Submitted by Tyler Durden: Following yesterday's frankly stunning news that the Troika politely requests that Greece hand over its first fiscal, then pretty much all other, sovereignty to "Europe", here is the Greek just as polite response to the Troika's foray into outright colonialism:
- GREEK GOVERNMENT SPOKESMAN DECLARES THAT THE BUDGET IS SOLELY ITS RESPONSIBILITY - DJ
What is interesting here is that unlike the highly irrelevant IIF negotiations which will end in a Greek default one way or another, the real plotline that should be followed is this one: because unless Germany, pardon the Troika, gets the one condition it demands, namely "absolute priority to debt service" and "transfer of national budgetary sovereignty", as well as a "constitutional amendment" thereto. there is no Troika funding deal. Furthermore, since as a reminder the PSI talks are just the beginning, the next step is ensuring compliance, as was noted yesterday ("[ceding sovereignty] will reassure public and private creditors that the Hellenic Republic will honour its comittments after PSI and will positively influence market access"), any refusal to implement such demands is an automatic dealbreaker. Which means anything Dallara and the IIF say, as representatives of a steering committee that at this point probably constitutes of one bondholder, with the bulk having shifted to the ad hoc committee, is irrelevant. Germany just got its answer.
And the next step is, as Zero Hedge first suggested, an epic LTRO in precisely one month, whose sole purpose will be to prefund European banks ahead of the Greek default with enough cash to withstand Europe's Bear Stearns. Although as a reminder, in the US, Bear Stearns only led to Lehman and the global "all in" gambit to preserve the financial system by shifting bank insolvency risk to the sovereigns (a chart showing bank assets as a percentage of host countries' GDP can befound here). But who will bailout the world's central banks which already collectively hold over 30% of global GDP in the form of "assets", or as this term is better known these days, debt?
And for those who missed it the first time, here was the Troika's declaration of bloodless war:
Some more local perspectives from Keep Talking Greece:
Athens categorically rejected the German proposal to cede control over its budget to the European Union as a precognition for the second bailout, the rescue package for Greece. “We can never accept this. A similar proposal was made in the past by a Dutch minister. We do not even discuss about it” senior governmental sources told Athens News Agency (quoted via in.gr).AFP quotes another (?) Greek government source, saying that ”There is effectively a ‘non-paper’ that was presented to the Eurogroup,” said the source and stressed that “Greece will not discuss such a possibility. It is out of the question that we would accept it, these are matters of national sovereignty.” At the same time the source told AFP that such a move would “require a change in (EU) treaties.”The proposal as published by newspaper Financial Times triggered strong reactions in Greece. Education Minister Anna Diamantopoulou (PASOK) described it as the product of a sick imagination. “Tt’s an issue of sick imagination, whoever thought it” Diamantopoulou told private Mega TV on Saturday morning.So far there has been no reacton by the other two coalition government partners conservative Nea Dimokratia and far-right LAOS.Greek Communist Party (KKE) said “f the Commissioner be necessary for the plutocracy, it will accept him. But with or without a commissioner, crime against the people is predetermined by the co-ruling of the EU the ECB and the plutocracy in general. ”Alexis Tsipras, chairman of left-wing SYRIZA asked the Greek government to resing immediately and general elections to be held in February. He describeed the transefer of budget control as “a plan beyond any reason. “It is a plan to loot the country and the transfer of its sovereignty to the Eruopean banks and the international usury” Tsipras said (via Proto Thema)
Finally, to anyone who is still confused by the sequence of events, here is a reminder of how it would all transpire, back from July 21, 2011:
Submitted by Tyler Durden: Update: Formal Greek annexation order attached.
It was tried previously (several times) under "slightly different" circumstances, and failed. Yet when it comes to taking over a country without spilling even one drop of blood, and converting its citizens into debt slaves, Germany's Merkel may have just succeeded where so many of her predecessors failed. According to a Reuters exclusive, "Germany is pushing for Greece to relinquish control over its budget policy to European institutions [ZH: read ze Germans] as part of discussions over a second rescue package, a European source told Reuters on Friday." Reuters add: "There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said.' So while the great distraction that is the Charles Dallara "negotiation" with Hedge Funds continues (as its outcome is irrelevant: a Greece default is assured at this point), the real development once again was behind the scenes where Germany was cleanly and clinically taking over Greece.Because while today it is the fiscal apparatus, tomorrow it is the legislative. As for the executive: who cares. At that point Goldman will merely appoint one of its retired partners as Greek president and Greece will become the first 21st century German, pardon, European colony. But at least it will have its precious euro. We can't wait until Greek citizens find out about this quiet coup.
More from Reuters:
The source added that under the proposals European institutions already operating in Greece should be given "certain decision-making powers" over fiscal policy."This could be carried out even more stringently through external expertise," the source said.The German demands for greater control over Greek budget policy comes amid intense talks to finalize a second 130-billion euro rescue package for Greece, which has repeatedly failed to meet the fiscal targets set out for it by its international lenders.It is likely to spark a strong reaction in Athens ahead of elections expected to take place in April.
"Strong reaction?" Is that the politically correct parlance for "civil war" these days? We must be out of the loop on that one...
The specific language that strips Greece of its sovereignty and which will be plastered over every front page in the Greek media tomorrow:
Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control. He must have the power a) to implement a centralized reporting and surveillance system covering all major blocks of expenditure in the Greek budget, b) to veto decisions not in line with the budgetary targets set by the Troika and c) will be tasked to ensure compliance with the above mentioned rule to prioritize debt service.The new surveillance and institutional approach should be formulated in the MoU as follows: “In the case of non-compliance, confirmed by the ECB, IMF and EU COM, a new budget commissioner appointed by the Eurogroup would help implementing reforms. The commissioner will have broad surveillance competences over public expenditure and a veto right against budget decisions not in line with the set budgetary targets and the rule giving priority to debt service.”Greece has to ensure that the new surveillance mechanism is fully enshrined in national law, preferably through constitutional amendment.
And here is the full formal pre-annexation order:
In the meantime, Greeks are already practicing the switchover from Sirtaki as the dance of choice to this...
Source
Submitted by Tyler Durden: Courtesy of the BBC's Andrew Neil, on the back of the previously noted formal annexation demand of Greece by Germany:
Endgame Begins - UK "Foreign Office Sources Say Merkel Now Thinks Greece Will Default"
Of course, this is what we, and everyone else whose frontal lobe has not bee hijacked by the status quo, said back in January 2010...
JP Morgan and Morgan Stanley better pray they are right when they say they are 100% insulated from contagion, because we are all about to find out.
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