Greek Finance Minister George Papaconstantinou said Saturday that Greece was exploring the possibility of having a European bailout fund buy its debt if the government is unable to access capital markets again next year. "The markets continue to disbelieve in our country," Mr. Papaconstantinou told reporters. "We have to plan our next steps for 2012, for 2013." This could mean turning to the European Financial Stability Facility if the Greek government is still unable to issue debt in capital markets in 2012 as planned … At the root of Greek concerns is a lack of investor confidence regarding its debt outlook, making new borrowing possible only at prohibitive cost. Yields on two-year Greek bonds have topped 23% on persistent fears that the country will have to restructure its debt at some point, forcing investors to absorb heavy losses on their holdings. ING bank analysts said in a report that Greek bonds maturing in five years or more price in around a 50% loss of principal to investors who bought them at face value. – Wall Street Journal
Dominant Social Theme: Greece debt payments will be lengthened, austerity will be rationalized and all this nonsensical talk about the Greeks leaving the EU will cease.
Free-Market Analysis: We have long-predicted the possible break-up of the EU in these modest pages. As we have written many times in the past few years, the EU experiment is not a logical one and at this point its disadvantages far outweigh its advantages. The "immoveable rigor" of the Eurocrats keeps the whole disaster afloat, much as the various compartments of the Titanic allowed that great doomed ship to ride the waters for a number of hours even after it was fatally wounded. Eventually it sank.
But even immoveable rigor has its limits. It is easy to demand that others sacrifice – as the top Eurocrats do – while jetting from country to country and paying no heed to their generous carbon emissions. But when confronted with the determined desperation of their victims – Greece being a prime example – even immoveable rigor gives way to feverish rejiggering designed to inflict further misery on reeling PIGS populations while still allowing the EU to function as a whole.
We continue to believe it probably will not work. Every additional compromise made by the Eurocrats comes at the expense of the Northern EU countries that have benefited from the EU even as the Southern ones have not. It is the Northern countries that are actually the problem. The Finns have just overthrown their government in an attempt to remove themselves from the EU. The German Iron Lady Frau Angela Merkel is bleeding continually at the edges of her coalition as she commits more and more German taxpayer money to the cause of salvaging Southern finances. There is a constitutional challenge to her activities that continues to progress.
The Eurocrats are apparently in denial about these issues. Used to ignoring the sentiments of the electorate (or demanding re-votes when inevitable) EU Grandees continue to come up with clever compromises that seem to provide hope for the EU as a whole. The supine mainstream media trumpets these deals as if each one were a definitive solution to the rolling, roiling EU debt crisis. None of them are.
Eventually, the EU electorate itself will have its way. Eastern Europe is growing increasingly hostile to the EU concept. Then the real pushback shall begin. One wonders for instance how long German unease shall be contained. The issue is far beyond clever compromise, as elections will continue most likely to vote EU-centric politicians out of office.
Now the Greeks may ask the European Union to buy their debt since the market will not; but once again no one mentions whether the Germans (or the Finns) will stand for it. The argument is trotted out that Greece will have to put up "collateral" to guaranteed the additional loans. Worse and worse. So the Germans shall pay tax dollars to bail out Greece and if it doesn't work out the German government shall end up owning part of the Parthenon.
In fact, this is a big question. Exactly who will receive this collateral in case of Greek's seemingly inevitable default? The taxpayer losses are tangible. The idea that Germans or other Northern EU states will receive compensation for their losses via the sale of such collateral seems to us a kind of bad joke. If we can see through it without knowing the details, far more sophisticated anti-EU forces in the EU's North will likely take apart these proposals quickly and ruthlessly.
Meanwhile, there is no free-market left that we can see. The EU's supposed purpose continues to degrade. We have returned to an age of quarreling nation states. The idea that the EU is actually a facilitation of free-markets is not even honored rhetorically anymore. The Greek crisis is just one more evidence among many that the union is unworkable, that its policies are undemocratic and its outcome is one that is continually substituting misery for prosperity.
From the standpoint of freedom, nothing is more desirable than the breakup of this authoritarian monstrosity that crushes culture and makes increasingly absurd laws for hundreds of millions at a time under the laughable pretense of keeping them "safe." The EU itself is an increasingly risible entity. At the top is responsible to no one and has not even been officially audited in a decade or more as those responsible for the numbers will not sign off on its evident and obvious corrupt practices. This is the institution that presumes to make financial decisions for others.
As far as the EU's larger problems are concerned, there is no more pretense that issues involve economies; the action is focused on nation-states that cannot pay their obligations. The state itself has accrued the debt; its citizens pay with austerity and unappointed leaders gather together in (presumably smoke-free) back rooms to apportion resources as they see fit.
Was this the intended outcome after all? We are always of two-minds of this. We look at the huge financial resources controlled by the monetary elite and we wonder if the whole EU crisis is manufactured, designed to impose maximum "austerity" on European populations to distract them from the authoritarian cage being constructed around them.
On the other hand, the EU seems constantly on the brink of some sort of dissolution – and the EU powers-that-be scramble around in a panic to make sure that the worst does not occur. Maybe there are competing agendas, as we have suggested in the past. The Anglo-American elites have inflicted maximum damage on Western economies but do not want the results to undermine its globalization efforts. Thus competing agendas, even within the larger aims of those who run these statist agglomerations.
There is no doubt that the Eurocrats, despite the misery that the world's central-banking economy has inflicted throughout the West, do not want to see a break-up of the EU. It is one of the building-blocks of world empire. That is not merely a rhetorical stance. When Der Spiegal, the German magazine, wrote last week that Greek leaders were considering leaving the EU, a weekend meeting of various finance chiefs was organized in Greece with startling rapidity. Here's some more from the article:
U.K. Chancellor of the Exchequer George Osborne said Sunday that European Union countries will spend the next several weeks discussing ways to provide Greece with more financial aid as the country struggles to reduce its debt burden. "I think it's inevitable that we are going to look at the Greek package and see what they can do to get through next year, but that might involve additional assistance from, for example, the euro zone," he said in an interview with BBC television.
Mr. Osborne said the chance of Greece being unable to regain access to capital markets next year has been recognized as a problem. But he said he doesn't think it is inevitable that Greece will default on its debt."There are some very difficult questions that Greece has to address now," Mr. Osborne said. "Because the whole assumption when the euro zone put together a rescue package last year was that Greece would come back into the market and borrow. The market is quite skeptical about this happening."
The U.K. isn't one of the 17 euro-zone countries sharing the euro currency, but government bailout decisions require approval from all EU countries. The possibility that Greece will be unable to meet financial payments next year without more external aid was the focus of a top level meeting of European Union officials in Luxembourg late Friday. At that meeting, Greece asked its euro-zone partners to ease the country's deficit targets as it struggles to comply with strict austerity terms set under last year's financial bailout agreement, a senior euro-zone government official said Saturday.
The senior official said Greece acknowledged that it was unlikely to be able to return to the bond market next year and might need to tap the EFSF for funding. A German proposal to possibly extend the maturities of Greek debt falling due in 2012 also was discussed, this person said. Athens has a long-term borrowing requirement of €27 billion ($39 billion) in 2012.
The deal is not done, of course. But it looks to be on track. Greece will likely receive easier terms (because its must) despite grumbling. Then Greek leaders will pledge to provide the necessary collateral and redouble austerity efforts, which include high-tech spying on the swimming pools of wealth citizens who may not have paid enough taxes.
The results shall be twofold. More Northern political leaders shall be voted out of office by enraged voters while the Greeks themselves shall take to the streets in redoubled fury. EU officials remain in denial. Surely something will be worked out. "We are not discussing the exit of Greece from the euro area, this is a stupid idea and an avenue we would never take," Eurogroup President Jean-Claude Juncker said Friday. "We have excluded any restructuring of Greek debt." (Good luck with that.)
The good news is that the world-spanning plans of the Anglosphere power elite are under attack as never before. From Afghanistan, to the EU to America, its strategies are seemingly foundering and world government does not seem to us to be assured, especially not in the near future. However, we try not to be predictive in this publication. We point out elite dominant social themes and their foundering; lately there has been more and more damage to them in our opinion. It surely seems as we have often written that the 21st century is considerably less kind to elite globalist ambitions than the 20th. Time will tell. Right now, insofar as the EU is concerned, in some instances anyway, it does not seem to be on the side of the globalists.
