Thread: Greece Welcomes Its New European Overlords - Juncker Warns

Greece Welcomes Its New European Overlords - Juncker Warns "The Sovereignty Of Greece Will Be Massively Limited"

Submitted by Tyler Durden
07/03/2011 14:05 -0400
131 comments

The Greek indigents huffed and puffed, broke a couple of marble plates from Syntagma square, striked for a few days (or is that stroke?), and achieved nothing. In the meantime, their government just sold off the country to European banking interests. But don't take our word for it. Take the word (on those very rare occasions when it is actually telling the truth) of Eurogroup chairman Jean-Claude Juncker who just told Focus magazine that "The sovereignty of Greece will be massively limited." And just like DSK's innocence was effectively granted 2 days after Christine Lagarde was made new head of the IMF (we still are waiting for the IMF to have a statement on the recent DSK developments), so Juncker's stunning disclosure comes not even 12 hours after the 5th Greek bailout package has been released. Per the Guardian: "Juncker's interview appeared just hours after Eurozone ministers signed off the fifth tranche of last year's bailout, worth €12bn. The payment must now be rubber-stamped by the International Monetary Fund (IMF) and pushed through by 15 July in time to meet several bond repayment deadlines. Agreeing the latest IMF payout, on 8 July, will be an early task for Christine Lagarde, the new IMF boss, who starts work in Washington on Wednesday." One wonders how different, it at all, DSK's probanker stance would have been had he still been the IMF head.

Per the Guardian: http://www.guardian.co.uk/business/2011 ... r-treuhand

Juncker said Greece needed to adopt a process similar to the Treuhand agency, used by Germany to sell off 14,000 former East German firms between 1990 and 1994 – even though Treuhand failed to deliver any profit, oversaw huge job losses and eventually closed its books with a deficit.

But he did appear to acknowledge that the Greeks were hostile to foreign officials appearing to take charge: "One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the eurozone."

Athens, together with European leaders and the IMF, must now start work on a second €110bn bailout for Greece, which must be finalised by September and is likely to include private-sector involvement.

In the meantime, and in the purest definition of insanity, Greece is now "fighting" record debt with even more record debt:

The European commission conceded on Saturday, after the two-hour Eurogroup teleconference agreed the fifth tranche payout, that any plan to cut Greece's debt of 160% of economic output would be at risk of being derailed by internal unrest or external economic conditions. Growth just one percentage point below expectations, it said, would push Greece's debt to 170% of GDP, and rising, past 2020.

For the first time, the commission's report also discusses debt restructuring, including a possible 40% "haircut" – a forced reduction in the value of Greek bonds – which would devastate Greek banks and, the report warns, could reverberate on Ireland, Portugal and Spain.

Which means that European bankers will only have a few months in which to pick Greek bones dry and buy up various islands, before the charade ends. For their sake, however, we hope they realize that buying "assets" or even islands in a nation, that now loathes everything to do with a "united" Europe, a "united" currency, and the banker klepto-oligarchy, will need substantial fortifications and firepower, for when the tide inevitably turns and Europe realizes it was it that has been fooled and has been throwing ever more good money after bad, as the locals seek to reclaim not only what is rightfully theirs but determines that Greek Odious Debt is about 100% of total debt outstanding. http://en.wikipedia.org/wiki/Odious_debt

http://www.zerohedge.com/article/greece ... e-massivel

Selling gold teeth to make ends meet in Greece

By Daniel Flynn and Renee Maltezou

ATHENS | Thu Jun 30, 2011 2:13pm EDT

ATHENS (Reuters) - A smartly dressed woman waits as a young man behind a glass screen weighs her gold earrings, bracelets and rings and counts out 1,600 euros.

"I'll see you again soon," she says, slipping the bills into her purse. Behind her, a grey-haired man shuffles toward the counter. "Do you buy gold teeth?" he asks.

In the Greek capital, gold is marking a divide between the "haves" and a growing number of "have nots."

Shops like this one have mushroomed in downtown Athens and are doing a brisk business. They offer cash for gold by weight and sell it to foundries.

Many ordinary Greeks who prospered after the Mediterranean country entered the euro a decade ago are now being forced to sell their family treasures just to make ends meet.

With the worst recession since the 1970s grinding into its third year, fresh belt-tightening measures to appease international lenders are driving many middle-class Greeks to desperation.

Unemployment has climbed to more than 16 percent and real wages are down by around a fifth since the global financial crisis struck three years ago.

With average salaries less than 1,300 euros ($1,900) a month and inflation running at more than 3 percent, many Greeks say they do not have enough money to pay for the basics.

"A lady came to me the other day crying because she needed to sell her gold jewels and didn't know what they were worth," said Alexandria Verykokaki, 55, whose family has owned a jewelry shop in downtown Athens since 1923.

"These are not poor folks. They are ordinary, middle-class Greeks: a woman with three kids who needs to sell her wedding jewelry just to send her kids to school."

GOLD RUSH FOR WEALTHY

That is one side of the coin. On the other, many wealthy Greeks, worried by the political paralysis gripping their country, are pulling money out of the bank and buying gold, regarded as the ultimate safe haven in times of uncertainty.

Burnishing its appeal, the price of the precious metal has climbed to record highs over the last year, driven in part by anxiety in financial markets over Greece's prolonged agony which has prompted a flight to stable assets.

Many international investors believe the eastern Mediterranean country, which makes up just 2.5 percent of the euro zone economy, cannot hope to service its enormous debt running at nearly 350 billion euros and rising.

Many in Greece appear to agree. Banks have lost around 8 percent of their deposits this year, with outflows accelerating in May and June as anxiety grew at the government's dwindling parliamentary support, according to credit ratings agency Moody's.

Roughly half the fall was due to individuals and companies burning through their savings to compensate for their lower income.

But the rest was due to wealthier Greeks, fearful of an impending financial collapse should the country default, sending money abroad, stashing it in safety deposit boxes, or buying gold coins, Moody's said.

"The people with money are no longer buying land, they are buying gold and silver," said Verykokaki. "Greeks are ignorant. It's stupid because if they take the money from the bank, the banks won't have enough to go around."

With capital flight compounded by a increasing number of loans turning bad, authorities have urged banks to explore merger possibilities to cope with the crisis.

The flow of capital from banks could become a flood if the government fails to implement the 28 billion euro austerity plan, demanded by the European Union and the International Monetary Fund as a condition for propping up its finances.

In a tight vote on Wednesday, parliament approved a law outlining tax rises, spending cuts and the sale of state companies.

But Greece's privatization process, which stalled when the Socialists won power, may struggle to meet targets amid the political and economic maelstrom. Greece needs to sell 5 billion euros in assets by December to honor its commitments, but foreign investors may be wary faced with militant unions.

"The prime minister talks about privatization, tax reforms, social reforms. He's talked about all that before," said political analyst Costas Panagopoulos. "The question is will he use this vote to move forward with these crucial reforms?"

Greece's debt is forecast to reach 1.6 times its economic output next year -- bigger than Argentina's when the South American country stumbled into a chaotic default in early 2002.

Many Greeks believe not only that it is not economically feasible, but it is not morally acceptable to pay a debt racked up by the political dynasties which have ruled the country for decades.

"I want to tear down the parliament building. We didn't waste all this money, they did, and they are not going to jail," said Dimitris Avramidis, 34, a bookstore employee.

"I've done nothing wrong. I've never taken out a loan in my life. So why should I pay now? I want people to take all their money out of the banks."

(Editing by Robert Woodward)

http://www.reuters.com/article/2011/06/ ... BL20110630