vectorized protests greece

How Europe failed Greece and what its European “partners” never learnt from recent European history

 

Greece’s financial nightmare has lasted five years now. There’s no sign of real relief—for a very specific reason.

While reading different Online Magazines regarding Greece one could come across a United States magazine called Salon (23/6/2015) which has a recent article entitled ” Europe wants Greece to suffer ” , and explains:

What has been happening in Greece has been a long exercise in sadism by European elites, who care only about keeping their political project alive, regardless of how those who must deal with the consequences are affected. Three governments ago, Greece rang up a series of debts that they have no practical ability to pay back. The structure of the eurozone, 19 countries sharing a common currency, encouraged this debt buildup, which manifested through capital flows from the wealthier north to the southern periphery. With a single currency, investors chased higher returns in countries where capital was scarcer; this was part of the core euro design. When the investors pulled out and the debts came due, the northern states, led by Germany, pretended this didn’t happen and demanded their money back.

And continues analysing the objectifs of the European programs:

The European Union, the European Central Bank and the International Monetary Fund – the “troika” for short – forced Greece and other debtor nations into a bailout program, where they would run budget surpluses, even in the midst of a depression, and repay debts over the long-term.

But despite some modest tax increases on corporate profits and luxury yachts, the bottom line is that Syriza agreed to future austerity measures indefinitely. Under the plan, they would maintain a budgetary surplus at 1 percent of gross domestic product for 2015. The surplus would steadily rise to 2 percent next year, 3 percent in 2017 and as high as 3.5 percent by 2018, as a condition for getting their bailout funds.

Syriza had no real hand to play in the negotiations. They don’t have the luxury of their own currency, so they could not inflate their way out of debt. The eurozone leadership spent the last five years fireproofing their institutions to limit the effects of a Greek exit. European banks are now not exposed to Greece, and Germany believes Greece’s expulsion would only cost them a pittance. That obliterated Syriza’s leverage. The troika obviously still care about Greece staying in the eurozone, or they wouldn’t keep negotiating. They desire a united Europe, transforming the continent from its war-torn past. But that’s not enough to get Greece a decent deal.

On the same issue, an article published on “The Washington Post” (23/6/15) speaks by itself:

Europe is destroying the economy of Greece without any reason“. The journalist, a Nobel laureate economist and columnist in “The New York Times”, and one of a number of prominent scientists puzzled for aimless EU and IMF policies, including the most recent text that titled “Dispelling the Greece” “… So what happens? The aim is to dissolve the Syriza? To force Greece to a devastating bankruptcy as an example? … .if A crash or exit of Greece from the euro occurs, it will be because creditors or at least the IMF, sought to do it”.

Even if we consider these both two articles as of a “leftish” opinion somehow, let’s see what he writes, for example, a conservative associate of “The Telegraph” journal from London (19/6/15), Ambrose Evans-Pritchard having as a title :

Greek debt crisis is the Iraq War of finance

The spectacle is astonishing. The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.

They want to see these rebel Klephts hanged from the columns of the Parthenon – or impaled as Ottoman forces preferred, deeming them bandits – even if they degrade their own institutions in the process.

This is not the first time that the ECB has strayed far from its mandate. It forced the Irish state to make good the claims of junior bondholders of Anglo-Irish Bank, saddling Irish taxpayers with extra debt equal to 20pc of GDP.

This was done purely in order to save the European banking system at a time when the ECB was refusing to do the job itself, betraying the primary task of a central bank to act as a lender of last resort.

He explains what role Troika is playing in Greece likewise the same way the other two journalists wrote above:

The Troika pushed privatisation of profitable state assets at knock-down depression prices to private monopolies, to the benefit of an entrenched elite. To call that reforms invites a bitter cynicism.

The only reason that the Troika pushed this policy was in order to extract money. It was acting at a debt collector. “The reforms were a smokescreen. Whenever I tried talking about proposals, they were bored. I could see it in their body language,” Mr Varoufakis told me.

Nothing of all these written here do not justify successive Greek governments criminal irresponsibly that led Greece to a modern servitude and to a bank chaos today 29th of June.

A greek journalist explains methodically how Greece led itself to the disaster regarding the previous Greek governments mistakes within the Eurozone.

The last 24 hours numerous articles from different journalists across the globe are giving their point of view regarding a possible Grexit. Let’s see what is written on Financial Times today:

When a shock you predicted actually happens, it still feels like a shock. Alexis Tsipras was right to walk away. But it was a momentous decision nevertheless when the Greek prime minister rejected an offer that would have allowed it to pay its debt to the International Monetary Fund and the European Central Bank. What I am struggling to understand is why he suddenly decided to call a referendum on whether to accept a bailout for next Sunday.

Juncker urges Greece to vote YES to stay in the euro

The head of the European Commission has effectively said Sunday’s referendum is a vote on Greece’s membership of the eurozone.

I ask the Greek people to vote Yes in Sunday’s referendum, says Juncker. Vote Yes to stay in the euro.I say to the Greek people, you should not commit suicide because you are afraid of death.

 

Eur/Usd exchange Today

EUR/USD is supported around 1.1100 levels and currently trading at 1.1095 levels. It has made intraday high at 1.1123 and low at 1.0952 levels. The investors await more definite news on Greece after a number of officials across the Euro zone calmed market nerves by stating a possibility of the Greece deal before the July 5 referendum in Greece. The verbal assurances helped the pair recover from the low of 1.09533 and clock a high at 1.1123. As the Greek negotiations with the Euro group failed to bring any positive results, the Greek government imposed capital controls including a €60 per day maximum ATM machine withdrawal to limit the chaos and panic, while banks and the stock market in Athens will be closed for the whole week. Initial support is seen around 1.0914 and resistance is seen around 1.1218 levels.

FAQ (source Telegraph)

Greek bail-out

greece flag parliament
Total debt pile:€320bn
Greece still owed:€7.2bn
Debt settled by:2057

How did Greece get here?

In January left-wing government Syriza promised to end years of austerity measures but remain a member of the eurozone

What went wrong?

Negotiations descended into acrimony. Creditors want economic reforms in return for more aid, but Syriza won’t budge on key election promises

When is the deadline?

June 30 – when Greece’s bail-out programme expires and it owes €1.6bn to the IMF

What if they don’t pay?

Greece will still be in the eurozone, but will get no further aid. The central bank could stop providing money to Greek banks forcing the government to issue an alternative currency

Sources: Greekreporter, Washington Post,NYTimes, Telegraph.

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