How Greece is being beaten into a pulp to force Europe’s banks to accept capital while keeping Italy et al in awe.
Reliable sources tell me that the troika has drawn a surprising line on the sand: Either the Greek government agrees to force upon the private sector trades unions an immediate reduction in minimum wages with immediate effect (plus the dismantling of all awards regarding dismissal compensation and limitations), or the next instalment (or tranche) of EU-IMF-ECB loans to Greece will be withheld. Noting that even Mrs Thatcher took years before she could impose her iron will on the trades unions, it is clear that the troika is asking the Greek government to commit to a change that it may be both unwilling and unable to effect. If this is true, two questions arise: Click here for the full story by Yanis Varoufakis.It is a must read and concludes: In short, the plan seems to be to let Greece default in a big way, so as to scare the bankers into accepting new capital, while, at once, grinding the Greek social economy into a pulp to keep Italy and the rest of the NFY member-states in awe and keen to do as they are told. Our collective tragedy is that this plan, like all the others before it, will not work. Why? Because, like all the previous plans, it does not address the eurozone’s systemic Crisis systematically. Because, once again, the powers that be choose to ignore the interconnections between: (a) the banking sector’s insolvencies, (b) the lack of fiscal shock absorbers in case there is a run on the bonds of one or more member-states, and (c) the absence of a decent surplus recycling mechanism that directs surplus into deficit regions in the form of productive investments. As long as this form of European denial remains, Greece’s reduction to a pile of ashes will only lead Mrs Merkel to a Pyrrhic victory over the banks.