Referendum Call on Debt Deal Has Greek Parliament on Knife-Edge!
Will not be missed !
- This week is going to be too exciting for people in the financial markets.
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Referendum call on debt deal has Greek parliament on knife-edge!
AFP, http://www.theaustralian.com.au/
GREECE’S government appeared headed for meltdown ahead of a confidence vote after Prime Minister George Papandreou called a referendum on the country’s EU debt deal.
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The shock announcement sparked a call for early elections and a defection that left Mr Papandreou’s parliamentary majority on a knife edge, while shares plunged 6.92 per cent.
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Adding to the chaos, Greece’s foreign minister cancelled meetings with three foreign ambassadors, while Finance Minister Evangelos Venizelos was hospitalised with an inflamed appendix.
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Amid the political upheaval, Mr Venizelos – a former party rival of Mr Papandreou – appeared to distance himself from the referendum bombshell on Tuesday when sources close to him said he was unaware of it. The assertion was at odds with an impassioned speech Mr Venizelos gave in parliament on Monday in support of the move.
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Stocks, Euro Decline on Greek Referendum!
By Stephen Kirkland and Rita Nazareth, http://www.bloomberg.com/
Stocks sank and the euro weakened, while a surge in German bunds sent yields down the most on record, amid concern Europe’s bailout of Greece will unravel.The dollar and U.S. Treasuries rallied.
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The MSCI All-Country World Index fell 3.4 percent at 4:32 p.m. in New York as gauges in Italy, France and Germany plunged at least 5 percent. The Standard & Poor’s 500 Index closed down 2.8 percent at 1,218.28. German 10-year yields fell as much as 29 basis points to 1.73 percent. Rates on 10-year Italian and French debt touched euro-era records above German debt. The euro fell 1.2 percent to $1.3696. Copper and oil paced losses in commodities after China’s manufacturing growth cooled.
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Greek Prime Minister George Papandreou’s grip on power weakened after his call for a referendum to approve the bailout provoked lawmaker defections from his party and fueled concern a default would undermine financial stability in the region. European leaders pressed Greece to uphold the terms of the bailout before a summit of Group of 20 leaders later this week.
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“It’s frustrating,” David Kelly, chief market strategist for JPMorgan Funds in New York, said in a telephone interview.“The danger of having a referendum is that it could be defeated, in which case Greece presumably would end up defaulting on its debt. Europe is not addressing the basic problem. They are not giving the peripheral countries a way out of a recession.”
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Greek Vote Sets off ‘Pandemonium’, Engulfs Italy!
- I cannot tell you which of the last 5 straws will break the camel’s back. But the camel’s back will break! The world is heading towards a global economic, financial and monetary collapse! Got physical gold yet?
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Greek vote sets off ‘pandemonium’, engulfs Italy!
By Ambrose Evans-Pritchard, http://www.telegraph.co.uk/
Greece’s startling decision to call a referendum on last week’s EU summit deal has set off wild tremors across the eurozone, pushing Italy to the brink of a perilous downward spiral.
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The country’s ruling Pasok party appeared to be splintering on Tuesdsay night, leaving it unclear whether the governent of premier George Papandreou can survive a parliamentary vote of confidence on Friday. Signs that the EU’s pain-stakingly negotiated Grand Plan is unravelling within days has been a profound shock to confidence.
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A frantic search for safe havens led to the second biggest one-day fall ever recorded in Europe’s AAA bond yields. Ten-year German Bund yields tumbled 25 basis points to 1.77pc, with similar moves in non-EMU Swedish and Danish debt. British Gilt yields fell to 2.2pc.
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Italy took the brunt of the punishment. Spreads over Bunds spiked to a crisis-high of 459 basis points before the European Central Bank came to the rescue. Spanish spreads reached 384. Andrew Roberts from RBS said Italy’s debt stress is “dangerously close to a level that could cause pandemonium in financial markets”.
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The point of no return – judging from the sequence in Greece, Ireland and Portugal – would most likely be if LCH Clearnet imposed higher margin requirements. This trigger is 450 points over a basket of AAA benchmark bonds. The spread reached 388 on Tuesday. “We’re two more days of violence from this point, but we’re not there yet,” he said.
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The Greek move – denounced by France’s Elysee as “irrational and dangerous” - raises the serious possibility that a euro member could soon be forced out of the monetary union, setting a precedent with explosive ramifications for other states in trouble.
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“I would have liked to do without this piece of news,” said Eurogroup chairman Jean-Claude Juncker. “It is something that brings a great nervousness, that adds great insecurity to already great insecurity.” Mr Juncker said a “no” vote by Greek citizens would set in motion events that could lead to bankruptcy and threaten Greece’s foothold in Europe.
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… for more click here!
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Greece on Brink of Collapse in Euro Crisis!
Above, lightning over the Parthenon temple, on the Acropolis hill in Athens. Photograph: Petros Giannakouris/AP
- We could see the breakup of the Eurozone in the next few days, maybe even in the next 24 hours?! This current ‘crisis/event’ is perfect as an excuse for the FedRes to QE to infinity. The 2 days FedRes meeting will end Wednesday and there are much talk of QE3! Stock markets are tanking worldwide! Got physical gold yet?
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Greece on brink of collapse in euro crisis!
By Robert Winnett, and James Kirkup, http://www.telegraph.co.uk/
The Greek government was on the brink of collapse last night after an “extraordinarily reckless” decision to hold a referendum on euro bail-out plans sparked turmoil in stock markets across the world.
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Uncertainty in Greece raised fresh fears that the single currency crisis will spread. European stock markets plunged and the Italian government’s borrowing costs hit record highs as investors warned that efforts to save the euro were “unravelling”.
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George Papandreou, the Greek prime minister, faced calls by members of his own government to step down amid fears that Greeks will vote against the bail-out package and the deep cuts in public spending its sponsors are demanding. As Greek politics grew ever more chaotic, there were strong political protests as the government moved to replace military chiefs with officers seen as more supportive of Mr Papandreou.
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A No vote could mean Greece is forced to withdraw from the single currency, raising doubts about the euro’s value and wiping trillions off the value of shares and loans across the continent.
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The renewed global turmoil overshadowed the release of better than expected economic figures in Britain. The economy grew by 0.5 per cent over the summer, almost double the increase expected by economists. Growth is expected to slow and possibly even slip back into recession because of the eurozone crisis.
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At a Cabinet meeting, Mr Cameron told ministers to “roll up their sleeves” and do more to implement plans to boost growth. Yesterday, at least two members of Mr Papandreou’s Pasok party threatened to defect, which could cost him his parliamentary majority. The collapse of the Papandreou government could mean elections next month, raising fresh doubts about the bail-out deal and delaying any final approval still further.
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Opposition parties accused the government of trying to politicise the military leadership amid threats to Mr Papandreou’s position. Greece was run by a military junta between 1967 and 1974. Local reports said the government had been panicked by residents posting portraits of top generals in parts of Athens.
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… for more click here!
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Greece: Revenge of the Sovereign Nation!
It is coming!!!
- So much for the Eurozone ’rescue plan’. I thought it will last 3-6 months. But it cratered in less than 3 working days! Market is in fear and trepidation mode. There are talks that Greece may do a hard default and tell the Eurozone to go to hell by Friday. The Eurozone will crater! Of course, the Illuminist MSM is selling it as bad for the Greeks. I don’t think so. This bailout is about bailing out French and German Illuminist banks and not about helping the Greeks. Iceland is doing just fine after telling the banksters to colonoscopy themselves!
- - The endgame of the Illuminists, it seems, is to give even greater power to the ECB. Finally, the Illuminist bankster snakes will QE to infinity to ‘solve’ this engineered crisis. All major fiat currencies are toast! Got physical gold yet? (emphasis mine)
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Revenge of the Sovereign Nation
By Ambrose Evans-Pritchard, http://www.telegraph.co.uk/
Greece’s astonishing decision to call a referendum – “a supreme act of democracy and of patriotism”, in the words of premier George Papandreou – has more or less killed last week’s EU summit deal.
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The markets cannot wait three months to find out the result, and nor is China going to lend much money to the EFSF bail-out fund until this is cleared up. The whole edifice is already at risk of crumbling. Société Générale is down 15pc this morning. The FTSE MIB index in Milan has crashed 7pc. Italian bond spreads have jumped to 450 basis points.
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Unless the European Central Bank step in very soon and on a massive scale to shore up Italy, the game is up. We will have a spectacular smash-up. If handled badly, the disorderly insolvency of the world’s third largest debtor with €1.9 trillion in public debt and nearer €3.5 trillion in total debt would be a much greater event than the fall of Credit Anstalt in 1931. (Let me add that Italy is not fundamentally insolvent. It is only in these straits because it does not have a lender of last resort, a sovereign central bank, or a sovereign currency. The euro structure itself has turned a solvent state into an insolvent state. It is reverse alchemy.)
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The Anstalt debacle triggered the European banking collapse, set off tremors in London and New York, and turned recession into depression. Within four months the global financial order had essentially disintegrated. That is the risk right now as the reality of Europe’s make-up becomes clear.
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The Greek referendum – if it is not overtaken by a collapse of the government first – has left officials in Paris, Berlin, and Brussels speechless with rage. The ingratitude of them.
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The spokesman of French president Nicolas Sarkozy (himself half Greek, from Thessaloniki) said the move was “irrational and dangerous”. Rainer Brüderle, Bundestag leader of the Free Democrats, said the Greeks appear to be “wriggling out” of a solemn commitment. They face outright bankruptcy, he blustered.
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Well yes, but at least the Greeks are stripping away the self-serving claims of the creditor states that their “rescue” loan packages are to “save Greece”. They are nothing of the sort. Greece has been subjected to the greatest fiscal squeeze ever attempted in a modern industrial state, without any offsetting monetary stimulus or devaluation.
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The economy has so far collapsed by 14pc to 16pc since the peak – depending who you ask – and is spiralling downwards at a vertiginous pace.
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The debt has exploded under the EU-IMF Troika programme. It is heading for 180pc of GDP by next year. Even under the haircut deal, Greek debt will be 120pc of GDP in 2020 after nine years of depression. That is not cure, it is a punitive sentence.
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Every major claim by the inspectors at the outset of the Memorandum has turned out to be untrue. The facts are so far from the truth that it is hard to believe they ever thought it could work. The Greeks were made to suffer IMF austerity without the usual IMF cure. This was done for one purpose only, to buy time for banks and other Club Med states to beef up their defences.
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It was not an unreasonable strategy (though a BIG LIE), and might not have failed entirely if the global economy recovered briskly this year and if the ECB had behaved with an ounce of common sense. Instead the ECB choose to tighten.
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… for more click here!
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About
Societal and economics observer and commentator with an endtimes, future history perspective. Follow me at Twitter: socioecohistory
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