With many conveniently placed holidays right around the corner, don’t be surprised if Greece meets the same fate as Cyprus…should they decide to vote against the wishes of their masters.
Funny what a difference two months make. Back on October 4, we wrote “Here We Go Again: Greece Will Be In Default Within 15 Months, S&P Warns” and… nobody cared as the Greek stock market meltup continued. Now, after the biggest three-day rout in Greek stock market history (or about 30% lower), and with the overhyped, oversold, oversusbcribed recent Greek 5 Year bond issue available in the open market some 16 points lower, and suddenly everyone cares. Including Goldman Sachs.
Overnight the bank with the $58 trillion in derivative exposure issued a note “From GRecovery to GRelapse” which is quite absent on the usual optimism, cheerfulness and happy-ending we have grown to expect from the bank whose former employee is in charge of the European printing press. Here is the punchline: “In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point.”
Goldman wasn’t the only ones warning Greece. The EU’s Mr. Juncker issued a ‘you have been warned’ statement to the Greek people.
“Dear Greeks, “don’t vote wrong”. Via Reuters:
The European Union’s chief executive has given Greeks a stark and unusual warning of major problems if they vote the “wrong” way and radicals win an early parliamentary election.
Jean-Claude Juncker, the president of the European Commission, stressed in remarks carried late on Thursday by Austrian broadcaster ORF that he was not trying to insert himself into the Greek political process.
In general, EU officials take pains to avoid accusations of interference and Juncker’s remarks went beyond the normal reticence.
As the government in Athens faces a possible election and defeat by an untried left-wing party that opposes the terms the EU has set on Greece’s financial bailout, Juncker said he was not averse to seeing “familiar faces” remaining in charge.
Prime Minister Antonis Samaras said on Thursday that Greece risked a “catastrophic” return to financial crisis if his government fell as a result of a parliamentary vote he has called for this month to elect a head of state.
Juncker, who was closely involved in managing the euro zone debt crisis when he was prime minister of Luxembourg, said he was sure Greek voters understood the risks of an election that polls show could bring to power the left-wing Syriza party.
“I assume that the Greeks — who don’t have an easy life, above all the many poor people — know very well what a wrong election result would mean for Greece and the euro zone,” he said.
“I won’t express my own opinion. I just wouldn’t like extremist forces to take the wheel.
“I would like Greece to be governed by people with an eye on and a heart for the many little people in Greece — and there are many — and also understand the necessity of European processes.”
He said he did not view market ructions in Greece of late as a sign that a new Greek crisis was breaking out.
The mafia has spoken! Dear Greek citizens, you can vote as you wish, just make sure you vote for my guy or else we will destroy you.
European democracy in action!
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.