Buggering Greece: Really, really, Sunday is last chance!

“Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system,” “Failing to find a deal [by Sunday, 12th July] will mean the end of the negotiations with all the possible consequences, including the worst-case scenario where everyone will lose.” – EU President Donald Tusk.
A myth in 16th century was nurtured to turn Greece into the cradle of Western Civilisation so as to forget the unsavoury and forgettable history of intervening almost 2000 years. All that was “great” and “noble” in the emerging Western Europe, the myth told, was a direct inheritance somehow from the hoary antiquity of Greek civilisation but with obscure transmitting mechanisms. Europe, especially Germany and France, are getting ready to give ignominious burial to their “Civilisational Cradle”.

But instead of a formal blueprint, Greece’s new finance minister, Euclid Tsakalotos, spoke from handwritten notes about his country’s intentions to rein in costs and prop up its creaky fiscal underpinnings while avoiding some of the tough austerity measures that Greece’s creditors have demandedEuropean officials were incredulous that Greece had not come better prepared, especially with the country’s banking system subsisting from day to day and likely needing a fresh infusion of cash from the European Central Bank on Wednesday just to stay in business. Jeroen Dijsselbloem, president of euro-zone finance ministers, said it was not clear what the Greeks were offering or whether it would meet the standards Europe has set for authorizing a new multibillion-euro bailout.

The plain and simple truth is that Greece is insolvent. It cannot repay the debt in full unless significant write offs are made by the Troika as IMF pointed out in its “preliminary” notes released on 2nd July just 3 days prior to referendum. Troika won’t budge from its stand of giving up even a single Euro of debt. Troika can’t accept debt write offs because southern periphery is watching in fervent anticipation. In continuation of its “Austerity at any cost policy”, which has not worked for past 6 years, Troika demands Pension cut of 1% of GDP [that is 6.1% of pensions on top of 40% cut affected in past 5 years], phase out welfare assistance [EKAS] for poorer pensioners, fiscal tightening by 2% of GDP in a country marred by shrinking GDP for past 7 years, and 7% immediate hike in VAT on hotels [Tourism makes up sixth of the GDP and tax collection system is laggard]. Greeks can’t accept these austerity and taxation measures that would drive unemployment much higher than current +25%, pensions would go below 50%, and would render the social fabric of the nation woefully tattered. Choice is simple before Greece: Accept far greater pain in immediate future to exit Euro for long term recovery or abjectly fold before the Troika to kick the can of worms ahead and forget recovery for ever. Pain is certain either way, the only difference is whether now with grace or later with disgrace.
GDP since 2008 has fallen by whopping 28%. Debt rose to a high €379Bn in 2011 but since then somewhat moderated to €322Bn in 2015, but the Debt to GDP ratio has remained stubbornly high and has slightly increased to 185% from 182% in 2011. That demonstrates the failure of austerity measures to strengthen economy to pay off debt.  
Rumours have started doing the rounds that Alexis Tsipras wished and prayed to lose the #Greferendum, which he won so handsomely. That is right, at least, if one believes what Ambrose Evans-Pritchard has to say in The Telegraph.
Greek premier Alexis Tsipras never expected to win Sunday’s referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control. He called the snap vote with the expectation – and intention – of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 “ultimatum” and suffer the opprobrium.
The narrative is offered without any evidence but is believable based on stark economic realities. Tsipras knows that the European Commission [EC] and European Central Bank [ECB] are in no mood, nay, are in no position, to offer slightest slack in the harsh conditions imposed for a bailout let alone accept a debt write off. The “revolt” in their support of the southern EU periphery, who may be in similar predicament down the line, that Yanis Varoufakis and he had hoped for did not materialise. A “NAI” vote in the referendum would have opened a graceful exit for Tsipras to step down and let someone-else preside over the buggering of Greece people; and allowed him take his chances in future election. But, this neat speculation suffers a fatal defect. If the intention was really to lose the referendum, it could have been so worded as to guarantee a NAI verdict: Should Greece Stay in Euro Zone [Corporate controlled MSM Polls say, if they can be trusted, 75% favour remaining in Euro zone] whatever the consequences? Whereas, it talked off “NO” to Austerity while [saying “YES” to] staying on in Euro Zone. Tsipras probably imagined that a resounding NO to austerity would embolden the Southern Revolt. Had it happened, he would have got the hand to negotiate from position of strength with the Troika. Probably, EU and ECB were scared of the possibility of the southern revolt too. That it has not happened gives the Troika freedom of telling Greece “Take it [what we tell you to do], or leave it“. That is where they wanted Greece to be in the first place. Whatever choice Tsipras makes Greece faces great danger to political instability, after all he is leading a coalition, and while that is being sorted out Greece can descend into wholesale economic chaos. One recalls what M K Gandhi once reportedly said when asked, “What do you think of Western Civilisation”: “It is a GOOD IDEA”

When NATO can abandon one of its own, Red Signal is flashing warning of grave dangers to all those Emerging Markets and wannabe Economic Power Houses, who want to fall into the lap of Western Capital with visions of soaring GDP growth. Global Capital has no abiding friends, only abiding self interests.

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