Thursday, January 1, 2015

Archive Greece Euro Crisis: Dec. 30, 2014 - July 4, 2015


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July 4, 2015

GDP COLLAPSE WORST SINCE 1870

The following chart makes clear how awfully mismanaged the Greek economy is under the policies of the troika.


VAROUFAKIS, "HOPE RETURNS TO EUROPE"


Nearly 10 million Greeks are going to the polls tomorrow between 7AM and 7PM LT. The half truths and whole lies floated by the media defy description. The arguments are often based on emotions, a sure sign that rational considerations are secondary to dogma. The electorate in Greece is about evenly split. Here's Yanis Varoufakis about the matter as he sat down with Paul Mason. More on Varoufakis' blog. (Source)



Jul 4, 2015 Greek FinMin Yanis Varoufakis has 'reintroduced the concept of democracy' to Europe with the Greferendum.



July 3, 2015

'IMF ACCOUNTABLE FOR FAILED POLICIES' 

At the eleventh hour part of the Left is now mobilizing on the side of Greece. Perhaps the choice between international Socialism and national welfare was a tough call for them. But now there's this:
Euro zone countries tried in vain to stop the IMF publishing a gloomy analysis of Greece's debt burden which the leftist government says vindicates its call to voters to reject bailout terms, sources familiar with the situation said on Friday. The document released in Washington on Thursday said Greece's public finances will not be sustainable without substantial debt relief, possibly including write-offs by European partners of loans guaranteed by taxpayers. It also said Greece will need at least 50 billion euros in additional aid over the next three years to keep itself afloat. Publication of the draft Debt Sustainability Analysis laid bare a dispute between Brussels and the Washington-based global lender that has been simmering (...)  (Source)
HuffPo adds:
Now comes a group of U.S. members of Congress warning the IMF that it could -- perhaps for the first time in decades -- be held accountable for the economic destruction that it's helping to implement. The letter objects to the IMF "taking a hard line with respect to demands that Greece implement further reforms" and notes: Greece has already reduced its national public sector work force by 19 percent and carried out many of the reforms demanded by the IMF and its creditors. It has gone through an enormous fiscal adjustment, achieving the largest cyclically adjusted primary budget surplus in the euro area last year; and a very large current account adjustment (with a 36 percent reduction in imports). At the same time, as even the IMF has acknowledged in its own research, the austerity imposed by Greece's creditors over the past five years turned out to be far more devastating to the economy than they had predicted. Senator Bernie Sanders, who joined House members in signing the letter, issued his own blistering statement yesterday.  (Source)



July 2, 2015

SOVEREIGNTY IS DEAD IN EUROPE

Not news, but shocking to be reminded that national sovereignty means nothing in Europe. It was around that time that eurocrats were about to commit two coups: in Athens and in Rome.



WHAT EUROCRATS REALLY WANT?

For once in this blog I will give way to private experience and share with the readers a personal note. Having lived in Greece in the eighties of the last century and again briefly in 2005 and 2006, the difference between the two periods was inescapable. From a poverty stricken backwater in the Balkans that reminded my mother (albeit in a good way) of pre WW2 Europe, Greece had transformed itself into a modern society with a real middle class.

But as this WaPo article (source) explains, this prosperity wasn't based on economic realities, but on bubbles from Brussels. Remember: bubbles is how economic growth is faked. It's like heating up the stove to suggest that the weather is improving. It's manipulating an effect, implying that there is a actual cause underlying the process. Now that the bubble has burst, the eurocrats want to make the Greek people pay, and they make it personal!

Here's what is blowing their cover: we've yet to hear the first eurocrat express fear of killing the Greek consumer market. We'd have heard about that consideration if economic rectitude is what moves them, as they claim. But the death of the Greek consumer market couldn't bother the eurocrats less! Because all they really want is servitude to Brussels. To them the EU is the moral end. Not the prosperity of the Greeks, or the Europeans, or the economy, or employment (both of which they have killed): it's subjugation to their centralist super state!


THE PIE CHART THAT SAYS IT ALL


This picture says it all! The Greek bailout operation was to shift the debt from the banks to the tax payer. Nothing of that money helped Greece. It helped banks to recover the loss  they suffered due to bad business decisions. The eurocrats can't have that, because the entire system is based on the debts incurred by the welfare state being covered by bonds held by the banks, paid for by inflating the currency, which  YOU are paying for. The Greek people are being sacrificed to this pernicious system.: the Socialist death spiral of the postmodern monetary system.




TSIPRAS IS RIGHT! 


Excellent speech held by Alexis Tsipras yesterday. This puts into perspective the forces that are working against him. Not that the authoritarian, undemocratic and statist nature of the EU is any surprise. The last aspect may not bother Alexis Tsipras as much as it disturbs individualists, but the first two characteristics ought to stick any 'progressive' in the throat as well. That is, if for once objective truth would win out on partisan opportunism.



Jul 1, 2015 Message about the negotiation and the referendum. Transcript.




July 1, 2015

THE EUROPEAN HYPOCRISY 

Here's the hypocrisy of #EU leaders regarding Greece: they're hiding behind monetary and moral rectitude, while they're prepared to rob their own citizens blind to save their precious statist project! They bailed out banks and gladly sacrificed their tax payers to it.

Number crushing is fine for real creditors, like banks. The role of political leaders is political. The problem is political. The euro project is political.

Postmodern politicians are forever confusing the nature of the state with private enterprises. There is a quintessential difference between the two. Private is voluntary, while Government is force. This makes the role of the Government uniquely different.

Here's why the European Union and its leaders are extremely dangerous. This EU is not just a neutral platform for free trade and cooperation. Like the Sovjet Union, it has become a moral end in itself! The global tyranny is not just a possibility, it already exists.

Update: This WaPo article (source) goes a long way pointing out the truth, but it still doesn't go to the root of the matter: that Greece for decades was encouraged to loan and spend in order to increase the living standard to enable European integration. Now they are abdicating their responsibility over the backs of the Greek people. Eurocrats should be ashamed of themselves. It's not enough for the institutions to demand repayment, they also insist on governing Greece telling the Greek Government where to make cuts (in pensions) and levy even more taxes (never a moral thing to do). This goes to the sovereignty of the country and the Liberty of the Greek people.



DEBUNKING THE RUMORS

Today, the day after Greece defaulted on the IMF loan, and the bailout has formally expired, rumors abound. Greece is now without financing. PM Tsipras, while saying he is prepared to sign a new deal, is denying that Greece is considering scrapping the Greferendum, or would have backed down from its earlier stance and accepted a new deal. Markets have bounced on a leaked memo from Tsipras's desk addressed to the EMS, requesting a bailout. (Source) Update: The office of the PM just denied that there is or will be a new  proposal for financing.

Also Mrs Merkel has pored cold water on that a new deal is in the making. Renegotiating would take weeks. Furthermore, talks are useless before the referendum on Sunday. One wonders who is floating these stories. The scrapping of the referendum apparently comes from a source in the Eurogroup. On the agenda today: telconf of Eurogroup Ministers at 17:30 CET. In the meanwhile Greece is a divided country: those who have something to lose -- business man, shop keepers, the new rich --  hedge their bets on the euro (33%); the unemployed youth and pensioners who got noting to lose, want out (54%).



July 29, 2015

GREECE MULLS GOING TO COURT TO BLOCK GREXIT

Greece has threatened to seek a court injunction against the EU institutions, both to block the country's expulsion from the euro and to halt asphyxiation of the banking system. “The Greek government will make use of all our legal rights,” said the finance minister, Yanis Varoufakis. “We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable,“ he told the Daily Telegraph.


SCHAUEBLE: 'WON'T LET GREECE DESTROY EUROPE'


The German FinMin just gave a presser that confirms the conclusion we just posted. What Schaueble meant was: once in the euro, there's no way out. We'll just have to start negotiations all over again. The euro is like a cult, or the mob, or Islam. The euro is forever.


"DON'T COMMIT SUICIDE BECAUSE YOU'RE AFRAID TO DIE"


The eurocrats have been digging themselves in for decades. Not so much as even a whisper of doubt was allowed. This was partly done to protect the euro. But a big part of it is psychology, or rather psycho pathology. Belief in the Union is infallible dogma to the true believer. The current President of the Commission Jean Claude Juncker is such a euro high priest. Reason has nothing to do with it! These maniacs would gladly sacrifice entire peoples to their cause. This is why Juncker takes the 'betrayal' of the Greeks deeply personal. Eurocrats want to punish Greece because the country can derail their sacred project. So they want to make an example of Greece. Betray or oppose us and we'll destroy you! But for now Juncker is grovelling and lying to the Greek people. Juncker's rhetoric is particularly painful as Greece suffers a "significant, sharp, and sustained increase" in suicides. (Source)



June 28, 2015


BBC: "ECB MAY STOP FUNDING GREEK BANKS TONIGHT"

Well-placed sources told BBC economics editor Robert Peston a decision to end the Emergency Liquidity Assistance (ELA) would be made by the ECB's governing council later on Sunday (...) Greek banks would find themselves in serious straits as soon as Monday if the ECB cut the ELA funding (Source)



GREEK BANK WITHDRAWALS CAPPED AT EUR 50-60 PER DAY


The Economics Ministry in Athens may announce a Bank Holiday in Greece until at least a day after the Referendum, July 7, a full week. Other reports mention that withdrawals from ATMs will be capped at 50-60 euros per account per day. Foreign bank card holders will be allowed to withdraw maximum limit set by their banks.

Apart of the banks also the Athens Stock Market will be closed on Monday. Some contagion must be expected in Spain, Portugal and Italy. The Bondholders in all these countries could be holding a massive amount of worthless paper. There is a lot of impaired capital and collateral out in the open. They're going to be running for the fire exits all over Europe. The euro will get hammered unless the Fed steps in with massive currency swaps. History is being made.


ECB MAINTAINS ELA, GREECE MULLS CAPITAL CONTROLS

The European Central Bank has refused to increase emergency credit to Greek banks. The Greek Government can't do anything else but to consider capital controls. The ECB decision does not cut off emergency funding to Greece, but the institution will only continue to provide emergency liquidity at its current level, leaving Greece's banks under increasing pressure. The ECB said it could still reconsider its decision on credit level.

"INSTITUTIONS" ARE PLAYING LOAN SHARK TO GREECE IN OUR NAME


Greek FinMin YanisVaroufakis in a BBC radio interview hits the nail on the head. The proposal of the "institutions" is like a bank offering a client an expensive credit card to pay back his mortgage. This is predatory. In other words, the tax payer funded government institutions, like the European Central Bank, the IMF, the ESFS, etc. are playing loan shark with money they extorted from the tax payer. This is an act of a rogue government! There is a collusion here of what is proper to private and what is proper to government.

Depositors voluntarily put their money in private banks. If the bank has bad business practices, the bank goes bankrupt. The bank and the depositor lose their money. This is called loss. This is a healthy situation and how it should be.

Instead, Governments are bailing out these banks and depositors with involuntary tax payer money. While we live in democracies, and national politicians can in theory be held responsible and replaced, no such thing is possible in the "institutions". So what we have here is a Publicly Funded Extortion Racket, that is acting on our behalf while we have no say whatsoever in the matter.

What is worse, these undemocratic, despotic institutions are telling the democratically elected government of Greece how they should rule their country: cut more pensions, raise more taxes, it is never enough. But this isn't for them to decide or even to demand! They do it presumably in the name of the tax payers, while they violate the democratic rights and liberty of the Greek people.

This crisis is about a financial and political system that is corrupt to the bone! It is corrupt, because governments have usurped a private sector -- banking, setting interest rates and coining money -- and turned it into a Government utility that by its nature is beyond the realm of normal economic corrections. It's a system that is fallible, but it is treated as if it can't fail.

Which goes once again to Ayn Rand's axiom: you can evade reality, but you can't escape the consequences of evading reality. The metaphysics of postmodern thinking is not based on what Is, but on what Ought To Be. It is a continuous war on reality. If you wage war on a culture, it eventually implodes. If you wage war on the reality of economics, the economy eventually implodes. If you wage war on a currency, it eventually collapses.

The present crisis is entirely Government made. The European project is resting in Statist premises that are contrary to the demands of Liberty. This is just another example why Government should not be in the business of money and economics: when will there finally be a separation on par with the separation of Church and State? Economics isn't a science! It can only be run through the auto corrections of markets.



ECB MAINTAINS ELA TO GREEK BANKS

According to Yanis Varoufakis -- the Greek FinMin --  there are no provisions to leave the euro and Greece doesn't plan to leave the euro. For the moment the ECB is maintaining the ELA -- delivery of euros to Greek banks. However, it states clearly that the Governing Council is ready to review this situation at any time. What else could Greece do in that case but to call a bank holiday and issue drachmas?

PRESS RELEASE 28 June 2015 
"ELA to Greek banks maintained at its current level" 
  • ECB takes note of decision on Greek referendum and the non-prolongation of the EU adjustment programme 
  • ECB will work closely with Bank of Greece to maintain financial stability Emergency liquidity assistance maintained at Friday’s (26 June 2015) level 
  • Governing Council stands ready to review decision 
  • Governing Council closely monitoring situation and potential implications for monetary policy stance



June 27, 2015

NEXT STEP, CAPITAL CONTROLS? 

Eurogroup ministers are meeting later tonight without Greece to discuss how to handle the fallout from an expected Greek debt default on Tuesday. There was no sign of panic on the streets of Athens. Government officials said there was no plan to impose capital controls that would limit withdrawals. The Financial Times has reported that a phone conference was scheduled for Sunday morning between the European Central Bank and the Bank of Greece to discuss implementing capital controls. According to the FT, one option would be for Greece to declare a bank holiday between now and the July 5 referendum. Varoufakis, however, has told Reuters that banks should remain open between now and then. (Source) To complicate matters further, there's this:




EURO GROUP'S FULL STATEMENT (source)

Greek PM Alexis Tsipras has called for a referendum on the proposal of what is currently in the media referred to as, "the institutions". At least, that is what it looked like this morning. The eurozone FinMins are presently discussing the situation. The Dutch chairman has already rejected anything that goes beyond our way or the highway. No extension is acceptable. Democratic values are non-existent at this point.

The Greeks must pay for the mistakes made by the EU fundamentalists, who in the run up to the euro pressured Greece to spend, spend, spend so as to bring living standards on par with western Europe. Central banks kept interest rates low; loans were cheap. The Greek Socialist governments were happy to oblige, as were the banks, who provided them with unsustainable loans, knowing the tax payers in western Europe would foot the bill if Greece defaulted.

But after 2001 Greece lost control of its own interest rates, and thus lost influence over the yield on government bonds. The rest is history. It is an intensely corrupt system made up of politicians and crony banking institutions caught together in a revolving door scheming with our money.

It transpired later today that Greek law doesn't allow a referendum on fiscal matters. But that detail is something for constitutional lawyers to sort out. Others objected that there would be no deal on the table to vote on since the institutions would withdrawn their offer well before July 5 -- the chosen day of the referendum. But that point has now been cleared up.

The question  the Greek voters must decide on will be, the euro or the drachma? Politicians and the lapdog media meanwhile are invoking apocalyptic pictures, should Greeks have the gall to tell them to go where the sun don't shine.

Neverthless, the Greeks are writing history. If one people can be trusted with the balls to fight off tyranny, it's them! They have a lot less to lose than most. The question therefore is on the other foot. At the other end of this tunnel there will still be Greeks; but if there will still be a euro and an European Union, remains to be seen.




May 8, 2014 Nick Malkoutzis, deputy editor of Greek daily newspaper Kathimerini English Edition is looking back at the euro crisis in Greece.




June 21, 2015

EU LEADERS DISCUSS LATEST PROPOSAL


This article in the Irish Times by Greek FinMin Yanis Varoufakis is supposedly the best argument Greece is able to make, just prior to D-Day. Frankly, it is disappointing. Not only does the Greek Government propose to stay in the corrupt EMU, @yanisvaroufakis is creating a false dichotomy: will the union be better off without Greece? Or will an agreement with Greece lead to more transparency and democracy? Neither is true. With Greece in the EMU, the union will not suddenly become more transparent or democratic. It makes no moral difference, one way or another. The only thing that would help Greece and the other member countries, is an end to the entire socialistic euro project. The latest news: Tsipras presents proposal to Merkel, Hollande and Juncker. (Source)






June 20, 2015


ECB PROVOKING CHAOS AS NEGOTIATING TACTIC

A quote from this article by the Greek FinMin, Ioannis Varoufakis: Momentous decisions are rubber- stamped by finance ministers who remain in the dark on the details, while unelected officials of mighty institutions are locked into one-sided negotiations with a solitary government-in-distress. 


After the ECB (or someone else in the meeting) tried to collapse Greece by triggering a bank run, Tsipras is retaliating today, predicting the collapse of the euro. High noon Monday night at the eurozone emergency summit. Ambrose Evens-Pritcherd has the entire story in The Telegraph. MUST READ! Here in part:


Greek debt crisis is the Iraq War of finance 

Guardians of financial stability are deliberately provoking a bank run and endangering Europe's system in their zeal to force Greece to its knees.


Rarely in modern times have we witnessed such a display of petulance and bad judgment by those supposed to be in charge of global financial stability, and by those who set the tone for the Western world. The spectacle is astonishing. The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.


They want to see these rebel Klephts hanged from the columns of the Parthenon – or impaled as Ottoman forces preferred, deeming them bandits - even if they degrade their own institutions in the process. If we want to date the moment when the Atlantic liberal order lost its authority – and when the European Project ceased to be a motivating historic force – this may well be it. In a sense, the Greek crisis is the financial equivalent of the Iraq War, totemic for the Left, and for Souverainistes on the Right, and replete with its own “sexed up” dossiers. Does anybody dispute that the ECB – via the Bank of Greece - is actively inciting a bank run in a country where it is also the banking regulator by issuing this report on Wednesday? (Source)



June 19, 2015



June 18, 2015

ECB TRIGGERING BANK RUN IN GREECE

Someone has been ' leaking'  out of a closed door meeting of the euro ministers and the ECB.


TALKS COLLAPSE, GREECE & RUSSIA TO SIGN GAS DEAL




As talks with the euro group collapse, Greeks and Russians prepare signing the Turkish Stream Natural Gas Pipeline deal. (Source: EN) (Source: GR)




June 17, 2015


Greek Business Man: "Bring It On!"


Regrettably this article is only for subscribers of the WSJ. But the picture speaks more than a thousand words. It is indicative of fierce independence and assertive love of liberty that is sadly lacking in the West today. The country is effectively run by European bureaucrats that don't give a hoot about sovereignty or democracy. So much for "European values". Businessman Christos Lousis: μολὼν λαβέ!

Greece is a country with a dualistic history that is at odds with itself. On the one hand there is the feudal Byzantine root of Orthodox culture that ties it to "Rome III",  Russia. On the other hand there is the proud part of history that liberated Greece from the Turkish rule, rooted in the independence of Western Enlightenment. It's motto: Freedom or Death. The country is perpetually torn between the two: religious collectivism, mysticism and feudalism versus individualism, reason and liberty.




April 21, 2015


Greek Government Starts Countdown For Endgame



Two months after coming to power the Greek Government has started issuing decrees for the control  of capital in the country. Municipal authorities have been instructed to return to the state any cash reserves not immediately required for their upkeep. This is the beginning of the end game.

It took the radical leftist one all of 2 months since coming to power. And the punchline is that the use of confiscated proceeds is unclear: the government says it is to pay pensions and wages, but recall that the same government recently confiscated pensions to repay the IMF, so according to the chain of logic, the government first raided pensions, and now municipalities, just to repay the dreaded Troika. The Athens city council and the union of municipalities and communities in Greece will convene tomorrow to debate the order, a press officer of the mayor’s office said. And one everyone realizes what just happened, expect the riot cam and the Greek Pay-Per-Riot channel, which has been on hiatus since the summer of 2012, to be fully reactivated. (Source)




April 19, 2015

Russia Denies Greek Gas Deal Worth €5bn


Russia has denied providing up to €5b  n to Greece for a planned gas pipeline, in a move that would significantly ease Athens' cash crisis. According to reports in Der Spiegel, Moscow was ready to provide advanced payment to Greece in assent for its "Turkish Stream" project. The magazine quoted a senior Syriza minister saying the deal would "turn the tide" for the debt-stricken country, and could be signed as early as Tuesday. However, the Kremlin later denied it had reached an agreement for any financial aid in advance of future profits from the pipe's transit fees. Russia's RIA news agency said there was no sweetener on the table, citing government spokesman Dmitry Peskov. (Source) (Includes practical infographic of what Greece owes and when.)



Feb. 11, 2015

LIVE: MASS RALLY FROM ATHENS #MAZI #11FEBGR





Feb. 4, 2015



Greek FinMin: "Don't Trust Us, Listen To Us!"




Feb. 2, 2015

Obama Intervening On Behalf of Greece

The propaganda machines on both ends are working overtime. Barack Obama, presiding over the largest deficit in the history of the United States, has come out on the side of the Greek commies. Who's surprised about that? The spin in Europe itself is preposterous. The economies in the euro zone have been tanking for years, and that stands to reason. One size fits none. But British finance minister George Osborne said on Monday that a stand-off between Greece and the euro zone over Greek debt was fast becoming the biggest risk to the global economy. "We had a constructive discussion, and it is clear that the stand-off between Greece and the euro zone is the greatest risk to the global economy," Osborne said after meeting Greek Finance Minister Yanis Varoufakis in London. (Source)



Feb. 1, 2015

The View From Germany On the Greek Rebellion



"This lady" is Deutsche Welle's Barbara Wesel. She writes:

And at the end of the day - you can believe that cheek will win out. And you can be drunk with your own power and put your hands in your pockets when you say goodbye to one of your European colleagues. But you can't continually insult the people you have to negotiate with, whether it's about national bankruptcy or Greece's exit from the EU. Angela Merkel doesn't have to accept the comparisons with Hitler and Schäuble has nothing to do with any "Fourth Reich." Tsipras and his people have replaced reason and realism with insolence and bad manners. The EU should quickly think up some mechanisms that might open the way for a "Grexit," before they drag the whole of Europe with them.



Jan. 30, 2015

New Greek PM Sends Germans An Open Letter




Jan. 29, 2015

New Greek Government Shocks Germans





Jan. 27, 2015

Who Made the Greek PM a Communist? 




Dec. 30, 2014

Communist Rule in Greece Haunts Euro Zone


Grexit from the Euro system is the least of worries after snap elections are held in Greece in January 25. Contagion of other countries is unlikely, but a row between Germany and Italy, and worse, between Germany and France over austerity is potentially explosive! 


The EZ crisis has returned with a vengeance as snap elections in Greece may result in an anti-austerity government and a showdown over the terms of paying back the loans. Premier Antonis Samaras last week failed to win the votes in parliament needed to avert a general election on January 25: there's fear of defaulting on the loans and Grexit. The election will likely bring the communist Syriza movement to power, which has vowed to tear up Greece’s hated Memorandum with EU-IMF Troika creditors "on its first day in office." Syriza threatened to default on rescue loans. The hard Left party is leading by 23-30 percent in the latest polls.

Alexis Tsipras, Syriza's leader, vowed to stop austerity policies and launch a new era of socialism, claiming the people have seen through the government’s campaign of "blackmail and terror". The Athens stock exchange crashed by 10 percent. German FinMin Schauble warned the Greeks not to play with fire, stating that fresh elections won’t change Greece’s debt.
Each new government must fulfil the contractual obligations of its predecessors. If Greece chooses another way, it’s going to be tough. 
While Syriza's policies may soften when in office when it is confronted with reality, it will be hard to settle the core dispute over debt relief. Greece faces no immediate financing needs, yet the issue will return once Greece runs out of money in February. Things will get worse in July and August when Greece must repay €6.7 billion to the ECB. The Greek banking system is on life-support, kept afloat by $40 billion of ECB liquidity.

The ECB must safeguard the money of other eurozone members and cannot prop up lenders in a country that is threatening to default. The Greek FinMin has warned that the ECB could "strangle the Greek economy in a split second" by cutting off funding. Holger Schmieding from Berenberg Bank said there is now a 30 percent risk that Greece could stumble into a rolling crisis and a potential Grexit.

Sources close to Tsipras say he is braced for a showdown with the ECB at any time and knows that loss of bank support would force Greece’s ejection from the euro. But he intends to call the bluff of EU leaders, calculating that they have invested too much political capital in Greek bailouts to let the crisis spin out of control.

The party’s main Marxist group says Greece must "be ready to implement its progressive programme outside the eurozone" if needed, rather than submit to threats of Armageddon. Joschka Fischer,the former German foreign minister, said northern Europe cannot give ground to Syriza without causing EMU discipline to break down.

Greece’s economy has stabilized after contracting by almost 26 percent in a six-year depression, the damage has been enormous and caused pervasive cynicism. Investment has fallen by 63.5 percent. Unemployment is still 26 percent. Troika loans have left the country with a public debt 177 percent of GDP, even after two haircuts for private creditors.

Grexit risk is particularly threatening at a time when deflationary forces are causing debt ratios to ratchet higher across southern Europe, and populist parties are gaining ground everywhere. Contagion no longer poses the same danger now that backstop machinery is in place. The EZ can handle a Greek  exit.

Yields on Italian and Spanish debt spiked on Monday but remain below levels earlier this month before the latest spasm of the Greek crisis began. But here's the catch: everything hinges on the ECB. Joska Fischer has said:
"There will be no contagion long as the markets believe that the ECB will come out with all guns blazing and launch quantitative easing on a meaningful scale, but they are deluding themselves because this is not going to happen and that is when the trouble will start. The conflict over austerity is politically explosive because it is becoming a conflict between Germany and Italy, and worse, between Germany and France".