Photo: Nihnih, Wikimedia Commons
“If Greece doesn’t get its next loan instalment , the Eurozone will collapse the following day,” scowled Alexis Tsipras, leader of the left-wing SYRIZA, on Thursday morning. By threatening the entire Eurozone with its demise, he ratcheted up the bailout extortion racket a few more notches.Yet, he and his party, if they were to win the June 17 election, promised to do precisely what would cause the bailout Troika to withhold payment: they’d repudiate the memorandum that the prior government had agreed to in order to get the second bailout. The “worthless piece of paper,” as he described it, spelled out structural reforms, privatizations, budget cuts, minimum wage cuts, etc. that would make the Greek economy competitive again through internal devaluation.
And it has been happening: draconian cuts in pay, benefits, and pensions; tax hikes, layoffs, spiking bankruptcies of small businesses; record unemployment; failing hospitals. The middle-class standard of living—it had defied gravity after Greece joined the Eurozone—has been crushed.
Tsipras wants to reverse all this. He wants to hire civil servants, nationalize companies, raise the minimum wage to where it was before, and throw borrowed euros in every direction—but he’s prepared to dialogue with the Troika. And… “If they say ‘no’ to everything, it means they want the end of the Greek people and the euro.”
But patience is running thin in the Eurozone. Politicians are on edge. Spain needs a bailout for its banks. And then for itself. And Italy is hobbling towards a bailout though it’s too big to get bailed out.
“If the Greeks don’t meet the commitments they have made,” Slovak Prime Minister Robert Fico told parliament on Thursday, “if they don’t honour their financial commitments and don’t repay their loans, Slovakia will demand that Greece leave the Eurozone.”
French President and socialist François Hollande had set the tone during an interview on Greek TV on Wednesday. “But I have to warn them because I am a friend of Greece,” he said, setting himself apart from German Chancellor Angela Merkel, who’d been depicted as Nazi occupier. If Greece walked away from its commitments, there’d be countries that would “prefer to finish with the presence of Greece in the Eurozone.”
And so the run on the banks has turned into panic—for fear of a forced conversion of all bank accounts into drachmas, followed by devaluation. And the numbers have been oozing to the surface on a daily basis. In the chaos after the May 6 election, €100 to €500 million were yanked out every working day, with peaks on Fridays; a drachma conversion would occur over a weekend. This week, it jumped to €500 to €800 million per day. Cash withdrawals at the counter, bank transfers to foreign accounts, by individuals, by businesses. What keeps banks from toppling is the €18 billion they’d received from the Troika last week and the Emergency Liquidity Assistance from the ECB via the Bank of Greece.
But, but, wait…. the Athens stock exchange index, the ATHEX, jumped 10.1% on Thursday though it seemed for the longest time that it would head towards zero. The bank index skyrocket 23.4%. Over the last seven days, it was up 43.7%. The very banks that were hearing the giant sucking sound rallied in a death-defying manner. A glorious day of euphoria, stirred up by … rumours.
rumours that the conservative New Democracy would win enough votes to form a coalition government. rumours that the Troika would relax its requirements and give Greece some leeway. Unnamed “EU officials” were talking to Reuters. “The headline targets cannot be changed,” one of them said. “But there could be some tweaks to the path to get there.” And another one said that there would be “a very clear 100-day plan for a new government. If it’s not implemented in full, then the game is over.”
And retail is suddenly ticking up; people are stocking up on supplies and food, preparing for upheaval and shortages, should the euro be ditched. So, on June 17, Greeks will decide their country’s fate—or not. One thing is for sure: whoever wins will push for more bailout billions, but forget the conditions, the structural reforms, and austerity. Just the money. They’d watched the Spanish Prime Minister proclaim victory. Read…. Greece’s Scams, Extortion, and the “Suicidal” Possibility.