The Wild Card Question that Brussels Dares not Ask
from The Wealth Watchman
End of an Era
Folks, as the hours go by, it’s becoming painfully obvious to anyone paying attention, that no matter what path Greece takes in the days ahead, what’s happening right now spells the end of “business as usual” in Europe. The leaders of Syriza have managed to doggedly stand firm in their main pledge(at least to date): to force Brussels and Germany to reduce the debt burden upon the Greek people.
The new Greek Prime Minister, Tsipras, has gunned down any banker hopes that this EU ultimatum(to either accept further bailout debt, or to leave the EU) is going to be successful in bringing them to heel. Varoufakis, the new Finance Minister, has now reiterated Syriza’s position, so that no one can possibly mistake their intentions.
Amazingly, Brussels has(for now) still chosen to pull up a chair at the poker table, and play tough with Greece.
E.U. leadership is still insisting that the debt isn’t negotiable.
They’re still insisting in hardliner fashion, that the bailout terms are somehow…sacrosanct.
They’re still, hilariously, maintaining that debts must always be repaid(when we know that debts are defaulted upon all the time)!
The E.U. has played a dangerous hand here with Greece, because I believe they’re acting under 2 disastrous assumptions:
1)They’re assuming that they hold all the ace cards in this scenario, and
2)They’re assuming that the Greek government stands to lose everything, should they be expelled from the Euro.
But are those assumptions really true? Does Brussels really hold the hand that they think they do? Let’s examine this together.
What Cards do They Hold?
First, It seems that everyone who has dealt with the Greek government has been saying the same thing. They all seem to believe that somehow leaving the EU would simply be too painful for any ruling party in Greece to go through with. The Troika keeps mentioning the horrible bank runs that Greece would be hit with, or that all public and private lending would instantly dry up.
“Greece can’t leave the E.U., because she would be almost certainly rendered a ‘failed state’”, that’s the line that’s repeated, over and over again.
Personally though, whatever else that Syriza believes, I think we can all agree with them that extending further bailout funding is the opposite of “constructive” for the Greek people. Greece is an insolvent debtor, and austerity is a non-solution for any insolvent debtor.
Remember that bailouts are monetary heroin! They are a debilitating drug which ensnares any insolvent institution which tries them(be they banks or sovereigns). Bailouts have led Greece to a spiraling path of economic disintegration and depression. This is important, because Brussels has been shocked to learn that so many in Greece wouldn’t want their financial “assistance”.
Brussels has failed to understand, that what they view as this:
Greece looks upon as this:
Greece has experienced an extraordinary depression for the last 3 years, all to save large European banks. Their islands, their shipping industries, everything they really own has come under the chopping block at auctions. Unemployment among the youth there has regularly been upwards of 60%! General unemployment has stayed well above 20%. There has been so little cash to even pay for day to day expenses, that Greek neighborhoods and communities have had to resort to complex bartering for goods and services. Suicide has become rampant, and crime has skyrocketed.
To the average Greek, the Euro has been nothing but trouble, representing oppressive government by German banks. Many in Greece have wished that they’ never joined the Euro. The Greeks have abandoned hope, during this bailout arrangement. They know where it leads, and they’re ready to look anywhere else for another option.
The Unseen Factor
Enter Russia and the Eurasian Economic Union, onto the scene.
Remember, several weeks ago, I wrote about the real unseen danger of this whole Greek situation: that if Greece left the EU, that Russia would be all too happy to pick up the pieces, and establish a sovereign, Orthodox foothold to trade with, right on the European mainland. With that in mind, there’s an obvious question, that I can’t seem to shake in all this:
What if the Greek government isn’t just “talking tough”? What if Brussels has completely misread their opponents? What if Syriza’s confidence springs, not from obstinate brinksmanship, but from the knowledge of what they stand to gain with their new burgeoning, geo-political partnerships?
Brussels keeps asking the question, “How will Greece cope with what they’ll lose, if they leave the Eurozone”?
The question that Brussels should be asking though(but dares not) is:
What does Greece stand to gain by seeking a completely new financial arrangement elsewhere?
It seems that Brussels is working under the assumption that it is the only game in town, but indeed it is not. As we’ve been seeing, Putin and Russia have been establishing ties with Syriza and with the Greek government for years now. That is plainly obvious to anyone paying attention, as these relationships aren’t forged overnight.
The biggest danger during this whole process for Brussels is that they’re not playing poker under equal terms with the Greek government. The Greek Finance Minister, Varoufakis, knows quite well what terms and “help” that the Troika could offer. Greece knows its opponents cards!
Whereas, Brussels does not have a clue as to what cards Greece holds right now!
They do not know what Tsipras was recently offered in Moscow during his visit.
They don’t know what terms and transit agreements may have been signed between Greece and Moscow, concerning the new “Turk Stream” pipeline, which you can see beneath.
Does anyone else remember what Bulgaria’s South Stream transit income was going to be each year? It was estimated to be at least half a billion dollars, and perhaps as much as $600 million dollars per year!
Do ya think that maybe tiny Greece would welcome a new revenue stream of 600 million dollars per annum…indefinitely?
Let me ask you this: do you think that Greece is keen at the thought of all that new money being funneled directly into E.U. bankster coffers, instead of the Greek economy?
Do you see what I mean?
I think it’s highly likely that Moscow(with fewer options now that South Stream is no more) has offered an even sweeter deal to Greece, compared to previous offers to other countries. Like, say, what if Greece has been offered insanely cheap natural gas rates for the forseeable future, atop an already generous transit royalty?
Furthermore, Brussels doesn’t know what emergency, financial assistance that Russia(or China) may have offered to Greece. After all, their government has already publicly stated that they’d be willing to seek emergency financial assistance in those very countries.
Furthermore, there’s a high degree of probability that Greece would also grant something else to the Kremlin that Russia has wanted for years: a military base, right off the coast of mainland Europe!
This isn’t just pie in the sky conjecture either, as there are signs that the Greek Defense Minister has always been speaking to Russia about this very thing! We also know now that Cyprus has just offered Moscow the very same thing.
As can be plainly seen, if Greece chooses Brussels, they get things like more austerity, more monetary heroin(bailout cash), more loss of sovereignty, and more shame.
Whereas, if they pivot to Eurasia, they undoubtedly get things like a new gas transit income, likely cheaper gas, a lifting of Russian food sanctions, and perhaps even income from leasing space for a new Russian military base.
Even if Europe decides to play ball, and successfully brokers a reduction in debt for Greece, this entire process has caused an enormous loss of trust, prestige, and face for Brussels, in the eyes of the Greek people.
While we have seen that EU leadership believes it holds all the winning cards here, it is actually holding a pair of deuces!
The Troika is acting under the assumption that Greece has no other options, other than to continually accept unconditional surrender to new bailout terms, but they are gravely mistaken.
Russia has already begun to pivot to Greece, and vice versa, just as I said they might 2 weeks ago. Tsipras and Putin have been making hay for awhile now, and no one knows(including Brussels) the terms, agreements, or even treaties that Syriza has been cordially drawing up with the Russian Federation.
No matter whether there’s an eventual Grexit, or whether they reach a deal or not, there are no good options for the E.U. here.
If I’m right, and the ECB and Brussels have played this dangerous hand under several mistaken beliefs, then they stand to lose much, much more than just Greece over time. Either way:
Their fragile banking system will lose hundreds of billions in loans to the rest of Europe…
The Euro could be taken well under parity to the dollar…
They’ll lose bargaining power with several other(larger) insolvent countries.
They’ll lose the final battle in this fight against “Turk Stream”.
And lastly, the risk that I mentioned before anyone else….
They’d slowly lose the entire Balkan region to the East, as the Orthodox world is irrevocably pulled into the gravitational nexis of Russia and Greater Eurasia.
The EU and Athens are playing on unequal footing right here.
Remember, Greece knows what Brussels has to offer, but Brussels has no idea what Greece has to gain by seeking other partners.
In classic, technocratic fashion, Brussels has issued an ultimatum to Greece. But let me ask you this:
How did their ultimatums to Syria’s Assad government work out?
How did the ultimatums to Putin work out?