Greek Referendum

It seems to me to show strength of character. Perhaps Papendreou has decided on a decision path, either solve this problem with a democratic mandate in the method proposed by the EU elite, or leave the Euro and try an alternative solution. Is that not a credible decision strategy? For a continental politician in the EU, it shows an unusual faith in democracy. The Greek elite (at least in the guise of Papendreou) have not abandoned democratic principles for such an important national decision, which to me seems appropriate.

Hi Karl,

my spontaneous thought was, it won’t happen, I consider it diplomatic trickery:

Referendum = 100% default, back to drachme? = much higher EU Recap -> Merkozy up shit creek

Result >=75% haircut instead?

the FG /LAB Goverment missed the boat when elected
the first item on the agenda should have been a Referendum
on the Bank EU/IMF bail out but alas not be

ironic in a way to see the FF party coming out today not to pay
Anglo Irish Banks unsecured senior bond holders after the led the charge
in selling people of Ireland down the perverbial

“What are the implications for the euro?”

There are none.

It has been dead for some time.

@Gregory Connor

Cicero would approve.

Democracy must triumph or the EU isn’t worth the candle. Who follows next?

In geo-political terms there are powerful cliques in the US, NATO, the military-industrial complex, Russia, organized crime of the non-financial system variety, [to say absolutely nothing about financial system crime] who might prefer to see a weakened Europe.

p.s. glad to hear you discoverd Hegel in Maynooth – he was banned for a long time … any first editions? ‘Spose you’ll be on about Kant and Marx next (-:

@ Desmond Brennan

“The Greeks intentionally falsified their figures”

Did they get any help from Glodman Sachs?

Is the ISDA helping Goldman Sachs?

Are Goldman Sachs one of the 15 members of the Determination Committee?

It seems the situation in Greece is evolving rapidly….

“Opposition parties accuse PM of ‘blackmail’

New Democracy leader Antonis Samaras is to meet with President Karolos Papoulias on Tuesday, when he is expected to repeat his call for snap polls
New Democracy rejected Prime Minister George Papandreou’s call for a referendum on the debt deal Greece agreed with its eurozone partners, saying that it was tantamount to blackmailing the Greek people.

New Democracy leader Antonis Samaras is due to meet with President Karolos Papoulias on Tuesday, when he is expected to repeat his call for general elections to be held. Sources said that the conservatives were on Monday night considering ways of forcing Papandreou’s hand so he would call elections rather than go to the polls.

One of the options being considered was for all ND lawmakers to resign their positions and boycott Parliament.

“Mr Papandreou is dangerous,” said ND spokesman Yiannis Michelakis. “He has tossed Greece’s future in Europe in the air like a coin.”

The Communist Party (KKE) had a similar reaction, saying it was opposed to a referendum being held. “No to the blatant blackmail and the ideological terrorization of the people,” said spokesman Makis Mailis.

KKE leader Aleka Papariga had earlier repeated the party’s call for elections to be held.

A few hours before Papandreou called for the referendum, the Coalition of the Radical Left (SYRIZA) met with Papoulias and asked the president to use his powers to convene a session in Parliament to discuss the debt deal agreed with the eurozone. Later, SYRIZA leader Alexis Tsipras dismissed Papandreou’s initiative as a “trick.”

Democratic Left chief Fotis Kouvelis also dismissed the referendum idea. “The question of ‘yes’ or ‘no’ to a new loan deal refers to fiscal matters and it is questionable whether the constitution allows such a referendum,” he said.

While it was not clear what question Papandreou would like to pose in the referendum, Papoulias would have to give his approval. Also, for the result of the vote to be considered binding, at least 40 percent of registered voters would have to cast their ballots.”

@Lord Wellington
That they did, but the issue at hand is the Greeks

@ David O’Donnell

Wouldn’t worry to much about that.

He’d say the same of the Irish if it suited him.

@ Desmond Brennan

“That they did, but the issue at hand is the Greeks”

I will leave aside your idiocy.

The issue at hand is debt.

Nothing more nothing less.

If you do not understand that you will continue to misconstrue what is happening.

I do hope you don’t invest your own money.

“The Greeks intentionally falsified their figures, that is theft.”

And the Irish banks on September 29 2008 – they didn’t even know what their exposures were. And they railroaded the Govt into a guarantee. Was that theft or just incompetence?

“They also have a lazy public service, with jobs down to nepotism, that is corruption”

Hello Kettleopolous. This is Seamus Dubh McPot

@Seafóid
We are paying our debts, the cost of our sinful bubble binge as it were. The Greek people wish to avoid paying their debts, and their politicians seem slow to structural reform.

@Grumpy

I think he will be forced into an election. He’s bound to come under fierce pressure from the troika. The FT reporting an EU official saying…” it came like a bolt out of the blue”.

I wonder how the markets will react am?

@ Desmond Brennan

At best you are an idiot Brennan.

You might want to consider educating yourself.

Debt, and the manner in which it is created, would be a good place to start.

In the meantime. Could you possibly keep your racist opinions to yourself?

@Seafoid re Desmond Brennan

I do not know why you are debating with that poster. IMHO the earlier comments remove any value from any subsequent arguments that poster may make until they are voluntarily withdrawn.

Anyway fair play to Greece. They won the Euro football once so they know about timing. Let’s move on to the inflation, shall we ?

Song for all the French banks out there

It isn’t over.

@ Georg R. Baumann

Yes he is as slippery as Bertie.

But if he now fails to give the referendum he will have Civil War.

I was wondering where the moral high ground had got to, I see it has moved here.

The interesting question, what happens if they vote yes?

The no case is pretty much baked in, leave the euro, disorderly default, CDS triggered, banks emergency recapitalised, all over in a month at most. A bit like Iceland. Greece is neither big nor systemic. Anyone invested there is a fool.

On the other hand, if they vote yes, there are alarming implications for european sovereign debt, and not just in the periphery. The austerity program is only unsustainable from a debt perspective. From a year-to-year accounts perspective it makes sense. If you accept that in return for debt forgiveness there must be economic restructuring, then basically you are baking in debt forgiveness… (since there seems to be a lot of economic restructuring to be done).

“The Bundestag voted last week to upgrade the EU’s bail-out fund (EFSF) to around €1.2 trillion but only on condition that the ECB steps back from its support role. This pits Germany against much of the world. The US Treasury, the International Monetary Fund, and most leading economists fear the fund will fail without a central bank prop.
“There is great scepticism. The evidence from the bond markets is that they don’t see the EFSF as credible,” said Silvio Peruzzo from RBS.
Investors have grave doubts over plans to leverage the fund fivefold by insuring “first loss” tranches of new debt, which concentrates risk and threatens France’s AAA rating.”

The wheels are coming off the wagon. Italy in the firing line now and if France loses its triple A then it is game over. Four days for the summit deal to crumble even before it is formally enacted.

I hope MN has a plan B and is not relying on the kindness of strangers.

@ceteris

“He’s bound to come under fierce pressure from the troika.”

The Troika can hardly publicly disparage the defining act of democracy, much as they would like to.

I think this is for real. He knows that the Greeks will not endure 10+ of austerity. He and Greece have a lot more to worry about from their own fundamentalists (i.e the generals, 30 years out of office), than they have from crazy ECB, German or French economists.

This referendum is about uniting Greece for a decision that it is clear they must take. Leave the Euro and default big.
Continuing on the current path will split Greece into the ancient city states of old, a veritable European Somalia. The army will not allow that.
So the choice is exit the euro and default or welcome the generals.
What would you do.

@Joseph Ryan

+1

Re Joseph Ryan ”The Troika can hardly publicly disparage the defining act of democracy, much as they would like to.”

I’m not so confident – have you seen some of Barrosso’s recent speeches about the arrival of ”un moment federateur” ?
”The democratic model has failed” etc.
He was speaking primarily about the desire from whatever faction he belongs to to establish a single decision-making structure and get rid of the vetoes, etc, but it doesn’t take a huge leap from this type of ideology to see them trying to put a recriminatory spin on any decision reached by a Greek referendum.

It’s finally coming down to national sovereignty versus european ideology.

Greeks will go for the former.

Carnage will ensue.

Greece will be kicked out.

Euro survival will come down to the remaining countries giving away more sovereignty.

Ireland will vote against this in any referendum unless we’re given sweetners re Anglo rebate etc (the people will demand this rather than the passive government because of our national insecurity with growing a pair).

Ireland will bring back the punt and it won’t be the end of the world.

Discuss……

The EU should make a path for Greece to exit the euro. Would pegging a new Drachma to the Euro prevent total depreciation of the economy?

A boneheaded move for sure. The “Markets” are writing off Greece and adjusting accordingly. The settlement will be rejected and the uncertainty both political and economic will seriously undermine the EU with knock on effects on other areas worldwide.

It is not over ’til the fat lady sings, Maria Callas died and Angela M is a bit too slim for that role.

As the Chinese curse goes “May you live in interesting times.”.

If Dr Merkel decides to permit her ‘subjects’ to express their opinion (she might decide in her infinite wisdom a no deal as referendum was not in the cards which makes the referendum redundant, she might make her own blackmails) and we have a referendum I think that the answer will be a yes to the ‘rescue’ because the consequences of a no will be depicted as harsher than the austerity. Personally, I am not sure about that and I believe that Euro is the real disaster (in spite of the deep structural problems of the Greek economy and the awful political system of corruption and nepotism). It does not suit the southern economies and it’s better that we go out now that we can default on our debt held by the private sector, than to do it later under worse circumstances. However, I think that if no prevails will be because of the lost sovereignty issue (this hurts more and the rhetoric coming from Germany, nothing unusual there, and recently from that short guy in France and perceived humiliation does matter), not the economic one. Either way, this country has passed worse disasters, enormous loss of life, bloody civil wars, hundreds of years of occupation, thefts of her wealth and dignity (and many defaults that no-one seem to remember! was reading about them in newspapers, I bet that the vast majority of Greeks did not even know about these) and she survived. We will overcome the difficulties.

@ Desmond Brennan,

“If the Greek people decide to go it alone, I say boot ‘em from the EU, in any case they are borderline Europeans, with tendency to street violence and terrorism – much more akin to the Middle East than Western civilisation.”

Nice! Also a wee bit ironic, considering they’re engaging in that most civilized construct, i.e. democracy, unlike the nob-ends who clearly populate your wall of fame.

But I like it, this plain speaking.

@ Mickey Hickey,

“The fact remains that “Markets” speak loudly and clearly and after PM Papandreou’s announcement of a referendum the unmistakable signal emanating from stock exchanges was that we are in a period of uncertainty which is and will be damaging to economies far and wide.”

So nothing has really changed then.

“Whether Greece or Ireland for that matter, stays in the EZ or leaves the EZ they will both labour under a mountain of debt. It is not a darkness and light scenario it is a dirty, depressing and murky grey.”

That’s assumes the euro can survive one, two, or even multiple withdrawals, and is conditional on maintaining debt servicing. I wouldn’t bet on it.

“I feel sorry for the Greeks, like the Irish the Greeks tend to blame their past colonial masters, the Ottomans in their case, for all their problems.”

I think the situation is a little more nuanced than that. I think there’re probably many, many Greeks, who blame their current elites as much as the historical legacy they’ve inherited. I think the average person has a pretty clear view of things, both here and in Greece. It’s the elites that need to get a grip, or indeed loosen the grip before it’s pried off for them. I think Papandreou understands that threat. Does Enda? No society that calls itself democratic or civilized can bear this sort of stuff for long.

“I am not a market aficionado nor am I an Ayn Rand fan.”

Glad to hear it. The markets are nuts. The markets are the banks and insurance companies and asset funds that on the one hand scream out for defaults, and even actively engage in coercive activities with an atomised view of success, and on the other hand are going to be on the receiving end of such defaults. They call for austerity and hammer a country for engaging in it. They are a self-obsessed oxymoron, a non-sequitir that negates itself by its contradictions and lack of logic and to some extent or another are going to be nationalized. We’re just the vanguard.

My guess is that he’s playing a fairly complex game under which he has chosen a strategy that is favourable to Greek interests whatever the outcome.

At one level, he’s playing a very effective “give us a better deal now, or else”, that may produce changes sufficient to justify calling off the referendum.

If the referendum is won on the current deal (probably improved in the interim by a lot of under-the-counter sweeteners from the EU), he reconciles the goals of pursuing the existing strategy and protecting the consent of Greek society to being governed.

If the referendum is lost on the current deal, the timing will coincide approximately with the planned move to a positive primary fiscal balance, when more austerity is required only to pay off creditors. At that point, whatever the balance between upsides and remaining downsides, at least the economy will be protected from the effects of a sudden stop in government spending and the need to immediately reintroduce the drachma to fund spending.

All that, and a refreshing dose of democracy too!!

This proposal by the Greek PM is freighted with the most delicious historical, political and economic ironies. It pits Greece, the cradle of democracy, against Germany, one of the newer ‘model’ EU democracies – with its Basic Law drafted by US and UK constitutional lawyers after the war. In the blue corner, we have Angela Merkel, hiding behind the Bundestag, whose members are seeking to channel constructively the anger of their voters about the extent to which they have been gulled about the nature of both the Euro and their most recent ‘economic miracle’, refusing to grant the ECB the authority to use its firepower to blow the naked shorters in the sovereign bond market out of the water and failing to sanction the shoring up of core EZ banks that recycled export surpluses to lend blindly to the periphery, rather than investing in the core, so that they could buy the output of the core.

In the red corner, we have George Papandreou exposing this accumulation of folly, seeking to secure a sensible deal for his country and aiming to pursue the structural reforms required to establish a better-governed polity.

My money’s on George.

He is offering the people a vote on whether to remain in the Euro or not. It is a great move. The technocrats will hate it.

@Ceterisparibus
“The FT reporting an EU official saying…” it came like a bolt out of the blue””

The Yanks in the Middle East and now the Germans in Greece run the same dumb numbers based analysis that takes no account of what really drives people in their own country- vague concepts that outsiders often have difficulty understanding .Of course “it came like a bolt out of the blue”- if you don’t understand what you must understand you can’t succeed.

Scott Atran explains

http://www.guardian.co.uk/commentisfree/cifamerica/video/2011/oct/31/scott-atran-us-foreign-policy-video

It is no coincidence that US power in the Middle East is waning at the same time as the Euro goes through its spasms of crisis

The last two comments are right on, and may even prove decisive!

Papandreou’s DNA is American (born in Minnesota!); a bit of Swedish learning; and admitting he wants Greece to emulate Sweden (his own words!). His father was Berkeley economic professor before he dethroned the Greece Colonels and set up PASOK.

Papandreou elder said, during Masstricht process, he wanted to *milk the EU cow*. He actually used EU Structral Funds to underpin his political base and PASOK – ie. not national structural reform and economic development (eg. Murcia region in Spain, at same time).
…………

Now, I believe (son) Papandreou is calling the bluff of ND (his old classmate from Harvard). Because normally under such pressing political emergency one usually runs a nation under a government–of-national-unity – in order to get through the difficult economic decision-making process and mainatain law and order.

If he can really get into the nitty gritty details on what EU decision-making means to Greece and how long it will take (+10yrs!) to get back to sovereign bond market….he’ll most likely succeed in getting *Yes* from the electorate and, thereby, putting ND on its backfoot (reason why their leader is today personally appealing to Grrece President against the referendum).

Bottom line, may be, Cameron’s (UK) attempt to silence his (+80) back -benchers on EU Referendum opened up the pandoras box for Papandreou – to test the democratic will of Greece and to prove Athenian Democracy is still alive and kicking.

BTW neither Merkel nor Sarkosy believe in referendums….

So much will happen between now and the vote. Can Italy hang on for another 2 months ? Will France lose its AAA rating?

@Constantine

“What people forgot in the process is that Greece is an independent state”

Yeah, right! Keep smoking that good stuff, if you can still import it!

@Lord Wellington,

But if he now fails to give the referendum he will have Civil War.

Tanks on the streets of Athens, what better excuse could he deliver to himself.

The real question is the effect of a Greek ‘no’ vote to this referendum, which everyone should expect, on the March meetings of the European leaders to change the terms of the overall Euro area agreements hammered out in the last weeks. 20+ States looking to increase fiscal integration, and the leaders of Greece, who will probably still have a vote on the issues at play there, stood firmly opposed to it with a strong mandate from their electorate. There is a potential for maximum disruption in such a situation.

If Greece leaves the Euro and defaults on its debts, then the next logical choice for the markets to focus on will be Ireland, as the weakest state in the Eurozone. Bond yields will climb back up, the government will spend most of its time fighting confidence fairies, and we won’t access the markets, even in a small way, for the next 2 or 3 years as the crisis works itself out. Imho this is bad news for Ireland in the medium term.

It should also be noted that the post-independence history of Greece contains a debt-default cycle, more information here: http://video.minpress.gr/wwwminpress/aboutgreece/aboutgreece_history.pdf

The Italy – Germany spread has been halting at resistance around 4% for quite a while with the ECB in. Italy has gone today, it is about 4.35% and the effect of these sort of technical breakouts on psychology is analogous to a quantum event in physics – the framework of arguments alters distinctly.

The half-baked efsf deal plus the potential input of non-bank enthralled Greek voters may have put Italy firmly in play.

In case any one has forgotten, Italy is the key to potential Euro breakup.

@Grumpy,

I agree. Greece, Ireland and Portugal, given their limited economic heft, are sideshows that can be managed. But Papandreou’s initiative has shone a bright light on the nonsense that’s being conjured up. Typical of the markets to go for the jugular – Italy. I don’t think Italy can remain united. Hello Padania and Mezzigiorno. It seems the end-game is coming more quickly than most people thought.

G-Pap’s stunt is more obvious now!

The referendum’s date has not been set. The debt deal specifics are not yet on the table, as soon as this has been delivered, he claims to call a referendum.

So what does that mean?

It is simple really, it pushes the ball back into Merkozy’s side of the playing field, to go back to the banks and demand a higher hair cut, this is what I mean with Result >= 75%

This move was threatened before, and of course Merkozy want to avoid it at all cost.

The next act of this tragedy unfolds rapidly.

@ All

Two links worth reading.

http://www.ft.com/intl/cms/s/0/c4886f7a-03d3-11e1-bbc5-00144feabdc0.html#axzz1c5fPdDgx

http://www.ft.com/intl/cms/s/0/c4886f7a-03d3-11e1-bbc5-00144feabdc0.html#axzz1c5fPdDgx

In a nutshell, why should anyone help the EZ out of the hole in which it finds itself if the main beneficiaries – and notably Germany – are unwilling to do so?

The dogged and capricious pursuit of PSI in order to make the wicked bankers pay is, however, the straw that has broken the camel’s back. Even the man in the street can recognise that asking your creditors to take a haircut of 50% and then expecting them to lend you more money is simply daft. Certainly, any Greek worker who contemplates the impact of this on his pension fund will have no difficulty in understanding. German and French leaders either do not understand, or are unwilling to accept, that the fate of countries and that of their major banks are now inseparably intertwined.

This crisis could best be described as that of the illusion of the free lunch on the part of all concerned. That and finger pointing with regard to placing the blame everywhere except at one’s own front door.

Paradoxically, the luck of the Irish seems to be holding. Nothing could be more sobering than to have a wide audience hear a former Greek finance minister spell out the harsh realities as just now on the Pat Kenny show.

I agree with those that consider the action by Papandreou as nothing more than a dangerous stunt at the head of a totally discredited party. How the Greeks handle the matter is, however, up to them. The consequences of them taking the wrong decisions, unfortunately, are not confined to them.

In fact, it seems inevitable that matters will play out as Wllem Buiter suggests. Implicit in his analysis is a major economic downturn in Europe and globally but that this should negate any risk of inflation, the great German bogeyman.

@Brian I had a go at a ‘what if’ in a back-of-envelope way in the Guardian some months back, but didn’t look at the issue of bonds at all. It’s in 2 parts, this is the second part. http://www.guardian.co.uk/business/ireland-business-blog-with-lisa-ocarroll/2011/may/11/morgan-kelly-plan-deflate-economy

On the ‘virtual money’ thing, I’m working on a book chapter on that exact issue now, I’ll post it when there are more actual sentences and less bullet points 🙂

@ All

Apologies. Duplicated link. Herwith the correct one.

http://www.ft.com/intl/cms/s/0/7147b724-03b7-11e1-bbc5-00144feabdc0.html#axzz1c5fPdDgx

@ All

Only the ECB can resolve the crisis or, rather, Germany will have to recognise that this is the case cf. recent article by Paul De Grauwe.

http://www.ft.com/intl/cms/s/0/4fd2a0c8-be10-11e0-ab9f-00144feabdc0.html#axzz1c5fPdDgx

And for the policy wonks herewith the figures to back up the analysis.

http://www.ceps.be/book/only-more-active-ecb-can-solve-euro-crisis

Will the ECB lower rates as Draghi’s first move?

We should take note that our own Minister for finance said he did not think it was a good deal for Greece as it would leave them outside the markets for the next 10 years.

The rhetoric from Sarkozy and stance of French officials undermines the entire European project as it shows France views Europe as a zero-sum game.

At the same time, Greece is acting up at a peculiar time. Firstly, they are getting more money in than they are paying out. Secondly, they keep getting better and better deals so there has to be hope that this deal can be imporved. Thirdly, they are throwing a bomb under Italy and the whole financial world at a stage whent here is huge economic and geopolitical instability.

The arrogance and aggression of the big powers, and particularly France, is pushing the smaller countries to desparate actions. It would be hard to justify such brinkmanship without the rhetoric of Sarkozy ringing in the world’s ears. That man is a most dangerous fool.

@ Paul Hunt

*FITCH SAYS GREEK REFERENDUM IS THREAT TO EURO AREA STABILITY

ITALY’S BERLUSCONI SAYS GREEK DECISION TO HOLD REFERENDUM WAS UNEXPECTED, HAS CREATED UNCERTAINTY, WEIGHED HEAVILY ON MARKETS

DUTCH OPPOSITION LABOUR PARTY SAYS GREEK REFERENDUM A POTENTIAL DEAL BREAKER FOR EUROZONE RESCUE PACKAGE

Not fans of democracy in action obviously…

@ All

developments in Greece – calls for unity government, push through reforms, then hold fresh elections. These would be as an alternative to referendum. Senior PASOK MP asks for Greece President to take action. Being treated as a serious suggestion.

@Stephen Kinsella
“If Greece leaves the Euro and defaults on its debts, then the next logical choice for the markets to focus on will be Ireland, as the weakest state in the Eurozone. Bond yields will climb back up, the government will spend most of its time fighting confidence fairies, and we won’t access the markets, even in a small way, for the next 2 or 3 years as the crisis works itself out. Imho this is bad news for Ireland in the medium term. ”

This, IMO, will happen anyway, Greece or no Greece. The problem is the attempts at solutions are not credible beyond an initial knee-jerk “that doesn’t sound too bad”. If you are in a bad situation, any solution that doesn’t sound ‘bad’ is not likely to be good enough.

“I think the third cohort will vote no and that leaves the Eurozone and the Euro area in quite a bind.”

On the contrary, I think there is a self-obsessed, semi-blind cohort both within and without Greece that think Greece leaving the eurozone is the perfect solution and will magically vanish all the other troubles away. First it was Lehmans, then it was Iceland, then it was Ireland, then it was Greece – the solution for a simple single answer leaves no tree unclimbed.

This is another great example of the dynamics politicians have to deal with in thie crisis. It is right up there with Deauville.

Announcing a referendum changed the dynamics so much as to possibly render such a referendum academic. It is very difficult for politicians to formulate, enunciate and implement policies to deal with this economic crisis as they would normally do in other situations.

With that said, it is a reasonable assumption that the politicians are aware of these dynamics which often pertain in economic crises (e.g. in our devaluation when Bertie said he wouldn’t budge until he budged). Accordingly, every announcement which does not achieve its goal must be seen as wither having another intention or as a blunder.

It is hard to imagine that Deauvillle was a total blunder. It is also hard to imagine that this referendum announcement is a total blunder. Just as default was put firmly on the agenda by Germany, now wholesale default and Euro exit has been put firmly on the agenda by Greece.

This is a nice article on CDS
Basically 5 US ‘wall street’ Banks hold about 65% of CDS liabilities on EU periphery debt.
They ramped up their insurance sales in 1st 1/4 2011.
This market is so untransparent. US Banks are claiming they have much less CDS exposure to their clients than regulators are estimating, like add 3 zeros to what the banks say their exposure is.
The US banks who sold the insurance on Greek debt should pay out in case of a no-vote. So the Fed prints another trillion dollars to bail them out, the dollar is the world reserve currency.

http://www.bloomberg.com/news/2011-11-01/selling-more-insurance-on-shaky-european-debt-raises-risk-for-u-s-banks.html1

This referendum is a big risk to the EZ. Besides a more generous package, their choices look limited. I’m not sure threatening the Greek people will work.

Should the referendum goes ahead, the pro-package interests will hope that ‘pragmatism’ wins out. I’m not so sure. My problem is that post-package, the Greeks will still have an huge national debt. This would be played up by anti-package folk in the lead up to a referendum.

So I guess there’ll be a lot of behind the scenes EZ pressure to stop this democratic stunt.

Does anyone commenting know much about Greek society ? Ever lived there or speak the language ? If a group of Venezuelans had an online discussion about hurling and the mentality of hurlers would it be worth reading?

Wait for all the scare tactics to come out now as people of Ireland start asking can we have a referendum. Wait till you see how the Greeks are treated over the next few months in our equal Europe.

@ All

G-Pap has just called an emergency cabinet meeting. Things could get very ugly very quickly.

@seafóid

‘If a group of Venezuelans had an online discussion about hurling and the mentality of hurlers would it be worth reading?

I’d welcome them here – local clubs running out of hurlers in their 20s – most of them in Australia, California, Britain, and Canada.

@Chris

I’ve had a hunch for some time that the ‘block’ on triggering CDSs has a certain Timmy Geithner at full back with AIG_neu and The Squid in the corners -and a lorry load of prime cement blocks clogging up the goal line.

@Greeks on the Blog

In solidarity. Yes – you have problems; as we do; both, albeit of different hues, stem from dodgy capital flows within the EZ for which no-one appears to be accepting responsibility. Why should citizens, Irish-Greek-Portugeese-German etc etc pay for the bets of casino capitalists in dodgy financial system? We pay some – such if life – but not all.

@Stephen/Zhou

The dynamics have changed all right. Whatever amount of trust Papandreou commanded before the bombshell last night, he has succeeded in reducing it to zero with the people that matter in this crisis, Nicky and Angela. Reports to day suggest that the French were “dismayed” and Angela is keeping her counsel but must be fuming. I believe that Pap can expect a typical Germanic response in due course.

For a small country, Greece has succeeded in reducing the worldwide value of stock markets by many trillions….more than enough to sort the problem properly. But the half arsed EFSF and leverage convinced nobody, so it would appear that there is more than enough blame to go around all concerned.

I agree with Grumpy that Italy is the one to watch. Currently trading at 6.3% despite ECB intervention…..Ireland is only a side show.

@all
Heating up. Pap majority reduced to 2.

“Six members of PASOK’s national council drafted a letter on Tuesday afternoon demanding the resignation of Prime Minister George Papandreou, creating more discord in the ruling Socialist party.

The move came just hours after the resignation of PASOK MP Milena Apostolaki, which brought the government’s Parliamentary majority down to two votes, and a call from PASOK deputy Vasso Papandreou on President Karolos Papoulias to form a national unity government that would serve for a fixed period of time before elections are held.”

@ David O’Donnell,

“6 of his advisors have requested his resignation. He cannot back down now – but he can be fired by his own.”

Assuming this is a way of avoiding a referendum; even if he gets the boot, what message will it send to the Greek protestors? The protestors will play the ‘denied democratic freedom’ card and things could get very fiery.

If the political opposition is anything like their Irish equivalents, they must be cursing Papandreou. Ideally he would have pushed through the package, then a quick election and the new government blame Papandreou’s bunch and move on. What happens if an election occurs before this package is pushed through? Do the opposition run a No-to-the-bail-out campaign? Where would this leave the EZ and how does it extend the timeline? Greece is supposed to run out of money in a few weeks.

These events give Draghi the excuse to bid up the price of Gold – if he does not the Euro is toast and the Dollar wins again.

Its clear that Euro austerity is just transferring consumption elsewhere (US & China) – its completly pointless unless you are a banker which is a problem when bankers run the shop.

The Torygraph is reporting that the referendum call is DOA as a Greek referendum bill would require a 3/5th majority in parliament.

http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html

@ KD

its feigning occasional interest, but nothing substantial

Fair play to the Greeks! Now, let the people tell the banks where they can offload their losses. Let the people decided who must pay for the bondholders gambling debts. ΜΟΛΩΝ ΛΑΒΕ

If this leads to the collapse of the euro or indeed the EU, so much the better. An EU dominated–financially or otherwise–by France and Germany was not the gig anyone signed up for.

And if this leads to the collapse of banks or markets, then we will all be saved from the Tyranny of the Banking Putsch once and for all. Onward to the ballot box!

@David
He is probally a US treasury man given the fact he is a Goldman man – unless they decide to move their base of operations .. but I am not sure they even have a base now – why would you when you control the worlds sheep
HA HA HA HA.
http://www.youtube.com/watch?v=RP_az7U7YjI
Economics makes no sense now that currencies are so plastic and goverments bail out credit agents so they they can recoup their losses by speculating on Goverment debt.
Imagine giving these agents credit licences ???? – it boggles the mind.
Its hard to escape the notion that the Euro was created simply to indulge banks in the final speculation of all time – when exactly civilisation will end – you can make a shitload of money up until when the event actually happens.

Greek Referendum may not happen as the politico class are are non too pleased and G Paps Pasok Socialists Party are falling like flies others in the
in the party are calling for his head

JCT has left the Euro zone in great shape with Italian yields on the way to 6.5% . Au revoir M Trichet and let’s hope posterity is kind to you.

Nom de Dieu de putain de bordel de merde de saloperies de Price stability de connards d’enculé de ta mère

@DOCM

The dogged and capricious pursuit of PSI in order to make the wicked bankers pay is, however, the straw that has broken the camel’s back. Even the man in the street can recognise that asking your creditors to take a haircut of 50% and then expecting them to lend you more money is simply daft.

The logical consequence of your position is that you believe the IMF to be capricious and daft. It was the IMF that forced the 50% haircut, with their latest debt sustainability analysis. There isn’t really a troika any more – instead there is more of a “two plus one”. The latest (draft) Greek review from the EU Commission/ECB was published without the “debt sustainability analysis” box, since there was no agreement with the IMF. The IMF then published their own, and this was the basis last week’s PSI deal. The IMF stated:

Deeper PSI, which is now being contemplated, also has a vital role in establishing the sustainability of Greece’s debt1. To assess the potential magnitude of improvements in the debt trajectory, and potential implications for official financing, illustrative scenarios can be considered using discount bonds with an assumed yield of 6 percent and no collateral. The results show that debt can be brought to just above120 percent of GDP by end-2020 if 50 percent discounts are applied.

This was the baseline adopted, although the €30bn sweetener did not figure in their calculations. I presume that the USA, who can veto any IMF Executive Board decision, and others, decided that to put the IMF’s name to a repeat of the EU Commission/ECB July 2011 “debt sustainability analysis box” would just be so absurd and ridiculous that the loss of credibility to the organization would be quite damaging in the long run. The EU July text said “Fiscal discipline and privatisation receipts will achieve sustainability.”

To be consistent you would also have to call Chopra’s Kenmare speech capricious and daft too, since that really provides the medium term framework the IMF are looking at, and within which their current position on Greek PSI makes perfect sense.

——————-

Looks like the Greek government won’t last the week, or even another day. Papandreou didn’t even consult with his own cabinet before the referendum announcement, and there have been a couple of defections already to bring the majority down to +1. There are too many Greeks that understand that “Greece is not Argentina” to allow the referendum – i.e. Greece isn’t a commodity based export driven economy that could deal with a default/devaluation – it is a services/public administration driven economy that would simply implode.

I have difficulty seeing the reasoning behind bashing Germany and France. Germany’s Konrad Adenauer and France’s Charles DeGaulle were the prime movers, shakers and founders of the EEC (European Economic Community) which later became known as the EU. The vision was an economic community from the Urals to the Atlantic when the treaty of Rome was agreed to in 1957. Charles De Gaulle was vehemently opposed to the British being included in the EEC and in 1965 took an over my dead body stance in Brussels. CDG saw Britain as being joined to the hip of the Americans and their entry to the EEC did not fit with his plan to establish a counterweight to the USA and Soviet Russia. CDG was a General who understood that economic power was as important as military power. After 1945 everyone in Western Europe understood that another major war was likely within 25 to 50 years if economic nationalism was to continue as before.

Today we are living in unimagined prosperity resulting from the vision and drive of the leaders of Germany and France. We were bribed, cajoled and threatened by the EU into becoming a modern and prosperous country. Of our own volition we elected politicians that catered to all our whims and we got the mother and father of all property booms as well as ill advised investments in foreign property. Our Gov’t, yes, the Gov’t we elected then opted to support privately owned failed banks at taxpayers expense. There were no Leopard tanks from the Wehrmacht or regiments of Infanterie Francaise from France on O’Connel Street. There is no way we can say we were coerced, threatened or intimidated into agreeing to anything that we disagreed with.

The ECB has kept us afloat since 2007 in an act of generosity that has no precedent in our long and tortured history.

And still we whine, point fingers and bite the hand that feeds us.

Wake up, take off the green tinted glasses and try to see the world as it is.

finally !!!!!!!!!!!!!!!!!!!!!

someone asked people what they want!!!!!!!!!!!!!!
democracy is born there(Greece )
hear people’s voice
let them decide what they want

fu£%^&u all

Power to the people

“The Greeks intentionally falsified their figures, that is theft. They also have a lazy public service, with jobs down to nepotism, that is corruption.”

Die Herman and Les Pierre did a great job underwriting those loans. That’s the thing about this sort of reasoning, lying on a loan application is expected. If an applicant successfully lies either the underwriter is the one with the personal and moral failings, or is colluding with the applicant. I will leave resolving the incompetent underwriter vs the colluding underwriter hypothesis to more diligent persons than lazy lying me.

@all The Last Supper at Cannes!

“This referendum has changed the psychological situation massively,” Dr Merkel said.

“We want to help Greece. We want Greece to remain a member of the euro area but there is this unilateral decision taken by Greece that has changed the situation significantly,” she added.

“This is why we’re saying very clearly the sixth tranche can only be dispersed once Greece has adopted all of the parts of the decisions of the 27th of October and, additionally, any doubt as to the outcome of the announced referendum are removed. That is to say there is a positive vote on this referendum.” ….. “This referendum needs to be in its very core about the question: does Greece wish to remain in the euro area, yes or no?” the chancellor said.

http://www.irishtimes.com/newspaper/frontpage/2011/1103/1224306980869.html

I don’t think Angela has studied much social psychology – this will absolutely infuriate the Greek citizenry through its collective 20th century memory …..

….and there is a rumour going around Athens that the Neu Greek Generals have hired a poltroon of eight Irish mercenary 5*_attorney_Generals to engineer a NO Vote with the Island of Crete as the down payment.