Thread: CIA Warns Of A Greek Military Coup, Rebellion, If Austerity

CIA Warns Of A Greek Military Coup, Rebellion, If Austerity Intensifies

Submitted by Tyler Durden
05/30/2011 10:30 -0400
158 comments

Turkish daily Hurriyet, which paraphrases German Bild, which in turn references a CIA report, warns that Greece could face a military coup if the "tough austerity measures and the dire situation" escalate any further. On the other hand, one can avoid this belabored hypertextual chain and simply look at what happens practically every day on Syntagma square where yet again we are witnessing record numbers of people protest against what everyone now realizes is a dead end regime (luckily, in a peaceful manner, for now). More Captain Obviousness (thank you Grant Williams) from Hurriyet: "According to the CIA report, ongoing street protests in crisis-hit Greece could turn into escalated violence and a rebellion and the Greek government could lose control, said Bild. The newspaper said the CIA report talks of a possible military coup if the situation becomes more serious and uncontrolled." Luckily, following last year's Athens mob-inspired flash crash, and 2011's MENA revolutions, the market is rather desensitized to this sort of thing, and nothing short of fat-finger driven invasion of Greece by Turkey, in its humanitarian bid to reestablish the Ottoman Empire 2.0, could dent the /ES or EURUSD by more than 0.01%.

More:

Opposition parties have mostly refused to support the government in its quest to cut spending by trimming an overblown civil service and the sweeping privatization drive announced this week has attracted even stronger protests.

Meanwhile, the Dutch finance minister said his country, Germany, Finland and other EU members won't give Greece any more bailout money, if the debt-laden country fails to adopt further austerity measures.

Jan Kees de Jager said Saturday that "it's vital that Greece will live up fully" to conditions set by the International Monetary Fund if it's to receive the next batch of a 110 billion euros ($155 billion) bailout loan deal it agreed to last year, the Associated Press reported.

Last year, as the financial crisis battered Greece, Bild went as far as to highlight a suggestion by a conservative politician that Athens sell off some of its many islands to help pay off its debts.

What next: CIA reports that monetary policy could set off mass food price driven revolutions in North Africa?

h/t Scrataliano

http://www.zerohedge.com/article/cia-wa ... ntensifies

EU Holds Unannounced Emergency Talks With Greece Over Weekend To Draft Second Bailout As Two Year Greek Bonds Pass 26%

Submitted by Tyler Durden
05/30/2011 08:35 -0400
86 comments

Another weekend, another secret, and failed, meeting between the EU and Greece to find a bailout solution that simply does not exist. Reuters reports that while America was out camping, barbecuing and all around vacationing, the European Union was feverishly working on a second bailout package, holding another round of emergency talks with the Greek government, to prevent a June 29 default by Greece when money runs out. Alas, it is now too late: with austerity protests now a daily event, the political opposition has the upper hand and it seems that Greece's conservative opposition has demanded lower taxes as a condition for reaching a political consensus with the Socialist government on further austerity measures, a move which Brussels would not agree to, since unlike in America, cutting revenues does not lead to an reduction in the deficit, and anyone with a 2nd grader's education is aware of it. Punctuating that Europe's idealist unitary vision is about to be torn to shreds, even as the US and UK are out for the day, is the Greek 10-year Bund spread which rose by 20 basis points to 1,387 while two-year yields were up 58 bps to 26.23%.

More on the political barriers to a rescue package:

The tax cuts sought by conservative New Democracy leader Antonis Samaras could aggravate the revenue shortfall, but he argues they are essential to revive economic growth.

EU officials said a new 65 billion euro package could involve a mixture of collateralized loans from the EU and IMF, and additional revenue measures, with unprecedented intrusive external supervision of Greece's privatisation program. "It would require collateral for new loans and EU technical assistance -- EU involvement in the privatisation process," one senior EU official said, speaking on condition of anonymity.

Extra funding for Greece faces fierce political resistance from fiscal conservatives and nationalists in key north European creditor countries -- Germany, the Netherlands and Finland -- complicating EU governments' task.

More allegations of secret meetings, this time not from Spiegel but from Kathimerini:

Greek daily Kathimerini said finance ministers of the 17-nation single currency area may hold a special meeting next Monday on a new package. European Commission spokesman Amadeu Altafaj dismissed the report as "unfounded rumours, once again."

The next scheduled meeting of euro zone finance ministers is on June 20 in Luxembourg, having been pushed back a week from its original date. It will be followed three days later by a summit of EU leaders to assess the 18-month-long debt crisis.

And while a reprofiling, a SMILE, or however one wants to call the Greek bankruptcy is inevitable, the ECB continues to be staunchly against it, correctly pointing out that there is no such thing as a "controlled demolition."

ECB board member Lorenzo Bini Smaghi said in an interview published on Monday the idea that debt restructuring could be carried out in an orderly way was a "fairytale," saying it was the equivalent of the death penalty.

"If you look at financial markets, every time there is mention of a word like 'restructuring' or 'soft restructuring' they go crazy -- which proves that this could not happen in an orderly way, in this environment at least," Bini Smaghi told the Financial Times.

He also warned against a debt 'reprofiling', or voluntary extension of Greek bond maturities, saying it would be hard to get investors to agree to such a deal without the use of force.


Naturally, as reported yesterday, the best outcome to Europe, or rather Europe's bankers, would be for Greece to cede all sovereignty, and just become a vassal colony of Belgium:

"The Eurogroup is doing research for reprofiling -- what can you do on reprofiling? Is it possible without a credit event?" Dutch Finance Minister Jan Kees De Jager told reporters on Saturday in Cyprus. "It's an investigation, and we have to wait for the outcome of it.

EU officials contend that Greece could do much more to help itself by selling off a treasure trove of state assets.

ECB executive board member Juergen Stark told Welt am Sonntag newspaper that Athens could raise as much as 300 billion euros from privatising state property.

Greece currently aims to raise 50 billion euros from privatisations by 2015 to help stave off a fiscal meltdown, but the country lacks a proper land registry and ownership of many potentially lucrative assets is legally uncertain.

Athens is setting up a sovereign wealth fund to pool real estate assets and state stakes in companies such as telecom company OTE, Post Savings Bank and ports.

It is funny how everything will come to a head (enter IMF jokes) within a 24 hour span: the Greek IMF tranche is due June 29 (and as of right now we use the word "due" very loosely), while QE2 ends on June 30, which also happens to be the day the new IMF successor is expected to be chosen. Lots of distractions ahead: avoid the noise and focus on the signal.

And for all those to whom things are still unclear (even though Zero Hedge suggested the purchase of Greek, and all other sovereign, CDS back in January of 2009), here is a flowchart we presented in January of 2010, well before the "everybody could have seen this happening" stage, which explains everything that has transpired in (and with) Greece in the past 1.5 years. We are now in the "Insufficient Adjustment" stage. There are only two options as to what lies ahead (and only one open question: will the final E-Bay price for Santorini have the VAT included and can it be shipped via first overnight).



http://www.zerohedge.com/article/eu-hol ... year-greek

Germany Humiliates Itself By Conceding To A Second Greek Bailout, EUR Predictably Jumps Briefly

Submitted by Tyler Durden
05/30/2011 20:17 -0400
153 comments

Like clockwork, hours before the US market reopens, we get another Greece bailout. Since last week's Chinese white knight "rescue" of Portugal helped the EUR for about 18 hours, it is now time to get the biggest guns possible out: the WSJ reports that Germany, contrary to populist demand which has indicated that another German bailout of Greece would mean the end of Angela Merkel, has decided to allow Greek bailout round two to proceed. Per the WSJ: "Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece, according to people familiar with the matter.Berlin's concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece's funding needs before the indebted country runs out of cash in mid-July." The end result: the EURUSD surged by 70 pips from the closing print of 1.4270 to a high of 1.4350, although the half life of even that innuendo appears to have peaked and the pair is now on the way down, as it does absolutely nothing, except to destroy any credibility Merkel may have had, to resolve the impasse which is that, well, Greece is bankrupt.

Below is a snapshot of the halflife of the latest intervention, which appears to be 45 minutes:



The WSJ explains why Germany has thrown in the towel and has done a complete 180, to the terminal detriment of Ms. Merkel's political career:

Some officials in Berlin hope that a short-term fix can be found that would allow a full deal including a bond rescheduling later this year.

LOL. No really, LOL.

Euro-zone officials have acknowledged for weeks that Greece will face a shortfall in financing of around €30 billion ($43 billion) a year in 2012 and 2013—even after a €110 billion bailout agreed last year. But agreement on how those gaps should be filled is proving difficult, thanks to growing political opposition in northern Europe to bailouts of profligate countries such as Greece.

Germany has for weeks argued that private investors in Greek bonds should, in some way, bear part of the burden of any new bailout package for Athens. But the European Central Bank staunchly opposes any form of debt restructuring. Meanwhile the International Monetary Fund is demanding clarity on Greece's 2012 funding before it releases money that Greece needs to get through this summer.

A senior German official said on Monday that the deal being discussed in Vienna might not include any investor participation—even though that could spark a backlash from German lawmakers.

"We will try to resolve the Greek problem between now and the end of June," Luxembourg's Prime Minister Jean-Claude Juncker said on Monday. European finance ministers are expected to discuss Greece at a June 20 meeting, ahead of a summit of European leaders on June 24.

Etc.

And good luck: the Greeks are so delighted with being bailed out, pardon, with bailing out Germany's banks, that they have been celebrating this fact for 6 nights straight in front of the parliament in Athens. Surely this latest batch of good news, will only send the popular jubilation to previously unseen highs.

http://www.zerohedge.com/article/german ... ps-briefly