In These New Times

A new paradigm for a post-imperial world

Greece triggers the global crisis

Posted by seumasach on July 7, 2015

Cailean Bochanan

7th July, 2015

Coming at the end of a week in which the Greek people overwhelmingly reasserted their desire to remain in the Eurozone, the “No” vote can only be a result of Tsipras’ ability to convince them that their position in the Eurozone is safe, whatever happens. That now looks like a very shaky assumption and, I expect,  a brazen deception on Tspras’ part. It is particularly pertinent  to recall, at this point, that it was German Finance Minister, Schauble himself, who first proposed a referendum on proposals for Greece back in May and that this same Schauble had been arguing for Greek withdrawal from the euro in the face of the position of Angela Merkel. Merkel now looks on the way out if the latest take down on her by Spiegel is anything to go by. Could it be that, after a murky and convoluted process that has left everyone perplexed, Schauble has won?

Of course, the pretence of negotiating a deal goes on. Obviously, if the Eurogroup are now prepared to countenance Greek exit from the Eurozone, Tsipras’ position will not be one of strength even if he hasn’t sent in Varoufakis to do a deal with the “terrorists”. There is still the possibility that the Eurogroup aim to get rid of Tsipras and do a deal with someone else with the referendum result being relegated to the status of a momentary aberration, a rush of blood. The Greek people could blame Tsipras for deceiving them as they rush back into the waiting arms of the Eurogroup:  but that is not how I perceive the mood. Anyway, who could this alternative government be? The entire Greek political class is burnt out- that’s why Syriza emerged in the first place.

If , indeed, the European leadership is now prepared to abandon attempts to keep Greece in the Eurozone and the whole referendum was somehow staged with that in mind, the implications are quite startling. Without further funds coming in Greece will default. This would be very damaging to Europe if there was no back-up plan to allow banks to go under. But there is one, that of Michel Barnier which is scheduled to be in place soon.  But, that in turn would be difficult without some kind of global debt write-down. After all, could Europe really jump first whilst still in the line of fire from City/Wall Street hedge funds. There are already many indications of a degree of covert cooperation between all global players: the QE measures of Japan and Europe, the holding down of the gold price while China buys it all, the manipulation of interest rates and the admirable restraint of China and Russia in not dumping US and UK government bonds.

Whilst the world is riveted on the Greek crisis which will become a full-blown humanitarian crisis in the event of exit from the Eurozone, we may see concomitant events unfolding elsewhere with breathtaking rapidity.

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One Response to “Greece triggers the global crisis”

  1. seumasach said

    According to Wikipedia: Initially, European banks had the largest holdings of Greek debt. However, this has shifted as the “troika” (i.e., European Central Bank or ECB, International Monetary Fund or IMF, and a European government-sponsored fund) have purchased Greek bonds. As of early 2015, the largest individual contributors to the fund were Germany, France and Italy with roughly €130B total of the €323B debt.[127] The IMF is owed €32B and the ECB €20B. Foreign banks had little Greek debt.[128]

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