Greece between bankruptcy and new elections

Greece between bankruptcy and new elections


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As anticipated by New Europe before Commission president Jose Barroso visited Athens on 26 July, the European Central Bank decided on 4 August to grant Greece a guarantee for €4 billion loans so to defer bankruptcy at least until September.

From there on, nobody can anticipate what will happen as the amount Greece will require in September will be much more, while the entire Euro-American economic nomenclature will be back from the summer vacation and will be fresh, with its batteries charged, ready to face and handle everything and anything.

Two days before, so Greece could completely secure August cash flow requirements, ECB raised to €7 billion (from €3 billion) the treasury bills the Greek central bank can accept for collateral in the case of emergency aid. Under the circumstances, Greece is in the limits of "non plus ultra."

In his visit, Barroso told the Greek leaders that unless they make spectacular moves in August, from September on it will be a case of "no money, no honey."

However, instead the Greek government announced; the dismissal of a minimum of 5% of the civil servants (counting over one million) or selling the state trains company OSE to the Chinese (now losing over half a billion per year and offering poor service); the breaking of the Agricultural Bank (ATE) into two parts, the bad one which will be kept by the state (!) and the good part which was sold to a small Greek private bank (!).

At the same time, speaking of the Chinese, we learned that the European Commission (we hope for a denial) has initiated an infringement procedure concerning the sale to the Chinese company Kosko, of the Piraeus harbour.

Europeans are becoming crazy with the penetration of China in the European Union and the Commission services are doing what ever is possible to block it.

In this context, before the summer break there have been several discussions on this subject and one of the issues that the EU will address in the near future, will be to persuade Member States to limit granting the "CE" mark to Chinese products blocking in this way their distribution in the EU.

Returning to the Greek question, there are little, if any, hopes that the Greek miracle will occur in mid August.

What will happen, is that the government will attempt once more to gain political time but this time it will be more difficult as in the past there were many warnings by the representatives of Greece's lenders but always Greece managed to circumvent their promises.

This time, it will be most difficult to circumvent the ultimatum delivered to the Greek Prime Minister by the President of the European Commission in person.

Thus, it should not be excluded that in September, if the European Commission does not approve the disbursement of a large trance of the mega-loan to Greece, before the Greek government declares bankruptcy and exit from the Eurozone, the government calls for election and the Left Coalition comes in power and left alone to manage the catastrophe.

From there on, sky is the limit.

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