Tag Archives: New Democracy

Feeding hungry wolves

You might think that this is another attempt to quell the hunger of paparazzi, which is always a dilemma we people face (famous people more often). They want their pound of flesh and they will have it. So when I stumbles upon ‘Greece crisis: Yanis Varoufakis admits ‘contingency plan’ for euro exit‘ this morning, I knew that a roasting would be in order. The article (at http://www.theguardian.com/business/2015/jul/27/greece-crisis-yanis-varoufakis-admits-contingency-plan-for-euro-exit). So when I read “The plan was denounced by Greek opposition parties, which in recent weeks have called for Varoufakis to be put on trial for treason” I knew I was onto something, in addition there is “the scheme was “reminiscent of a bad thriller.” The main opposition New Democracy party demanded that the government “come up with convincing answers for the Greek people … so that light can be shed on this dark narrative.”“. Now you know me, I consider Yanis Varoufakis to be a bit of a rock star (not a good one) and he played the limelight wrong, but in this case I am on HIS side.

How stupid can the Greeks get?

It was the job of Yanis Varoufakis to protect the financial future of Greece, because of the mistakes by the Greeks themselves, they are in a boatload of hurt and they will be in that position for three generations, that is, as long as they keep austerity. This is not something that was started by Yanis Varoufakis or Alexis Tsipras for that matter, they mismanaged an inherited bad situation. So in light of those accusing him of treason, I call them ‘the worst bloody idiots in the history of Greece!’ They get to live with that title for both this version of Greece as well as dethroning the idiots of ancient Greece because these people have just truly outdone themselves!

And as for these people who are shouting treason, why do we not hear that in regard of the following names? Yiannos Papantoniou and Nikos Christodoulakis former ministers of Finance as well as Konstantinos Simitis and Kostas Karamanlis both former prime ministers. Did they all conveniently forget that the found mismanaged budgets which they hid from the people of Greece and Goldman Sachs was eager to help them for the money it brought them? Yes, you all forgot about them didn’t you?

Now in addition we need to mention Christoforos Sardelis, former head of Greece’s Public Debt Management Agency, when we learn from the Business Insider “the loan was so confusing that even the Greece government had trouble understanding it and thought it was much cheaper than it actually was” (at http://www.businessinsider.com.au/the-secret-goldman-sachs-greece-deal-thats-described-as-a-very-sexy-story-between-two-sinners-2012-3), so Greece, let’s call it Monkey Mountain for now, gave the keys of what they no longer owned to the ‘Top Banana’ in all this (Christoforos Sardelis), to do something none of them understood, how is that not trialed in a Greek court? So after shaking hands smiles and autographs, Greece was due payment of 600 million euros ($793 million) more than the 2.8 billion euros it borrowed.

That comes down to almost 20%! I’ve had a 50% better rate on my Credit Card!

So, when I see the accusation towards Yanis Varoufakis, which was in my view the wrong man, at least he did what he did for ideological reasons (as far as I can tell), his focus was Greece! I never stated anything to the contrary in any of my articles!

In this path, there are still a few issues that are an issue, yet, let’s not forget that this was a plan conceived in the 11th hour as the dangers were very considerable that Greece could be cast out of the Euro (even though that was technically a legal impossibility). ““We were planning to create, surreptitiously, reserve accounts attached to every tax file number, without telling anyone, just to have this system in a function under wraps,” he says, adding that he had appointed a childhood friend to help him carry out the plan. “We were ready to get the green light from the PM when the banks closed”“, I understand the logic attached to this, but in that way, it also meant that the tax dodgers would have had an escape plan, in addition, the Greek 2047 Swiss Accounts (roughly) could walk away scot free, which is not entirely on the up an up here. Yet in the bulk of it all it was the millions of Greeks Yanis tried to protect (I hope), so explain to my how this was treason? The added fact that we see ‘We were ready to get the green light from the PM’ implies that it was based on government structure, so again, how is this treason?

So when we read the Tweet Yanis gave “So, I was going to ‘hijack’ Greek citizens’ tax numbers? Impressed by my defamers’ imagination”, I would tend to agree, because a step like that is impossible without both the tax system and every bank involved to open the doors to their system. It is not imagination, in my view it is basically a technical impossibility, because that many transfers would light the European financial system up like a Christmas tree, Yanis would literally have no place to run or too, or to hide for that matter.

There is one part I disagree with. The quote “Tsipras’s left-wing Syriza party is not only divided but bears little resemblance to the one he was catapulted into office with in January”. You see, Japan only had itself to blame, Tsipras is partially accountable, yet the debt, the massive result from a decade of mismanaged debt and a mismanaged tax system that spans decades, that part was inherited, they can look at previous national rulers, spokespersons and economic managers for that.

So, let’s remove the title ‘Monkey Mountain’ (now that the Top Banana has gone to sunny, luxurious Italy) and focus on Greece! You see Greece will be in a bad place for a very long time to come, it refuses to go after those who truly pushed Greece into generations of bad times. As the Greek population will have to settle for hunger and poverty, other players like Christoforos Sardelis, who is as far as I can tell at present, living in decent luxury in Italy where he works for Banca IMI, the investment banking unit of Italy’s Intesa Sanpaolo. The Greeks are looking in all the wrong places. Hiding the debt was not done by one person, it took several officials, the swap was really stupid but not illegal (Goldman Sachs does not do illegal things, it is very clever in making other people do stupid things). The issue is not yesterday, it is today and tomorrow. Greece needs to wake up and reform a system that cannot deal with the elements of today’s economy, the fact that Greece needs 86 billion just to make it to 2017 is clear evidence of that, the fact that it takes three generations to get the debt into focus is evidence of that and it will only work if debt relief is granted. Greece is no longer able to survive in the current climate, a fact that has been known for a long time and it had to be acted upon a long time before yesterday, but it was not. In all this the Greeks are now blaming the one person who (even though wrongly) tried to get a better deal for the Greeks, who tried any option to at least try to avoid that retirees would have ended up with 1 drachma to the Euro, because that would have been the result from ejection from the Euro (if the EEC could have pulled that off legally). So yes, I have hammered on Yanis Varoufakis (and Alexis Tsipras) in my previous blogs. In this case, there is an utter failure in my view to see where he acted wrongly.

There is one additional consideration to make. There is every chance that the plan started by Yanis Varoufakis needs to stay on hand, it might need almost immediate evolution and preparation should not seize. You see Greece is and remains the tinderbox for events that have been playing for a lot longer than anyone cares to ‘remember’. We might bash on certain Greeks (names I mentioned here), but Greece was not alone. Italy had done a similar thing. Now as both France and Italy represent 5 trillion in debt and the UK close to 1.8 trillion, the current status is that both France and the UK are still in a place where they could voluntarily leave the Euro. France is the initial ‘problem’ because what has been ignored for 2 years, what I feared would come is now almost a reality. At present Marine Le Pen is sitting on close to 40% of the prospective votes for the 2017 presidency, if she wins the Mayoral election of Calais (which is presently almost a certainty) and if she can achieve any decent improvement for Calais, the reality of her making a landslide victory in 2017 would become a mere matter of fact, in that light in 2017, the Socialist Party of François Hollande will face its biggest defeat in French history, they will be ten times worse off than the UK Labour Party currently is, so good luck with that. This is important, because Marine Le Pen could entice French National pride and walk out of the Euro, which would spark a similar thing in the UK at that point. Now we see the part that impacts Greece, when those two walk, Italy will have no option left the Euro will crumble and this plan, this approach by Yanis Varoufakis, this alternative plan would be the only option left for Greece and they would not have any time to implement it. So as ideas go, his alternative was not the worst for the people of Greece and there is a reasonable chance that when the Euro fails, this plan will safe that lives of millions of Greeks. So whomever shouted ‘treason’ against Yanis Varoufakis better be aware that this person himself could end up being roasted when my predictions come to pass.

The wolves are hungry, they want their pound of flesh and those in the game will sell out anyone that no longer seems to be a player in the international economy game.

I cannot and will not support that view!

 

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It is today!

We can boast, we can make all kinds of slogans. Like ‘Do you feel lucky, punk?’, ‘The writing’s on the Wall!’ or ‘If at first you do fail, whinge, whinge again!’

We can make all these boasts and claims when it comes to Greece, but there is symmetry in mine: ‘It is today!’

You see, in my previous blogs involving Greece, too many to just mention them all here, but Google ‘Lawlordtobe Greece’ and you’ll get a nice list! I stated clearly that Tsipras was out of his league. You cannot play the high stakes he did and not given in on several fields. Banks will not allow that, they were dealing with what they thought was an adult population (previous Greek governments) and ended up at the table with a petulant child (this Greek government). How did you think it would go over?

By the way, Greece lost a lot more than they bargained for, as the interest bill kept on going, as the bills were still due. Syriza and their approach of inaction has cost the Greek people already 11 billion in interest, an ongoing cost that would not be set still, so the 7.2 billion in bailout does not even cover the interest bill, let alone the additional costs that have matured. Tsipras and his gang played a game of solitaire, taking a day for every move, a game with 8 visible elements. Cost to the taxpayer 61.1 million Euro’s a day. Not to mention the flight and hotel and food and drinking costs. Just the interest alone, 61,111,111.11 a day!

Today Tsipras will realise what I have been telling all along. Certain players will not budge, he should have realised that when President Obama spoke on the need for actions and he was not kidding. Do I need to remind People on the IMF loan that did not go through for Argentina in 2001? It was said that the US was the strongest voice that stopped IMF bailing out Argentina and they were left with Vulture funds, which was 13 years ago, that issue is still playing today. So when President Obama gave his speech last week, the only option Alexis Tsipras had was to take the first flight back and seriously discuss actual options. He decided not to do that.

Now the IMF has walked away from the table. Like the SNS bank, Greece believed that they were ‘too big to fail’, which did not work for SNS and it will not work for Greece. We need to realise that Greece only represents 2% of the European Economy and the repercussions at present of default will be massive in Europe, because even though the results have been heavily downplayed, the impact of Greece will be felt, there is no doubt about that. Syriza did this to Greece, not the Germans and no one else, it is a Greek act of whatever they think it is.

So as the Guardian is not printing a picture of Tsipras laughing, or Tsipras pointing at his watch, this is Tsipras contemplating in deep worry, because the final bell is ringing and he is out of time. Perhaps he finally realises this, perhaps he is thinking of one more act before the Greek flag is lowered forever. Whatever he does, he better think of the people that elected him, because they are about to lose out on a lot more than even they bargained for.

So what can Greece do?

My first voice would be to re-elect New Democracy, because Syriza did not seem to have a clue what they were doing. Now that the US has had enough, they will have even less time and less options. In my view Greece needs to become a professional entity and needs to call in the professionals. It is my view that any act needs to show that ACTUAL work is being done. It will appease the creditors, the rating firms and the IMF, all in one deal. In my view (especially as they have many fences to mend), Greece should call on PricewaterhouseCoopers. Not just for advisory, but also for implementation, consultancy, education and taxation. In the view of all who matter and the view of many more, the statement from Greece that they can fix it, no longer holds value. In this way, PricewaterhouseCoopers (PwC) gets to redeem themselves for an issue involving a grocery store or two and Greece gets a sweet deal on actually resolving issues. Greece can no longer continue in this way and that needs to be documented. Not for the world to know, because to some extent it is nobodies business, but to seriously call in the commercial auditing cavalry and sit down and actually do something about it is essential. The additional benefit is that if Greece would ever need to repackage anything, having PwC in your corner with all the data and evidence will go a long way, a degree of freedom Greece lost some time ago.

The second party in all this would be Natixis. Any actual movement from debt, any resetting of outstanding loans needs a group of people that has the ear of those who matter. Natixis is one of the ONLY non-US firms that has the ear of every G-20 nation, has strong ties with European governments and has access to possible financial solutions that Greece did not consider. If pensions are to be saved they need to look at those making actual money, Natixis is such a player. It is not the worst idea to rescale a government to be commercially viable, Greece now has to make the step no government has ever considered before. You see, in 300: Rise of an Empire we see an interesting quote in the beginning of the movie “All glory die, thousands died by the hundreds of them all for the idea. The Greeks free. An experiment called democracy of Athens. I wonder this idea is worth all the sacrifice

You might wonder why I grasp back on a movie quote, but consider “Aristotle argues that all forms of government have their problems, including, but not limited to democracy“, we all live in a democracy, an idea that came from Greece, would it be so far-fetched that it is Greece who takes an entirely different step, one that could propel them forwards? So many governments, all these nations that are set in methods by their own internal ‘experts’ (none of them able to hold a budget I might add), you see, the best experts are never in government, so why not call on the actual experts who might give view on solving this matter.

Greece might end up being the first to take such drastic steps, but it is 99% certain that this solution will take hold at some point and more governments will need to consider this point in the future and make that act, many of them will have economies substantially larger than Greece, even when we consider Greece when it was at the height of their economy.

We are all pushed into new directions, perhaps the road least travelled, will show the solution never pondered and a resolution is undertaken that changes everything.

This is just me having an idea!

 

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S&M or S&H?

That is the question that should be on the minds of people everywhere! You see Self-interest and Misinformation is every bit a tool of application in the Sade-Masochistic approach that politicians use, or if we use names it would be the dialogue between Alexis Tsipras and Jean-Claude Juncker where Tsipras voices: “You wash my back, I wash yours real hard!” So as we see in the Guardian the call for ‘Sanity and Humanity‘ we must ask the clear ‘why?’ part. You see, we are now getting ‘misinformed’ by laureates and by people in the industry of high economics. They most likely want their cushy job to continue. If Greece falters that is no longer an option, because the repercussions go a lot further than Greece, even the US is now getting involved because the fallout from Greece leaving is a lot more than the people are told.

First Premise: If my thoughts were wrong, then why not let Greece out of the Euro, let it float its Drachma and slowly get back on the horse? Because virtual or not, the fallout of half a trillion whilst Italy and France are so deep in debt is a massive problem!

The names calling for this are: Nobel Prize winner Joseph Stiglitz, star French economist Thomas Piketty, former Italian PM Massimo D’Alema, and America’s Jamie Galbraith. The list has more names, but you’ll have to get to the Financial Times for that.

You see, the premise of Humanity is nice (and I am all for Humanity), but when the person involved REFUSES to take decent steps towards the solution, the sanity part is to just cut them lose, but as I stated in my first premise, that is not an option, the negative consequences are scaring too many ‘profiteers’ as I see them!

The first untruth by these writers (bleeding hearts seem to be the most apt title). We see the quote: “Six months on, we are dismayed that austerity is undermining Syriza’s key reforms, on which EU leaders should surely have been collaborating with the Greek government: most notably to overcome tax evasion and corruption“. I would call this a lie of the first order! Why am I calling it that loud?

The Greek government has done close to nothing to overcome tax evasion and corruption! Which politicians from former administrations have been arrested and are investigated for squandering government funds? We saw one case of tax evasion for 1.2 million, which is 0.000028436% of the debt, it does not even cover the smallest part of the interest bill.

The next statement is: “Austerity drastically reduces revenue from tax reform, and restricts the space for change to make public administration accountable and socially efficient” the second expression of laughter! Greece has next to nothing in revenue from taxation, let alone revenue from tax reforms, in addition public administration is not holding anyone accountable, the Greek public administration is a joke no one wants to touch (let alone the Greeks), so the claim made here is nothing more than an empty sentence.

Now we get to an interesting part: “It is wrong to ask Greece to commit itself to an old programme that has demonstrably failed, been rejected by Greek voters, and which large numbers of economists (including ourselves) believe was misguided from the start“. Well, if it was misguided, then the ‘friends’ you have in Goldman Sachs and other financial pool party’s should not have borrowed them the money to begin with! There is no doubt that Syriza has a bad deal, but they wanted the bad deal! They wanted to govern at the expense of everything and everyone! New Democracy under Antonis Samaras was actually trying to sort things out. In addition, the Greek voters do not get to reject this. They voted the people in that spend the money with zero foresight or consideration of the consequences, the Greek people now get to pay for it all. You see, someone spend over 400 billion, it went somewhere. That part is due and the loans made afterwards to get things ‘rolling’ was never realistic, but the top economists were all eager to get the kickbacks that they refer to as consultancy and commission! When a bank allows for events THIS STUPID to get out of proportions, in the end, I do not deny that Tsipras and Varoufakis are playing a clever game. They are willing to let the ‘other’ players collapse. It is a ‘pay our debt or else’ approach. It is not acceptable! And I reckon it should not be tolerated on this level.

What would be acceptable, if the entire debt is paid for by banks, monitored by oversight commissions to ensure that the people (their consumers) never get any additional charges! That banks would need to come up with the money from their own profits and dividends. That I would find acceptable, but guess what? The ‘friends’ of those who signed this letter will not accept that and they will reject that in a heartbeat, so here we see Joseph Stiglitz, Thomas Piketty, et al all writing about humanity, when it should be about accountability!

Now we get the half-truth in all this “Clearly a revised, longer-term agreement with the creditor institutions is necessary: otherwise default is inevitable, imposing great risks on the economies of Europe and the world, and even for the European project that the Eurozone was supposed to strengthen“, is that so?

My second premise: Yes there will be risks, but the one I see is a more total collapse when the debt is shouldered by those already in too deep. That part is not mentioned and moreover that risk has been trivialised by several players all over the Eurozone field, including by the top of the IMF and a few top players in the US too.

And I reckon that the quote “Syriza is the only hope for legitimacy in Greece” can be discarded out of hand, they actually escalated it all, in all this, as I see it, New Democracy was the true hope for Greece.

Now we get a quote that is truly a worry “Consider, on the other hand, a rapid move to a positive programme for recovery in Greece (and in the EU as a whole), using the massive financial strength of the Eurozone to promote investment, rescuing young Europeans from mass unemployment with measures that would increase employment today and growth in the future“.

My third premise: First of all, this is not the first time that approach is used, Adolf Hitler used it in 1935; how did THAT turn out? Now, let’s not go all Nazi on this and consider the issues in Spain, Italy and France? Do you have solutions for them too? How would you like to voice this in reality? That is the problem, you see, jobs come from places that have income, that have product and that is selling, that allows for hiring and paying staff! This is the entire issue, there are no jobs, because people are not buying, because after the cost of living there is not enough money to spend.

It is not a math issue that requires a Nobel price, a mere abacus, or just common sense, paper and pen could have worked that out! In addition, the prediction I made in my article ‘An Olympic steeplechase‘ on May 26th 2015 (at https://lawlordtobe.com/2015/05/26/an-olympic-steeplechase/), two days later Deutche Welle publishes this “‘We’ve been receiving reports of a decline in bookings, especially from Germany’, says the tourism manager to DW“. I saw the writing on THAT wall! In addition there is “Andreadis quotes the latest statistics from the German Society for Consumer Research (GfK): Bookings in Germany have declined by 2 percent based on annual figures“, two percent does not seem that much, but in an economy where the Greek GDP is making another step towards 0 and lower, 2% is a lot. The issues with refugees isn’t helping Greece either. The British media reported that Kos, a Greek tourist attractor has become a ‘disgusting hellhole’, which would push tourism down further. Influx from both Russia and Scandinavia is down too, but at present unknown by exactly how much. It basically means that tourism will not bring the bacon to the outstanding invoices for Greece, apart from collecting the taxation on it all that is.

The final misrepresentation is “Like the Marshall plan, let it be one of hope not despair“, it is a misrepresentation, because the Marshall plan did the right thing, whilst the people did their part, the governments were in better control, within the Euro at present not one government has been holding pace with the expenditure and keeping a proper budget, which gets trivialised by those administering it and the extra spending is overstretched again and again.

My fourth premise: So this is not about Mr Marshall and his amazing achievement, this is about the Greek government actually doing something. Pushing the invoice out 30 days is not a solution. In addition to that, nearly every person and toddler can see that the 7 billion that is supposed to be freed up will after paying the civil servants their 2.2 billion in outstanding parts will not even cover all the bills until the end of the year and whilst Greek taxation is not being addressed, another interest invoice of 22 billion will be due in under 10 months. Yes, 22 billion just for the interest payment!

So as we are misdirected by some people hiding behind the fact that IMF payments have been overdue before, the issue here is that Greece is now TWO payments behind, totaling a little over 1 billion, part one due in two weeks! So as the Greeks vow not to leave the Euro, the question will soon become, do they actually have a choice in this, because when payments are not forthcoming, there must be repercussions, the one part Greeks are really good at denying.

I must of course also mention that there is debt restructuring document, which is regarded as being ‘hopeful’. The view comes from Peter Spiegel of the Financial Times and the quote is “The restructuring plan is ambitious, offering ways to reduce the amount of debt held by all four of its public-sector creditors: the European Central Bank, which holds €27bn in Greek bonds purchased starting in 2010; the International Monetary Fund, which is owed about €20bn from bailout loans; individual Eurozone member states, which banded together to make €53bn bilateral loans to Athens as part of its first bailout; and the Eurozone’s bailout fund, the European Financial Stability Facility, which picks up the EU’s €144bn in the current programme“.

The fifth premise: My issue on these document is that they are ALWAYS based on too positive an outlook, which is why they usually fail. In addition, Greece will at least need another 20 billion, that is if the 7.2 billion that they are trying to get their fingers on is already in the given picture, which is not a given at present.

The quote “to get back under 60 per cent of GDP” is just insanely unrealistic. You see, to do that you need to fix expenditure by a lot, the one part the Greeks utterly refused to do, in addition, they just rehired the people they had let go, so expenses are back up too!

As Peter Spiegel (@SpiegelPeter) states: “It also involves eliminating a chunk of Greece’s bailout debt“, which is fine by me as long as the BANKS pay for that part, if it comes from Goldman Sachs’s pocket so much the better! Let’s not forget that part of this entire mess was because Goldman Sachs helped Greece mask the actual debt it had (source: Der Spiegel) on February 8th 2010! How much forward momentum did Greece achieve since then (like lowering debt)? NONE!

I will say again that this is all unfair on the Greek people, but they did elect this lot into parliament, as they elected the previous bunches, how about knocking on those doors to get at least some of those funds back (which also lowers debt)?

 

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An Olympic steeplechase

Greece is at it again (or still might be a better word)! Let’s turn back the clock a mere month! On April 28th we get the following news (via several sources): “Greece has decided to pull Finance Minister Yanis Varoufakis back from bailout negotiations, a move it describes as ‘clipping Varoufakis’ wings’ and ‘reining him in’ after three months of debt talks failed to produce an agreement”.

That move made perfect sense, several people (including me) saw him in some rock star presentation which was good for his ego and not too good for the Greek people. Of course, reining in does not mean ‘keeping him quiet‘, which I would not do (for the shear entertainment value alone), but also because he is the selected spokesperson of the Greek economy. So when we see the news in the Guardian a few hours ago stating: “Greek bond weaken after Varoufakis blames creditors“, my first thought was ‘can’t the man shut up?’

The quote given is “The problem is simple: Greece’s creditors insist on even greater austerity for this year and beyond – an approach that would impede recovery, obstruct growth, worsen the debt-deflationary cycle, and, in the end, erode Greeks’ willingness and ability to see through the reform agenda that the country so desperately needs. Our government cannot – and will not – accept a cure that has proven itself over five long years to be worse than the disease

In my own view I state that he squandered 95% of the time he had with posturing, he forfeited the game buy thinking that Greece is too big to be ‘Grexitted’. Guess what Yanis! The Dutch SNS bank thought that very same notion! It did not pan out too well for them either!

Now we get the second quote, this one from Dimitris Stratoulis. He states “If we decide that there is no money left for the IMF, we have repeatedly said that our priority is to pay salaries, pensions, health, and education”. To be honest, I cannot completely oppose that! Although my priority should state Pension, Salary and Health, with a question mark to what salaries are to be paid, but I understand that the people should normally go first. I do not oppose this! Yet Syriza has been playing what I regard to be a pissing contest with people who did not need to play that game and had no interesting in playing that game. There is additional evidence. Perhaps you remember the case of Leonidas Bobolas, who got arrested in April 2015 for 1.2 million in tax evasion? That short term theatrical play just as the ‘negotiations’ were going on. I reported it in my blog on April 27th in the article ‘Finding inspiration‘ (at https://lawlordtobe.com/2015/04/27/finding-inspiration/).

How many arrests since then?

The news is awfully quiet around it. There has also been zero visibility on praising Kostas Vaxevanis on his findings and his reports. It seems to me that the members of Syriza have absolutely no intent of doing anything constructive at all towards their creditors. So when we see the statements “Greek finance minister Yanis Varoufakis has apparently pledged that Greece will meet its €305m repayment to the International Monetary Fund” by Yanis Varoufakis as well as “Tsipras instructed officials to act speedily as his government sought to defuse tensions saying it would do its best to honour its debts – even if it failed to reveal how, exactly, it would find the money to pay €1.6bn in loans to the International Monetary Fund next month” (Helena Smith, the Guardian).

Yet these two parts are already ignoring the 750 million pushed forward because the invoice of May 12th was not ‘paid’! It was settled using the IMF emergency funds, which means that this money is also due. In addition on May 12th, 16th and 19th are the amounts of 348, 581 and 348 million due. That is just the IMF, the maturing bonds as well as the ECB have not been taking into account in this matter. In addition, more bailouts are already known to be needed, so as Varoufakis is boasting, threatening and claiming, I notice that many are ignoring the observation some made “the creditors’ insistence on even more austerity, even at the expense of the reform agenda that our government is eager to pursue“. This is at the heart of the matter, because Greece is facing a 22 billion annual interest invoice, which it has no way of paying. A fact many are simply ignoring. So as non-actual payment of three quarters of a billion were made, we must wonder where that comes from. Let’s not forget that on June 12th 3.6 billion in T-bills mature!

Another non-reality comes from that same Guardian when we see: “Traders are also blaming Klaus Regling, the head of the European Stability Mechanism, for today’s euro selloff“, which is specified in “There is little time left… That’s why we’re working day and night for an agreement. Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that”, which is a reality I have pleaded for, for some time now. The funny part is that the New Democracy HAD it for the most sorted and the Greek people were suffering, no one denies that! Yet the courts have not made any attempt to hold previous administrations accountable, the tax evasion schemes had one trial so far and 1.2 million does not go far.

There is one final part that is an additional danger. It is not reported on, because in all honesty, the actual danger is not known yet. But did you consider how tourism will do this year? How many thousands of tourists will consider avoiding Greece (the Germans being a first nation that comes to mind)? You see, no matter how we regard the Germans, they for the most had jobs, had incomes and will desire a warm vacation. The Greek approach will work out nicely for Spain, Portugal and Italy I reckon, but with the acts of alienation Greece is cutting itself in the fingers. In addition, the dangers of drying ‘wells’, like the fear of empty ATM’s and other means not operational give added fear to the tourist population. Even though Crete should remain reasonably safe, the reality is that no part of Greece might be safe if clear progress is not booked within 2 weeks. I do hope that it will not pan out to be too bad for Crete, Stavros Arnaoutakis has been an active fighter for the prosperity of Crete for a long time and it was his birthday yesterday, so: “Happy belated birthday Stavros!” He was born in Archanes, due South of Iraklion. You might wonder why I bring this up. I will repeat the issue I voiced well over a year ago. It is becoming more and more visible that the power of Crete might reside in its independence. Crete has a founded tourist base, it has a functioning harbour for commerce and functioning airports for commercial ends too. This independence would not break their Union with Greece, but unlike the independence of Scotland, Greece has a much better chance to setup its independence at present, without too many nasty negative sides. Whatever options Syriza is currently destroying, Crete could set up a working base of minimal credit and continue for now. It will be hard, no one will deny that, but if Crete can sway a few services towards the Cretan island, it would for the better part be decently self-reliant.

This is a much better position than the position Greece had in the past, which team Tsipras/Varoufakis efficiently destroyed as I personally see it.

I also believe that the dedication Stavros Arnaoutakis has shown for a strong Crete could go a long way with whatever creditor conversation might be needed. As Crete moves straight into the Drachma, which would then be called the Cretan Drachma, would start to build on a future for both social enhancements (within Crete) as well as built on the decent foundations that Cretan housing has as well as a shift towards a services oriented future. Consider the mild climate Crete offers with water views all around that island, how long until 2-3 retirement villages would rake in jobs, commerce and income from retirees who would like their last few years in decent sunshine?

It is not enough to warrant full independence, but it is a start, if only to make the reliance on tourism 10%-20% smaller. Consider call centres that could work in that time zone and the better weather conditions. Before too long, students from all over Europe will seek a call centre all day and party all night vacation. I admit it is not the business call that matters here, but good commerce is where you built it!

Now, this might not be a great idea (perhaps not even a good idea), but I am trying to find a solution! I hope that there will be options for the Greek people, because Syriza is quickly and as I see it possibly intentional discarding whatever solution is left for the Greek people. If you doubt this, then consider the following facts:

* Less than an hour ago, I see in the Guardian, the following release: “Mujtaba Rahman, analyst at Eurasia Group, reckons that Greece will probably reach a deal with the Eurozone in time” (I am not convinced), in addition we see “We continue to believe Tsipras will lose around 5-10 lawmakers from his coalition when the package is presented to parliament (potentially attached to a vote of confidence). But we suspect he will lose less than 12 MP’s allowing him to keep his parliamentary majority“. As I see it, this should be about protecting the Greek people, now we see the cold reality (not an invalid one) that this seems to be more about playing with votes and keeping a ‘parliamentary majority‘!

This is why I felt that Antonis Samaras was the better option. He was trying to find solutions, not be ‘the popular guy’! You think Antonis Samaras was making friends when he was in office? No! He inherited a 400 billion invoice (very rough estimate) with no way to pay for it. With floating the credit ceiling and pushing non actions, Tsipras in his short time (with of course support by Varoufakis) has added close to 20% to that total debt. Now, in all honesty, he did not cause that 20% directly, but by sitting on his hands and playing theatrics he has not helped resolve any of it.

But we must also adhere to reality. The following we get from Bloomberg if Greece misses a payment: “A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement. Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration“. This is a true reality, yet is that per payment?

Consider that this happen on June 5th and we get to June 19th? At that point two T-bills will have matured for the total amount of 5.2 billion, the second one of 1.6 billion on the 19th itself. When the 5th is missed, what will the markets do then? In addition, on June 19th a total of 910 million will be due too (16th and 19th of June IMF payments). In addition, what will happen to the interest levels when the two week term passes?

No one denies that the payment pressure is too unreal, but the Greek government themselves was cause to all of this (not Syriza)! That is at the heart of the ignored facts (read: unmentioned). These facts are exactly why Crete should consider protecting the Cretan population if at all possible. In addition, the separation could give additional credit to the Greeks on Crete and it might (not a guarantee) instil a lesser negative impact on tourism, which would be a massive plus. A few extra options could be set up there, but that would be up to Stavros Arnaoutakis and his peers to decide.

So how will we see this steeplechase unfold?

The ‘die hard’ positive proclaimers are singing the same song again and again, the doomsayers are hammering on what cannot be and both are interestingly avoiding key issues. Whether they feel repetitive on them is beside the point. I try to remain on the fence (which is hard with Syriza), yet I do try to find solutions. Will they be useful? Not for me to decide, but at least as a non-Greek, I might be one of the few trying to find a non-exploitative solution, which puts me ethically, morally and spiritually ahead of the pack.

 

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I told you so!

OK, not the best title, but it is time to throw a little hardship onto the fire. Now, the next part will be one you might not agree with, especially if you’re an economist, yet, so far, my prediction have been spot on and there is a lot more to come.

First there is the answer to those who either revoiced or proclaimed that Greece still had plenty of time, in addition, we now see the how the inactions of Tsipras is now showing to be the death of his fellow Greeks. The message that is only hours old “It’s official, Greek cash reserves are running dry” The quote gives us “In a move that puts Greece’s credit crunch into perspective, prime minister Alexis Tsipras’ government has revealed that it has just over €600m euro in cash reserves. A presidential degree allowing the state to sequester the funds of public bodies has seen €64.5m being transferred from local authorities to the Central Bank of Greece, said a government statement released this morning“, in addition we get “The statement’s timing – hours after Greek finance minister Yanis Varoufakis’ alarming warning that the country could go bust “in a couple of weeks” – is clearly aimed at focusing minds as EU finance ministers meet in Brussels” and last there is “described by the leading economist Mohammed El Erian today as potentially “devastating for Greece’s long-suffering population.””. That part I stated weeks ago, but several people disagreed. It would never get that far. Now we see it! It has come that far! In addition the 600 million part implies (implies not fact) that the loans can no longer be honoured. Now we see the first clear consequence of the Status Quo push I opposed all along.

Now we get to the utter incompetent politicians, better known as Alexis Tsipras and Yanis Varoufakis. The quote “Media and analysts in Greece this morning believe it is almost inevitable that a deal will now be put to public vote” means that these two are going to hide behind a referendum, In my mind, the actual response should be ‘If Syriza actually loves its nation, it will abdicate today and returns power to New Democracy and the seat of power returns to Antonis Samaras’. I believe that such a change, with additional austerity would give Greece a chance to remain in existence. This had also been my view all along and is now voiced by Costas Karagounis (at http://greece.greekreporter.com/2015/05/11/new-democracy-the-greek-government-has-put-the-party-above-national-interests/). This will not be an easy sell.

The only way that this works is to do two steps that the Greek rich will not like.

  1. All tax settlements from December 2014 are to be declared null and void in Greek Parliament.
  2. All tax evaders to be prosecuted with late fines set at 20%.

2b. the accounts of any listed tax evaders are to be frozen through the Palace of Justice in The Hague and to be monitored as payment is properly made to the Greek treasury.

Now for the other parts, this is the one that will cost the IMF, however, they can now consider an option where the payments will become an option.

  1. All loans are to be reset with the total amount set at 1% interest and all bonds are to be matured immediately and added to the debt, also at 1%.
  2. Greece is prohibited from entering the bonds market until 2040, in addition, they are not allowed any more bond actions until 75% of the debt has been repaid (whichever date comes last).

 

Now we get to the future of Greece, for that to work a harsh change will be needed if Greece is not to become extinct (again).

  1. Every municipality is now under austerity for balanced budgets, which means that services would cease unless there is money coming into the city. Debts are no longer allowed to be passed on, in every municipality the mayor and the local treasurer are liable for prosecution and mandatory prison terms if they fail. It seems to me that wasting funds should be stopped at the source.

You see, some will see my steps as ‘too extreme’, but when we get the quote: ““there is almost no-one who believes that negotiations over a [long-term] deal will end in June. Everyone is saying journalists should be prepared to work right the way through the summer and ensure they are around in June, July, early August.”” This implies that Tsipras is still playing the ‘let’s delay it all game‘. This is given added weight, but the following statement from Wolfgang Schäuble: “12-May-2015 11:21:47 – GERMAN FINANCE MINISTER SCHAEUBLE SAYS IMPROVEMENT IN GREEK TALKS CLIMATE NOT MATCHED BY SUBSTANCE“. Which was a clear reported issue in February 2015, so in one quarter the Greek team had not learned anything at all. This was not a ‘pissing’ content, this is a situation where two politicians are playing with the very existence and livelihood of millions of Greeks. You see, when it all stops the Greek retirees are literally left with nothing.

So as the EU finance clambake ended with no progress for Greece, we see a small message at the end. The message is: “They also hope to reach agreement on a new scheme, the European fund for strategic investments (EFSI), by June – so it can begin investing in private projects this summer“. Can anyone tell me where that money is coming from? Another trillion euro’s? I have no idea how much is involved, yet with the EU at large out of cash, who will fund those investments?

Yet, the trouble for Greece is not even close to over, it only deepens, that part was shown less than two hours ago, when we got the following from Twitter source: @enikos_en

The Social Security Foundation (IKA), Greece’s largest pension fund, has decided to take short term loans worth €360 million in order to pay June’s pensions to its members, financial site enikonomia.gr reports. The decision was made Monday by IKA’s governing board. The loan is comprised of €150 million in repos from a private bank, using Greek Treasury bonds that IKA owns as collateral, and the rest from cash reserves of three other funds, including €100 million from the Public Power Corporation (PPC) employees’ insurance fund” (source: the Guardian).

Now we get to the issue I had less than two weeks ago, I predicted this to some extent, get loans to pay for loans. This situation is so much more dangerous when you analyse the information, which should get you the following:

  1. IKA takes a loan to pay members.
  2. It is using Greek Treasury bonds it holds in collateral (Which the Greek government cannot pay as it seems).
  3. Consider the previous statement, if payments are not met those bonds will get value $0.00, in addition, we saw that Greece has 600 million left and this Friday 1.4 billion in Greek bonds mature. So, how is this going anywhere else but to a really bad place?
  4. The loan drained the PPC insurance fund.

So these facts imply that IKA will have no more payment options in a month, whilst the loans could claim chunks of whatever IKA had as a foundation, which could now give added dangers to the PPC getting hit. Can anyone else see the dangers here? You see, if IKA had so many reserves left, the Greek government would not be out on a limb claiming it only had 600 million left. It seems that when we see a full list of everyone’s money in the Greek bonds, we will see a few names that had been quiet, then what?

So as we see no results from Ecofin, we should wonder what will happen this Friday. One set of 1.4 billion in Greek bonds matured on May 8th, the press has remained awfully silent there. I cannot find any actual news on what happened, there are mentions that the debts will be rolled over with new bonds, but that is also a clear misrepresentation. Many of the old bonds were at 6%, now the rollover, will mean that the new set will represent 1.6 billion, more important, if bonds are usually set to a 1% commission, who did all this and where EXACTLY did that 16 million go? That is quick money, but for whom? A fan/friend of the Varoufakis rock band? I actually have no idea, so perhaps someone else knows.

Any finally we see that ‘rock star’ (Varoufakis) back on the microphone stating “From the perspective [of timing], we are talking about the next couple of weeks” regarding the liquidity. Well, that is not the case, because the bills due before Friday, in addition another 1.4 billion bond, that 600 million will have melted like snow in the sun. As payments are now an issue on several levels form a multitude of places, this weekend could start the end of Greece in a very real way, which is only hitting harder as the ECB has raised the Greek ceiling again, now by an additional 1.1 billion. Giving the Greeks now a total minus cap of 80 billion, put that on top of the 300 plus debt they already have and we see the makings of a new level of approaching disaster.

Are you, the reader still thinking that my approach was extreme?

Now consider the 750 million due today. Greek repaid it, but it did so by using money which was already at the IMF, so basically, they extended their death line by one month. Yet in the Guardian it was stated as: “Greece moved to banish fears it was on the brink of insolvency and default on Monday, ordering the repayment of €750m (£535m) in IMF loans hours before they were due“, that news came on May 11th. However, the Financial Times gave us “Greece took the unusual step of raiding its holdings of the International Monetary Fund’s de facto currency to make a €750m payment to the fund on Tuesday, in another sign of the country’s increasingly desperate cash crunch” (at

http://www.ft.com/cms/s/0/ddb97ae8-f899-11e4-be00-00144feab7de.html#axzz3ZzefGf2r), so the consequence here is that any bond action will be a lot more expensive and under these conditions, the Greek debt goes up by something approaching another billion.

There is now another question, are the releasers of information guilty of manipulating the markets? The markets released pressure because of the initial news and panicked when the ‘true’ facts came out. Moreover, this gives us more clarity that Greece is still all about misrepresentation, an issue the creditors might find alarming on several levels. We cannot truly condone the way Greece went about paying the amount, but this game of extensions, deferment and delays has been made for too long, whilst we see from various sources that the reformation essential to the survival of Greece is being made, in addition, staff that had been fired earlier is now rehired, which means that the governments costs are going up again, no real income is reaching Greece. Add all this up and Greece seems to be working itself into a deeper hole with every passing minute.

The Greek people deserved better!

 

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