FOCUS ON  PORTUGAL - The imbalance of the Euro between rich and poor countries has acerbated and wrecked the Portugese industries of tourism, and of clothes and shoes from cheap Chinese imports into Europe. The debt is unsustainable and to add any more austerity simply makes it worse. It will, along with Greece, need a massive debt forgiveness to solve its problems, and this will happen as sure as night follows day, and Merkel and Germany will have to swallow it whole.  I should mention the accelerating decline in the population, and particularly the working age population who actually pay most of the taxes (when they can find jobs that is). Since population size is a significant indicator of GDP ( eg less people equals less demand for all sorts of goods and services from food to haircuts, housing and furniture to put in it etc) this is going to be perhaps the major long term issue for Portugal.  This is driven by two factors. The first is that birthrate has been barely half that required to maintain a steady population level for the whole of this century and the second is substantial emigration, especially of graduate level young people who also happen to be just in the age range that provides the majority of children. For a short while the increasing longevity the large number born born from the 1940's to the 1970's is masking what is already certain to happen. But we already know the number of people aged 0-20 years old is barely half that of a generation ago and its thus inevitable that there will be a totally unavoidable drop in the working population for at least the next generation and also because there will be far fewer 20-40 year olds in this period there will also be yet again even fewer children born to them. When you add in the high level of immigration to this the numbers are truly frightening- well they should be if any politician cared to take notice!  Demographics is a much ignored and yet very hard to reverse adverse trend that is going to have an unavoidable impact on many European countries. Portugal is probably the most critical but Italy, Germany and to a lesser extent Spain are all going to have a chronic problem emanating from this for decades to come...THE FACT that the IMF is still working with Portugal is a good sign. I just wonder if Portugal could get the same interest rates and terms that Greece is being offered if its debt situation would be so dire. For example, the Portugese government could, much as China is trying to do, consolidate debt and rationalize industry through debt exchanges with the Central government offering low cost loans to solid Portugese companies to take over the zombie firms or refinancing consumer and business loans.

At the moment the Greek government receipts are used to pay for  pensions and public salaries. Afterwards there is practically no money left to pay for social, health, education, traffic, communication,  military etc.  All these items are paid by credits from partners. Interests and debt  repayment is only done by partners.  Without a "haircut" on pensions and public salaries Greece has not even a slight chance to survive..."To relieve the present exigency is always the object which principally interests those immediately concerned in the administration of public affairs. The future liberation of public revenue they leave to the care of posterity." -Adam Smith, The Wealth of Nations (1776) 2010. Greece was about to default on its debts. As usual, politicians and bureaucrats blamed everyone but the perpetrators — the politicians and bureaucrats. They claimed that the only way to relieve the crisis of debt was debt itself.  Problem: An excess of borrowing behavior by Greeks.

Goal: To have saved the Big Banks, mainly in France and Germany. Plan: To allow Greeks to default to non-banking creditors; have the European Central Bank and International Monetary Fund lend even more money to Greece in order to give Big Banks time to rid themselves of basically worthless Greek debt; then, when Greece finally defaults, charge the taxpayers in the European Union, that phony paradise of united social democracies, for the losses to the ECB and IMF. Measurement: Success for bankers, bureaucrats, and politicians. Failure for taxpayers. There were alternatives more fair and just; for example, see "Debt & the Race to the Bottom" at ... http://nationonfire.com/catego... In 2015. Greece defaults. Consequence? Another rescue from the EU in exchange for more Greek promises.

B.S. de jour...

Spain emerged as the best performer of the eurozone’s big four economies last month as the single currency area largely shrugged off the impact of the Greek debt crisis.  The latest health check conducted by the information services company Markit showed the pace of activity across the eurozone eased only slightly during the weeks when Greek banks were closed for business.  But the survey found no signs that the eurozone was about to slide back into recession and, with Spain leading the way, was consistent with growth continuing at about 0.4% per quarter.  However, the fragility of the recovery in the 19-nation group was highlighted by data from the EU’s statistical agency, Eurostat, showing a 0.6% drop in retail sales growth in June.  The drop in spending was sharper than the financial markets had been expecting and cut the annual growth in retail sales from 2.6% to 1.2% – its slowest pace for nine months. Jack Allen, an economist at Capital Economics, said the decline in retail sales growth from 1% in the first quarter to 0.3% in the second quarter suggested that the boost to consumer spending from the collapse in oil prices late last year had started to fade....Spain’s return to growth is the result of the performance of its services sector, with the Markit survey showing output in recent months back to levels last seen when the economy was booming in 2006. The services PMI rose from 56.1 to 58.7 last month.

All kinds o BS from the delapidators in Brusells...

Greece is close to reaching a deal with its creditors to secure a €86bn lifeline that will keep it afloat for the next three years and secure its place within the eurozone, according to the country's prime minister.   As shares in Greece's benchmark index continued to plummet, Alexis Tsipras said meetings between the government and Greece's creditors had made good progress.

"We are in the final stretch," said Mr Tsipras. "Despite the difficulties we are facing we hope this agreement can end uncertainty on the future of Greece."   Greek bank shares plunged for a third day on Wednesday, after the end of a five-week shutdown sparked the biggest stock market drop on record.  The Athens stock exchange closed down 2.44pc at 643.86 on Wednesday, after falling by as much as 4.4pc, while an index of the country's top four banks fell 25pc to 246.50.

Bank shares have now fallen close to the maximum 30pc allowed for three straight days.

 

Point 1: discussion of debt relief is a red herring. At the primary level - ie: before ANY debt service is accounted for - Greece is very negative: tax collection 25% below budget, no state suppliers have been paid since 7th March, GDP falling rapidly. Until the basic economy is managed properly, any debt service is academic.

Point 2: the banks are very bust. 55% of their 'capital' is Deferred Tax Assets - which everybody knows is phoney capital: it only has value if their future is profitable, no value on a winding up. Non-performing loans are declared at 50% but in reality are much worse. Banks are deliberately refinancing dead loans in order to make them appear 'performing'. The market knows this: the four bank shares were suspended 30% 'limit down' on Monday, Tuesday and two of the four are already suspended again today (Eurobank and NBG managing to remain above suspension so far Wednesday by way of two token €2m buy orders).

There really needs to be a bankruptcy process for a country, like Chapter 11 for corporations. Bailout 3 (if it happens - which I doubt) will simply pour more money down the drain, failing to address the above issues thoroughly.

Like everything else about Varoufakis, the shirts are just another distraction from the fiduciary malfeasance and outright crimes. Hacking into taxpayer accounts -- for any reason! -- is a crime. I would refuse to live in any country that had such weak banking firewalls, or where a government minister could just spontaneously decide, for whatever reason, to access my confidential and proprietary business information that I shared with the appropriate tax revenue collection agencies!

There is no excuse for hacking government servers, Mr Tsipras, and the fact that you are attempting to defend such crimes is in fact proof of your own complicity. You were willing to go and make outlandish speeches in St Petersburg, to kowtow to war criminal Putin and his derelict government of mass murderers... Of course, by comparison, hacking the personal accounts of Greek citizens would seem like just another day at the office to you!   If you accept Varoufakis's outrageous breach of his oath of office as a "reasonable" method to "protect" Greece from the creditors who have helped you before and upon whom you are relying yet again, then you, too, need to resign, and have your immunity lifted, and face a thorough investigation. Because all these actions represent an Abuse of Power and a shocking disregard for laws.  The extension of 'liquidity' was illegal under the ECB's own rules. Liquidity is a shortage of cash and required those seeking Emergency Liquidity Assistance to provide collateral to obtain it. The problem became not one of liquidity but the insolvency of Greek banks and at that point, by the rules of the ECB ELA should have been terminated and the banks shut.

The ECB bent the rules because it didn't want to be the one to force Greece out of the Euro. Now it is stuck with some 90 billion of ELA and insufficient collateral to cover that 90 billion euros which is why the EU is having to discuss 20 billion or more euros as to recapitalize the Greek banking system as part of a new bailout.  The Greek banks were not illiquid they were busted. Insolvent. Unable to sell assets or use their own capital to honor deposits.

"The United States is a nation-state with enough of a sense of shared political community to accept majoritarian democratic rule. Unlike the eurozone. Germany and France sharing a government? Hard to imagine. Germany and Greece? Impossible." An excellent point, but the writer seems to ignore the obvious conclusion: that a common currency cannot exist where political traditions and aims are so incompatibly diverse. The point about the US - constantly swept under the carpet - is that for all the foundation state freedoms, no single state (not even the southern Confederacy) was completely self-governing, racially and linguistically distinctive and hostile to its neighbours for any length of time - and certainly not for a millennium. It became a country dominated by the politics and philosophy of English liberalism and united colloquially by the English language.   The glaring exceptions were weeded out by the Louisiana Purchase and the wars with Mexico.  France, Germany, Britain, Italy and Spain (for example) are the five most unlikely candidates for political union imaginable.   The way Greece has been treated is treason. Treason against basic human rights, treason against the very reason of existence of the EU, treason against the fathers of Democracy as we (thought to) intend it, treason against any decent and modern view of society... I am not Greek, but I do sympathize for them. and if I will be burdened with £20 to help them pay their debts, well...better reason than pay £300 for a stroll to Parliament, is it?
Shame on all European politicians...but...hey! Where the REAL POLITICIANS are...? all gone fishing, I guess...only profiting gangsters remained...that's why the likes of SNP and UKIP are taking spaces...So, indeed, shame on all of us that defend a society based on money.
I am not Labour, but...welcome Corbyn! You may be able to bring back some common sense here!

Nobody does Shirty better than Germans...always grumpy, always moody, always annoyed - from astute Self-Righteous perspective.   Example: Schaeuble - Shirty in the quintessential sense.

Another Example: Merkel - Shirtiness in the quintessential Germanic sense.   Corporate Germans, Germanic cultured Corporate entities used dirty propaganda to bad-mouth Greeks. The character-assassination of the modern-Greek National-Character is finest example of their (propaganda) work. They tried to make the Greeks look bad, but in the event...they made themselves look even worse.   Hermanic attitudes towards Greece and the Greek-Hellenic peoples have been duly noted, at highest echelons of diplomatic and political office.   Germany and the Germanic cultured parts of Europe did not score highly in that arena.   The running of Europe cannot be left in the sole domain of the Teutons...Greeks, Latins and Celts know that now!   So France, Italy, Greece and silent-partner(s) band together to counter Hermanic domination of Evropi. Old-Europe standing shoulder to shoulder against common foe.   The Greek crisis, is simply a proxy for the €uro crisis. Significantly 'the' crisis has now shown the gulf that exists between the two architects of the €, i.e, France and Germany.

Germany has realised, it can not work with the French. Schauble in particular is looking at more natural fiscal partners to call upon and to work with.  No prizes for guessing who that might be.

Varoufakis did call upon the most powerful mind in the universe... his own... and called upon the next greatest economic thinkers to help him develop a cunning plan to overcome the plodding intellects of Schauble, Legarde and Djisselbloem arrayed against him. The best these mental giants could come up with was a criminal scheme to seize and plunder the Bank of Greece, have some Columbia professor secretly 'hack' into the computers of the Greek tax collection system to set up a illegal bank with no capital to hold citizens 'deposits' and call it Plan B!    This is getting tiresome reading these 'sanitized' definitions of the Tsipras/Varoufakis "Plan B". The actual plan was this. Tsipras would appear to be negotiating in 'good faith' for a deal to release some 7.2 billion in EU funds in order to meets its debt payments. Behind the backs of his negotiating partners he authorized his Finance Minister to prepare a surprise default to cause maximum damage to the Euro system and use criminal methods to achieve it. These were to include seizing the Bank of Greece and its mint, possibly to allow the counterfeiting of at least 10 Euro notes, arresting its Governor and plundering any remaining assets it had. Employing the services of US based computer hackers to surreptitiously access and alter the code of the Greek tax collection services in order to establish a banking system outside of and not authorized by the European Central Bank.  Now defend that as just being a normal and prudent policy for ANY government to engage in!