You’ve probably heard that announcement on a subway train
before. Now, that’s what Greece’s creditors are saying.
Fed up with Prime Minister Alexis Tsipras, Finance Minister
Yanis Varoufakis, and the rest of the Greek negotiating team, they’ve put what
looks like a final deal on the table.
No more pension or tax goodies.
No more compromises on budget surplus targets.
No more well-choreographed, delicate negotiating dances.
The message coming out of Europe sounds much more like “Take
it or leave it!”
Here’s the key right now: Weekend talks between Greek
officials and their European counterparts in Brussels reportedly collapsed in
just 45 minutes. That leaves a June 18 meeting of finance ministers in
Luxembourg as the likely last-ditch opportunity for Greece to secure a deal. Greek
Prime Minister Alexis Tsipras is battling it out with international creditors.
Failing that, Greece will likely soon default on payments
due the International Monetary Fund, the European Union, or both. It will be
forced to enact capital controls to keep more money from fleeing the country’s
banking system. And it will probably have to exit the euro currency union, with
untold consequences at home, throughout Europe, and around the world in
financial markets!
I know what you’re thinking. We’ve seen this movie before.
We always get down to the last minute. Then the politicians manage to come up
with a buzzer-beater save. Those saves never solve the underlying problem of
too much debt, too little growth, and too many unreasonable promises made by a
series of Greek governments. But they buy some time … until the next deadline.
The difference now is in the language coming out of Europe.
Officials are genuinely fed up, and sick and tired of the wheeling and dealing.
Greece has to pay 1.6 billion euros to the IMF at the end of June, and 6.7
billion euros to the European Central Bank in July and August. The current
bailout program ends on June 30, and European officials won’t release a
7.2-billion euro tranche of aid unless Greece stops playing games.
Indeed, German officials wrote today in an op-ed that “Not
only is time running out but so too is patience across Europe. Everywhere in
Europe, the sentiment is growing that enough is enough.”
The Belgian Finance Minister warned: “There is no free lunch
being part of the euro zone. It requires discipline.”
An unnamed official quoted by Reuters said “This is very
disappointing and sad. It was a last attempt to bridge our differences but the
gap is too large. One can discuss a gap, but this is an ocean.”
Despite all that “take it or leave it” style talk, the
Greeks still haven’t budged. After the latest talks failed, Tspiras retorted:
“We will wait patiently until the institutions adhere to realism … We are
shouldering the dignity of our people.”
“I know what you’re thinking. We’ve seen this movie before.”
The latest Greek chaos comes at a potentially dangerous time
for the markets. We’ve already seen key sectors like the transports and
utilities break down. We’ve also already seen multiple “Bloody Wednesday”-style
selloffs in government bonds.
If we get a real Grexit-driven panic, there’s a lot of air
under the broader averages. So stay alert and prepared to take further action
at any time – to protect yourself and profit from the consequences of the “Take
it or leave it” talks in Europe.
So what are your thoughts? Is this finally the end game, and
how does it conclude? Does Greece have a chance to save itself, or are its
European creditors ready to give up on the country and its leaders? Let me know
over at the website ASAP!
Comments
Greece is occupies 51 square miles of land and has a
population of about 11. Its GDP is $266
billion. Unemployment is about 30%. Tourism, shipping, agriculture, fishing and
mining are its main industries. Government spends 60% of GDP and is saddled with high
pension costs. Greeks can retire at age 58 at 80% of salary or at age 63. Government
jobs dominate at 3 million. There are 2.5 million retirees. Half the population
lives off the government.
The formula for economic decay appears to be big
government, corruption, overreaching bureaucracy, early retirement, welfare and
belief in global warming.
Norb Leahy, Dunwoody GA Tea Party Leader
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