Greece Crisis: Athens On The Verge Of Collapse, Russia Threatens Response To Pentagon Provocation

Greece crisis: Athens poised on the verge of catastrophic debt default as bailout talks collapse - Europe - World - The Independent

The world’s financial markets are facing up to the possibility that Greece could soon become the first country to crash out of Europe’s single currency. Talks between Athens and its eurozone creditors have collapsed in acrimony just days before a final deadline for Greece to unlock the €7.2bn (£5.2bn) in bailout funds it needs to avoid a catastrophic debt default.

The Greek Prime Minister, Alexis Tsipras, accused the creditor powers of hidden “political motives” in their demands that Greece make further cuts to public pension payments in return for the financial aid. “We are shouldering the dignity of our people, as well as the hopes of the people of Europe,” Mr Tsipras said in a defiant statement. “We cannot ignore this responsibility. This is not a matter of ideological stubbornness. This is about democracy.”

Günther Oettinger, a European Commissioner and member of the German Chancellor’s ruling Christian Demorcrat party, hit back –suggesting Greece could soon be designated an “emergency area” if it fails to pay its debts later this month.

Greek government interest rates – which reflect the likelihood that investors attach to a future sovereign default – soared as soon as markets opened on Monday. There were also ominous signs of financial contagion across the single currency, as the interest rates of Greece’s potentially vulnerable eurozone neighbours such as Italy, Spain and Portugal also shot up.

Stock markets across Europe also fell, with almost 5 per cent wiped off Greek shares by increasingly worried investors.

The Greek negotiating delegation met representatives of creditors for just 45 minutes in Brussels on Sunday night before storming out. The negotiating team of the International Monetary Fund, which is also a creditor of Greece, flew out of Brussels last week, saying it was pointless to stay while the two sides remained so far apart.

Greece must repay €1.6bn to the IMF on 30 June or find itself in a technical sovereign default. That could prompt the European Central Bank to cut off an emergency lifeline to Greece’s banks, which would cause an instant financial meltdown and very probably force Athens to impose capital controls.

Many analysts expect that such controls would inevitably lead to Greece exiting the eurozone.

The European Central Bank’s president Mario Draghi described the prospect of a Greek default as “uncharted waters”.

European finance ministers are due to meet in Luxembourg on Thursday to decide whether Greece is offering enough reform for them to approve the release of funds. “This could well prove to be the last realistic chance of reaching a deal,” said Adam Chester of Lloyds Bank.

Athens is being told by creditors to raise the national retirement age, curb pension payouts and commit to running a significant budget surplus for the foreseeable future. But the Greek government is refusing to sign up to this package of demands, insisting that to do so would be to break the key promises upon which it was elected in January.

The response of the European Central Bank will be of paramount importance if Greece does default on 30 June. Mr Draghi, speaking at the European Parliament in Brussels, said: “The ball lies squarely in the camp of the Greek government”.

Greece accuses Europe of plotting regime change as creditors draw up ultimatum - Telegraph

Greek premier Alexis Tsipras has accused Europe’s creditor powers of trying to subvert Greece’s elected government after five years of “pillaging”, warning in solemn terms that his country will defend its sovereign dignity whatever the consequences. 

The defiant stand came as the European Commission lashed out at the Greeks and warned that the country would collapse into a “state of emergency” unless there is a deal to avert a financial crash. 

Germany's EU Commissioner Guenther Oettinger said the creditor powers must draw up urgent plans to cope with social unrest in Greece and a break-down of energy supplies and medicine as soon as July. 

In a terse statement, Mr Tsipras called on the EU institutions and the International Monetary Fund to “adhere to realism”. 

• Markets suffer as Greece teeters on edge of Grexit - live

He accused the creditors of “political motives” for demanding further pension cuts, hinting that their real goal is to destroy the credibility of his radical-Left Syriza government and force regime change. 

“We are not only carrying a historical past underlined with struggles. We are carrying our people's dignity as well as the aspirations of all Europeans. We cannot ignore this responsibility. It has to do with democracy,” he said.

Germany’s Suddeutsche Zeitung reported that the creditors are drawing an ultimatum to the Greeks, threatening to cut off Greek access to the European payments system and forcing capital controls on the country as soon as this weekend. The plan would lead to the temporary closure of the banks, followed by a rationing of cash withdrawals.

The suspicion in Athens is that the creditors are deliberately engineering a Greek political crisis in what amounts to an arms-length coup d’etat, an allegation dismissed as absurd in Brussels. The IMF says the Greek pension system gobbles up 16pc of GDP – one of the highest in the world – and must be brought under control before there can be any further money. 

The mood is hardening in Berlin where Volker Bouffier, the deputy leader of the ruling Christian Democrats (CDU), said nothing more can be done for a country bent on its own ruin. “It’s awful for the Greek people but we can’t have the rest of European people paying for utterly mad behaviour,” he said.

In a crucial twist, the IMF’s chief economist Olivier Blanchard blamed both sides for the impasse, arguing that there was a limit to what Greece could bear and calling for significant debt relief to restore the country to viability. “A credible deal will require difficult decisions by all sides,” he said. 

It is the first time that a senior IMF official has stated that Greece needs a haircut on its public debt – 180pc of GDP – implying direct losses for EMU taxpayers for the first time. The Fund pulled its Greek team out of Europe last week, letting it be known privately that it will not take part until the debt issue is confronted head on.

"Lehman Weekend" Looms For Greece As Europe Readies "Emergency" Sunday Meeting | Zero Hedge

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Russia's Threatening Response To Pentagon Provocation | The Daily Sheeple

Over the weekend the Pentagon announced their intention to store heavy weapons, tanks, Humvees, and Bradley Fighting Vehicles, in several Eastern European nations. Two of these nations, Estonia and Latvia, lie directly on the border with Russia. Such a move would be unprecedented, and is still subject to approval from Washington. A 1997 agreement with Russia currently prohibits the US from positioning these weapons and vehicles in Eastern Europe.

Russian General Yury Yakubov has since responded to the move “If US heavy hardware including tanks, artillery systems, or other fighting vehicles does appear in some Eastern European and Baltic countries, this would mark the Pentagon and NATO’s most aggressive step since the Cold War time of the past century.” and further added that “Russia won’t have anything else to do but bolster its forces and resources on the Western strategic theater of operations.”

Of course, The United States doesn’t have a monopoly on hot-headed military brass, that are currently refueling Cold War tensions. Yakubov himself publicly identified the US as the most significant threat to Russia last year, and suggested that they prepare themselves to launch a preemptive nuclear strike against the US and NATO in the near future.

Russia warns will retaliate if US weapons stationed on its borders

A plan by Washington to station tanks and heavy weapons in NATO states on Russia's border would be the most aggressive US act since the Cold War, and Moscow would retaliate by beefing up its own forces, a Russian defence official said on Monday.

The United States is offering to store military equipment on allies' territory in eastern Europe, a proposal aimed at reassuring governments worried that after the conflict in Ukraine, they could be the Kremlin's next target.

Poland and the Baltic states, where officials say privately they have been frustrated the NATO alliance has not taken more decisive steps to deter Russia, welcomed the decision by Washington to take the lead.

But others in the region were more cautious, fearing their countries could be caught in the middle of a new arms race between Russia and the United States.

"If heavy military equipment, including tanks, artillery batteries and other equipment really does turn up in countries in eastern Europe and the Baltics, that will be the most aggressive step by the Pentagon and NATO since the Cold War," Russian defence ministry official General Yuri Yakubov said.

"Russia will have no option but to build up its forces and resources on the Western strategic front," Interfax news agency quoted him as saying.

He said the Russian response was likely to include speeding up the deployment of Iskander missiles to Kaliningrad, a Russian exclave bordered by Poland and Lithuania, and beefing up Russian forces in ex-Soviet Belarus.

"Our hands are completely free to organise retaliatory steps to strengthen our Western frontiers," General Yakubov said.

The Russian Foreign Ministry said: "We hope that reason will prevail and the situation in Europe will be prevented from sliding into a new military confrontation which may have dangerous consequences."

The Pentagon said on Monday the military was in the process of deciding where to store a battalion's worth of military equipment in Europe. The decision is part of a long-term effort to maintain equipment for a heavy brigade in the region to facilitate rotational training with NATO allies.

South China Sea Islands: Nuclear-capable missile tests | WU-14

A QUIET battle lingering over the South China Sea just got a whole lot more dangerous after reports China tested hypersonic glide vehicles capable of carrying nuclear weapons.

The vehicle, dubbed the WU-14, was the fourth test of the missile in 18 months, RT News reports.

The weapon is extremely advanced and can travel at 10 times the speed of sound.

And it’s ticking off the Americans.

The US has labelled the testing as an “extreme manoeuvre” amid tensions in the South China Sea, theSouth China Morning Post reports.

Tensions between the two military superpowers have been increasing due to a cluster of tiny islands in the South China Sea.

And the US and China have been doing a lot of peacocking about them.

US Secretary of Defence Ash Carter has previously warned the US would not shy away from confronting Beijing about the continued expansion.

The problem is also placing Australia in an awkward position over who it would be better off being best buddies with.

The tiny man-made islands popping up in the South China Sea have been dubbed a “flashpoint” of war due to the land grab they inspire.

The Chinese have used dredging engineering to create the islands from what were previously reefs — and it claims it has the sovereign right to do this, despite some of them being 1400km from China’s mainland or on the continental shelfs of the Philippines and Vietnam.

Militarisation of those islands could very well result in conflict between China and US, which runs its ships through the area.

That would drag Australia firmly into the war muck — Australia needs China for trade, but the US is one of its closest defence allies.

As well as US military interests in the area, countries including the Philippines, Brunei, Malaysia, Taiwan and Vietnam also have a stake in the region.

As each island appears, China stakes a claim in the sea around it and this is the crux of the issue for China’s neighbours.

“Economics mean very little at the end of the day,” said Prof Siracussa, who is an expert in human security and international diplomacy.

“Once you militarise a problem, you don’t get a diplomatic solution.

“The [US] Secretary of Defence’s job is to think about the next war and how to beat them up.

“The trigger is there, it’s just waiting to happen,” he said.

During a “Re-assessing the Global Nuclear Order” conference in January, Prof Siracussa said discussions about “inevitable” war between the US and China were quite open and on the table.

“They were discussing the inevitable war with China,” he said.

“This will happen. This is about power.

“The American pentagon is on a collision course with China.

“So the South China Sea has become a flashpoint for war.”

Japan debates shooting down Chinese drones over Diaoyutai｜WantChinaTimes.com

The Japanese Ministry of Defense is considering whether to shoot down Chinese drones if the PLA decides to carry out routine patrols over contested islands in the East China Sea, reports the Tokyo-based Kyodo News.

The islands, known as Senkaku to Japan, which controls them, are also claimed by China as Diaoyu and by Taiwan as Diaoyutai.

An article from an official PLA magazine published last October suggested that the Chinese military is planning to carry out routine aerial patrols over the islands. It stated that coast guard vessels alone cannot defend China's sovereignty claims and the air defense identification zone set up by Beijing over the East China Sea. The PLA has an estimated 50 unmanned aerial vehicles, according to the report.

China deployed drones for island patrols for the first time in 2013 and has determined to carry out routine aerial patrols using drones as a response to US drone activities over the East China Sea. The US Air Force has deployed two of its RQ-4 Global Hawk unmanned aerial vehicles to Okinawa to monitor Chinese naval activities in the region. China has tried several times to jam the American drones flying over the disputed airspace, said the report.

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