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Sunday, July 26, 2015

The Greek drama is far from over

Now there are stories about two alternative angles explored by the Greek government before they finally submitted to the Eurotroika:
In short, Varoufakis claims Tsipras had pre-approved the creation of secret accounts for every tax filer (which, knowing Greece, might have left Varoufakis short on accounts for quite a few citizens). Greeks would be made aware of the accounts' existence in the event the banking system ceased to function altogether, and Athens would effectively facilitate payments through the new system in defiance of the EMU. Clearly, this would not have been well received by Brussels - especially the bit about hacking their software - but ultimately, because the new system would be entirely controlled by Varoufakis' finance ministry, it could be converted to the drachma immediately.

Kathimerini goes on the quote Varoufakis as saying that German FinMin Wolfgang Schaeuble intended to use Grexit as leverage to force France into supporting a system that ceded fiscal decision making to Brussels (which would of course mean giving Berlin more say over EMU countries' finances):

    "Schaeuble has a plan. The way he described it to me is very simple. He believes that the eurozone is not sustainable as it is. He believes there has to be some fiscal transfers, some degree of political union. He believes that for that political union to work without federation, without the legitimacy that a properly elected federal parliament can render, can bestow upon an executive, it will have to be done in a very disciplinary way. And he said explicitly to me that a Grexit is going to equip him with sufficient bargaining, sufficient terrorising power in order to impose upon the French that which Paris has been resisting. And what is that? A degree of transfer of budget making powers from Paris to Brussels."

The new revelations raise serious concerns for Alexis Tsipras. The deep divisions within Syriza are by now well publicized, but reports of covert plans to establish parallel banking systems using tax filers' IDs and the idea that elements within the ruling party plotted to seize billions in currency reserves and take control of the central bank have left some lawmakers demanding answers.
There is always considerably more to these things than meets the eye. But it is interesting, is it not, that a national referendum is so completely irrelevant to the events nominally happening around it? Why, it's almost as if we're living in a post-democratic age!

The one thing everyone seems to have in common is that no one wants to bite the bullet and deal with the economic realities. Debt that can't be repaid will be defaulted. Everything else follows from that.

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22 Comments:

Blogger Nate July 26, 2015 12:44 PM  

"Debt that can't be repaid will be defaulted. "

one way or another.

I'm not entirely sure at some point governments will not start asserting that the debt is not legitimate.

Blogger Salt July 26, 2015 1:06 PM  

I'm not entirely sure at some point governments will not start asserting that the debt is not legitimate.

Like a parent telling Junior, "You're cut off!" eventually people will assert the same thing and stop financing the debt.

Blogger Nate July 26, 2015 1:20 PM  

the fact is... it would be a very simple solution to assert that the corrupt bankers used illegal means to foist the debt onto the people... nationalize the banks and throw the bankers in jail.

Anonymous BGS July 26, 2015 1:21 PM  

Secret accounts + known corrupt leftist politicians=

Blogger Groot July 26, 2015 1:33 PM  

Germans using terror in a disciplined way to seize control of Europe without elections. It does kind of rhyme. French rifle for sale: Never fired, only dropped once.

Anonymous Heywood July 26, 2015 1:40 PM  

"But it is interesting, is it not, that a national referendum is so completely irrelevant to the events nominally happening around it? Why, it's almost as if we're living in a post-democratic age!"

That Greek election has no bearing on anything. If Mexicans voted tomorrow that all Americans - even the non-illegals ones - had to start paying 50% of their income as remittances to Mexico tomorrow, that'd be amusing, but it would certainly not be any democratic outrage if the US told them to get lost. Similarly, what the Greeks think of how they handle the fact that they've been financing their way-way-past-productivy lifestyles for decades by loans is entirely besides the point as well. Default or deal.

Anonymous Rolf July 26, 2015 1:42 PM  

Drama, drachma, only two letters of difference, same theater.

In the long run, reality ALWAYS wins.

Blogger Sam Hall July 26, 2015 2:01 PM  

@5 French rifle for sale: Never fired, only dropped once.

Why does France plant trees on the sides of their highways? So the Germans can march in the shade.

Blogger Floyd Looney July 26, 2015 2:55 PM  

The chickens are going to come home to roost, whether they are part of the EU or not. They need to see Venezuela and Zimbabwe on this economic matter.

Blogger Doom July 26, 2015 4:05 PM  

You know, I keep hearing the Greece is post-democracy. And yet I hear that most Greeks actually do want to stay in the EU, they simply don't want to pay their bills. They have demanded that their government give them both. While it is true that Greece is post-democracy, that isn't a new thing or related to the decisions by this government. You can't be a democracy and a socialism, save on paper.

But then it is not just Greece. What nation in the EU is not socialist, if in no other way then their reliance, and submission, to the EU? Post-democracy? Even America seems intent on being done with democracy.

Blogger Doom July 26, 2015 4:06 PM  

(Actually, a pure democracy will always devolve into socialism, but that is a process.)

Anonymous jdgalt July 26, 2015 4:21 PM  

Another source has Syriza pursuing a completely different (but also outrageous) set of plans.
http://marginalrevolution.com/marginalrevolution/2015/07/what-the-not-very-serious-people-among-the-not-very-serious-people-were-up-to.html

Anonymous DT July 26, 2015 5:14 PM  

@6 If Mexicans voted tomorrow that all Americans - even the non-illegals ones - had to start paying 50% of their income as remittances to Mexico tomorrow, that'd be amusing, but it would certainly not be any democratic outrage if the US told them to get lost.

False analogy.

A correct analogy using the U.S. is difficult because we elect representatives, we don't really vote on laws. But let's say that the American people manage to pass a Constitutional amendment which specifies that our debts to China shall be defaulted, and that the Federal government is forbidden from ever making any payments or deals that in result in any form of compensation to China.

Then, the day after the amendment is ratified, Congress goes ahead and borrows more money from China while approving a budget which makes larger direct payments to China and offers Hawaii as collateral.

You can argue all you want that a debt is a debt, but the thing with sovereign nations is that National Sovereignty > Financial Obligations, however unfair that may seem.

And in a nation which claims to be a democracy, the will of the people IS the national sovereignty.

Quite frankly at this point Greeks should be throwing members of their government in jail.

Anonymous DT July 26, 2015 5:23 PM  

@10 You know, I keep hearing the Greece is post-democracy. And yet I hear that most Greeks actually do want to stay in the EU, they simply don't want to pay their bills.

I believe Denninger has pointed out...with citations of EU law...that the Greeks can actually do that. Defaulting on debt != automatic ejection from the EU.

If memory serves, he also cited EU law which clearly forbids some aspects of the recent Greek bailouts. As he is fond of pointing out in relation to the US housing crisis, a loan made in willful violation of the law by the lender is ultimately not enforceable. Or at least should not be enforceable.

The irony of all of this is that if the EU would just let Greece tank then reality would force the Greeks to change their behavior for the better. But they know doing so risks a Greek exit from the EU, and they're more interested in preserving that monstrosity then simply letting the Greeks face reality.

For their part, the Greeks are more interested in 'one more loan because this time it will be different!' then in imposing any changes to better their economy in the long run.

Seems like they deserve each other.

Anonymous RedJack #22 July 26, 2015 5:45 PM  

I find it funny that both Hitler and Napoleon fought some of the bloodiest wars to build a United States of Europe (it was their stated and explicit goal). Everyone thought it was wrong then, and now, a scant seventy years from the last go round, it exists.

I do find it odd that Brussels, and not Berlin, has become the capital.

Blogger Salt July 26, 2015 6:03 PM  

Jewish Games to be held at Nazi-era German venue

I'm sure there's some late night comedy that could play off this.

Anonymous DT July 26, 2015 7:10 PM  

@15 I do find it odd that Brussels, and not Berlin, has become the capital.

Can't be too obvious about it.

Anonymous zen0 July 26, 2015 9:39 PM  

The one thing everyone seems to have in common is that no one wants to bite the bullet and deal with the economic realities. Debt that can't be repaid will be defaulted. Everything else follows from that.

Vox, Vox, Vox. I know you are not that naive and you are presenting things so that the masses can grasp the concept.

To those who don't follow: Politicians don't know shit about anything but politics.

I made the rookie mistake in a meeting with a Provincial Minister of Health, where I referred to what the official Report of the Legislation of Chinese Medicine said, and she immediately shot back, "I read the report!". Right away, I knew she did not read the report.

Politicos rely on their minions to take care of the petty details. They have no idea what economics is about, and don't care.

Anonymous AlteredFate July 26, 2015 11:46 PM  

@RedJack

I heard someone in these comments say that what Hitler tried to do with tanks and armies, post-Hitler Germany did with briefcases and armies of lawyers. Sounds about right.

Anonymous The other robot July 27, 2015 12:13 AM  

Someone agrees that democracy is a myth.

What better people than the Greeks to demonstrate it.

Blogger Joseph C. Bartlett July 27, 2015 3:52 AM  

A must-read for decades, Architectural Digest continues to celebrate the most dazzling places and people—in the magazine, online at Ariise

Blogger Tommy Hass July 27, 2015 3:57 AM  

"Drama, drachma, only two letters of difference, same theater."

It's one letter.

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