Last night, when we concluded our overnight summary state of affairs we said that "we expect some resolution around first light this morning, and while another Greek can kicking and some last-moment "hope" is surely in the cards, we know two things: Greece is officially finished - there is no way the Tsipras or any other government can politically recover after such a humiliating spectacle when half of Europe made a mockery of the Greek people; and perhaps better, we finally have seen the true face of Europe: visible only when things are finally falling apart."
Sure enough, just around 9am CET, after a 17-hour mammoth all-night session, Greece did manage to cobble together a "deal" if one may call this latest embarrassing can-kicking that, which was nothing short of total capitulation by Tsipras: a prime minister who 8 days ago was victorious cheering the passage of a referendum that rejected a far less draconian deal.
As part of the deal, Greece "surrendered to European demands for immediate action to qualify for up to 86 billion euros ($95 billion) of aid Greece needs to stay in the euro" as Bloomberg politely put it.
We would put it as follows: Greece agreed, at the cost of ceding its sovereignty to Europe, to allow the Troika to repay itself. Even Greek prime minister Tsipras admitted as much saying "Greece will fight to return to growth and to reclaim its lost sovereignty." He started the "fight" by being brave enough to put up a smile for the reporters.
Worse, there is no actual deal term sheet on the table: while the summit agreement averted a worst-case outcome for Greece, it only established the basis for negotiations on an aid package, which would also include €25 billion euros to recapitalize its weakened financial system, money which would come from Greek asset sales.
One wonders just how effective leaders of a multi-trillion political and monetary block are at cobbling together deals at 4 am in the morning, when the biggest motivators is just to get a deal signed.
The terms of the deal are largely as had been agreed upon by the finance ministers previously, and contain numerous draconian clauses which make the much-hated "memorandum" from the second bailout tame in comparison. Furthermore, Greece also capitulated on the IMF remaining as a key part of the deal, as well as the formation of a €50 billion "escrow" fund which would receive proceeds from the liquidation of Greece assets, and where the first €25 billion of capital would be used to bailout the insolvent Greek banking system.
According to Reuters, "Tsipras finally accepted a compromise on German-led demands for the sequestration of Greek state assets worth 50 billion euros - including recapitalized banks - in a trust fund beyond government reach, to be sold off primarily to pay down debt. In a gesture to Greece, some 12.5 billion euros of the proceeds would go to investment in Greece, Merkel said. The Greek leader had to drop his resistance to a full role for the International Monetary Fund in a proposed 86 billion euro bailout, which Merkel has declared essential to win parliamentary backing in Berlin."
Perhaps the toughest condition for Tsipras to swallow was Germany's insistence that Greek state assets worth up to 50 billion euros be placed in a trust fund beyond government reach to be sold off with proceeds going directly to pay down debt.
Berlin initially wanted to use a structure in Luxembourg managed by its own national development bank, KfW, but diplomats said it was flexible on the location.
One diplomat said that was tantamount to turning Greece into a "German protectorate", stripping it of more sovereignty.
But Merkel declared the matter a "red line" for Germany.
Tsirpas naturally tried to spin the total capitulation as at least some victory: "Greece will be able to stand on its own feet with agreement reached at EU summit, Greek PM Alexis Tsipras says in statement broadcast live on state-run ERT TV. Agreement with creditors “tough”, averted transfer of Greek assets abroad. Greece will keep fighting to return to growth. Greece has sent message of democracy, dignity across Europe. Measures included in the deal will inevitably cause recession to Greek economy. Agreement with creditors will put Grexit talks in the past."
Well not really: only until the next government comes in power promising to undo the current memorandum just as Tsipras did.
But the punchline came from Malta's Prime Minister Muscat who said that "The Greek government has accepted practically everything... It accepted all the crucial and important points.”
European creditors have agreed on a deal with Greece, but the existence of the political union in its previous form is out of the question. The EU will split, and the final break is only a matter of time, DWN wrote.
Many international observers called the recent EU summit a “humiliation of the Greeks.” The talks which were the longest in the history of the Union diminished all values for which the EU once stood, they said.
According to DWN, this is the end of the EU in its previous form — a political union, cherishing mutual trust and democratic principles. The democracy is now becoming a marginal phenomenon. ‘Strong’ states now give ultimatums to ‘weak’ ones in a way that was never done before.
On Monday, Greece and Eurozone leaders are finally reported to have reached a unanimous agreement, according to which Greece may get 86 billion euros over the next three years if it conducts the necessary reforms.
The consequences for Eurozone countries will be dramatic. The Greek banking panic could in seconds become a European banking panic which would be uncontrollable. The solidarity in the EU is eroding, with countries acting in their own selfish interests. The refugee crisis is likely to become the next failure in the EU, which will have members acting in their own interests and not in the interests of the Union as a whole, the article said.
The drama over Greece’s financial crisis continues to dominate the headlines. As this column is being written, a deal may have been reached providing Greece with yet another bailout if the Greek government adopts new “austerity” measures. The deal will allow all sides to brag about how they came together to save the Greek economy and the European Monetary Union. However, this deal is merely a Band-Aid, not a permanent fix to Greece’s problems. So another crisis is inevitable.
On reason Greece has been forced to seek bailouts from its EU partners is that Greece ceded control over its currency when it joined the European Union. In contrast, the dollar’s status as the world’s reserve currency is the main reason the US has been able to run up huge deficits without suffering a major economic crisis. The need for the Federal Reserve to monetize ever-increasing levels of government spending will eventually create hyperinflation, which will lead to increasing threats to the dollar’s status. China and Russia are already moving away from using the dollar in international transactions. It is only a matter of time before more countries challenge the dollar’s reserve currency status, and, when this happens, a Greece-style catastrophe may be unavoidable.
Despite the clear dangers of staying on our recent course, Congress continues to increase spending. The only real debate between the two parties is over whether we should spend more on welfare or warfare. It is easy to blame the politicians for our current dilemma. But the politicians are responding to demands from the people for greater spending. Too many Americans believe they have a moral right to government support. This entitlement mentally is just as common, if not more so, among the corporate welfare queens of the militarily-industrial complex, the big banks, and the crony capitalists as it is among lower-income Americans.
Congress will only reverse course when a critical mass of people reject the entitlement mentality and understand that the government is incapable of running the world, running our lives, and running the economy. Therefore, those of us who know the truth must spread the ideas of, and grow the movement for, limited government, free markets, sound money, and peace.
As the situation in Puerto Rico has recently revealed, Greece is not alone. The world is filled with debt laden nations, many of which may never be able to pay down their liabilities. All told, the world is $200 trillion in debt, of which $57 trillion was accumulated in the past 8 years. And for the record, all the wealth in the world, including assets, amounts to $241 trillion (as of 2013). It’s safe to say that the human race is on one massive debt bender, and there won’t be any easy way out.
Currently it’s estimated that the US has the same debt to GDP ratio that it had during the middle of World War Two. Not to mention that our unfunded liabilities rest at around $127 trillion and rising.
There’s no way that we will ever pay that off, which means that the United States, while perhaps not in the same boat as Greece, is definitely in the same fleet. Our debt to GDP ratio may not be the worst, but that debt is larger than any other in human history. And unlike Greece, our economy is more connected and codependent on the global economy than any other. Once we go down, we’re taking the whole world down with us.
You’d think we’d be worth mentioning, but I guess our debt is a hard pill to swallow.
Spain has shown that it is fully on board with the Brussels authoritarian direction of ending democracy. Those in power have simply convinced themselves that the people do not understand what is good for them so they must impose their will upon the people but raw force. How does this differ in any what from the justification of imposing communism? This is the death of all freedom and it is upon our doorstep.
Here are the new laws in Spain:
1. If you photograph security personnel and then share these images on social media: up to €30.000 fine (particularly if photo exposes violence used against a member of the public). This fine could increase depending on the number of Instagram or social media followers you have.
2. Tweet or retweet information or the “location of an organized protest” can now be interpreted as an act of terrorism as it incites others to “commit a crime” (now that “demonstrating” in many ways has become a crime). Sound “1984”-ish? Read about Orwell and his time in Spain.
3. Snowden-like whistle blowing is now defined as an act of terrorism. If you write for a local publication, be careful what you print, whom you speak to, and whether the government is listening.
4. Visiting or consulting terrorist websites – even for investigative purposes – can be interpreted as an act of terrorism. Make sure you use “Tor” browser, reject cookies, and don’t allow pop-ups. Not to mention, don’t post it on your Facebook timeline!
5. Be careful with the royal jokes! Any satirical comment against the royal family is a new crime “against the Crown”. For example, “What did Leticia and the Bishop have to say after they ––“ (SORRY CENSORED).
6. No more hassling elected members of the government or local authorities – even if they say one thing in order to be elected, but then go and do the exact opposite. Confronting them about this hypocritical behavior. Even if you see them in the street chatting to a street cleaner, dining at their favorite expensive restaurant, or having their shoes shined by that physics graduate who cannot find a decent job in the country, hassling them about their behavior is now a criminal offence.
7. Has your local river been so polluted by that plastic factory along the edge that all life has extinguished? Well, tough! Greenpeace or similar protests are now finable from €601–€30.000.
8. Protests in a spontaneous way outside Parliament are now illegal. For example if Parliament passes a hugely unpopular bill, or are debating something extremely important to you or your community, it is now finable from €601 – €30.000. Tip: Use Google Maps to protest just around the corner – but don’t tweet the location!
9. Obstructing an officer in the course of their business, “resisting arrest”, refusing to leave a demonstration when told, or getting in the way of a swinging baton are all now finable offences from €601 – €30.000.
10. Showing lack of respect to officers of the law is an immediate fine of €100 – €600. Answering back, asking a disrespectful question, making a funny face, showing your bottom to an officer of the law, or telling him/her that their breath reminds you of your dog’s underparts is now, sadly, not advisable.
11. Occupying, squatting, or refusing to leave an office, business, bank or other place until your complaint has been heard as a protest is now a €100 – €600 fine (no more flash mobs).
12. Digital protests: Writing something that could technically “disturb the peace” is a now a crime. Bloggers beware, for no one has yet defined whose peace you could be disturbing.