Banks take extra care to keep ATMs full of cash
By Yiannis Papadoyiannis
Cash withdrawals from bank accounts exceeded 2 billion euros on Wednesday and Thursday, according to bank officials, as the vast majority of Greeks appear to have decided to stash some cash due to the uncertainty of tomorrow’s election. There were also some who have opted for foreign bonds, mutual funds, foreign currency and foreign stocks.
The same officials noted that throughout May and the first two weeks of June there was not a single day without a net outflow of cash withdrawals, which ranged from 100 million to over 1 billion euros on a daily basis.
In the last few days, however, banks have taken extra care to have plenty of cash available to meet the increased demand by clients and minimize the risk of a bad impression, which could lead to panic. There has been particular emphasis placed on feeding ATMs constantly, with special measures taken for this weekend.
Meanwhile, bank customers are reporting that lenders are delaying withdrawals of large amounts, asking for a period of two to three days, while it has become particularly difficult to open an account abroad: Besides the usual bureaucratic obstacles, the time of response by foreign banks has grown considerably when it comes to new accounts.
and keep those ATMS full as best one can - but note the limits on large withdrawals....
http://greece.greekreporter.com/2012/06/16/greek-banks-delay-large-withdrawals-keep-refilling-atms/
Greek Banks Delay Large Withdrawals, Keep Refilling ATMS
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 ATHENS – Fearful of a stalemated June 17th election and worried over giving up the euro and returning to the ancient drachma, frantic Greeks in the days leading up to the polls took out more than $1.25 billion a day from their accounts, but were blocked from making larger withdrawals, saying as it would take two to three days for transactions to clear.
The uncertainty over who will win and whether anti-austerity parties would prevail, a step that could push Greece out of the Eurozone, had Greeks yanking out as much as they could from banks, who told customers that bigger withdrawals would take several days or even extend into next week and after the elections, the newspaper Kathimerini reported. Some customers opted for foreign bonds, mutual funds, foreign currency and foreign stocks.
Bank officials said that since the first of May, six days before a first ballot was stalemated with no party able to gain enough support to form a government, Greeks have been withdrawing at least $126 million a day, and often more than $1.25 billion. Greek banks, already weakened by 74 percent losses imposed by a former shaky hybrid government of the New Democracy Conservatives and PASOK Socialists who backed austerity measures demanded by international lenders, had to get a $24 billion cash injection from the European Central Bank worked through the Greek central bank emergency liquidity fund. A day after the May 6 elections, so much money has been taken out that officials feared a run on the banks and many ATM’s were empty.
To prevent a recurrence and limit any sense of panic, banks are working overtime to keep ATM’s full, and officials said they would make sure the machines were full of cash over the weekend, including the day of the election. Warnings from New Democracy leader Antonis Samaras that a victory by his chief rival at the polls, the anti-austerity Coalition of the Radical Left (SYRIZA), could lead to a return to the drachma and nationalization of the banks have spurred many Greeks to clean out their accounts, with reports that many are stuffing the money under their mattresses or trying to open foreign bank accounts.
The worries have triggered foreign banks in to having contingency plans already in place if the elections fail to create a government or panic sets in. The New York Times reported that big international banks have special teams on standby if the results of the Greek elections shake world stock markets on June 18. “As clients get nervous, banks have been guiding clients on how to react to a range of situations, from just one country leaving the Eurozone to the dissolution of the euro itself,” the paper reported.
Greece is surviving on a first bailout of $152 billion from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is withholding much of a second for $173 billion until the elections results are in and it is determined whether Greece sticks to the reforms or, as SYRIZA leader Alexis Tsipras has vowed to do, renegotiates the conditions or reneges.
and...
http://www.spiegel.de/international/europe/greeks-emptying-bank-accounts-a-839160.html
Many Greeks are emptying their bank accounts out of fear that the country may return to the drachma. But most of the money is not going abroad. Instead, individuals are storing cash in safe deposit boxes or at home -- leading to an increase in burglaries.
Joanna Stavropoulos is not proud of what she has done. "I had a guilty conscience when I withdrew my money from Greece," says the 43-year-old. Of course she knew what would happen if everybody does the same: Greece's banks would be threatened with collapse. But she says she had to think of her two-month-old daughter, Josephina, who is currently asleep on Joanna's shoulder.
Increasing numbers of Greeks are following Joanna Stavropoulos' example and emptying their accounts. They are afraid that Greece may leave the euro zone and return to the drachma.
Stavropoulos is one of the few people who know very well what this scenario would look like in concrete terms. As a journalist and NGO worker, she has traveled all over the world, most recently in Haiti and Iraq. "I have been to countries where banks closed," she says. She was in Argentina, for example, when the government declared a national default. She has also lived in Zimbabwe, where three-digit inflation destroyed the currency. Joanna is sure that Greece could face the same thing if it returns to the drachma. "My country is going downhill," she says.
There is still little sign of panic in Greece, and there has not been a stampede to the banks. Nevertheless, people are withdrawing hundreds of millions of euros from the banks every day. In May alone, outflows totaled €5 billion. According to official figures, €80 billion has been withdrawn since the start of the crisis.
High Demand for Safe Deposit Boxes
Christiana (not her real name) can see the capital flight every day with her own eyes. The 46-year-old, who wishes to remain anonymous, works as an asset manager at a large Greek bank. "It's not just that it is increasing," she says of the withdrawals. It's not only major customers who have been taking out money in recent months, she explains, but all kinds of clients, from account holders with a few hundred euros to the bank's most important private customers. "Naturally, the wealthy ask particularly often what they should do with their money," she says.
Rich Greeks have long been moving billions to countries such as Italy or Switzerland, or buying luxury properties in London. But overall, according to estimates by the Greek central bank, only about one-fifth of the total money withdrawn has gone abroad. Many customers have left their money in the bank itself, Christiana says -- but in a safe deposit box rather than in their accounts. "It's currently impossible to find a free safe deposit box in a Greek bank," she says.
Those customers clearly don't want to be surprised by a currency reform. There has long been speculation over how that could work. The banks could close over a weekend, take stock of the euro holdings in their accounts and prevent further transfers to foreign accounts. Euro bills which are already in circulation would be marked with stamps. The export of unmarked bills would be prevented at the borders. Within a short time, the drachma could be reintroduced.
If it gets that far, Marianna's clients want to be prepared. Like Christiana, she also works as an asset consultant at a Greek bank, And like Christiana, she does not want her real name to be used. Her clients are lawyers, doctors or top managers. "On average, they have between €200,000 and €300,000, which they can withdraw at any time," Marianna says.
Burglaries Increasing
She has noticed the increasing capital flight during the last three months. Last year, her clients mainly moved their money to London or Cyprus. But now the latter country is also at risk of collapse itself because of its bloated banking sector. "Now they prefer Germany and Switzerland," she says.
Quite a few wealthy clients also tell Marianna that they are keeping their money at home. Many people are apparently doing the same thing. Greeks now have around €50 billion stashed at home, reports the Greek newspaper Ta Nea, citing the Greek Finance Ministry. Burglaries are increasing as a result. In Crete, they have gone up by 700 percent within two years. Burglars recently stole €50,000 in cash from a house of an old couple in Athens.
The crisis may now increase the social divide in Greece, just as it has done many times in recent years. While members of the upper class have long managed to stash their money in safe places, a possible currency reform and the subsequent devaluation would probably hit many low-income earners unprepared.
Even a cosmopolitan woman like Joanna Stavropoulous has been overwhelmed in her attempts to come up with the right strategy. In 2010, as the signs of Greece's economic crash intensified, she moved her savings to a Spanish bank. Then Spain's economy got into trouble. She moved her money back to Greece -- until the next bout of bad news. She has paid more than €100 ($125) in bank fees alone, she says, due to the constant movement of her money.
When her daughter was born, Stavropoulos paid €12,000 for the birth, a sum that is not considered unusual in private Greek clinics. Now, she has barely any money left. She has now invested the last of her savings in foreign currency, hoping that they will hold their value if Greece returns to the drachma.
Stavropoulos and her friends have a new strategy to deal with their daily expenses. "We charge everything to our credit cards," she says. If the Greek banks fail, they won't be able to collect the outstanding debts, she argues. "If they want to mess me around, I will do the same to them."
German provocations to jigger the elections continue....
http://www.businessinsider.com/bild-open-letter-to-greek-voters-2012-6
ATHENS, GREECE: Sunday's Greek election is going to be incredibly close, as the establishment conservative candidate Samaras does battle with the radical left-winger Alexis Tsipras, of the SYRIZA party
Any late shift could tip things, and tonight in Greece there's buzz about an open letter to the Greek people in the newspaper Bild, which basically says: Dear Greeks, who you choose tomorrow is your choice, but it's us Germans who keep your ATMs filled with Euros, so be careful which clown you pick (via @efiefthimiou).
If you choose not to honor your commitments, no more Euros from Germany.
Anyway, this is being talked about quite a bit, and you can probably figure how a letter from a right-wing German newspaper is going over. Suffice to say... it's not going to make anyone vote for the conservative.
and the words from the papers before election day.....
http://www.athensnews.gr/portal/1/56338
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| What's making the front pages of the Saturday press. (file photo) |
Elections are upon us once more and the front pages of the Greek press are hammering the point home with all the subtlety of cannon fire.
It’s all about the euro or the drachma, Antonis or Alexis, Syriza or New Democracy, European dreams or EU nightmares and other such wonderful little gems. Not really surprising considering the importance of this electional battle, but my word it does strike me as strange that no one is reacting to the fact that for all of Greece’s shouts and screams concerning the end of two-party politics, that’s exactly where we are once more. Two parties, two clearly divided patches of political thought, two very different styles of leadership. No wonder Pasok chief Evagelos Venizelos gets so easily flustered these days. Losing your membership to such an exclusive club must really sting.
Ta Nea seem to be in a slight fluster, cutting up their front page with a number of slogan-esque tags. “A historical vote, which Greece do we want”, says one of them, “the Sunday dilemmas” says another, “yes to hope” gets squeezed in right next to “the Monday enigmas”. Finding space on the bottom right is a collage of Antonis Samras, Fotis Kouvelis, Evangelos Venizelos and Antonis Samaras, the awesome foursome that will somehow have to find a coalition in the exact same spaces they couldn’t find one last time round.
To Thema sees things much clearer, at least it seems to. A profile of a face covered in shadow, looms over an image of the Athenian landscape. “What’s dawning on us” shouts the headline. The shadowed profile looks very much like the one belonging to a mister Alexis Tsipras. You might have heard of him. Quite the dashing fellow apparently.
“We vote for the euro and for the changes in the memorandum”, says Eleftheros Tipos who reminds us that “citizens hold Greece’s fate in their hands”. So no pressure there then. It’s a good thing that the boys at the paper have narrowed down our options for us though. “Papandreou and Pasok opened the door to the IMF, New Democracy can close the door that leads us out of the euro”. Syriza can’t we take it. They’re busy talking on the phone or some such.
Adesmeytos Tipos waste even less time with their front page, splashing a picture of a tremendously happy Antonis Samaras right next to the not actually very subtle “All together for a ND win”. Antonis Samaras should be rewarded for his unificating efforts, the paper thinks. We take it then, he wouldn’t just like a pat on the back and some ice cream. Being that we’re in the middle of summer and all.
Whatever happens, whoever wins, I think that the soundest piece of advice one can take from all this pre-election panic is that one should exhale more and shout less. For all the EU disaster talk, Greece is in no way in particular control of its destiny. Sure, there are elements of political thought to be decided, but the true essence of Europe’s problem stretches far beyond little Greece and far beyond the frightening tales of Lord Drachma and his evil co-horts.
and the economy continues to be impacted.....
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http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_16/06/2012_447377
UK tourists shun Greece on euro exit concern
British tourists are shunning Greek holidays in favor of other European destinations on concern the country may exit the euro area, the Financial Times reported on Saturday.
The British paper cited tour operator TUI Travel Plc.
Competitor Thomas Cook Group Plc is advising travelers to Greece to carry small-denomination euro notes to help minimize any disruption should the country exit the single currency, the newspaper reported, citing a statement from the company.
[Bloomberg]
and the talk from the EU just won't stop....
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_28383_16/06/2012_447369
Juncker warns Greece not to quit eurozone
Eurogroup head Jean-Claude Juncker warned Greeks not to turn their backs on the euro, saying in a newspaper interview that a win by anti-bailout radical leftists in a vote on Sunday would have «unforeseeable» consequences for the monetary union.
The radical leftist SYRIZA party is racing neck-and-neck with the conservative New Democracy party ahead of the election, which could decide if Greece stays in the euro zone and spread turmoil across global financial markets.
SYRIZA leader Alexis Tsipras is threatening to tear up the punishing terms of the 130-billion-euro bailout that is keeping Greece from bankruptcy.
"If the radical left wins - which cannot be ruled out - the consequences for the currency union are unforeseeable,» Juncker, head of the group of eurozone finance ministers, told Austrian paper Kurier on Saturday.
"We will have to speak to any government. I can only warn everyone against leaving the currency union. The internal cohesion of the eurozone would be in danger."
In addition to the economic and social consequences for Greece itself, an exit would damage the entire currency union, he said, adding: «This has to be avoided. This would send a devastating signal. The Greeks must be aware of this."
Sunday's vote is a re-run of a May 6 election that produced a stalemate. No matter who wins the repeat vote, Juncker said, European leaders would have to quickly address Greece's reform program with the country's new leadership. «A third election would not be a solution."
He made clear, however, that renegotiating the substance of the conditions for international aid to Athens was out of the question.
Juncker said he would spend Sunday evening in telephone contact with European Central Bank President Mario Draghi and EU Economic and Monetary Affairs Commissioner Olli Rehn.
and Merkel NOT telling Greece how to vote and NOT saying spurn SYRIZA but why does it seem that is just what she is doing..........
http://www.businessinsider.com/merkel-plea-greece-election-2012-6
German Chancellor Angela Merkel made her final remarks on the Greek election this morning, telling members of her party that broken promises made by fellow Europeans will no longer work.
She continued:
It cannot be the case — and this is also an issue now in connection with the Greek election — that what comes out in the end is that those who don't keep to an agreement can, so to speak, lead everyone else through the arena by the nose ring ... That won't work.
That is why it is so important that, in the Greek election tomorrow ... a result emerges in which those who form a government in future tell us, yes, we want to keep to the agreements.
Although Merkel did not refer to a particular party, her comments fly against the left-wing group Syriza, which has argued that austerity measures must be rolled back and new accords reached with lenders.
Merkel ended telling members of her party that the EU must focus on lowering debts.
"Those who are not prepared to do that will see that it will then be very difficult to keep a common currency stable in the long term."
and why the Greeks are leery of German intentions.....
http://greece.greekreporter.com/2012/05/27/shocking-german-article-in-berlin-they-even-consider-military-coup-scenarios-for-greece/
Shocking German Article: “In Berlin They Even Consider Military Coup Scenarios for Greece”
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During the past hours, the Greek media has been circulating a shocking German article from http://www.german-foreign-policy.com that argues than in Berlin, authorities are considering coup scenarios and other ways to use armed forces to impose their will on During the past hours, the Greek media has been circulating a shocking German article from http://www.german-foreign-policy.com that argues than in Berlin, authorities are considering coup scenarios and other ways to use armed forces to impose their will on Greece. The article is entitled “ On The Relevance of Democracy”, and it presents several nightmare scenarios on how the Germans intend to turn Greece into a protectorate since the German austerity dictate can no longer be enforced with democratic means. The article also refers to German commentators who are drawing comparisons to the situation in the later stages of Germany’s Weimar Republic: “In the Greek situation, the worst case would be a reversion to a dictatorship,” warned an influential commentator.
According to the website’s editors, German foreign policy.com is compiled by a group of independent journalists and social scientists who observe, on an ongoing basis, Germany’s renewed attempts to regain a status of great power in the economic, military and political arena.
ATHENS/BERLIN
In the run-up to new elections in Greece, the German elite is discussing various scenarios involving the use of force to ensure control over Athens, including the establishment of a protectorate or the deployment of “protection forces” in that southern European country. The German austerity dictate, pushing Greece into destitution, is provoking growing popular resistance, which, apparently, can no longer be suppressed with democratic means. Berlin has failed in its efforts to force Athens into subordination by threatening to withdraw the Euro, as much as with its demand that Greece combines its parliamentary elections with a referendum on the question of remaining in the Euro zone. Berlin categorically rejects the option of retracting the austerity dictate and replacing it with stimulus programs, as is being demanded by leading economists worldwide, even though the exclusion of Greece from the Euro zone threatens to push the currency itself, into an abyss.
17th of June – Greece’s Last Chance
After all attempts to form a government in Greece failed last week, it appears that in the elections set for June 17, those forces that are strictly opposed to the German austerity dictate will win a majority. Even with their slight majority in parliament, the three parties willing to implement the austerity program have not succeeded in forming a government. Polls are predicting their defeat. The fact that a majority in the Greek population would like to keep the Euro, is seen in Berlin and Brussels as a last chance to achieve a change in public opinion. Already before the announcement of new elections, German Finance Minister Wolfgang Schäuble declared that the Euro zone could easily cope with Greece’s withdrawal. EU Trade Commissioner Karel De Gucht has just confirmed that the EU Commission and the European Central Bank (ECB) are already preparing for Greece’s withdrawal. And, Jean-Claude Juncker, head of the Euro Group, is quoted as saying that “if we would take a poll with secret ballots on Greece remaining in the Euro zone, an overwhelming majority would vote against it.” The new elections are Greece’s “last chance.” If they do not furnish a majority for the austerity dictate, “it will be over.”
No Right to Respect
In addition, Berlin has obviously applied pressure on Athens to combine a referendum on remaining in the Euro zone with the elections. This tactic is aimed at weakening the opponents of austerity. According to reports, German Finance Minister Schäuble already made this proposal last Monday to his Greek counterpart at the meeting of the Euro finance ministers. This proposal is obviously supported by the Chairman of the CDU/CSU parliamentary group in the Bundestag, Volker Kauder (“Now German will be spoken in Europe”). A Greek government spokesman confirmed that Chancellor Angela Merkel urged Greek President Karolos Papoulias last Friday to implement the German plan for a Greek referendum, whereas in November 2011, Berlin briskly rebuffed the Prime Minister at the time, Giorgos Papandreou, when he publicly announced his proposal to hold a referendum. This led to his demise. Berlin’s open interference is met with outrage in Athens. The Greek population has a “right to respect,” the chairperson of the conservative Nea Dimokratia, Antonis Samaras, was quoted as saying. And the chairman of the opposition party Syriza, Alexis Tsipras, declared that Berlin is acting as if Greece “is a protectorate”.Euro Dusk
Berlin is gruffly rebuffing every deviation from the severe austerity policy, ruining Greece, german-foreign-policy.com reported - in spite of the fact that this will accelerate the collapse of the entire Euro zone. A few days ago, the economist and Nobel laureate Paul Krugman was not the first to describe such a scenario. Soon, “most likely, next month,” Greece will exit the Euro zone, according to Krugman. Immediately thereafter, a comprehensive capital flight can be expected to Germany – at least from Spain and Italy, out of fear of these two countries’ economic collapse as well. This would necessitate drastic measures – limitations of money transfers or new support measures for Spanish and Italian banks, and possibly both. In the long run, however, support, particularly for the Spanish economy with stimulus programs, cannot be avoided. This would mean a strategy change for combatting the crisis that Berlin from the very beginning has been trying to avoid at all costs. “Germany has the choice,” explains Krugman, accept the change of course or “the end of the Euro” is imminent. Concerning the time span of the “Euro dusk,” Krugman says, “we are speaking in terms of months, not years.
Protectorate
The sectors of the German elite, which refuse to consider this change of course proposed by Krugman and numerous other experts outside Germany, are now publicly debating scenarios involving the use of force. In a newspaper interview early this month, the director of the prominent Hamburg Institute of International Economics, Thomas Straubhaar, called for establishing a protectorate in Greece – “regardless of the outcome of the elections”. The country is a “failed state,” he says, which is unable to raise itself “to a new start” under “its own steam.” Athens needs “help in establishing viable state structures”. It, therefore, must be transformed into “a European protectorate.” “The EU must do it,” affirms Straubhaar. The EU “would have to help Greece modernize its institutions at every level, particularly with administrative staff, tax experts, and tax inspectors.” However, refounding Greece would demand “intuition” to “overcome national pride, conceit, and the resistance of interest groups.” This is referring to a sovereign democracy, a German ally in the EU and NATO.
Putsch
In the meantime, there is even discussion of a putsch in Athens. Greece threatens to sink into complete chaos, warned a long time companion of Germany’s former Foreign Minister, Joseph Fischer, Daniel Cohn-Bendit, a European parliamentarian for the French Green Party. Cohn-Bendit explained that it is impossible to avoid extensive foreign interference. “If you leave the Greeks to muddle through alone, you are risking a military putsch.” German commentators are drawing comparisons to the situation in the later stages of Germany’s Weimar Republic. “In the Greek situation, the worst case would be a reversion to a dictatorship,” warned an influential commentator. “This scenario becomes more probable as instability grows.” In reference to the links between a possible dictatorship and Berlin’s austerity dictate, the commentator writes, “already today, it seems as though Merkel’s austerity policy can, at best, be imposed on the streets of Athens by force of arms.”
Protection Forces
Last week, a leading German daily discussed the issue of dispatching troops to Greece. Should the country go bankrupt, it would then, as a “‘failing state,’ (…) be less in a position” to shore up its borders against migrants, writes the Frankfurter Allgemeine Zeitung. Just recently, the EU Commission announced that it finds itself forced to prolong the mission of its EU border troops at the Greek/Turkish borders. If Athens “should no longer be able to pay its officials, or can pay only in Drachmas,” the situation risks becoming “chaotic”. The country could possibly “be rocked by rebellions”. “Help for Greece would then no longer be on credit, but be transformed into a sort of humanitarian emergency aid,” prophesied the journal in its front-page lead editorial. “Hopefully, an international protection force, such as the one stationed in the teetering countries further to the north, will not become an option.”
and....
and what matters and what doesn't - Mark Grant...
http://www.zerohedge.com/news/greece-%E2%80%94-what-matters-and-what-does-not
Greece — What Matters And What Does Not
Submitted by Tyler Durden on 06/16/2012 11:35 -0400
From Mark Grant, author of Out of the Box
Greece—What matters and What does Not
The bond market is heading East while the equity markets heads West because they have two totally different focuses at present. I have seen this often enough in my almost four decades on Wall Street and I am always amused when this differentiation takes place. It is really just a reaction to what either market is staring at that causes this phenomenon to take place and, eventually, one market proves to be correct while the other gallops along to catch up. The stock markets seem buoyed by the possibility of the more EU friendly government to win this Sunday’s election and they are taking comfort in the hope for support of the world’s major central banks and the possibility of more easing; a new or redefined QE3. The fixed income people are concentrating on the possibility of a systemic financial shock, the recession in Europe that will affect the United States and the plight of the European banks. In my experience the bond markets generally get it right and get there first and I expect nothing different this time.
Let us calmly consider the facts as we can ferret them out and change our focus to reality and not what we are spoon fed by the Europeans. Greece has a total debt of about $1.3 trillion. This is composed of their sovereign debt, which Europe counts, and then their $90 billion in derivatives, their Federally guaranteed regional debt, their sovereign guaranteed bank and corporate debt, their obligations to the EU and finally their loans at the other central banks. It is just simple addition and not my opinion; I am just counting all of the liabilities while Europe does not. Then if you take their GDP and divide it by their total debt you get a debt to GDP ratio of around 453%. You may claim, and somewhat correctly, there is value in some of their assets which would be an off-set in case of actual default but the problem here is that they are a sovereign nation so how one would lay claim to any Greeks assets would be quite problematical.
In any event the amount of money that Greece owes cannot be paid back. They do not have enough assets, they certainly do not have enough cash flow or revenues and the situation was manipulated by Greece and allowed by the European Union as other factors were more important and overshadowed the burgeoning deficit. So now Greece is stuck and Europe is stuck and it matters very little really who will be elected on Sunday as there is no way out of this trap except continuing cash payments from the other European nations. Because the charity that has been given comes with strings attached there is one group that is more friendly to Europe and one that is less friendly and the reality is that Greece will try to soak up as much money as they can from the EU and when the money is stopped then Greece will default because there is no other choice regardless of anyone’s politics. It is then the default that is the real issue, the only important issue really, because the size of the debt will cause ripples and possibly large waves all across the financial landscape. It will hit the ECB, the banks on the other side of the derivatives contracts, all of the Greek banks who are really in default at present and being carried by Europe as well as the nation and the Greek default will spread the infection in many places that we cannot imagine because so much is hidden and tucked away in the European financial system. There is only one way out of this mess and that is if Europe keeps handing Greece money like one does to some aged aunt that cannot support herself but that is a family decision while Greece requires 16 other family members to support here jointly and the politics in many of these nations, including Germany, is making it difficult for the charade to continue.
The countries in Europe cannot call it charity because various governments would be thrown out of office and so the “loans;” continue. Both pending political winners in Greece want to re-negotiate the loans so that a friendly group or a less friendly group is possibly something at the margin but that would be all. The debt cannot be repaid. Then the calculation is made by Europe as to the potential damage and more money may be offered, any changes in terms will make very little difference, as Greece sinks further into its financial sinkhole. Consequently it will either be debt forgiveness (charity) or Europe refusing to pay any longer and default. The bond markets are getting the joke while the equity markets don’t understand the sentence leading to the punch line and hence the different reactions. Again; it is all a matter of focus.
So the Greek elections come and go and someone takes over or there is no government and new elections are called. In the meantime either Europe hands Greece more money or Greece defaults. It is at the point of default where consequences require central bank action and where even the best made plans may careen out of control because so much information has been hidden and not accounted for so that their consequences were not considered.Dealing with incorrect facts leads to incorrect conclusions and this is my greatest fear at present for all of the financial markets; that the pending default, it will most likely come, will not have been assessed in the manner that was needed because Europe did not allow all of the necessary data to be correctly appreciated.
Greek Defaults
- 366 B.C.
- 1826 (50% of the time since independence Greece has been in defualt)
- 1843
- 1860
- 1894
- 1932
So the most likely scenario is not debt forgiveness, which would cure the problem but is not politically feasibly in many European nations but default and default within the Eurozone initially. Then Greece will be forced to return to the Drachma and devalue and the default will cause bank runs and money flowing into Germany and the United States as the only viable safe haven bets. Central bank intervention will help in the short term but will not cure the longer term solvency issues and the European banks, at 300% larger than their sovereign nations that support them, may well overcome the European Union’s capacity including their ability to print money which will become of less and less value given what supports it. It won’t be Doomsday and it won’t happen overnight but there will be more than enough shocks to wake-up the casual observer.
This is where I think we are heading and I do not think the arrival date is too far off now!
and jibber jabber goes on and on and on.........
http://gogreece.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=gogreece&cdn=travel&tm=119&f=00&su=p531.56.342.ip_&tt=2&bt=0&bts=0&zu=http%3A//www.newpost.gr/English
World weighs in on Greeks' voting options
As international pressure grew on Friday for Greece to honor its commitments to its foreign creditors, political parties responded sharply to perceived attempts to interfere in domestic politics while European leaders heading to Mexico for the G20 summit were said to have Sunday’s Greek elections in mind.
European Commission spokeswoman Pia Hansen told reporters in Brussels that senior EU officials would issue a statement on the election result on Sunday. Sources said an emergency session of eurozone finance ministers would likely be called after the elections.
Meanwhile, senior US Treasury Department official Lael Brainard sought to strike a positive tone, noting that “everyone is prepared, in the wake of elections in Greece, to work together to make sure that there is a path forward that is sustainable for Greece and bolsters confidence more broadly.”
The developments came a few hours after a report by the Financial Times suggested that EU leaders may soften some of the terms of Greece’s debt deal. Another report, by the FT’s German edition -- proposing that Greeks vote for New Democracy as the best of a bad bunch to avert a Greek eurozone exit -- caused a political storm.
“Dear Greeks, vote courageously for reforms instead of angrily against the necessary, painful structural changes,” read the editorial, which was published in Greek and German. “Resist the demagoguery of Alexis Tsipras,” it added, referring to the leader of the leftist party which rejects the bailout.SYRIZA condemned the editorial as “a coarse and unprecedented intervention.”
ND, which co-signed the deal but now wants a renegotiation, reacted sharply too. “We do not want orders. We do not want provocation and manipulation,” said spokesman Yiannis Michelakis.
Socialist PASOK said the article was “offensive for the Greek people.”
Pressed for Germany’s official line on the Greek elections, a spokesman for Chancellor Angela Merkel said, “The chancellor does not give voting advice to neighboring and friendly countries.”
Berlin’s established stance -- for the strict implementation of reforms -- was reiterated by Bundesbank President Jens Weidmann in an interview with Kathimerini and three other newspapers.
He said the new government would be “bound by existing agreements” and that if it “opted out,” further aid would be in jeopardy.
and the care taker PM hopes his job will be done soon I'm sure........
http://gogreece.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=gogreece&cdn=travel&tm=119&f=00&su=p531.56.342.ip_&tt=2&bt=0&bts=0&zu=http%3A//www.newpost.gr/English
Pikrammenos sees 'dangerous' inertia ahead of elections
Greece’s general election on Sunday cannot come soon enough, the outgoing prime minister said on Friday, as he warned of a ”dangerous inertia” in state operations and ”critical” decisions lying ahead.
”There is dangerous inertia in critical state areas such as tax collection,” caretaker Prime Minister Panagiotis Pikrammenos told his administration’s closing cabinet meeting, his office said.
”There are critical issues pending that require political decisions in the coming weeks,” the 67-year-old said.
The finance ministry has reportedly admitted that Greece only has money left to pay salaries and pensions until late July, and state revenue is officially 666 million euros ($836 million) short of a target 18.8 billion euros for the first five months of the year.
Pikrammenos said also his government had taken action during its one-month term to avert an electricity blackout during a liquidity shortage among power providers, and warned that tough times lay ahead for Greece’s vital tourism industry.
”The tourism season ahead looks poor -- or at least worse than last year’s,” he said.
Formerly head of Greece’s top administrative court, Pikrammenos and a team of fellow technocrats took over in May to prepare the country for fresh elections after an inconclusive ballot failed to produce a workable majority on May 6. The Sunday ballot is seen by many as a Greek referendum on the euro, as one of the possible victors is a radical leftist party that has pledged to tear up the country’s bailout agreement with the European Union and the International Monetary Fund.
European leaders have warned Athens of a loan freeze if reform promises are broken, leading to mounting speculation that the country could even be forced to leave the eurozone.
”It would not be an exaggeration to say that the (electoral) result can define the future of younger generations in Europe and have an important impact on developments in Europe,” the prime minister said on Friday. [AFP]
and will taxes along with German and EU troll dictates tip things to Tsipras ..........
http://www.businessinsider.com/an-alexis-tsipras-victory-is-still-possible-2012-6
ATHENS, GREECE -- The Greek election is tomorrow, and the current conventional wisdom is that conservative leader Antonio Samaras is going to win by a narrow amount.
"Private polls" (polls commissioned by candidates or banks on behalf of clients) supposedly show Samaras winning, and it seems that enough people have been scared into believing that a Tsipras victory would mean a Greek expulsion from the Eurozone, something that's deeply unpopular here.
But the election isn't over yet, and an extremely plugged in Athens resident gave me reason to think that in just the last 2 or 3 days, the momentum may have broken back towards Tsipras.
Here's why:
In the weeks surrounding an election, the process of tax collection grinds to a halt. No sitting government ever wants to crack the whip about collecting payments when it's running, and generally, due to the uncertainty, nobody feels particularly motivated to get their payments in. But taxes will be due right after this election, and so people are going to their accountants now to start tax preparation.
Now it should be noted that the average Greek has a much more intimate relationship with their taxes than the average American. In the US, everyone complains come tax time, but for most people it's a fairly uneventful process. They file electronically, and the money zips out of their account (usually out of their paycheck, actually) and that's that.
But in Greece it's not nearly so simple. Everyone uses an accountant, the tax code is incredibly complex, and you actually go to the tax office pay in person multiple times per year. The Greek bureacracy loves this, because in-person taxes means opportunities for bribes and kickbacks.
In the late 90s, Greece apparently brought in "Tax Rambos" form the United States IRS to teach Greece how to get better at tax collection (how to set up more electronic systems, and so forth) but the entrenched Greek bureacracy would have none of it, and nothing happened.
Okay, so in the past several days people have begun preparing their post-election taxes, and they've been hit with sticker shock. The new austerity reforms have seen some major increases in tax bills for the average Greek... sometimes to the tune of 300-400%, according to one person familiar with the intricacies of it all.
This has got people particularly angry, and it could be this trend which causes people at the last second to turn away from Samaras with disgust, and vote for Tsipras.
It's impossible to know, and nobody in the market can do anything about it at this point, but if Tsipras pulls out the victory, this could be one explanation.
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and Mish comments on dumbkopf statements from Germany , EU trolls ( not mentioned but I would add Hollande's comments as a so called friend of Greece ) - will they be a tipping point sunday....
http://globaleconomicanalysis.blogspot.com/2012/06/greeks-rail-against-crude-german.html
In the past week, as I expected, the ECB, Troika, German officials and others have all warned Greeks to not vote for Alexis Tsipras and his radical-left party Syriza. Will those tactics backfire?
I suggest they already have. The pertinent question is whether they have backfired enough to matter.
Please consider Greeks rail against 'crude' German editorial.
Greek parties reacted with outrage on Friday after the German edition of the Financial Times made a front-page call on Greeks to vote for the New Democracy conservatives in the upcoming election.
"Dear Greeks, create clear political conditions. Vote courageously for reforms instead of angrily against the necessary, painful structural changes," read the Financial Times Deutschland's editorial, published in Greek and German.
"Your country will only be able to keep the euro with parties that accept the conditions of the international creditors," the daily said, adding: "Resist the demagoguery of Alexis Tsipras and his (radical-left party) Syriza."
It endorsed the New Democracy party led by 61-year-old Antonis Samaras.
Syriza condemned the editorial as "a crude and unprecedented intervention, which offends national dignity and tries to undermine democracy."
The only thing left now is for German Chancellor Angela Merkel to "come and hand out ballots for the right," said top Syriza official Dimitris Papadimoulis.
Merkel ally tells Greece: Vote right or euro's gone
Also from The Local, please consider Merkel ally tells Greece: Vote right or euro's gone
A leading German right-wing politician warned Saturday that if the far left wins Greece's elections this weekend, the country's exit from the eurozone "will be only a matter of time."
"If the radical left carries on saying it wants the help of all the other countries in the eurozone but does not offer anything in return, then it will only be a matter of time before Greece exits" the eurozone, said Wolfgang Bosbach, chairman of the interior ministry committee in parliament and a close ally of Chancellor Angela Merkel.
Even without Sunday's elections, Greece is not fit to be a member of the eurozone, the top Christian Democratic Union official said.
"The country's economy lacks dynamism, competitiveness and efficient governance. And billions more aid will not change that fundamentally," he said in excerpts from an interview with Frankfurter Allgemeine Zeitung, to be published in full on Sunday.
Results 2:30 ET Sunday
Bloomberg reports Greek Vote Outcomes Range From Coalition to Euro Exit: Scenarios
Election and polls close at 7 p.m. Athens time (5 p.m. in London, 12 p.m. in New York). Exit polls will be published immediately, and initial estimates of the result will come in around 9:30 p.m. local time.
Many expect there will be no workable coalition. I believe Syriza will be able to secure one if it wins, and I believe it will win. Should New Democracy win, however, there is a good chance party leader Antonis Samaras will be forced to step aside as part of a coalition with Pasok.
There are really no good choices for Greece. However, a Syriza win has the huge advantage of getting what needs to be done (a Greek exit) much sooner, with at least some chance of recovering in a couple years as opposed to a decade from now.
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