Greece, Germany and a European systemic risk

Posted: July 14, 2015 in Uncategorized

The markets will cheer Germany (please note I do not use the word Europe) win, but the deal has seeded a bigger risk for the European Union.

Germans forgot their own history. After the I World War the Allied power put such harsh debt repayment condition to Germany that created the perfect condition to the rise of the Nazi party and Hitler. They did the same with Greece.

Greece – what is happening now?

-They have to ratify what agreed with the Germans by Wednesday – probably a Government reshuffle will be required as even PM Tsipras admitted “we need to work hard to regain our sovereignty” (so Greece has LOST its sovereignty to Germany #thisisacoup – and there are quite a few opposed to the deal in Greece

-6 European Parliament will have to ratify  by 20 July (next Greek debt repayment)

– Capital control probably will be eased, but not lifted

-The really big issue is the ratification process of what has been agreed

-Even bigger is the selection of which asset to put in the special guarantee fund of Euro 50 billion. This is a crucial point most probably doomed to fail as PM Papandreou in 2011 already tried this strategy  (tried to privatize airports, seaports and beach residential estates….and netted off just Euro 3.5 billion, according to the State Privatization Authority. With the crisis that hit so hard Greece in the last years, Euro 50 Billion represents circa 1/5 of the country value. And the states assets owned by the Greek Government look like in the range of 20 billion at best (sales can be challenged by environmental groups, unions etc)

So let’s cheer now, but the Greek situation is far from over – it is not if Greece will leave the Euro – but when

Europe – systemic risk

Europe has shown is cards in this negotiations. Europe is a puppet of Germany and Germany is now one of the most hated country in Europe.

While the financial oligarchy submitted to the German Reich, the population at large is increasingly hostile. The internet has been used to spread the voices against Germany as the twitter #thisisacoup showed (by the way started from someone in Spain). This is bound to reinvigorate the nationalistic tendency always latent in Europe and associaton of Germany with the old “Nazi Germany” as a new Fourth Reich.

As soon as an anti European party will raise to power – they will know that the is no negotiation is possible – look out if, in 2017, Marine Le Pen will win in the French Presidential election.

TMark my word – the European Union, sometime in the next 10 year, politically, will fail.

But for now let’s cheer the market!


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