The G20 is planning to increase the crisis-fighting firepower of the International Monetary Fund after the start of its summit was dominated by the first open admission from EU leaders that it might be necessary for Greece to leave the eurozone if the single currency is to survive. George Osborne said there was a "real sense of urgency" on a day that saw an emergency interest rate cut from the European Central Bank, backtracking from Greece over a referendum on its bailout conditions, and a recognition that the IMF may need extra resources to cope with a deteriorating global economy. Amid distinct echoes of the financial market meltdown in the autumn of 2008, European leaders put massive pressure on the embattled government of Greek prime minister George Papandreou, forcing the abandonment of plans to hold a referendum and triggering a political showdown in Athens. Downing Street sources said "strong political pressure to sort itself out" had been put on Greece, while Barack Obama said it was time to "flesh out" Europe's bailout plan. Share prices rose towards the end of the day as it became clear that Papandreou had been forced to shelve his referendum plans and was seeking to put together a government of national unity that would agree to Europe's bailout conditions. How could Greece leave the eurozone? There are two scenarios for Greece to leave the euro. The first would be if Greece was unable, or refused, to abide by its EU-IMF austerity programme. The refusal would lead to EU-IMF payments being withheld and Greece defaulting, a catastrophic event for both the Greeks and the EU. The second scenario involves a Greek referendum on the EU-IMF austerity programme, the economic pain and the loss of sovereignty entailed with it. As the EU has made clear, via Angela Merkal and Nicolas Sarkozy, a No vote or even the referendum itself would be taken as a decision to exit the euro. Can Greece leave the euro? Does it mean leaving the EU? The EU lawyers are not sure. "It's a legal minefield in uncharted waters," said one EU legal advisor. The confusion might be a deliberate ploy. A European Central Bank document examining the possibility two years ago decided that "some lack of legal certainty is desirable" to stop countries walking away too easily. "The hitherto silence may therefore be preferable to clarity," it said. George Papandreou, the Greek prime minister, seems to think it is all or nothing. "If we leave the euro we will have to leave Europe," he told MPs.
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Friday, November 4, 2011
The G20 is planning to increase the crisis-fighting firepower of the International Monetary Fund after the start of its summit was dominated by the first open admission from EU leaders that it might be necessary for Greece to leave the eurozone if the single currency is to survive. George Osborne said there was a "real sense of urgency" on a day that saw an emergency interest rate cut from the European Central Bank, backtracking from Greece over a referendum on its bailout conditions, and a recognition that the IMF may need extra resources to cope with a deteriorating global economy. Amid distinct echoes of the financial market meltdown in the autumn of 2008, European leaders put massive pressure on the embattled government of Greek prime minister George Papandreou, forcing the abandonment of plans to hold a referendum and triggering a political showdown in Athens. Downing Street sources said "strong political pressure to sort itself out" had been put on Greece, while Barack Obama said it was time to "flesh out" Europe's bailout plan. Share prices rose towards the end of the day as it became clear that Papandreou had been forced to shelve his referendum plans and was seeking to put together a government of national unity that would agree to Europe's bailout conditions. How could Greece leave the eurozone? There are two scenarios for Greece to leave the euro. The first would be if Greece was unable, or refused, to abide by its EU-IMF austerity programme. The refusal would lead to EU-IMF payments being withheld and Greece defaulting, a catastrophic event for both the Greeks and the EU. The second scenario involves a Greek referendum on the EU-IMF austerity programme, the economic pain and the loss of sovereignty entailed with it. As the EU has made clear, via Angela Merkal and Nicolas Sarkozy, a No vote or even the referendum itself would be taken as a decision to exit the euro. Can Greece leave the euro? Does it mean leaving the EU? The EU lawyers are not sure. "It's a legal minefield in uncharted waters," said one EU legal advisor. The confusion might be a deliberate ploy. A European Central Bank document examining the possibility two years ago decided that "some lack of legal certainty is desirable" to stop countries walking away too easily. "The hitherto silence may therefore be preferable to clarity," it said. George Papandreou, the Greek prime minister, seems to think it is all or nothing. "If we leave the euro we will have to leave Europe," he told MPs.
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Papandreou’s shock announcement that he would seek the democratic endorsement of a programme that would see the country put under permanent supervision of the EU-IMF-ECB troika and years of further austerity infuriated other European capitals.
Late on Wednesday, the finance minister declared in a public statement his opposition to the referendum and called for the formation of a government of national unity, a move that appeared to have tipped the balance against the prime minister.
Deputies also began to signal that they would not vote in favour of a referendum and on Thursday, MP Eva Kaili said she would vote against the government in a vote of confidence scheduled for Friday, meaning that Papandreou now has in principle the support of just 151 lawmakers in the 300-seat house.
The former ECB man, should he become Greece’s new leader, has a doctorate in economics and is know to be a strong supporter of the austerity strategy being imposed.
Delivering a lecture to the Association of Greek Bankers last November, he said that the government had been courageous in what it had achieved but deeper public spending cuts were necessary.
"If we do not have real and long-term economic discipline we can not ensure financial stability," he said.
The Greek economy is facing its fourth year of decline and lacks the revenues to service its national debt held by private European banks. The banks don’t want to lose any money, so a handful of power brokers reached an agreement with representatives of the Greek government to write off some of the debt in exchange for EU capital subsidies to be financed by inflicting severe austerity on the Greek population. Wages, salaries, pensions and medical care are being cut while the rate of unemployment rises to depression levels. Government employees are laid off. Valuable public properties are to be sold to private parties for pennies on the dollar. In short, Greece is to be looted.
Large numbers of Greeks have been in the streets protesting the austerity policy and have reached the point of anger of throwing Molotov cocktails at the police. Greece is disintegrating politically. The Greek people sense that the EU “bailout” is not bailing out Greece. It is bailing out the French, Dutch, and German banks at the expense of the Greek people.
The Greek prime minister, watching his party’s support and power crumble, announced that he would let the people decide in a referendum. After all, allegedly that’s what democracies do. But it turns out that “we have freedom and democracy” is not supposed to be taken literally. It is merely a propagandistic slogan behind which people are ruled through back-room deals decided by powerful private interests..."
Citiţi mai mult: Grecia se joacă cu focul. Ce urmează pentru zona euro - Criza > EVZ.ro http://www.evz.ro/detalii/stiri/grecia-se-joaca-cu-focul-ce-urmeaza-pentru-zona-euro-952511.html#ixzz1ciZZsP2w
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