EUROBLOWN: American influence on the Greek Government waning – sources

Intrigue, austerity denial, side-deals, and economic collapse: but the bottom line is ‘debt monetisation’

Coalition dilemma…which way is up?

Senior sources close to Greek Opposition MPs are claiming this morning that those calling the shots in the ruling Coalition of Antonis Samaras do not view a return to the drachma with American support as “a viable alternative to staying within the EU”. The Troika’s abrupt change of attitude to Greece is also suggesting to some observers that “some kind of secret deal” has been done between the ECB and Athens to both reassure the Troikanauts, and keep the Greeks onside. But it’s clear the Germans aren’t on board with this.
Something very odd indeed is going on between Brussels, Berlin, Frankfurt, Washington and Athens. On all sides, things said in public are either slightly mad, or completely different to what is thought in private – and then executed while nobody is looking. Facial expressions and media soundbites have turned 180 degrees to give the impression of Jolly Good Pals. But there is a great deal of intrigue going on behind all this.
Most people outside Greece find it less and less intriguing. “It’s holiday time, the Greeks owe a lot of money, the Troika seems to be happy again, it’s tough for the people – whatever. I’m all Greeked out.” It would be a mistake for any of us to think like this,  for two reasons.

First, at the sovereign level, the overlapping (and often contradictory) aims of the ECB, the Brussels Commission, the Americans, the Germans, and the Greek elite may be very close now to snatching meltdown from the jaws of chaos. Taken together, these swirling objectives could easily turn Europe and the Middle East into an unstable nightmare.
Second, at the globalist investment bank level, sooner or later – whether one lives in Finchley, Philadelphia or Famagusta – it will be our turn to be pauperised further. Bluntly, only an insane person would imagine that Greece can survive the latest round of cuts: so either the Troikanauts are all crazy, or there’s another game in play. The game is called monetising debt. One way or another, the financial Establishment  is hell-bent on squeezing real money out of the populace in order to meet the currently ‘virtual’ cost of a decade of unscored, frontal-lobe lending policies, and derivative salamis chopped up on the back of it. In my view, it can’t be done because the numbers are far too high. But mark my words, unless somebody courageous stops them, they’re going to have a crack at it.
A quick survey of the Troika’s feigned insanity – and the terror now felt by the Samaras Coalition – will suffice to make the point.
Following Draghi’s (in my view much underreported) new deal for the Bank of Greece concerning collateral relaxation, the negotiating mood changed immediately: the Troika left Athens all smiles and happy handshakes last week. But the first time the BoG tried to use the facility, they were turned down. And it now emerges that, behind closed doors, Christine Lagarde and her IMF officials maintain Greece’s debt must be reduced to “sustainable” levels before the fund releases billions more euros…..to keep Athens from running out of cash. That’s what I thought the Draghi deal was about, silly me. But now Chrissie the Countdown genius says – for once correctly – that the most effective way to do this is at least some degree of debt forgiveness.
Chrissie is not mad, just stupid and cunning. She knows perfectly well that Greece’s deep recession has blown the country’s bailout programme several light years off course. The statistics are horrendous, and are I think reported in the West for the first time here. 68,000 small businesses closed in the first 6 Months of 2012. 190,000 businesses stated they were at risk of closing down in the
next 12 months. One in Four companies are unable to meet their business loan repayments. One in Two faces difficulties in paying employees’ salaries. 30% have fallen behind on the rent. Three in Ten have debts to utility companies. The average fall in SME turnover was 34.5%  during the first half of 2012. This isn’t a slump, it’s scorched-earth economics worthy of the less sensitive form of Gauleiter.
I simply do not accept that even the barmiest neocon thinks this “retribution” (as the holy suits love to call it) is getting the european economy anywhere, or is indeed likely to achieve anything more than the destruction of the Greek economy….and violence against the new Athens government. That the Samaras Coalition realises this only too well is obvious: for these new cuts are the scimitar which dare not leave its scabbard.
“There will be spending cuts but no new austerity,” said a struggling Government minister on TV last week. But the reality (admitted by the Greek government) is that they have signed up to €11.5bn in new cuts…and although the estimates vary, there are around €4.5bn in savings that, I understand, nobody in the Cabinet seriously thinks can be carried out. Plans are being drawn up for pension cuts on a grand scale, but the hospitals (which haven’t paid any bills for some five months) are already flooded with old people either half-starved or unable to afford to run air-conditioning during the August heat. This is, if you like, literally scorched earth.
In fact, not far below the surface is the widespread belief that, while Samaras seems robotic enough to do the Troika’s bidding, his Coalition partners aren’t. Finance Minister Yannis Stournaras, says in public the savings can be found, but in private he flatly rules out the possibility of firing public sector employees as “impractical”. PASOK leader Evangelos Venizelos has told colleagues he thinks they will “all be strung up” if the full cuts are enacted. (If they are carried out without firing bureaucrats, then I suspect he’ll be proved right).
So the Government plan for the moment is Don’t Mention the Austerity Measures. It wasn’t helped by Greek President Stournaras telling the media that “there will be no layoffs in the public sector”, although more optimistic Hellenics have interpreted this to mean that things are not so bad after all.
But things could not be worse. Without massive debt forgiveness, Greece will default – and very soon. What’s more, if Mario in Frankfurt keeps on playing silly buggers with the Bank of Greece, it will be very soon indeed.
This is what the Americans would not so much like to happen, as like to be around to control: defensively, to protect Wall Street: and aggressively, to maintain its position in the South-east Europe-to-North African axis of energy. But their main contact at senior Governmental level, Finance Tsar Yannis Stournaras, hasn’t been able to get enough credibility behind the American ‘offer’.
“There is no offer,” asserts one source close to Opposition Party Syriza, “just a lot of bullsh*t which adds up to ‘you dive off the cliff and we’ll be there with a net at the bottom’. Samaras thinks the EU needs us more than the Americans. Maybe he’s right.”
But not every EU member State ‘needs’ any more Greek dramas. And so it is that we find ourselves back in Berlin, where the view expressed in the media (and by almost every source one talks to) is that forgiving Greek debt would be completely unacceptable to the German people. You can sort of see their point: having already lent €127 billion, not just Merkel but pretty much the whole country has drawn a line in the sand. Understandable, but mad. Not just mad, in fact, but a failure to draw the blindingly obvious conclusion: had they forgiven much of it three years ago, the cost to EU governments would’ve been a fraction of what it is now shaping up to be.
But that’s the point: governments and taxpayers have coughed up: so far, the bondholders and general lending community have got away with nothing worse that a profit-negating haircut in Greece. Bizarrely, they see even this as a disaster, a precedent…and above all, the clinching piece of evidence that dictates, “We have to get our money out somehow”. And so that’s what is happening in Greece.
As I wrote earlier, the strategy is doomed. Next up are Spain and Italy. Draghi’s response to that unaffordable cost is, decoded, “print money”. This is what the bankers have been wanting to hear for eighteen months, for not only will it start wiping out the real value of their obligations through inflation, it once more reaffirms the central daft assumption within their survival strategy: they can’t pay, so the customers must….via the Mints, whose banknote machines will now start to work overtime.
The Americans are up for this, but the Germans will make their move soon to get away from so much as a whiff of hyperinflation. The Chinese too will not accept it: they’re already letting the Yuan fall again. And as for the economies….ah yes, the economies. They’re at a standstill. Ben Bernanke will start up QE3 soon enough to keep the markets solid. But that will also feed the inevitable inflation.
Interesting times. But not if you’re an ordinary Greek citizen. And – the fundamental point of this piece – not if you are one of the 97% sinking under the weight of the super-rich. So don’t let Greece slide off your radar: keep looking underneath.
Just to remind the Nazi trolls who turn up to complain when I point out the difference between right and wrong, I am not “a Leftie”. I am an economic radical who thinks the current model of capitalism is straight out of the Dutch tulip-buying manual circa 1396.

From: The slog