Tag Archives: Lisbon Treaty

They are still lying to us

There is a piece that the Guardian gave us less than 12 hours ago. The title ‘Greece ‘turning a page’ as Eurozone agrees deal to end financial crisis‘ should worry you. You are getting played! The article (at https://www.theguardian.com/world/2018/jun/22/eurozone-greece-financial-crisis-deal) is giving a dangerous situation as it is downplayed on nearly every level. Now, to set the stage, we need to understand that government budgets are complex. No one is denying it. Yet, what is complex about: “Eurozone member states reached an agreement on the final elements of a plan to make its massive debt pile more manageable, ending an eight-year bailout programme“, can you tell me that? You see in the heart of this is ‘its massive debt pile more manageable‘, we all see that. Yet do we understand it?  €328 billion, the interest on that small sucker is well over €500 a second! The debt is around 180% of GDP, it was 178% last year. These are issues that matter, because it gives Greece no options. Then the Guardian gives us the bit that matters a lot more. You see, in part one we consider “The plan allows Greece to extend and defer repayments on part of its debt for another 10 years and gives Athens another €15bn (£13.2bn) in new credit. Tsakalotos said it marked “the end of the Greek crisis … I think Greece is turning a page.”“, so an option to get even MORE DEBT. When was that a good idea? Now consider that the interest on the current loan is €640 million a year, so how does raising the debt by 5% help? You see, we see the game played, because the next elections are 20 October 2019. This is the beginning of an election stunt and the Eurozone is happy to help only if the current government does what the Eurozone tells them to. How is that for an option?

The next pack of non-truths is given by PM Alexis Tsipras with “The prime minister, Alexis Tsipras, told a meeting of MPs: “Greece is once again becoming a normal country, regaining its political and financial independence.”” I hope you understand that financial independence will not happen until 2045. The debt is that severe. The banks are not willing to be soft any longer, when the access to the markets are given it will merely take one screw up, one act of short sighted stupidity and people all over Europe will rally to demand the barring of Greece from the markets for decades. So when we are presented within: “The plan allows Greece to extend and defer repayments on part of its debt for another 10 years and gives Athens another €15bn (£13.2bn) in new credit“, you see this is what the beginning of slave labour looks like, a debt that cannot be repaid, a setting where €15 billion is merely a smoke screen and the coming years when you think your life is getting better, the truth is merely that your options are taken away. That is how you enter into slave labour. And the Eurozone will be nice and humane about it, they will not call it slave labour, they will call it new zero hour contracts and with the definition “Any individual on a zero hours contract who is a ‘worker’ will be entitled to at least the National Minimum Wage, paid annual leave, rest breaks and protection from discrimination” and the Greeks will realise too late that this government AFTER its election will set the stage where because of the high debts the National Minimum Wage would optionally have to be lowered by 20%, until the debts are better dealt with. So there you are sitting on a terrace having your last pita gyros with an Ouzo realising that you can no longer afford to do that, your income got cut by 20%. The opposing party reacted to the credit buffer with ‘Kostis Hatzidakis said it reflected the lack of faith international creditors had in Athens’ ability to successfully return to capital markets.‘ And in this Kostis is right, the international markets have zero faith in their return, they rely on a small thing called mathematics and the clarity there is that the scales are not in the favour of the Greeks. The financial market is hailing the success, especially those making money of every trade, and until the money is gone, some parties on Wall Street will love the Greek, give parties in their honour. The parties behind this were shown in the NY Times last week (at https://www.nytimes.com/2018/06/19/business/economy/greece-europe-bailout.html). Here we see “To play it safe, Greece won’t start selling bonds until well after it exits the bailout. Instead, the government, which is being advised by Paris-based Rothschild & Company, will pick a moment in the next two years when market conditions seem favourable. A cash buffer of up to €18 billion, funded by creditors, may help Greece secure the liquidity it needs in the meantime“, so now the credit makes a lot more sense, does it not? A credit to pay the bills until there is one more fish to cook for Wall Street ending the existence of Greece. Well, actually the Greek elected officials will do that all by themselves. Because it will be there choice (through whispers) that benefits could be gained through 10 year bonds giving 10 more years of relief. Yet those billions come at a cost, a 2% cost which goes to the traders, they will cash in millions at the expense of a few parties costing them mere thousands, after which they switch off their phones, walk away and it is no longer their problem. For them it was merely good business, the direct application of a mere fool and his money getting parted.

Yet, this is not the only part. In what I would regard to be a direct outright lie, we see the actions from Pierre Moscovici as we are treated to: “Greece had received €275bn in financial support from its international creditors over the past eight years and twice came perilously close to being kicked out of the Eurozone group, the EU commissioner, Pierre Moscovici, said, adding: “There have been enormous sacrifices. But at last Greece will be capable of moving on its own two feet.”“. This is what I personally see an outright lie! Let me explain why I think that this is as bad as such. The documentation gave us (I already published it before). It is a paper from 2009 from the ECB and I gave light to it in my article on July 1st 2015, yes, almost 3 years ago. The article was ‘Dress rehearsal (part 1)‘ (at https://lawlordtobe.com/2015/07/01/dress-rehearsal-part-1/), the original paper is there at the end. It is called ‘Withdrawal and expulsion from the EU and EMU some reflections‘, a paper written by Phoebus Athanassiou. Here we see “The idea that the treaties should explicitly provide for a possibility of expulsion was discussed in the 2001-2003 Intergovernmental Conference responsible for drafting the ill-fated Constitutional Treaty, but was abandoned“, on page 32 it gives the premise that greed driven politicians did not consider that expulsion should be an option. In addition, the EU observer gives us in 2011 ““Neither exit nor expulsion from the euro area is possible, according to the Lisbon treaty under which participation in the euro area is irrevocable,” he added, referring to the European Union’s rule-book.” and there is May 2012, where we get “The Mechanics of Eurozone Withdrawal, It has frequently been stated that the EU Treaties contain no legal framework for a withdrawal from the Eurozone.  This is true and, indeed, the Treaties make it clear that the process of monetary union was intended to be “irreversible” and “irrevocable”“. The last we got from Locke Lord LLP, a Texas Lawfirm. So I now need to revert to my original Dutch Diplomatic self stating: ‘Moscovici, you stupid fuck! There is 9 years of documentation from people better educated than me stating that kicking out of the Eurozone was not an option in any way. So get a fucking grip on your stupidity and amend it or resign your post, your choice!‘ (Sorry, I needed to get that off my chest, I feel a little better now).

The final straw for my ego is found in the Guardian quote “But it means the left-led government in Athens will have to stick to austerity measures and reforms, including high budget surpluses, for more than 40 years. Adherence will be monitored quarterly“, when we consider that my setting was without the ‘discount’, the proven setting that the debt will be a 3G debt, it will push hardship on three generations. A setting I was able to prove with an abacus is now finally recognised by those less fortunate as they were not able to get basic calculus done. I am happy for me being correct, but not for the hardship that the next generation of Greeks face, they never had any choice in the matter, merely have to clean up after grandpa’s bad political choices, to them it is massively unfair.

The final part if given with: “At almost 180% of GDP, Greece is burdened with the highest debt load in Europe. The €320bn debt mountain is widely recognised as the single biggest obstacle to economic recovery. The International Monetary Fund had resolutely refused to sign up to the country’s latest bailout unless Eurozone creditors agreed to a restructuring that would ultimately make the debt sustainable“, most will not recognise the miswording that is used here. With ‘widely recognised as the single biggest obstacle to economic recovery‘, which is actually ‘Greece has no options to recover from a debt that high, not ever‘. Which leads to ‘International Monetary Fund had resolutely refused to sign up to the country’s latest bailout‘ and ‘make the debt sustainable‘, which needs to be read as: ‘the IMF cannot allow the support of a debt that cannot be paid off, lower it!‘, yet when is the setting for sustainable made? Making it longer by setting the €328 billion in three stages of 26 years each? Who will sign up for that? How many forward pushing bond programs will it require and we understand that among the banks (read: financial institutions), they are willing to do that as long as it is set in 25% profit stages, giving light to the fact that the additional pressure beyond the debt is the Greek population paying an additional €78 billion in sustainable bonus. If you’re Greek, would you want your child to inherit a €75 billion invoice at birth? That was what I predicted three years ago and I have been proven correctly and I have been conservative, when you consider the cost of the bonds, the interest paid to the people buying the bonds as well as the impact of devaluation of a nation that cannot fund its infrastructure. It is a mess and when you consider Forbes on 28th Jan 2017, where we see: “The IMF projects Greek debt will reach 170 percent of GDP by 2020 and 164 percent of GDP by 2022 but will rise thereafter, reaching around 275 percent of GDP by 2060” (at https://www.forbes.com/sites/timworstall/2017/01/28/amazingly-yes-the-imf-is-still-saying-that-the-greek-debt-problem-is-not-yet-solved), we see that they were off last year by close to 10%, so the prospect for Greece is even worse than the IMF predicted (I admit a slight overbearing assumption at present).

To illustrate that, I will revert to a source that I cannot vouch for, yet they give (at https://www.thenation.com/article/goldmans-greek-gambit/) “As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.” For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Sardelis in 2005“, a fee closing that surpassed half a billion euros.

So in the end, the news, the papers the quotes, it will be up to you to decide how Greece is given a fair go, yet they themselves have mostly only themselves to blame. You see, in all this, how many Greek politicians went to prison? How many got their assets taken from them? Or are we all agreeing that there was no legal option? Now wonder if the legal options exist at present, if not. Then this is the bed of hardship that the Greeks made for Greece.

So, are the Greeks still being lied to? If that is so who exactly is presenting their version of the ‘facts’ to the Greeks?

 

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The mere legality

Now that the Greeks have voted to bankrupt themselves (blaming everyone else in the process), it is duly time to take another look at the part I touched on in my article ‘Dress rehearsal (part 1)’ on July 1st 2015 (at https://lawlordtobe.com/2015/07/01/dress-rehearsal-part-1/). There the issue that came from Danuta Hübner, Chair of the Committee on Constitutional Affairs, European Parliament, with the attachment I added in the paper by Phoebus Athanassiou ‘Withdrawal and expulsion from the EU and EMU

Danuta Hübner mentions Art. 50 of the Lisbon Treaty as well as Art. 140 Treaty on the Functioning of the European Union (TFEU). So, this is something we need to look at, because Greece has decided not to be responsible and before the papers and TV drown us in emotional issues, whilst keeping quiet that the debt of other European nations might go up and not by a small amount.

So, yes, basically article 50 is about ‘withdraw from the Union in accordance with its own constitutional requirements‘, which does not mean the others can throw Greece out.

So far, that part seems almost impossible, as Tsipras keeps on claiming wanting to remain in the Eurozone, the image given is that he would stay in because article 50 is all about voluntarily removing one’s self from the Euro. Article 7(1) gives us “On a reasoned proposal by one third of the Member States, by the European Parliament or by the European Commission, the Council, acting by a majority of four fifths of its members after obtaining the consent of the European Parliament, may determine that there is a clear risk of a serious breach by a Member State of the values referred to in Article 2“, which leads to Article 7(3) “Where a determination under paragraph 2 has been made, the Council, acting by a qualified majority, may decide to suspend certain of the rights deriving from the application of the Treaties to the Member State in question, including the voting rights of the representative of the government of that Member State in the Council

In short, Article 7 is about reprimanding, even if all rights are suspended. That does not mean that they exit, which gives us two parts, the fact that France can walk away from the Euro to protect itself, yet Greece cannot get removed, which is not a given yet, there is a lot more to sift through. Article 2 is all about values, respect from Human rights and the rights of minorities, which does not have bearing on this precise case. The PDF that brought this to light, which by the way (due to an error on my side) is from Phoebus Athanassiou, my apologies for the earlier mistake in my previous blog!

The idea that the treaties should explicitly provide for a possibility of expulsion was discussed in the 2001-2003 Intergovernmental Conference responsible for drafting the ill-fated Constitutional Treaty, but was abandoned“, so not only were politicians the start of the mess, yet NO ONE had the bright idea to consider that one player might not be an adult giving them all permanent headaches is beyond hilarious, the fact that this legal bright mind (trained in the UK) is also a former Lawyer connected to Athens Law Firm of Tsibanoulis & Partners, and a former consultant for Government of the Republic of Cyprus just adds to the humour. His paper from 2009 and now we are all about to learn how we wasted millions on representations from the ECB whilst they were unable (as it seems) to properly protect the members. In all this both Yanis Varoufakis and Alexis Tsipras must be howling with laughter as we learn that most papers had not even clearly investigated the marketing term Grexit, so even as Brexit and Frexit might become reality in voluntary secession, Grexit will not happen against the will of Greece, as the facts presently are given, but let’s take a look at the steps that come next, because the PDF I added on July 1st is truly a treasure trove (Phoebus Athanassiou seems to be hindered by extreme levels of brilliance).

There is however another consideration, if we look at Article 2, where we see “The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities“, the question becomes, as Greece decided to ignore equality and rule of law, are they in violation of Article 2?

Consider, that the creditors are a factual minority (one set on wealth and power of decision), the Greek government took out loans, they signed of these loans, as they are not complying with the execution of the agreed terms, are they not breaking the law? In addition, Article 3(2) gives us “The Union shall offer its citizens an area of freedom, security and justice without internal frontiers, in which the free movement of persons is ensured in conjunction with appropriate measures with respect to external border controls, asylum, immigration and the prevention and combating of crime

It is the part ‘prevention and combating of crime‘, so as we see that for decades Greece did not ‘uphold’ (read reform) taxation laws or properly prosecute tax evaders (one fined Bobolas ‘proper’ combatting tax evasion does not make), can we state that Greece is in violation in accepting the articles of the Union, as such, what could be made then?

I will be the first to admit that this is a mighty fine line, but in this game, could such a fine line be enough?

Article 3(3) is about several things, including cohesion, Economic, social and territorial. When we consider the economic part we get the thought that economic and social cohesion is an expression of solidarity between the Member States and regions of the European Union. This means balanced and sustainable development, reducing structural disparities between regions and countries and promoting equal opportunities for all individuals. The fact that Greece (one of many) has not been able to (or intentionally unwilling) to keep a proper budget, we get an unbalanced and unsustainable development, whilst these people (the previous administrations) have not been properly investigated or even prosecuted, which gives us possible transgressions of Articles 2, Article 3(2) and Article 3(3). So is expulsion still not an option in that hindsight?

So as we see that the makers of the articles painted themselves in a corner by only focussing on growth and ignoring accountability, we see that Greece either got really well informed, or just had the right page open on the right day, no matter what, the EEC is inheriting a mess it did not properly defend itself against, so even though the path was reached in another way, as we see this explode, it seems very conceivable that the fallout from this event will have a large impact on the chances of Brexit and Frexit as they will be voluntary. So even as the UN was bright enough to include their Article 6, where the member can send home in a not so nice way for ‘persistently infringing the principles of the Charter‘, it becomes clear that the overpaid makers of Treaty of Lisbon were a lot less clued in at this point (or so it seems).

As I see it, Dr Phoebus Athanassiou, Senior Legal Counsel with the DGLS of the European Central Bank (ECB) had nailed the issue fair and square in 2009, I am just appalled that journalists and politicians have either ignored the options, or intentionally misinformed the people, whilst the European member politicians had their ‘closed door‘ meeting.

As I stated on July 1st: “Consider the next news “Here’s Bloomberg on Schaeuble’s comments: German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece would stay in the euro for the time being if Greek voters reject austerity in a referendum scheduled this week, according to three people present. Schaeuble also said the European Central Bank would do what’s needed to protect the euro if Greeks voted against the bailout terms in the July 5 referendum, according to the people, all of whom participated in the closed-door meeting on Tuesday“, is that why it was closed door? The fact that expulsion is pretty much impossible?

So as we now see “Angela Merkel, is to head to Paris on Monday for urgent talks with French president François Hollande over how to avert a growing Eurozone debt crisis” (at http://www.theguardian.com/world/2015/jul/05/germany-greek-referendum-anger-solidarity), which signals two things, the first is that Germany is not considering steps that will accelerate many things, pat of it will make Greece the pariah it should not have made itself, you see, the BBC and the Guardian are all about ‘negotiations’ and the, as we might regard it hollow statement from EU Parliamentarian Martin Schulz “he hopes that meaningful proposals from the Greek government will arrive in the coming hours because “if not, we are entering a very difficult and even dramatic time.”“, is that so? Because Greece can only leave the Euro voluntarily as we see it at present. Another voice, which is the Economic editor Robert Preston gives us even more to worry about. “The Bank of Greece could make unsecured loans to Greek banks without the ECB’s permission“, which could blow the Euro straight into the basement value, as well as “Or it can explicitly create a new currency, a new drachma, which it could then use to provide vital finance to Greek banks and the Greek economy“, which might be more likely, but does Greece have to go either way? Consider that the lacking law makers forgot to properly defend itself, now take into account that when Tsipras will let it all fall and food and medication are no longer an option, we get back to Article 2 of the Lisbon Treaty with “The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities“, which means that the other EEC nations would have to foot the bill and come to the aid of Greece to deliver food and medication. All this because previous Greek elected officials refused to adhere to Article 3(2) regarding ‘prevention and combating of crime‘ (tax crime to be exact), as well as the economic cohesion thing, but the last one is one that pretty much NONE of the EEC members adhered too, so calling Greece on that seems slightly hypocritical from my side.

So as the creditors might resort to “Qu’ils mangent de la brioche” (let them eat cake), we see a dangerous escalation. I wonder how both Nigel Farage and Marine Le Pen will respond in the coming days. There is no doubt in my mind that this will impact Brexit and Grexit, especially as it will be voluntarily.

No matter how this plays, we already seeing images on how Greek retirees are getting hit all over the place. So as we see Tsipras playing ‘paper tiger’ stating “the vote showed that “democracy won’t be blackmailed””, my less ‘diplomatic’ quote would be: “No, you blistering idiot, you sitting on your hands and not seriously reforming taxation and prosecution laws is part of the direct reason of the mess we now see!” This is why we will now see articles like http://www.thenational.ae/world/europe/crying-greek-pensioner-the-story-behind-the-heartbreaking-photo, ‘Crying Greek pensioner’. Here we now see quotes like “I see my fellow citizens begging for a few cents to buy bread. I see more and more suicides. I am a sensitive person. I cannot stand to see my country in this situation.” And this is not even close to the tip of iceberg.

The next few days will be interesting to say the least.

 

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Dress rehearsal (part 1)

That is the question in my mind, are we in the final preparations of a new theatre play that will change everything? In the Green Room we have the people in preparation of the new mess they are about to bestow on the people of the EEC. A game that changes everything, yet the people behind all of this have a short term solution, because soon they will move out of the seats of power with a golden parachute, a golden umbrella, a golden handshake and a gold watch. They will get the most luxurious life imaginable, only by prolonging the power players. That is the very first thoughts going through my mind when I was looking at the article ‘Greek debt crisis: day of decision for Alexis Tsipras‘ (at http://www.theguardian.com/business/live/2015/jun/30/greek-debt-crisis-day-of-decision-for-tsipras)

When we look at this production in the limelight, we get a few parts, the introduction is all about comedy with the quick comedy play ‘It’s Greece’s problem, says Kremlin‘, yes, as Russia distances himself from that lefty organisation called Syriza that has elements of Marxist–Leninist, Trotskyist and Euro-communist. Must feel really nice for Alexis Tsipras to be the debutante at a Kremlin ball, only to realise he gave away his cherry for naught and got left out in the cold afterwards. Which means that one option he thought he had just left the exit on the left.

The intro act comes from Mariano Rajoy, our Spanish player. The quote ““What would happen if Greece came out of the euro? There would be a negative message that euro membership is reversible,” Rajoy said in a radio interview. “People may think that if one country can leave the euro, others could do so in the future. I think that is the most serious problem that could arise (from a Greek exit).”“, reflects not on Greece, but emphasizes on the danger France is about to pose. The players are comprehending the dangers, the news on Greece is coming from a few direction, but right from the bat, the others are now starting to manage the news any way they can. My reasoning?

Reuters reports: “Greece has not yet made any movement in response to a last-minute bid by creditors to broker a deal to end a deadlock over the Greek debt crisis, the European Commission said on Tuesday. Greek Prime Minister Alexis Tsipras called European Commission President Jean-Claude Juncker on Monday night and Juncker, after speaking to the chair of euro zone finance ministers Jeroen Dijsselbloem, explained what a last-minute deal could look like, Commission spokesman Margaritis Schinas told reporters. “This would require a move from the Greek government which President Juncker asked (for) before midnight last night. As we speak, this move has not yet been received, registered, and time is now narrowing,” Schinas said“.

In addition we see from Reuters:

30-Jun-2015 11:19:20 – EUROPEAN COMMISSION SAYS DOOR OPEN FOR GREEK DEAL, BUT TIME RUNNING OUT QUICKLY
30-Jun-2015 11:20:27 – EUROPEAN COMMISSION SAYS NO MOVE HAS BEEN RECEIVED FROM GREECE
30-Jun-2015 11:21:05 – EUROPEAN COMMISSION SAYS GREEK GOVERMENT WOULD NEED TO ACCEPT PUBLISHED PROPOSAL

In addition we see in the Guardian: “Danuta Huebner, chair of the committee on constitutional affairs at the European Parliament, has tweeted about the legality of Grexit“, she gives the following Tweets “A member state’s exit from #EMU without a parallel withdrawal from the EU, would be legally inconceivable #Greece

The link refers to a PDF (at the end of the article), where we see in the abstract “that a Member State’s exit from EMU, without a parallel withdrawal from the EU, would be legally inconceivable; and that, while perhaps feasible through indirect means, a Member State’s expulsion from the EU or EMU, would be legally next to impossible. This paper concludes with a reminder that while, institutionally, a Member State’s membership of the euro area would not survive the discontinuation of its membership of the EU, the same need not be true of the former Member State’s use of the euro

So, if the abstract holds any level of water, have we, the audience been played? Are we the people now being misdirected by missing legislation because politicians could not do their job properly? That is the question, because one EU paper, does not policy make. The introduction gives us “Until recently, to talk of ‘secession’ from the European Union (EU) would have been next to absurd“, really? Did you policy makers remember a man named Adolf Hitler in one corner and Arthur Neville Chamberlain with the Munich agreement in the other corner?

A paper linked to all this by Karolina Boronska-Hryniewiecka called ‘The Risky Game of EMU Withdrawal‘, which is implied to come from the Polish institute of international affairs gives us: “The EC’s statement about the legal “impossibility” of EMU withdrawal stems from the fact that no European treaty has included a provision for how a Member State could leave the single currency area. While Art. 50 of the Lisbon Treaty provides that any Member State may withdraw from the EU on the basis of a negotiated agreement with the EU institutions, it does not mention anything about the possibility of exiting EMU itself. At the same time, Art. 140 Treaty on the Functioning of the European Union (TFEU) provides that the rate at which the former national currencies are substituted by the “euro” for EMU members has been “irrevocably” fixed. What also follows from the EU treaties is that while membership is voluntary, participation in the EMU, apart from certain exceptions, is a legal, if eventual obligation of every EU Member State.

The links come from Danuta Hübner, Chair of the Committee on Constitutional Affairs, European Parliament. So why did no one properly look into this, or even report on this? I personally expected that the European members of constitutional affairs had their affairs in order, which means that if one local yokel (Alexis Tsipras) cannot get his act in order, there are decent steps that can be taken to either get that person in line, or expel his nation. Now we seem to get introduced that expulsion is not really an option. So in all the theatre plays we watched, it seems that the part, ‘expulsion is impossible‘ was never ever mentioned, was it?

And in addition we get “Reports are mounting that the Greek prime minister has not only accepted a deal but will travel to Brussels, possibly as early as this evening, to discuss it with senior EU officials. The deal, based on reforms proposed by EU commission president Jean-Claude Juncker late last night, is believed to have been rubber stamped at a meeting of senior government official held at the prime minister’s office, the Megaron Maximou, this morning. The German daily, Bild, is also backing up the reports, saying Tsipras has had contact with high ranking EU officials whom he will meet imminently. “The prime minister’s plane is at the ready,” the paper said.

This all comes from Helena Smith from the Guardian reporting. So, I feel comfortable trusting the source here. So now we have ourselves a fifth act. You see, in my view this is all about opening 7.2 billion if the 1.6 billion get paid. It must be really comfortable for any banker to underwrite a 7 days loan, with a nice percentage knowing that this payment is the first payment out of 7.2 billion. At 1% that banker ends up with a 16 million euro bonus, that is, if it is only one percent.

Yet, is it not me? Am I trivialising things, perhaps even over-dramatizing it?

Consider the next news “Here’s Bloomberg on Schaeuble’s comments: German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece would stay in the euro for the time being if Greek voters reject austerity in a referendum scheduled this week, according to three people present. Schaeuble also said the European Central Bank would do what’s needed to protect the euro if Greeks voted against the bailout terms in the July 5 referendum, according to the people, all of whom participated in the closed-door meeting on Tuesday. They asked not to be identified, citing the private nature of the discussion. The German Finance Ministry declined to comment.

Now we have a ballgame. There is also an issue, why do they need to be ‘not identified’? It seems to me that the European Central Bank would need to do what’s needed to protect the euro. Yet, in light of what made the news from Danuta Huebner, chair of the committee on constitutional affairs at the European Parliament, we now need to consider what options are there?

These are important questions to keep in mind. Consider all the news I have brought in the last 6 months through my blog. This is now ‘set’ in the limelight with the Guardian article ‘Alexis Tsipras: Mr Reasonable seizes the initiative from Project Fear’ (at http://www.theguardian.com/business/2015/jun/30/alexis-tsipras-greece-deal-vote-referendum), how misguided is that title? The quote “Faced with Project Fear, Tsipras wants to be seen as Mr Reasonable“, is as misguided as it can. They have not just changed the game, they have left, what should be regarded as criminal activities open to reactivation. (I will get to that part in part 2).

First two quotes “It little mattered that the new blueprint from Athens had a shelf life of only a couple of hours before Angela Merkel said there could be no fresh negotiations until after Greece’s referendum on Sunday” and “Somehow or other, Greece’s debt burden will be reduced. It can happen through a deal in which Athens gets debt relief for economic reform. Or it can came through a default that would swiftly follow Greek exit from the single currency. Everybody knows this, and it is bizarre that an explicit proposal for debt relief was not formally made to Tsipras in last week’s talks

You see, the game is changing, yet some elements have been ignored and some were never given clarity. So as Greece wants another extension 2 minutes before midnight, as they want another bailout of 30 billion with better terms, the game is now taking another term, one that the people behind the screens cannot contain, in the end, they are cutting their own veins even deeper than Greece ever did, but let me back that up with some facts, because without facts, this all becomes a rant (which anyone can get whilst reading the Telegraph, or an equally disastrous form of news coverage).

The quote “Juncker earlier told Tsipras that a last-minute deal was still possible if Athens agreed to sign up to the creditors’ proposals presented last Friday. He also dangled the prospects of debt relief for Greece and a €35bn “new start for jobs and growth” programme” from the Guardian (at http://www.theguardian.com/world/2015/jun/30/greece-brink-financial-collapse-imf-deadline-hours-away) gives us the salutation I made on May 6th (at https://lawlordtobe.com/2015/05/06/whats-the-matter), where I stated “when the voters learn that Greece is about to desire up to 30 billion before the end of the year, so that it can pay the outstanding bills“, so not only was I right all along, it is possible that the Greeks delayed because of the fear what it would do to the UKIP numbers and subsequently a first serious move away from the EU. Now, not only is Juncker offering 5 billion in addition, it comes with very little extra hardship for the Greeks, especially the previous Greek politicians.

Yet, now, as I mentioned, the game changes. With the migrant issues in Calais, Marine Le Pen is about to take control of another piece of France, which will soon prove to be really bad news for President Hollande. In addition, the quote “In January she asked French President Francois Hollande to suspend the visa-free Schengen Area in Europe and strip dual nationals of their French citizenship if they carry out “barbaric crimes”“, give us an additional change. It is not a given that the changes to Schengen will happen, but if it does, it is clearly in addition a preparation to move France away from the EU. Her statement a week ago clearly indicates the change she wants to impose.

In all this, Greece now stands alone, because the drive on the shores of Brexit and Frexit are now clearly stated in the news, stated by these politicians, which in case of Marine Le Pen is not a good thing for Europe, because unless her demands are met, she will call for an exit from the EEC, not just the Euro, which changes the game by a massive margin. So when I see the quote “but what Tsipras has done is seize the initiative“, it must be stated that it is an incomplete view, because the response from both the UK and France is about to give the world of finance a massive headache, one that will continue for the next 20 months, especially as Marine Le Pen ends up as the next possible leader of France, for which she is currently in the lead, ahead of Sarkozy and Hollande. The laughing whisper two years ago, is now a realistic threat, interesting how so many journalists missed this escalation.

There are more signals, all indicative of one more act on the floors of the theatre.

And the act starts with a gloomy theatre, men and women in black, handing a folder, from person to person, they all look at it for a few seconds and give it to the next person. This goes on and on. Yes, we get to the article ‘IMF: austerity measures would still leave Greece with unsustainable debt‘ (at http://www.theguardian.com/business/2015/jun/30/greek-debt-troika-analysis-says-significant-concessions-still-needed). The story already starts with questionable statements “Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors“, the reason that I call it questionable, is because Greece is what I call a 3G nation, which means it will take three generations for this debt to become close to manageable. So, with that I imply that the debt is still a massive form of pressure in 2061, there is no escaping it. Even with reforms Greece is no longer able to meet the interest payments and the payments after the payment reduction, unless it makes MASSIVE changes to its laws and its social system. This includes holding politicians accountable for overspending, making them prosecutable for criminal negligence if they cannot meet the budget. It is close to the only change that will start stopping the madness. In addition, tax laws need a massive overhaul, one that should be part of the IMF demand before Greece gets one additional eurocent.

By the way, Greece is not alone, Spain, France and Italy are all 3G nations at present. The UK is not that deep yet, but it will take a generation of hardship to get the debt under control.

That (secret) document also states “that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes”, is that even a surprise? I figured that out over a year ago, doing the math of my fingers, an Abacus was not required, this is exactly why I opposed Greece to be allowed back on the market selling another 5 billion in bonds. But the power players wanted their commission and as I see it a 100 million euro bonus is just too good to pass up.

So here in short is part one of this story. Certain elements are in play and have been in play for some time. Greece has done next to nothing to clean up its act, its laws and its massive shortcomings. As we see again the voices of many shouting against Austerity, we have to wonder whether people even realise what they are shouting against. You see, austerity is merely keeping a budget, for close to two decades governments have overspend every year, this is how Greece got into this mess, it had spent money that it never had. It is not alone in this pretty much every EEC nation is guilty of this and whilst some are still afloat, Greece is the first one who cannot even commit to the due interest bill, that is at the foundation of this debacle. So austerity is not a punishment, it is not a right, it is a mere responsibility and it has been forfeited by nearly every EEC nation for much too long.

I will give more answers in part 2 of this article, hopefully the day after tomorrow.

Withdrawal and expulsion from the EU and EMU

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