The European Nash Dis-equilibrium Through The Eyes Of A Greek

Submitted by Tyler Durden on 10/24/2012 19:58 -0400

• Creditors
 
• default
 
• European Central Bank
 
• European Union
 
• Eurozone
 
• Germany
 
• Greece
• International Monetary Fund
 
• Recession

In a somewhat mind-blowing 'gotcha' this evening (that we saw coming from the moment the words left his lips), the Greek finance minister has been forced to admit he's a lying cheat drop claims that he had secured a two-year extension for debt repayments and an agreement with creditors over EUR13.5bn in proposed austerity measures - because HE HADN'T! As The Guardian reports, Stournaras played to stereotype perfectly (the Greeks only got in the euro thanks to off-market currency swaps to reduce debt optics off-balance sheet) by lying once again (if you lie big enough it has to stock, right?). The U-turn - which he was forced to make after Germany denied the deal (yes Zee Germans again the only ones that anyone should be listening to) - caused chaotic scenes in parliament. As we have vociferously described, and Mr. Panos confirmed, the leverage is all with the Greeks (as much as the world does not want to admit it) as one Greek official said (frighteningly honestly!):

"Even if the troika give us a negative report, what are they going to do?Are they really going to not give us the installment [to keep Greece's economy afloat] two weeks before the US elections, with everything that entails – default, bankruptcy, global market turmoil? These labour reforms will turn our country into Bangladesh. They have no fiscal benefit and will actually derail the adjustment program. The political system will collapse if we impose them.The troika is demanding that we commit suicide!"

Via The Guardian:

Chaos in the Greek parliament following a row over the country's revised bailout plan brought fresh gloom to the eurozone as figures showed the currency union moving closer to recession.

The Greek finance minister was forced to drop claims that he had secured a two-year extension for debt repayments and an agreement with creditors over €13.5bn (£10.9bn) of proposed austerity measures when he addressed MPs on Wednesday.

Yannis Stournaras had previously told MPs that a deal was ready, only to later admit that negotiators had yet to approve a final draft. The U-turn, which Stournaras was forced to admit after Germany denied any deal, triggered chaotic scenes in parliament as opposition MPs objected to proposed tax rises and job cuts.

It was unclear last night whether the government will be able to submit two separate bills on austerity cuts and labour reforms due to be debated in parliament next week.

Greece has spent months in talks with its creditors, headed by the troika of the International Monetary Fund, the European Central Bank and the European Union.

Stournaras wants Greece to cut its debt pile by reducing the interest and extending the term of its bailout loans. Analysts still expect Athens to win improved loan terms, though not until it relinquishes more supervisory powers to the troika, which wants to closely monitor any deal.

One Greek official said the troika would need to back down over demands for tough labour laws or risk a political revolt.

"Even if the troika give us a negative report, what are they going to do? Are they really going to not give us the instalment [to keep Greece's economy afloat] two weeks before the US elections, with everything that entails – default, bankruptcy, global market turmoil?" he asked.

"These labour reforms will turn our country into Bangladesh. They have no fiscal benefit and will actually derail the adjustment programme. The political system will collapse if we impose them.
"The troika is demanding that we commit suicide, which is why we believe this is a matter that should be solved on a political level by the prime minister and not with the troika."

Stournaras was forced into his U-turn after the German finance minister, Wolfgang Schäuble, told reporters in Berlin that a deal would be impossible until the troika concluded its report.

Schäuble, who is a key architect of the austerity measures dominating Europe's economic landscape, warned that the eurozone's finance ministers must also read the report before agreeing to the two-year loan extension called for by the Greek government.

...

and as a reminder, The Greek Plan for Dummies:

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