sid­er­able pri­va­ti­za­tion poten­tial in a num­ber of EU coun­tries,” accord­ing to its recent­ly pub­lished “Rev­enue, com­pe­ti­tion, growth” report.[1] That pub­li­ca­tion details the “poten­tial for pri­va­ti­za­tion in the Euro area,” apprais­es Euro­pean nation­al economies coun­try by coun­try and sec­tor by sec­tor hard­ly miss­ing poten­tials for pri­va­ti­za­tions: “In prin­ci­ple, there are also ben­e­fits to be had from the pri­va­ti­za­tion of gov­ern­ment ser­vices of gen­er­al inter­est, e.g. water sup­ply and water dis­pos­al, health­care facil­i­ties and non-sov­er­eign admin­is­tra­tive tasks.” The paper also pro­vides con­crete num­bers. It lists poten­tial rev­enues from the sale of Ital­ian state assets and from grant­i­ng con­ces­sions to be between 150 and 210 bil­lion Euros.
    Con­flict­ing Bal­ance Sheet
    How­ev­er, the ambi­tious Ger­man expec­ta­tions have not been ful­filled every­where. In Feb­ru­ary, Greece revised its fore­cast and is now expect­ing pri­va­ti­za­tion rev­enues worth only 19 rather than 50 bil­lion Euros by 2015. Berlin is react­ing with more pres­sure on this slow­down of Greek pri­va­ti­za­tions. Gen­er­al­ly, Athens is not res­olute­ly remov­ing alleged “obsta­cles” to invest­ment projects, accord­ing to a memo leaked to the press in March to expose the Greek government.[2] Eco­nom­ic Min­is­ter Philipp Rösler has recent­ly con­firmed that Berlin is demand­ing a speedup of privatizations.[3] Last year, how­ev­er, the Span­ish gov­ern­ment had also stopped sell­ing shares of its Madrid and Barcelona air­ports, for which the Ger­man com­pa­nies Fra­port and Siemens had been bid­ding. The Span­ish gov­ern­ment hopes to achieve high­er rev­enues with­in an improved eco­nom­ic cli­mate, rather than in the cur­rent cri­sis. It will not sell its nation­al lot­tery for the time being. Accord­ing to the EU, IMF and Euro­pean Cen­tral Bank troi­ka, Por­tu­gal and Ire­land are ful­fill­ing the pri­va­ti­za­tion plan with a vol­ume of five and three bil­lion Euros respec­tive­ly.


    Posted by Pterrafractyl | April 22, 2012, 11:35 pm
  12. Awwww...look at the thugs nice fel­lows help­ing the old peo­ple cross the street. What a ray of sun­shine these Gold­en Dawn folks are with all that char­i­ty. And their calls for send­ing ille­gal immi­grants to forced labor camps, well that’s just warms my heart. How gen­er­ous must these Gold­en Dawn fel­lows be, what with Greece act­ing as the entry point for ~9 out of 10 of the ille­gal immi­grants enter­ing the EU...a forced labor pro­gram that gives those pre­cious jobs to pris­on­ers demon­strates a pro­found lev­el of com­pas­sion. It’s always dark­est before the dawn, espe­cial­ly when it’s mourn­ing morn­ing in Athens:

    Analy­sis: Secre­tive far-right par­ty taps into Greeks’ anger, fear

    By Renee Mal­te­zou

    PIRAEUS, Greece | Wed Apr 25, 2012 12:15pm EDT

    (Reuters) — In the port of Piraeus, dozens of young men with shaven heads and black t‑shirts packed a small room one evening to hear Gold­en Dawn’s dream of a Greece purged of for­eign­ers, its bor­ders sealed with land­mines.

    “We want all ille­gal immi­grants out, we want to take their stench out of this place,” said Frangis­cos Pori­his, an elec­tion can­di­date for the ultra-nation­al­ist and high­ly secre­tive par­ty.

    “They should­n’t be here and they will leave one way or the oth­er — the good or the bad way,” he told the Piraeus meet­ing.

    With Greece deep in eco­nom­ic and social cri­sis, the par­ty is promis­ing vot­ers in next mon­th’s elec­tions to start by expelling ille­gal immi­grants — before mov­ing on to the legal ones.

    Nev­er­the­less, Gold­en Dawn denies it is neo-Nazi, although its leader Niko­laos Mihalo­li­akos did intro­duce him­self to Athens city coun­cil last year with a Nazi salute.

    With its anti-for­eign­er mes­sage plus some wel­fare parcels for a few of Greece’s many needy, Gold­en Dawn has emerged from obscu­ri­ty in the last few months and now seems cer­tain to enter par­lia­ment com­fort­ably when the nation votes on May 6.

    Flanked by book­shelves lined with books on Aryan suprema­cy and nation­al­ism, the Piraeus audi­ence lis­tened in rapt atten­tion. Leaflets declar­ing “Not a sin­gle unem­ployed Greek, not a sin­gle ille­gal immi­grant in Greece” lay on tables, along­side man­i­festos pro­claim­ing “Greece belongs to Greeks”.



    Gold­en Dawn’s rhetoric res­onates with Greeks who blame ris­ing crime on the hun­dreds of thou­sands of ille­gal immi­grants flock­ing to the coun­try’s porous bor­ders.

    Nine out of 10 ille­gal immi­grants enter­ing the Euro­pean Union in 2010 arrived in Greece, large­ly from Turkey by land or sea. Last year Italy took the top spot due to a jump in arrivals of peo­ple flee­ing the Arab Spring upheaval.

    Nev­er­the­less, Greece has more than one mil­lion immi­grants, legal and ille­gal, in a coun­try of 11 mil­lion peo­ple.


    “It’s not that Greeks became right-wing overnight,” said Thomas Ger­akis, head of the Marc poll­ster group. “They just want to send a mes­sage to the polit­i­cal sys­tem as a whole.”

    Gold­en Dawn’s can­di­dates are not career politi­cians; they include farm­ers, shep­herds, work­ers and retired army offi­cers.

    The par­ty has no rec­og­niz­able names apart from its leader Mihalo­li­akos, who served in the Greek spe­cial forces and was elect­ed to the Athens city coun­cil in 2010 — giv­ing the Nazi salute on his first appear­ance there last year.

    “Gold­en Dawn has the advan­tage of being invis­i­ble,” said a polit­i­cal ana­lyst, who declined to be named. “Apart from Mihalo­li­akos, even I don’t know any of the oth­er faces in the par­ty and I’m in the busi­ness. That works as a pro­tec­tive shield for them.”

    Polls show the par­ty tak­ing between 4.1 and 5.7 per­cent next month. Much of that has come at the expense of the nation­al­ist LAOS par­ty, whose rat­ings plum­met­ed after it joined the out­go­ing coali­tion gov­ern­ment last year. It lat­er quit after refus­ing to accept the aus­ter­i­ty con­di­tions of Greece’s lat­est bailout.



    Gold­en Dawn’s man­i­festo is less benev­o­lent than the good-neigh­bor image its food dri­ve has helped to cul­ti­vate. Ille­gal immi­grants must be imme­di­ate­ly arrest­ed and deport­ed, and legal immi­grants even­tu­al­ly expelled as well, the group says.

    It wants crimes com­mit­ted by immi­grants to fall under a spe­cial cat­e­go­ry, with their sen­tences car­ried out in spe­cial deten­tion cen­ters where the immi­grants are put to work.

    “There are peo­ple who have been liv­ing in a build­ing for 40–50 years and they sud­den­ly real­ize that it’s only them and maybe anoth­er fam­i­ly and that the rest are third-world for­eign­ers who live in groups of 30–40 in one apart­ment,” said Pana­gio­taros.

    The group has lit­tle sym­pa­thy for the polit­i­cal class. Politi­cians behind Greece’s cri­sis must be hauled before a spe­cial court, jailed and their prop­er­ty seized, the group says, while any Greek refus­ing to join the con­script army will be stripped of their cit­i­zen­ship and exiled.

    Despite the com­par­isons with neo-Nazism, Gold­en Dawn has para­dox­i­cal­ly tapped into anti-Ger­man sen­ti­ment by attack­ing the bailout pack­age from the EU and Inter­na­tion­al Mon­e­tary Fund and what it calls Ger­man dom­i­na­tion of Europe.

    Set up in 1992 and relaunched in 2007, the par­ty admires Greek dic­ta­tor Ioan­nis Metaxas, who refused to sur­ren­der to the Axis pow­ers in 1940.


    Mem­bers say dis­ci­pline and years of unwa­ver­ing ded­i­ca­tion are required to win accep­tance. One said it can take up to three years to become a mem­ber — start­ing first as a sup­port­er, then as tri­al-mem­bers before join­ing the “fam­i­ly”.

    “For the Com­mu­nists we are Nazis, for the Social­ists we are fas­cists and for the con­ser­v­a­tives we are extreme right,” said Nas, a Gold­en Dawn mem­ber who declined to give his last name. “Let them call me what they want. I do what I do with hon­or.”

    Posted by Pterrafractyl | April 25, 2012, 8:11 pm
  13. Greek exit polls May 6th 2012, show greek neo nazi par­ty gain­ing seats
    “The Greek neo-Nazi Gold­en Dawn par­ty will enter par­lia­ment for the first time in near­ly 40 years, exit polls showed on Sun­day as bal­lots closed in an ear­ly elec­tion that could derail the country’s reforms.

    The par­ty is cal­cu­lat­ed to win between six and eight per­cent of the vote on ris­ing immi­gra­tion and crime con­cerns, com­fort­ably above the three-per­cent thresh­old required for to enter par­lia­ment.

    The group react­ed jubi­lant­ly and claimed the result would trans­late into more than 25 deputies in the 300-seat par­lia­ment, a stun­ning blow to main­stream par­ties.

    “A new nation­al­ist move­ment dawns,” Gold­en Dawn said on its web­site.

    “Hun­dreds of thou­sands of Greeks have dynam­i­cal­ly joined the nation­al cause for a great, free Greece,” it said.

    Once part of the country’s polit­i­cal fringe, the Hrys­si Avgi (Gold­en Dawn) had already made head­lines in 2010 by elect­ing its leader to the Athens city coun­cil on a wave of anti-immi­gra­tion ten­sion in the capital’s poor­er dis­tricts.

    In the two years that fol­lowed, with Greece sink­ing deep­er into reces­sion and over a mil­lion peo­ple out of job, Gold­en Dawn’s strength grew fur­ther.

    Now they appear to have mul­ti­plied their sup­port ten­fold.

    With Greece the main entry-point for irreg­u­lar migra­tion to Europe, thou­sands of migrants unable to cross to oth­er EU states due to legal con­straints have cre­at­ed urban ghet­tos in Athens, Patras and oth­er cities.

    Hos­til­i­ty from local res­i­dents has spiked in recent months with the dete­ri­o­ra­tion of an eco­nom­ic cri­sis that has brought reces­sion and hun­dreds of thou­sands of job loss­es in Greece.

    Migrants are also blamed for increased mug­gings, car thefts and break-ins”


    and from the AFP

    Posted by leif | May 6, 2012, 11:53 am
  14. When Wolf­gang Schauble is play­ing the ‘good cop’, you know you’re in a bad spot:

    Greek Reporter
    Merkel Rules Out More Greek Aid

    by Andy Dabilis — Feb 16, 2014

    Ger­man Chan­cel­lor Angela Merkel, whose coun­try is the biggest con­trib­u­tor to $325 bil­lion in two bailouts to save Greece, has ruled out a third, although Prime Min­is­ter Anto­nis Sama­ras said that with a 1.5 bil­lion euro ($2.05 bil­lion) pri­ma­ry sur­plus that his coun­try now doesn’t one any­way.

    Merkel over­ruled her Finance Min­is­ter, Wolf­gang Schaeu­ble, who had said Greece might need anoth­er 10–20 bil­lion euros ($13.63-$27.26 bil­lion) before the May elec­tions held for Greek munic­i­pal offices and the Euro­pean Par­lia­ment, the news­pa­per der Spiegel report­ed.

    Sama­ras’ New Democ­ra­cy Con­ser­v­a­tives and his coali­tion part­ner, the PASOK Social­ists, are trail­ing the major oppo­si­tion Coali­tion of the Rad­i­cal Left (SYRIZA) whose leader, Alex­is Tsipras, has pre­dict­ed will win and even­tu­al­ly come to pow­er.

    He is opposed to the terms of $325 bil­lion in two bailouts imposed by the gov­ern­ment on the orders of inter­na­tion­al lenders, the Troi­ka of the Euro­pean Union-Inter­na­tion­al Mon­e­tary Fund-Euro­pean Cen­tral Bank (EU-IMF-ECB) and said he wouldn’t repay the mon­ey.

    Schaeu­ble had want­ed to give the ail­ing Greek gov­ern­ment a “demon­stra­tion of sol­i­dar­i­ty” by com­mit­ting this spring to fur­ther sup­port from Europe after the May 25 poll.

    “He sees the dan­ger that with­out the prospect of fur­ther aid, rad­i­cal par­ties in Greece could make big gains in the elec­tion,” lead­ing the gov­ern­ment in Athens to col­lapse, the mag­a­zine report­ed.

    Besides SYRIZA, the anti-aus­ter­i­ty ultra-extrem­ist far-right Gold­en Dawn par­ty is a sol­id third in polls even though its lead­ers have been jailed on charges of oper­at­ing a crim­i­nal gang.

    It said Merkel’s own domes­tic polit­i­cal con­cerns led her to veto the move over fears that the Euroscep­tic Alter­na­tive for Ger­many (AfD) could ben­e­fit from a fresh debate about aid for Greece.

    The AfD, which wants to aban­don the euro and return to the deutschmark, was formed last year and failed to win any seats in September’s gen­er­al elec­tion but scored sev­en per­cent in a recent poll, far above the three-per­cent hur­dle for seats in the Euro­pean Par­lia­ment.


    We prob­a­bly should­n’t be sur­prised that the pro-aus­ter­i­ty ‘bad cop’ poli­cies pushed by lead­ers like Merkel are also pro-vig­i­lante. We also prob­a­bly should­n’t be sur­prised if some of those vig­i­lantes end up in office.

    Posted by Pterrafractyl | February 17, 2014, 10:28 am

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