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German election’s message to Greece: looks like Grexit is coming

Election result calls into question prospect of future Greek bailouts paving way for Grexit

Alexander Mercouris

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One little debated consequence of Sunday’s German election is that it significantly increases the prospect of Grexit, i.e. of Greece leaving the eurozone.

The last bailout of Greece in 2015 was not uncontroversial.  The IMF bureaucracy has never made any secret of its doubts about it.  Some of the other creditor states of the EU – for example Slovakia and Finland – are known to have been unhappy, whilst economists in the US and Britain were outspoken in their opposition.

However the bailout agreement was in the end railroaded through because it had the backing of Germany, by far the strongest state in the EU.

The bailout agreement was however also controversial in Germany itself.  The Finance Ministry and the Bundesbank are known to have had their doubts, as did many members of Chancellor Merkel’s CDU party.

The best known skeptic was however Germany’s Finance Minister Wolfgang Schäuble, who proposed at the height of the bailout crisis that Greece leave the eurozone “temporarily” in return for a haircut of its debt.  Unofficially it is reported that he also proposed that Greece be given a 50 billion euro parting gift to tide it over the inevitable turbulence that would follow in the aftermath of its leaving the eurozone.

Chancellor Merkel is known to have given serious thought to Schäuble’s proposal, and he at least seems to have thought for a short time that it had her backing.

However in the end the proposal was ditched in favour of another bailout of Greece following strong objections to Schäuble’s proposal from France and Italy (who were worried for the future of the eurozone if one of its member states left) and above all from the US, which saw Greece’s continued membership of the eurozone and of the EU as vitally necessary for NATO’s continued presence in the eastern Mediterranean  It was in fact apparently a telephone call from US President Obama that finally persuaded Chancellor Merkel to drop Schäuble’s proposal and give instead the proposed bailout of Greece her backing.

Though there was some unhappiness in Germany that the country had again been pushed into bailing out Greece, in the absence of any parties in the Bundestag opposed to the bailout Merkel had no difficulty getting it through.

That position has however now changed.

The AfD was originally set up to oppose bailouts by Germany of the eurozone’s weakest states, and it is a certainty that if any further bailouts are ever proposed whether of Greece or of any other of the eurozone’s weaker states it will vehemently oppose them.  That means that unlike in 2015 if any further bailout of Greece is proposed in future, unlike in 2015 there will be a party in the Bundestag which is guaranteed to oppose it.

However of even greater importance than the opposition of the AfD is that the FDP – Merkel’s all but certain future coalition partner – has also clearly signalled its strong opposition to any future bailouts, whether of Greece or of anyone else.  In the words of the FDP’s leader Christian Lindner during the election campaign

If there was a debt cut for Greece, as the International Monetary Fund suggests, then we should be open-minded to finally solving the problem.  Greece gets a debt cut, the money is gone, but for that Greece has to leave the euro zone, gets a new currency of its own which it can devalue and increase its competitiveness in tourism

In other comments Lindner is also reported to have said that Greece should be given a payoff to help it through the expected turbulence it will suffer once it leaves the eurozone.

What Lindner is proposing is of course the same as what Wolfgang Schäuble proposed in 2015.  Moreover it appears that Lindner is angling to replace Schäuble as Finance Minister.

Here it is necessary to make a number of points.

Firstly, it is a certainty that sooner or later Greece will need a further bailout if it is to remain in the eurozone.

At the present time the official view in Greece is that the worst of the crisis has passed, and that the country is recovering.

I do not know anyone in Greece who shares that view.

What is for the moment sustaining Greece’s economy is a temporary revival of the eurozone economy caused by the European Central Bank’s bond buying and quantitative easing programme.

However it is debatable whether the European Central Bank will be able to continue with this programme for much longer.  Not only is opposition to the programme in Germany since the election certain to grow, but the general global tightening of monetary conditions as a result of the US Federal Reserve Board’s unwinding of its quantitative easing programme appears to make the European Central Bank’s own bond buying and quantitative easing programme unsustainable.

All it will take is a dip in the economy of the eurozone for Greece to fall back into crisis, and with the European Central Bank’s bond buying and quantitative easing programme certain to end before long I know scarcely anyone in Greece who is properly informed about the situation who doubts that sooner or later this is what will happen.

When it does Greece will need another bailout if it is to stay in the eurozone.

Secondly, though Lindner’s statements and those of the FDP could not be more emphatic, it is likely that if a further Greek bailout situation arises he and the FDP will come under strong pressure to reverse their stance.  The same economic and geopolitical factors that lay behind the 2015 Greek bailout will still be there, making it a certainty that Lindner and the FDP will face demands from the EU bureaucracy, from the European Central Bank, from the Atlanticist wing of the German establishment and from the US to soften their stance.

However it is doubtful they will do so.  The FDP lost its position in the Bundestag following the previous parliamentary elections of 2013 in part because as Chancellor Merkel’s junior coalition partner it went along with all her orthodoxies.  The FDP will not want to be put in the same position again.

Given the strong position against further a bailout that Lindner and the FDP have taken, and the likely popularity within Germany of that stance, there will be strong opposition within the FDP if Lindner shows any inclination to reverse it, and it must be unlikely he will do so.

The odds must therefore be that when the next demand from Greece for another bailout comes the FDP will oppose it, in which case Merkel will risk the future of her coalition if she insists on it.  Moreover she will do so in support of a policy which is unpopular, and which will be opposed in the Bundestag and in the country by the AfD, leading to a high probability that opposition to a further bailout within the CDU will also crystallise.

Indeed it is likely that as the crisis within Greece resumes – as sooner or later it will – the knowledge of the opposition to a further bailout in Germany will have a chilling effect, and will harden opposition to the bailout in other countries in the eurozone which would have to agree to it, like Slovakia and Finland.

In that case it becomes extremely difficult to see how a further bailout could take place, in which case despite the opposition of France, Italy, the EU bureaucracy, the US and the Greek elite, a Grexit (ie. Greece’s exit from the eurozone) will finally have to take place.

Whilst it is too soon at the moment to say that the German election has definitely paved the way for a Grexit, realistically that looks like the most likely outcome.

There is a commonly expressed view that if a Grexit takes place and Greece finally leaves the eurozone, the eurozone itself will unravel as it is exposed as nothing more than a currency union rather than a true single currency

I have never shared this view.  On the contrary I believe that the eurozone will continue better without Greece, which will remain in all other respects a member state of the EU.

Following the German election it now looks as if before long this opinion will be put to the test.

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lickeyleaks
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lickeyleaks

If Greece does leave,just walk away,not like Brexit which is a crap deal,nobody listens to Nigel Farrage..

Jon Hellevig
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Jon Hellevig

Bullshit

Le Ruscino
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Le Ruscino

So you are saying by default that Germany is not a democracy ?

Interesting…………..with the screwing at BREXIT and the rigged French election we know UK & France are not democracies so now its Germany’s turn to be exposed ?

Constantine
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Constantine

If Grexit comes, the Greeks should go out with a bang. Go after the debt incurred by corporate crooks, corrupt politicians and their praetorians and start looking for realignment. It’s very interesting that even though the current so-called leftist government has bent to service the international neoliberal establishment and yet, there is an obvious effort to replace it with unabashed neoliberal right-wingers that fit the description for an appropriate ”western” government that partakes in EU and NATO.

ColinNZ
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ColinNZ

Sounds good in theory, but in practise the politicians who will decide the (bailout) stance of their party have joined the obscenely corrupt western political breed, routinely reversing political principle under threats and/or personal gain. As with ‘Oxi’, I will believe it when I see it.

Le Ruse
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Le Ruse

Quote: Greece: looks like Grexit is coming??
ROFLOL… Like the UK one, maybe it will be implemented in 2025 ?? Or 2050 ??Or we will have another referendum ?? I wouldn’t bet a brass razoo that UK will BREXIT by 2075 ??

Terry Ross
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Terry Ross

Is it called Grexit if Greece simply leaves Eurozone and NOT the EU? It would be a very different exit to that of the UK under Brexit, leaving all Greeks still subject to UK laws and regulations albeit with a severance from the euro and control over its own currency.
Perhaps it should be “grexit” with a small G?

JNDillard
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JNDillard

I hope Greece does leave. It will provide it with the autonomy it needs to do business deals with China and Russia, which view it as an important hub of the emerging One Belt One Road. In that direction lies prosperity for Greece

stevek9
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stevek9

The key to fixing the Eurozone has always been kicking out Germany, not Greece.

Alexis K
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Alexis K

It Will be the best thing that will happen to Greece, it will have a few hard years but it will be much better off eventually. With EU it will never be able to get out of this rut, because EU itself is in a Rathole and I don’t think it has the power to get out of it with the people that run it.

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Trump Weighs In On The Single Worst Mistake In American History

Trump hits Bush: Invading Iraq ‘the single worst decision ever made’.

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Via Zerohedge


In a wide ranging interview with The Hill on Tuesday conducted in the Oval Office, President Trump was asked to give his take on the biggest mistake in American history.

Considering just how open-ended a question that is, it’s perhaps surprising that he merely went back less than a couple decades into the Bush presidency, though Trump’s base will certainly welcome it as it hearkens back to his “America First” foreign policy vision of the campaign trail.

“The worst single mistake ever made in the history of our country: going into the Middle East, by President Bush,” the president during his interview with Hill.TV.

“Obama may have gotten them (U.S. soldiers) out wrong, but going in is to me the biggest single mistake made in the history of our country,” he said.

Trump explained the reasoning behind this choice, and why it wasn’t something like the civil war or another defining and devastating event reaching far into American History.

“Because we spent $7 trillion in the Middle East. Now if you wanna fix a window some place they say, ‘oh gee, let’s not do it. Seven trillion, and millions of lives — you know, ‘cause I like to count both sides. Millions of lives,” the president explained.

Some scholars and humanitarian groups estimate that over one million Iraqis were killed in the US invasion and occupation of Iraq starting in 2003. A 2008 Opinion Research Business (ORB) poll, for example, found that approximately 1.03 million people had died as a result of the war.

“To me it’s the worst single mistake made in the history of our country. Civil war you can understand. Civil war, civil war. That’s different. For us to have gone into the Middle East, and that was just, that was a bad day for this country, I will tell you.”

Various estimates on the Iraq war’s cost have put the total taxpayer bill as low as near $2 trillion, but none dispute that it is in the multiple trillions, and estimates will vary widely depending on if veteran care is factored into it.

The comments echo things Trump said on the campaign trail in 2016. For example during one of his first major foreign policy speeches then candidate Trump said, “I will never send our finest into battle unless necessary, and I mean absolutely necessary, and will only do so if we have a plan for victory with a capital V.” And referencing the famous quote of John Quincy Adams, he said during the same speech, “The world must know that we do not go abroad in search of enemies.”

He had previously shocked pundits for being the first Republican nominee for president to trash George W. Bush’s decision to go to war in Iraq, and has more recently likened it to “throwing a big fat brick into a hornet’s nest”.

All of this is a hopeful sign considering the extremely heightened and dangerous tensions over Syria this week, and given Trump seems to have vacillated between “bringing the troops home” and getting more involved. On Monday Trump hinted that a decision on the U.S. role in Syria is coming soon.

Commenting on the over 2,000 troops now in Syria ostensibly as part of the “anti-ISIL” coalition campaign, Trump indicated this mission could end soon: “We’re very close to being finished with that job,” he said. He followed with: “And then we’re going to make a determination as to what we’re going to do.”

We consider it a hopeful and a good sign that Trump is possibly revisiting his “America First” foreign policy pledges by identifying the Iraq War as the worst mistake in US history.

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Brett Kavanaugh eleventh hour smear begins to fall apart (Video)

The Duran – News in Review – Episode 112.

Alex Christoforou

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US President Trump is urging the woman accusing Brett Kavanaugh to testify and be heard.

Trump said he wants to hear from Christine Blasey Ford, noting that it would be “unfortunate” if she does not testify before a Senate committee. Trump told reporters Wednesday as he left the White House to view hurricane damage in North Carolina…

“If she doesn’t show up, that would be unfortunate.”

“If she shows up and makes a credible showing, that would be very interesting.”

From Trump’s lips to God’s ear…Blasey Ford came out to issue a statement essentially saying that she will not testify to Congress, either in an open or closed door session.

Furthermore it appears that Ford will not even allow Senate investigators to fly to California and obtain her statement from the comfort of her own home (as Senator Grassley has offered to do).

Ford is demanding an FBI investigation into an allegation with no date, time or place attached to it. 

RT CrossTalk host Peter Lavelle and The Duran’s Alex Christoforou discuss the dangerous game of identity politics being played by the establishment, Democrat left, and their mainstream media minions.

The premise that a four decades old accusation is all that is needed to destroy a person’s entire life, threatens to tear down the most basic foundational values adhered to from within the US Constitution, and propel the United States of America towards a fascist state where censorship, citizen surveillance, and evidence free accusations are used to keep the establishment left in power and the American population cowered in fear.

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According to Zerohedge, Democrats’ Hail Mary play to stymie the confirmation of Trump SCOTUS pick Brett Kavanaugh is beginning to fizzle out. As angry Dems demanded that a Monday hearing on the allegations against Kavanaugh be delayed until the FBI has a chance to investigate, turncoat Republicans (on whom the Dems had been depending for votes) instead withdrew their support and fell in line after Senate Judiciary Chairman Chuck Grassley declared that he would not honor Democrats’ request. Grassley revealed his intention to stand firm late Tuesday after lawyers for Palo Alto University professor Christine Blasey, who is claiming that Kavanaugh attempted to sexually assault her 35 years ago when the two were 17-year-old high school students, said their client wouldn’t be wiling to appear at Monday’s hearing.

According to the HillGrassley said Tuesday that there was “no reason” to delay the hearing now that Republicans have invited both Kavanaugh and Christine Blasey Ford, his accuser, to testify publicly. However, while Ford’s attorneys have insisted that their client has taken a polygraph test and “deserves to be heard”, Ford has bizarrely insisted that the FBI should have an opportunity to investigate her claims before she appears before the committee in order to spare her the “trauma” of confronting her alleged assailant.

Ford’s lawyers conveyed her request in the form of a letter sent to the committee, a copy of which was obtained by CNN.

Senator Grassley said he would refuse this request as several Republicans who had appeared to be on the cusp of defecting said they wouldn’t support further delays should Ford prove unwilling to testify.

Via the Hill…

“Republicans extended a hand in good faith. If we don’t hear from both sides on Monday, let’s vote,” said GOP Sen. Bob Corker (Tenn.), who was one of the first Republicans to call for the Judiciary Committee to hit pause on Kavanaugh’s nomination on Sunday.

GOP Sen. Susan Collins (Maine) told reporters earlier Tuesday that Ford’s lack of response to the committee about testifying was “puzzling.”

And GOP Sen. Jeff Flake, who had threatened to vote against Kavanaugh if Ford wasn’t given the chance to be heard, told CNN that he expected the committee to move on if she doesn’t appear.

“I think we’ll have to move to the markup,” he told CNN. “I hope she does (appear). I think she needs to be heard.”

Via Zerohedge…

Kavanaugh has denied Ford’s allegations and insisted he didn’t attend the party where the physical assault allegedly took place. Patrick Smyth, a fellow former Georgetown Prep student whom Ford alleges was also in attendance during the party issued a statement via his lawyer standing up for Kavanaugh. And in a separate letter to Grassley and Democratic Sen. Dianne Feinstein, not only does Smyth repudiate Ford’s allegations, but he adds that he doesn’t remember this party even taking place.

Of course, Feinstein – who admitted last night that she couldn’t say for certain that Ford’s story is entirely truthful – sat on Ford’s allegations for three months before referring them to the FBI and sharing them with other lawmakers (who purportedly “leaked” it to the press). President Trump on Tuesday said that he “feels sorry” for Kavanaugh, adding that he doesn’t want to “play into [Democrats] hands”, presumably by giving them more time to drag out the confirmation process.

“They should have done this a long time ago, three months ago, not now. But they did it now. So I don’t want to play into their hands,” Trump said.

Without the support of their Republican allies, Democrats will lack the votes on the committee to hold up the nomination past Monday. Though bizarrely, Kavanaugh himself hasn’t said yet whether he would or wouldn’t testify, which begs the question: If neither Kavanaugh nor Ford appear at the hearing, what exactly will lawmakers discuss?

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‘Hell on Earth’: MSF doctor tells RT of rape, violence, inhumane conditions in Lesbos refugee camp

One toilet for over 70 people, rape, and mental health issues – a doctor from Doctors Without Borders (MSF) and an aid worker told RT about the dire conditions in the overcrowded Moria refugee camp in Greece.

Alex Christoforou

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Via RT


One toilet for over 70 people, rape, and mental health issues – a doctor from Doctors Without Borders (MSF) and an aid worker told RT about the dire conditions in the overcrowded Moria refugee camp in Greece.

The overcrowded camp on the island of Lesbos, built to accommodate 3,100, houses around 9,000 people. “It’s a kind of hell on Earth in Europe,” Dr. Alessandro Barberio, an MSF clinical psychiatrist, said, adding that people in the camp suffer from lack of water and medical care. “It is impossible to stay there,” he said.

According to Barberio, asylum seekers are subjected to violence “during night and day.””There is also sexual violence”which leads to “mental health issues,” he said, adding that all categories of people at the camp may be subjected to it. “There is rape against men, women and children,” and the victims of sexual violence in the camp often have nightmares and hallucinations, Barberio told RT.

Asylum seekers in Moria “are in constant fear of violence,” and these fears are not groundless, the psychiatrist said. “Such cases [of violence] take place every week.”

There is “one toilet for 72 people, one shower for 84 people. The sanitation is bad. People are suffering from bad conditions,” Michael Raeber, an aid worker at the camp, told RT. They suffer from mental health problems because they are kept for a long time in the camp, according to Raeber.

“There is no perspective, they don’t know how their case will go on, when they will ever be able to leave the island.” The camp is a “place where there is no rule of law,” with rampant violence and drug addiction among the inhabitants, Raeber said.

In its latest report, MSF, which has been working near Moria since late 2017, criticized the unprecedented health crisis in the camp – one of the biggest in Greece. About a third of the camp population consists of children, and many of them have harmed themselves, and have thought about or attempted suicide, according to the group.

Barberio was behind an MSF open letter on the state of emergency in Moria, released on Monday, in which he writes that he has never “witnessed such overwhelming numbers of people suffering from serious mental health conditions.”

Calling the camp an “island prison,” he insisted that many of his patients in the camp are unable to perform basic everyday functions, “such as sleeping, eating well, maintaining personal hygiene, and communicating.”

A number of human rights groups have strongly criticized the conditions at the camp and Greece’s “containment policy”regarding asylum seekers.

Christina Kalogirou, the regional governor of the North Aegean, which includes Lesbos, has repeatedly threatened to shut down the facility unless the government improves the conditions. On Tuesday, government spokesman Dimitris Tzanakopoulos said that Greece will move 2,000 asylum seekers out of the severely overcrowded camp and send them to the mainland by the end of September.

Greece, like other EU states, is experiencing the worst refugee crisis since WWII. According to International Organization for Migration estimates, 22,000 asylum seekers have arrived in Greece since the start of this year alone.

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