Default by Greece Inevitable - Update : Heave to Oust Greece From the Eurozone

[C. Flower]

If the political will was there, yes we could do that yesterday. The problem is the political will is totally absent with the current government, and is obviously not being encouraged by the Troika. The policy is to reduce minimum wage, pensions, health care, social security, and tax Joe Soap in to obedience by extreme poverty. This whole situation has absolutely nothing to do with inability to raise taxes and clean up the mess. It has everything to do with the unwillingness to raise those taxes. And it has everything to do with protecting the vulture capitalists who made fortunes by running this country into the ground. That is why Tsipras is the most dangerous politician going. He won't play ball...
The Troika has in fact said "Nein" to further cuts in military spending. You know, And we have of course also got the common defense system heralded by Barroso during his "State of the Union" speech. Once the Federation of European Nations train is rolling, the armies will of course need upgrading to a uniform system of weaponry. The Dassaults, Krupps, and Vickers of this world are already rubbing their hands in delight.

It is not for nothing that SYRIZA suggested to tax the shipping industry. Even at a "preferential" tax rate of 10%, 1 year of taxes from that sector alone would sort the deficit of this country in one foul swoop. But again, that is not the idea. Making Joe Soap believe that the only way out is total obedience and sacrificing all the privileges he has "enjoyed" from the welfare state is the name of the game. And once he does that, you have your willing worker. Arbeit Macht Frei, but without the benefits...

I agree, the Troika does not want to see the rich made poorer. The idea is mainly to drive wages and living standards down, permanently, and to carve up public assets and hand them over to the wealthy. The new money printing exercise will create inflation, which will be de facto another wage and pension cut.

Until our wages are less than those in China and Africa, they will not be satisfied.

[Dr. FIVE]

another haircut

http://www.spiegel.de/international/...-a-857146.html

[Dr. FIVE]

Tsipras,

http://knaves.posterous.com/the-euro...s-going-to-exp

[disability student]

Pitfalls of the Euro:

Wynne Godley described the inherent flaw in the Euro:

“If a government does not have its own central bank on which it can draw cheques freely, its expenditures can be financed only by borrowing in the open market in competition with businesses, and this may prove excessively expensive or even impossible, particularly under conditions of extreme emergency….The danger then, is that the budgetary restraint to which governments are individually committed will impart a disinflationary bias that locks Europe as a whole into a depression it is powerless to lift.”

Randall Wray:

Under the EMU, monetary policy is supposed to be divorced from fiscal policy, with a great degree of monetary policy independencein order to focus on the primary objective of price stability. Fiscal policy, in turn will be tightly constrained by criteria which dictate maximum deficit to GDP and debt to deficit ratios. Most importantly, as Goodhart recognizes, this will be the world’s first modern experiment on a wide scale that would attempt to break the link between a government and its currency.

…As currently designed, the EMU will have a central bank (the ECB) but it will not have any fiscal branch. This would be much like a US which operated with a Fed, but with only individual state treasuries. It will be as if each EMU member country were to attempt to operate fiscal policy in a foreign currency; deficit spending will require borrowing in that foreign currency according to the dictates of private markets.”

Stephanie Kelton:

“Countries that wish to compete for benchmark status, or to improve the terms on which they borrow, will have an incentive to reduce fiscal deficits or strive for budget surpluses. In countries where this becomes the overriding policy objective, we should not be surprised to find relatively little attention paid to the stabilization of output and employment.In contrast, countries that attempt to eschew the principles of “sound” finance may find that they are unable to run large, counter-cyclical deficits, as lenders refuse to provide sufficient credit on desirable terms. Until something is done to enable member states to avert these financial constraints (e.g. political union and the establishment of a federal (EU) budget or the establishment of a new lending institution, designed to aid member states in pursuing a broad set of policy objectives), the prospects for stabilization in the Eurozone appear grim.”

All these weakness of Euro that our politicians haven't talked about nor brought it up with Herr Merkel to date?

[MPB]

Pitfalls of the Euro:

Wynne Godley described the inherent flaw in the Euro:

“If a government does not have its own central bank on which it can draw cheques freely, its expenditures can be financed only by borrowing in the open market in competition with businesses, and this may prove excessively expensive or even impossible, particularly under conditions of extreme emergency….The danger then, is that the budgetary restraint to which governments are individually committed will impart a disinflationary bias that locks Europe as a whole into a depression it is powerless to lift.”

Randall Wray:

Under the EMU, monetary policy is supposed to be divorced from fiscal policy, with a great degree of monetary policy independencein order to focus on the primary objective of price stability. Fiscal policy, in turn will be tightly constrained by criteria which dictate maximum deficit to GDP and debt to deficit ratios. Most importantly, as Goodhart recognizes, this will be the world’s first modern experiment on a wide scale that would attempt to break the link between a government and its currency.

…As currently designed, the EMU will have a central bank (the ECB) but it will not have any fiscal branch. This would be much like a US which operated with a Fed, but with only individual state treasuries. It will be as if each EMU member country were to attempt to operate fiscal policy in a foreign currency; deficit spending will require borrowing in that foreign currency according to the dictates of private markets.”

Stephanie Kelton:

“Countries that wish to compete for benchmark status, or to improve the terms on which they borrow, will have an incentive to reduce fiscal deficits or strive for budget surpluses. In countries where this becomes the overriding policy objective, we should not be surprised to find relatively little attention paid to the stabilization of output and employment.In contrast, countries that attempt to eschew the principles of “sound” finance may find that they are unable to run large, counter-cyclical deficits, as lenders refuse to provide sufficient credit on desirable terms. Until something is done to enable member states to avert these financial constraints (e.g. political union and the establishment of a federal (EU) budget or the establishment of a new lending institution, designed to aid member states in pursuing a broad set of policy objectives), the prospects for stabilization in the Eurozone appear grim.”

All these weakness of Euro that our politicians haven't talked about nor brought it up with Herr Merkel to date?

Why would teachers, doctors and farmers talk about things they don,t understand?

Politicians understand politics, nothing else.

Politics is the art of fooling people into believing that you know more than them, while hiding the fact that you know nothing, other than how to lie.

Why we bother with them is beyond me?

[Ephilant]

Depending on the source, Germans say we have an extra hole in our finances between 40 and 200 billion €.
The Troika is "leaking" a figure of between 20 - 30 billion €.
Our own minister for Finance say "Nein", but does admit we could do with an extra few bob....

It will be hard to get them to agree on a figure. They do however all agree that we are, once again, a few € short of what the EU masters wanted in order to give us another 30 billion for us to then give back to them with 7% interest.

What I can't figure out is why is Merkel stalling on all this. First we would have a decision end of August, then September, then end of October, now maybe December? Are they indeed trying to bleed the country completely dry, or has she got some other motive, or maybe even a plan?

[Ephilant]

Things are heating up. The 2 big trade unions ADEDY and GSEE, representing all of the private and public sector workers respectively, have decided to launch a joint, all out strike NOW.
Athens is expected to be swamped by thousands of protesters, including policemen, army, fire brigade etc.
The riot police has complained they were not given enough time to prepare for this, so they probably wont have enough men on the scene to beat the crap out of protesters.
People are expecting serious, and I do mean SERIOUS rioting over the next 24 hours.

[Dr. FIVE]

#26sgr

[fluffybiscuits]

Things are heating up. The 2 big trade unions ADEDY and GSEE, representing all of the private and public sector workers respectively, have decided to launch a joint, all out strike NOW.
Athens is expected to be swamped by thousands of protesters, including policemen, army, fire brigade etc.
The riot police has complained they were not given enough time to prepare for this, so they probably wont have enough men on the scene to beat the crap out of protesters.
People are expecting serious, and I do mean SERIOUS rioting over the next 24 hours.

Its the perfect recipe for a protest. The pigs dont have enough time to prepare and this means that they are going to get the crap hammered out of them if they touch the protestors. Next the joint private and public sector bodies are not standing for any crap from the troikia, there is no divide and conquer as has been so successful here. Is there any sign that they could get the police on board too?

[C. Flower]

Reports of 50,000 people marching and being dispersed with tear gas at Syntagma without being allowed to assemble.

This cartoon - "surrounded" from Presseurop, must have been drawn before the event.

[Ephilant]

We had an "accidental" black-out....

An estimated 100,000 people took to the streets of Athens today to tell the Troika and Samaras where to go. And they have been promised more.

The lack of riot police personnel was made up by the "enthousiasm" of those who were there. No reports of any casualties on either side, quite a few arrests, including a journalist who had a gasmask with him, which is illegal. Unless you are one of those throwing the teargas, then you can have one...

I think we will see Greece sink into further chaos over the next few days. The PAME Trade Union (Communist) has promised they will be back in force. If 100,000 isn't "in force", then what are they promising?

It was good to see some GD representatives who tried to join various sections of the protest being removed by the protesters themselves. They left, tail between legs. If the government keeps going the way it's going, there will be 100,000 hoodies on the streets soon.

[Ephilant]

Ooopppsss!

Tsipras was invited to Brussels for a meeting with Martin Schulz last Thursday.
Schultz welcomed him with the following words:

As you can see, I welcome you as a prime minister

And Oooppps again!

George Papaconstantinou, Finance Minister under Papandreou, and founder of the "Financial Crime Squad" admitted to setting up the squad in 2010 after receiving a cd with the names of German, French, Italian and 1991 Greek Swiss account holders. The Greeks held over 1.5 billion in their accounts. The CD is, according to him, in the possession of the Financial Crime Squad.
Current Finance Minister Stournaras denied the existence of this CD only 2 days ago, adding that anybody who had such a CD and passed it on/sold it would be a serious criminal facing hefty fines and long term jail.
Papaconstantinou not only admitted to receiving the cd, but also named the person he got it from None other than our friend Mme Christine Lagarde...

[C. Flower]

New taxes being announced - people on less than 5,000 euros a year "independents" to lose exemptions, amongst other measures. Via @kropotkie

#rbnews #greece Nouvelles mésures: un autre 1.5 bn euros sera recherché par augmentation des taxes directes et indirectes nouvelles

[Ephilant]

These are the actions of a dying monster lashing out at all it can still reach. Meanwhile, those with the ability to pay up and get the country out of the financial mess they put it in have been given the time and the ability to safeguard their ill gotten gains and Joe Soap is being told he has to pay.

My elderly neighbours, who between them have 380 € to live on for the month, will see their combined pension reduced to 300 € after this round of cuts. Their electricity bill per month averages 130 €, their weekly medication bill (which they now have to pay for and hope the social security funds will refund them) is 40 €. Meaning, they have 10€ a month to feed and cloth themselves. Greece anno 2012, courtesy of the EU.

[WhistleblowerIRL]

And here is another 'little' factor to consider about Greece's ability to reform (am I the only one thinking this sounds a bit like Ireland?!?)

Special Report: Greece's other debt problem

By George Georgiopoulos and Stephen Grey
Athens | Thu Sep 27, 2012 4:44am EDT

(Reuters) - The two main political parties in Greece are facing their own financial crisis. New Democracy and Pasok, the key members of the country's coalition government, are close to being overwhelmed by debts of more than 200 million euros, say rivals, as the big parties head for a slump in state funding because of falling public support.

In Greece's state-financed political system, parties that receive more votes get more funding. Relying on past good results, the big political parties have pledged future state funding as collateral for bank loans. But in the most recent poll their support collapsed, leaving them with big loans and facing much smaller incomes.

Banking sources familiar with the issue say that conservative New Democracy and socialist Pasok now owe a combined 232 million euros to Greek banks. Some of the loans are going unpaid, those sources say. The debts far exceed the combined 37 million euros the parties received in state funding last year - a figure set to decline.

The parties' debts raise questions about potential conflicts of interest because the government is in hock to a financial system that it also needs to reform. Athens is already struggling to implement spending cuts and reforms demanded by the European Union, International Monetary Fund (IMF) and European Central Bank (ECB) in return for the 130 billion euro bailout keeping Greece afloat. On Wednesday unions called a nationwide strike protesting against austerity...

http://www.reuters.com/article/2012/...88Q0EA20120927