Congratulations
to Greece.
While
everyone was expecting a close vote, nobody was prepared for the blowout
victory for the “no” vote.
The
vote caught European leaders off-guard. Many of them had expected – against the
conventional wisdom – that the “yes” vote would triumph. In the run-up to the
vote, EU leaders were doing everything in their capacity to influence the
outcome of the vote.
Martin
Shulz, President of the European Parliament, was the shrillest of all who
painted an apocalyptic scenario of collapse which would result in untold
miseries: banking system would collapse; there would not be any money to pay
the salaries, no money for import and medicines etc.
In
short, leaders of so-called democratic institution such as EU did everything in
their power to thwart the expression of the free will of the people of Greece
since it did not conform to the policies they had in mind for that nation.
And,
now that the Greek people have rejected loudly the debt deal, these so-called
peace-loving, democratic leaders are doing everything in their capacity to
negate the outcome of the referendum – a democratic expression of free will of
the people.
(On
a side note, the same attitude is expressed towards Novorossiya, currently
comprising Republics of Donetsk and Lugansk but could see other regions join as
well in due course of time, and Crimea where people have decided to exercise
their free will. In Crimean referendum, people – just like in Greece – voted
overwhelmingly to secede from Ukraine and join Russia in the aftermath of the
illegal overthrow of the Yanukovych regime and subsequent installation of the regime
of Porshenko, a US puppet. But EU leaders cried foul since Crimea decided to
join Russia and not the despicable entity called EU.)
EU
leaders, as usual, misjudged the rebellious mood of the people who were at the
end of their patience. The austerity measures imposed in earlier bailout deal
had degraded living standards to such as extent as to make people rebellious who
finally screamed “enough”.
Responses
of EU leaders have been quite shocking, bordering on authoritarianism. Instead
of acknowledging the desires of the Greek people regarding reduction in the
debt and favorable terms for the bailout deal, EU leaders have doubled down on
the rhetoric and reiterated support for their original position: steep VAT tax
hikes, cutback of pensions and deep budget cuts for social spending.
It
is as if a way of telling the Greeeks that their referendum does not matter.
What really matters is only one thing: What we, the EU leaders, say and decide.
That is all.
Well,
so much for the democracy.
On
top of it, ECB now has decided to maintain the line on ELA (Emergency Liquidity
Assistance) funding to Greek banks to the level 88.6 billion-euro that was in
place on June 26, 2015 level just to see if Greece and creditors can come to
some accord – on their terms and acceptable to them - by Wednesday. Which means
come Wednesday, Greek ATMs could go dry resulting in social chaos, riots etc.
It
is mind-boggling to see members of EU treat one of their own in this savage
fashion.
The
questions before Greece now is: where does it go from here?
Greek
officials have recognized that they have a limited time-frame, about 48 hours,
within which to act.
The
resounding victory of “no” camp, coupled with IMF’s leaked report regarding the
sustainability of Greek debt, has strengthened Tsipras’s hand for negotiations
with ECB.
On
the other hand, EU officials have decided to stand their ground and not budge
an inch so as not make it as a precedent for the other debt-ridden nation like
Italy, Spain and Portugal etc.
The
result could be a stalemate with neither side budging from their positions.
While EU can afford to slow-walk the negotiations, Greece cannot afford to do
so. It would have to act fast given that the liquidity would run out in 48
hours.
Under
such circumstances, Greek government has few options left.
It
could either issue IOU’s (California style, 2009) to recapitalize the banks and
revive the economy while it readies for the preparation for launching of its
own currency – Drachma.
Greece
could also go rogue – a kind of using nuclear option in financial sense - and
print euro notes in the denomination of 20 which it has the capacity to print. It
could also nationalize its banking system rather than accept the seizure of the
depositors’ money above euro 8,000 limits and prevent banks from being shut
down on the orders of ECB.
|
…..
Syriza
sources say the Greek ministry of finance is examining options to take direct
control of the banking system if need be rather than accept a draconian
seizure of depositor savings - reportedly a 'bail-in' above a threshhold of €8,000
- and to prevent any banks being shut down on the orders of the ECB.
…..
|
And,
there is another option that is being whispered not only as a life-line that
could help Greece but also alter geo-political landscape.
|
………
Russian
President Vladimir Putin discussed the outcomes of the Greek referendum with
Greek Prime Minister Alexis Tsipras on Monday, and expressed his support to
the Greek people in overcoming the future difficulties in the country,
Kremlin press service said.
…….
|
With
BRICS set to begin its meeting in Russian city of Ufa on July 8-9, and given
the fact that Putin had earlier offered a seat at the table to Tsipras to
become a member of the bank, it remains to be seen if the meeting would feature
a surprise guest – either Tsipras himself or his firebrand ex-finance minister
Yanis Varoufakis who resigned on Monday.
On
top of it all, Greece is supposed to pay back ECB euro 3.5 billion on July 20th.
If it fails to do so, it would certainly result in the withdrawal of financial
loans given, thereby resulting in financial collapse. And, this would
definitely lead to grexit.
Drama
of Greek tragedy is about to get more interesting.
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