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Greek Government, And Bailout Deal, On Verge Of Collapse Due To Definition Of "Fresh Milk" | Zero Hedge

Greek Government, And Bailout Deal, On Verge Of Collapse Due To Definition Of “Fresh Milk” | Zero Hedge.

The Greek economic collapse, depression and bankruptcy has seen many odd things in its brief and often times violent history (in those days when the violent elements were not on strike), but this surely is the first time when one of the countless Greek bailouts may be on the rocks due to the disagreement over the definition of “fresh milk.” No, really. Reuters explains that Greece’s government risks another rebellion over bailout terms this week after milk producers lobbied against a move to free up prices as part of efforts to make the economy more competitive. Basically, for Greeks, milk is fresh if it is 5 days old or less, yet according to the always fascinating codex of the Troika, “fresh” can be labeled anything that is as old as 11 days…. including the salmonella bacteria it contains. What’s worse, is that the “spoiled milk” scandal, far from a joke, has swept over the country, and now even threatens to topple the government.

From Reuters:

The country’s international lenders want it to ditch rules, such as limiting the shelf life of fresh milk to five days, that effectively deter importers.

But Greek dairy producers and lawmakers representing farming constituencies are fighting the move to call milk up to 11 days old ‘fresh’ – the latest in a long line of last-minute disruptions to Greece’s bailout reviews with the European Union and International Monetary Fund.

Six lawmakers from within the ruling coalition – three from Prime Minister Antonis Samaras’s New Democracy party and three from the Socialist PASOK – have opposed the proposal that will be submitted to parliament on Friday as part of an omnibus reform bill that Greece must pass to secure bailout aid.

If they vote against it, Samaras and PASOK leader Evangelos Venizelos could be forced to expel them, further reducing the government’s slim majority of just 153 seats in the 300-seat assembly.

In other words, there is a possibility that Samaras’ government, which nearly brought down the Eurozone after the summer of 2012 elections were almost won by the “anti-bailout” Samaras, will have no choice but to expel enough people from his party to leave it without an absolute 50%+1 majority, and potentially lead to a government collapse! All because of the definition of fresh milk.

Yup: it sure sounds like the European “Union.”

The bill – which will pave for the way for up to 10 billion euros ($14 billion) of aid – is expected to pass after last-minute wrangling, but the row has highlighted how powerful lobbies can undermine the country’s bailout lifeline.

You don’t need to be an expert to understand that extending the shelf life is aimed at allowing milk from abroad to be labelled as fresh,” PASOK lawmaker Mihalis Kassis told Greek radio at the weekend. “If that’s a prerequisite by the (EU/IMF) troika then we deserve what we get.”

The controversy has captured headlines and days of debate on Greek television, overshadowing expectations that the country will soon be able to raise money on bond markets again.

“It is unfair and saddening, at a time when Greece is spreading its wings to emerge from a rut, that there is such dissonance,” Samaras said during a trip to Brussels on Friday.

MPs drowning in a glass of milk!” the daily Ethnos wrote on its front page on Saturday. “Spoiled milk” proclaimed the center-left Eleftherotypia newspaper’s headline.

Why are foreign exporters so interested in penetrating the Greek milk market? Simple: prices. “Greece is the only country in Europe that has legislation to determine the shelf life of fresh milk and the price, at around 1.30 euros per litre, is among the highest in the EU. The Paris-based Organisation for Economic Co-operation and Development (OECD) says Greeks paid about a third more for dairy produce than the EU average in 2012.”

One would think that the Greeks would welcome the competition from abroad, and that the lower price would be a good thing. Well, if cow farms and milkmen account for a substantial portion of the Greek GDP, not to mention employment pool, which apparently in Greece they do, it becomes clear why the nation which is now a complete and utter economic disaster quarantine area, would be leery of allowing any foreign influence to raise its already laughter inducing unemployment rate.

So aside from that, the Grecovery is on pace.

Obama Issues Executive Order Freezing Assets Of Seven Putin Aides | Zero Hedge

Obama Issues Executive Order Freezing Assets Of Seven Putin Aides | Zero Hedge.

As was largely expected, the first retaliation by Obama has arrived, courtesy of a just issued Executive Order by the president, in which he has blocked and frozen “all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person” (i.e. assets) of not only the pre-coup Ukraine president Yanukovich and the Crimean leader Aksyonov, including all Russians that operate in the Russian arms industry, but most notably seven Putin aides. Not Putin himself of course – that would be too “escalatory”…

From the White House:

I, BARACK OBAMA, President of the United States of America, hereby expand the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, finding that the actions and policies of the Government of the Russian Federation with respect to Ukraine — including the recent deployment of Russian Federation military forces in the Crimea region of Ukraine — undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets, and thereby constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. Accordingly, I hereby order:

Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person (including any foreign branch) of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in…

The people impacted:

  • Vladislav Surkov

Vladislav Yuryevich Surkov (born 21 September 1964)[1] is a Russian businessman and politician. He was First Deputy of the Chief of the Russian Presidential Administration from 1999 to 2011, during which time he was widely seen as the main ideologist of the Kremlin. Allegedly he contributed greatly to the electoral victory of President Vladimir Putin in 2004. Surkov is seen as the main architect of the current Russian political system, often described as “sovereign” or “managed” democracy.

From December 2011 until 8 May 2013 he served as the Russian Federation’s Deputy Prime Minister. While his resignation was described as voluntary, presidential spokesman Peskov linked the resignation with the government’s failure to carry out decrees by President Putin., in the late 1980s he started as a businessman as the government lifted the ban against private businesses. He became a head of the advertisement department of Mikhail Khodorkovsky’s businesses. During the 1990s he held key managerial positions in advertisement and PR departments of Khodorkovsky’s Bank Menatep (1991 – April 1996) and Rosprom (March 1996 – February 1997) and Fridman’s Alfa-Bank (since February 1997).

In September 2004 Surkov was elected president of the board of directors of the oil products transportation company Transnefteproduct, but was instructed by Russia’s PM Mikhail Fradkov to give up the position in February 2006.

Sergey Yurievich Glazyev is a Russian politician and economist, Full Member of Russian Academy of Science since 2008. He was a minister in 1993, a member of the State Duma in 1993-2007, and ran for President of Russia in 2004. Glazyev was a co-founder of the Rodina party. Glazyev announced his retirement from politics in March 2007, and said that he did not intend to seek a further term in the Duma, arguing that Vladimir Putin’s rule had crowded out all forms of political opposition and debate in the country.

In July 2012, Putin appointed Glazyev as presidential aide for the coordination of the work of federal agencies in developing the Customs Union of Belarus, Kazakhstan, and Russia. Glazyev has authored more than forty books and hundreds of pamphlets and research papers. One of his books has been published in English translation by the LaRouche movement’s Executive Intelligence Review as Genocide: Russia and the New World Order (ISBN 0-943235-16-2). In 1995 he was awarded with the Gold Kondratieff Medal by the International N. D. Kondratieff Foundation and the Russian Academy of Natural Sciences (RAEN).

In August 2013 Glazyev claimed that stating that all Ukrainians favor Ukraine to integrate in the European Union “is some kind of sick self-delusion”.[3] Because, according to him, “sociological surveys by Ukrainian sociological services say something different: 35% of people prefer the European Union and 40% the Customs Union”. He blamed “numerous political scientists and experts, who have fed on European and American grants for 20 years, and a whole generation of diplomats and bureaucrats that has appeared after the years of the ‘orange’ hysteria, who are carrying out an anti-Russian agenda” and “who are too far from the economy and real life, don’t really know their country’s history and are divorced from its spiritual traditions” for creating “an effect that Ukraine doesn’t want”.[3] Ukrainian opinion polls that polled support in Ukraine for European Union membership did indicate that at the time of Mr Glazyev’s statements Ukrainians preferred joining the European Union rather than the Customs Union.

  • Leonid Slutsky

Leonid Eduardovich Slutskii is a member of the State Duma of Russia, a member of the LDPR party. Currently he is the Chairman of the State Duma Committee on the “Commonwealth of Independent States, Eurasian Integration and links with compatriots”. Slutsky as been a First Deputy Chairman of the State Duma’s Committee on International Affairs. He is dean of the international relations department at the Moscow State University of Economics, Information and Statistics. He has held senior banking positions and was an advisor to the mayor of Moscow. Slutsky also reported to a directorate of the Presidium of the Supreme Soviet of the RSFSR. He holds an economics degree from the Moscow Economic-Statistical Institute

  • Andrei Klishas

Dr. Andrey A. Klishas served as Vice President and Chairman of the Board of Directors at Interros Company since June 2008. Dr. Klishas is a visiting Professor of Constitutional and Administrative Law Faculty and an Assistant Professor of Constitutional and Municipal Department (Legal Department) of Russian Peoples Friendship University. Dr. Klishas is an Assistant Professor of constitutional and municipal department of Moscow University for the Russian Ministry of Domestic Affairs. From June 1998 to October 2001, he was the Legal Matters Director and Deputy General Director of Interros Company. From October 2001, Dr. Klishas served as the General Director of Interros and from December 2001, he was the Chairman of the Management Board. From January 2004, Dr. Klishas was a Member of the Board of Directors of the firm. He held different posts at Russian Federal Property Fund from 1995 to 1997 and at UNEXIM Bank, where he was the Deputy Head of Legal Department from August 1997 to June 1998. On July 2007, Dr. Klishas was elected the President of Federation of Hunting Dog Breeding.

Currently, he is the Chairman of the Board of Directors of Polyus Gold since June 26, 2008 and Open Investments company and a Member of the Board of Agros Group and Polyus CJSC. Dr. Klishas serves as a General Director at KM Invest Private Joint Stock Company. He has been Director of MMC Norilsk Nickel since December 2008.

  • Valentina Matviyenko

Valentina Ivanovna Matviyenko is the highest-ranking female politician in Russia, the former governor of Saint Petersburg and the current Chairman of the Federation Council of the Russian Federation. Born in the Ukrainian SSR, Matviyenko started her political career in the 1980s in Saint Petersburg (then called Leningrad) and was the First Secretary of the Krasnogvardeysky District CPSU of the city from 1984 to 1986. In the 1990s she served as Russian ambassador to Malta (1991–1995) and Greece (1997–1998). Between 1998–2003 Matviyenko was Deputy Prime Minister of Russia for Welfare, and briefly the Presidential Envoy to the Northwestern Federal District in 2003. By that time she firmly allied herself with Russian President Vladimir Putin, an alliance which secured her a victory in the governor elections in Saint Petersburg, Putin’s native city.

On 19 May 2007, the Federal Security Service of the Russian Federation announced that on 16 May it had detained several members of an undisclosed youth religious group allegedly preparing an assassination attempt on Valentina Matviyenko’s life using hand grenades and plastic explosive. On 23 May FSB Director Nikolay Patrushev announced that the prevented attempt had been scheduled for June.

Controversial businessman Vitaly Arkhangelsky accused Matviyenko in corporate raiding and corruption. According to him Matvieyenko is the real owner of the bank “Saint Petersburg” that staged a corporate raid on the property of his company, OMG that included Vyborg Port and Western Terminal of Saint Petersburg port using falsified documents with forged signature of Arkhangelsy. The lawyers of bank “Saint Petersburg” insist on exclusion materials of Matviyenko’s involvement from the criminal case in London court.

  • Dmitry Rogozin

Dmitryi Olegovich Rogozin  is a Russian Ambassador Extraordinary and Plenipotentiary of Russia, Deputy Prime Minister of Russia in charge of defense industry. In January 2008, he became Russia’s ambassador to NATO, until December 2011. He was a leader of the Rodina (Motherland) party until it merged with other similar Russian parties to form the Fair Russia party.He speaks 4 languages and holds a doctor’s degree.

On 18 February 2011 Russian President Dmitry Medvedev appointed Dmitry Rogozin as a Special Representative on anti-missile defence and negotiations with NATO countries on this issue. On 23 December 2011 Dmitry Rogozin was appointed deputy premier of Russian Government in charge of defense and space industry. As responsible for the defense industry he leads the creation of the Russian Foundation for Advanced Research Projects in the Defense Industry (Russian DARPA).

In 2008 he was appointed a Russian ambassador to NATO. As Russia’s NATO envoy he was heavily opposed to Ukraine and Georgia becoming members of NATO. After the two countries were denied membership of the NATO Membership Action Plan he claimed that: “They will not invite these bankrupt scandalous regimes to join NATO…more so as important partnerships with Russia are at stake.”. For such words he was criticized by some Ukrainian and Georgian officials. Former Ukraine’s envoy to NATO Ihor Sahach said: “In my opinion, he is merely used as one of cogs in the informational war waged against Ukraine. Sooner or later, I think, it should be stopped”. The envoy also expressed a surprise with Rogozin’s slang words. “It was for the first time that I heard such a higher official as envoy using this, I don’t even know how to describe it, whether it was a slang or language of criminal circles… I understand Russian, but, I’m sorry, I don’t know what his words meant”.The Foreign Minister of Ukraine Volodymyr Ohryzko stated that he did not regard the statement as serious.

  • Yelena Mizulina

Yelena Mizulina is a Russian politician serving as a member of the Russian Parliament between 1995 and 2003 and again since 2007. Since 2012, she has been the center of attention in regard to a set of controversial laws concerning the rights of the LGBT community in Russia and the adoption of Russian orphan children by foreigners. She is currently Chairman of the Duma Committee on Family, Women and Children Affairs. She has changed her political affiliation several times, having served public office on behalf of the Communist Party of the Soviet Union, the liberal Yabloko and Union of Right Forces parties and is currently representing the region of Omsk in the Duma as a representative of the social democratic A Just Russia party.

Obama Issues Executive Order Freezing Assets Of Seven Putin Aides | Zero Hedge

Obama Issues Executive Order Freezing Assets Of Seven Putin Aides | Zero Hedge.

As was largely expected, the first retaliation by Obama has arrived, courtesy of a just issued Executive Order by the president, in which he has blocked and frozen “all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person” (i.e. assets) of not only the pre-coup Ukraine president Yanukovich and the Crimean leader Aksyonov, including all Russians that operate in the Russian arms industry, but most notably seven Putin aides. Not Putin himself of course – that would be too “escalatory”…

From the White House:

I, BARACK OBAMA, President of the United States of America, hereby expand the scope of the national emergency declared in Executive Order 13660 of March 6, 2014, finding that the actions and policies of the Government of the Russian Federation with respect to Ukraine — including the recent deployment of Russian Federation military forces in the Crimea region of Ukraine — undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets, and thereby constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. Accordingly, I hereby order:

Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person (including any foreign branch) of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in…

The people impacted:

  • Vladislav Surkov

Vladislav Yuryevich Surkov (born 21 September 1964)[1] is a Russian businessman and politician. He was First Deputy of the Chief of the Russian Presidential Administration from 1999 to 2011, during which time he was widely seen as the main ideologist of the Kremlin. Allegedly he contributed greatly to the electoral victory of President Vladimir Putin in 2004. Surkov is seen as the main architect of the current Russian political system, often described as “sovereign” or “managed” democracy.

From December 2011 until 8 May 2013 he served as the Russian Federation’s Deputy Prime Minister. While his resignation was described as voluntary, presidential spokesman Peskov linked the resignation with the government’s failure to carry out decrees by President Putin., in the late 1980s he started as a businessman as the government lifted the ban against private businesses. He became a head of the advertisement department of Mikhail Khodorkovsky’s businesses. During the 1990s he held key managerial positions in advertisement and PR departments of Khodorkovsky’s Bank Menatep (1991 – April 1996) and Rosprom (March 1996 – February 1997) and Fridman’s Alfa-Bank (since February 1997).

In September 2004 Surkov was elected president of the board of directors of the oil products transportation company Transnefteproduct, but was instructed by Russia’s PM Mikhail Fradkov to give up the position in February 2006.

Sergey Yurievich Glazyev is a Russian politician and economist, Full Member of Russian Academy of Science since 2008. He was a minister in 1993, a member of the State Duma in 1993-2007, and ran for President of Russia in 2004. Glazyev was a co-founder of the Rodina party. Glazyev announced his retirement from politics in March 2007, and said that he did not intend to seek a further term in the Duma, arguing that Vladimir Putin’s rule had crowded out all forms of political opposition and debate in the country.

In July 2012, Putin appointed Glazyev as presidential aide for the coordination of the work of federal agencies in developing the Customs Union of Belarus, Kazakhstan, and Russia. Glazyev has authored more than forty books and hundreds of pamphlets and research papers. One of his books has been published in English translation by the LaRouche movement’s Executive Intelligence Review as Genocide: Russia and the New World Order (ISBN 0-943235-16-2). In 1995 he was awarded with the Gold Kondratieff Medal by the International N. D. Kondratieff Foundation and the Russian Academy of Natural Sciences (RAEN).

In August 2013 Glazyev claimed that stating that all Ukrainians favor Ukraine to integrate in the European Union “is some kind of sick self-delusion”.[3] Because, according to him, “sociological surveys by Ukrainian sociological services say something different: 35% of people prefer the European Union and 40% the Customs Union”. He blamed “numerous political scientists and experts, who have fed on European and American grants for 20 years, and a whole generation of diplomats and bureaucrats that has appeared after the years of the ‘orange’ hysteria, who are carrying out an anti-Russian agenda” and “who are too far from the economy and real life, don’t really know their country’s history and are divorced from its spiritual traditions” for creating “an effect that Ukraine doesn’t want”.[3] Ukrainian opinion polls that polled support in Ukraine for European Union membership did indicate that at the time of Mr Glazyev’s statements Ukrainians preferred joining the European Union rather than the Customs Union.

  • Leonid Slutsky

Leonid Eduardovich Slutskii is a member of the State Duma of Russia, a member of the LDPR party. Currently he is the Chairman of the State Duma Committee on the “Commonwealth of Independent States, Eurasian Integration and links with compatriots”. Slutsky as been a First Deputy Chairman of the State Duma’s Committee on International Affairs. He is dean of the international relations department at the Moscow State University of Economics, Information and Statistics. He has held senior banking positions and was an advisor to the mayor of Moscow. Slutsky also reported to a directorate of the Presidium of the Supreme Soviet of the RSFSR. He holds an economics degree from the Moscow Economic-Statistical Institute

  • Andrei Klishas

Dr. Andrey A. Klishas served as Vice President and Chairman of the Board of Directors at Interros Company since June 2008. Dr. Klishas is a visiting Professor of Constitutional and Administrative Law Faculty and an Assistant Professor of Constitutional and Municipal Department (Legal Department) of Russian Peoples Friendship University. Dr. Klishas is an Assistant Professor of constitutional and municipal department of Moscow University for the Russian Ministry of Domestic Affairs. From June 1998 to October 2001, he was the Legal Matters Director and Deputy General Director of Interros Company. From October 2001, Dr. Klishas served as the General Director of Interros and from December 2001, he was the Chairman of the Management Board. From January 2004, Dr. Klishas was a Member of the Board of Directors of the firm. He held different posts at Russian Federal Property Fund from 1995 to 1997 and at UNEXIM Bank, where he was the Deputy Head of Legal Department from August 1997 to June 1998. On July 2007, Dr. Klishas was elected the President of Federation of Hunting Dog Breeding.

Currently, he is the Chairman of the Board of Directors of Polyus Gold since June 26, 2008 and Open Investments company and a Member of the Board of Agros Group and Polyus CJSC. Dr. Klishas serves as a General Director at KM Invest Private Joint Stock Company. He has been Director of MMC Norilsk Nickel since December 2008.

  • Valentina Matviyenko

Valentina Ivanovna Matviyenko is the highest-ranking female politician in Russia, the former governor of Saint Petersburg and the current Chairman of the Federation Council of the Russian Federation. Born in the Ukrainian SSR, Matviyenko started her political career in the 1980s in Saint Petersburg (then called Leningrad) and was the First Secretary of the Krasnogvardeysky District CPSU of the city from 1984 to 1986. In the 1990s she served as Russian ambassador to Malta (1991–1995) and Greece (1997–1998). Between 1998–2003 Matviyenko was Deputy Prime Minister of Russia for Welfare, and briefly the Presidential Envoy to the Northwestern Federal District in 2003. By that time she firmly allied herself with Russian President Vladimir Putin, an alliance which secured her a victory in the governor elections in Saint Petersburg, Putin’s native city.

On 19 May 2007, the Federal Security Service of the Russian Federation announced that on 16 May it had detained several members of an undisclosed youth religious group allegedly preparing an assassination attempt on Valentina Matviyenko’s life using hand grenades and plastic explosive. On 23 May FSB Director Nikolay Patrushev announced that the prevented attempt had been scheduled for June.

Controversial businessman Vitaly Arkhangelsky accused Matviyenko in corporate raiding and corruption. According to him Matvieyenko is the real owner of the bank “Saint Petersburg” that staged a corporate raid on the property of his company, OMG that included Vyborg Port and Western Terminal of Saint Petersburg port using falsified documents with forged signature of Arkhangelsy. The lawyers of bank “Saint Petersburg” insist on exclusion materials of Matviyenko’s involvement from the criminal case in London court.

  • Dmitry Rogozin

Dmitryi Olegovich Rogozin  is a Russian Ambassador Extraordinary and Plenipotentiary of Russia, Deputy Prime Minister of Russia in charge of defense industry. In January 2008, he became Russia’s ambassador to NATO, until December 2011. He was a leader of the Rodina (Motherland) party until it merged with other similar Russian parties to form the Fair Russia party.He speaks 4 languages and holds a doctor’s degree.

On 18 February 2011 Russian President Dmitry Medvedev appointed Dmitry Rogozin as a Special Representative on anti-missile defence and negotiations with NATO countries on this issue. On 23 December 2011 Dmitry Rogozin was appointed deputy premier of Russian Government in charge of defense and space industry. As responsible for the defense industry he leads the creation of the Russian Foundation for Advanced Research Projects in the Defense Industry (Russian DARPA).

In 2008 he was appointed a Russian ambassador to NATO. As Russia’s NATO envoy he was heavily opposed to Ukraine and Georgia becoming members of NATO. After the two countries were denied membership of the NATO Membership Action Plan he claimed that: “They will not invite these bankrupt scandalous regimes to join NATO…more so as important partnerships with Russia are at stake.”. For such words he was criticized by some Ukrainian and Georgian officials. Former Ukraine’s envoy to NATO Ihor Sahach said: “In my opinion, he is merely used as one of cogs in the informational war waged against Ukraine. Sooner or later, I think, it should be stopped”. The envoy also expressed a surprise with Rogozin’s slang words. “It was for the first time that I heard such a higher official as envoy using this, I don’t even know how to describe it, whether it was a slang or language of criminal circles… I understand Russian, but, I’m sorry, I don’t know what his words meant”.The Foreign Minister of Ukraine Volodymyr Ohryzko stated that he did not regard the statement as serious.

  • Yelena Mizulina

Yelena Mizulina is a Russian politician serving as a member of the Russian Parliament between 1995 and 2003 and again since 2007. Since 2012, she has been the center of attention in regard to a set of controversial laws concerning the rights of the LGBT community in Russia and the adoption of Russian orphan children by foreigners. She is currently Chairman of the Duma Committee on Family, Women and Children Affairs. She has changed her political affiliation several times, having served public office on behalf of the Communist Party of the Soviet Union, the liberal Yabloko and Union of Right Forces parties and is currently representing the region of Omsk in the Duma as a representative of the social democratic A Just Russia party.

US And Israel Quietly Provide Military Support And Parts To Iran, Which In Turn Is Arming Syria | Zero Hedge

US And Israel Quietly Provide Military Support And Parts To Iran, Which In Turn Is Arming Syria | Zero Hedge.

Before the Ukraine, there was Syria. Before Syria, there was Iran. For over 30 years, Iran was the perpetual strawman of every attempt to escalate hostilities in the middle east. One only needs to recall that the original “red line” was not Obama’s but that of Israel’s PM Netanyahu referring to Iran’s nuclear program (which most likely was under the control of Stuxnet, and thus the NSA, more than it was Iran’s to begin with).

What is surprising in recent months, is how quickly in the aftermath of the Syrian failed escalation script from last summer, Iran quickly dropped off the axis of America’s worst enemies, and from the biggest bogeyman, has rapidly become a nation with which the US is eager to resume diplomatic and trade relations. Sure, Israel pretended to be angry about Iran’s ascent in the ranks of US foreign allies-to-be, and issued a few angry press releases, but that’s all it was – posturing, fit only for the front page of tabloids. It is what was happening behind the scenes that is noteworthy.

And what is happening behind the scenes is the same thing that happens every time the US (or Israel, or any other western nations) finds a surprising new ally: said ally proceeds to purchase military equipment from the US (or other western nations), using loans from the US (or other western nation banks).

Enter bizarre twist #1 – US companies selling military parts to none other than the formerly country non grata (at least until mid-2013): Iran. Reuters reports:

U.S. aerospace companies are seeking permission to sell airliner parts to Iran for the first time in three decades, in a key test of the temporary relief on sanctions given under talks to curtail Iran’s nuclear activities.

 

At least two leading manufacturers, Boeing and engine maker General Electric, have applied for export licenses in a six-month window agreed by Iran and six world powers in November, industry officials and other sources familiar with the matter said.

 

If approved, the sales would be the first acknowledged dealings between U.S. aerospace companies and Iran since the 1979 U.S. hostage crisis led to sanctions that were later broadened during the dispute over Iran’s nuclear activities.

 

A source familiar with the matter said that Boeing, the world’s biggest manufacturer of passenger jets, had also filed a request for permission to export parts to Iran.

 

Boeing declined to comment, referring questions to the U.S. State Department, which in turn referred queries to the U.S. Treasury. A spokeswoman for the Treasury Department, which enforces international sanctions, declined to comment on specific license requests or applications.

Enter bizarre twist # 2 – “GE is doing it for the kids.”

A GE spokesman said his company had been asking since 2004 for permission to provide parts and maintenance for engines for safety reasons, without profiting from the scheme. GE, the world’s largest maker of jet engines by sales, refiled its request after the sanctions relief came into force, he added.

 

“We don’t want to make a penny on it. It’s entirely for flight safety,” Rick Kennedy said, adding that GE would donate any proceeds to charity.

But of course, because when one thinks suing the US to get tax refunds corporate generosity (if not bailouts), one thinks GE.

Enter bizarre twist # 3 – it is not only the US that is seeking to promptly capitalize on this “temporary” elimination of Iran sanctions. It is Iran’s perpetual nemesis, Israel, that is not only planning to supply weapons to Iran, but is already doing so. However, unlike the US which at least has clumsily stumbled upon a detente whose only purpose is logically to get Iran to buy Made in America weapons, with Israel the hypocrisy takes on a whole new meaning. Quote the Telegraph:

Benjamin Netanyahu, the Israeli prime minister, called for increased pressure on Iran to force it to abandon a programme that Israel regards as a front for building an atomic bomb and a threat to its existence.

 

Visiting the Golan Heights on Tuesday, he accused Iran of “arming those who are carrying out the slaughter” in neighbouring Syria.  “I would like to tell the world, today, as the talks between the major powers and Iran are being resumed, that Iran has changed neither its aggressive policy nor its brutal character. Iran is continuing to support the Assad regime, which is slaughtering its own people,” Mr Netanyahu said.

And this is where it gets embarrassing for Bibi: it was Israel that was arming Iran.

[A] court in Athens has told The Telegraph that parts appearing on an American list of forbidden military-grade materials had been shipped from Israel on two occasions, apparently destined for Iran.

 

The seized items comprised spare parts for military aircraft: a constant speed drive designed for the F-4 Phantom jet, and a voltage output sensor used in the F-14 Tomcat. The parts were confiscated by Greece’s financial crimes squad and were being sent to the US for investigation, court officials said.

 

 

Israeli arms dealers twice tried to send spare parts for fighter planes to Iran, The Telegraph has established, flouting an international arms embargo and openly contradicting the bitter enmity between the Jewish state and the Islamic regime.

 

The illegal shipments are now being investigated by the US Homeland Security Department after they were intercepted by authorities in Greece.

 

The shipments – one in Dec 2012 and the other last April – were sent by courier from the Israeli town of Binyamina-Givat Ada, near Haifa, via a company in Greece, the newspaper reported. The firm was later established to be a ghost company. Its contact number was said to belong to a British national in the Greek city of Thessaloniki, who could not be traced.

Was Mossad involved? But of course.

A blogger, Richard Silverstein pointed the finger at two possible culprits who he said were well-known arms dealers living in Binyamina-Givat Ada. The pair had come to the attention of Israeli and US authorities on suspicion of violating the arms embargo on Iran in the past, Silverstein wrote, but had never been charged or prosecuted. “There can be no doubt that they are colluding with Israeli intelligence,” he added.

For those who are not convinced, “The defence and foreign ministries in Israel declined to comment on the seizures, which were first revealed by Kathimerini, a Greek newspaper. 

Finally, tying it all together, is another report from Reuters. in which we learn that “as Syria’s war nears the start of its fourth year, Iran has stepped up support on the ground for President Bashar al-Assad, providing elite teams to gather intelligence and train troops, sources with knowledge of military movements say.

This further backing from Tehran, along with deliveries of munitions and equipment from Moscow, is helping to keep Assad in power at a time when neither his own forces nor opposition fighters have a decisive edge on the battlefield.

Assad’s forces have failed to capitalize fully on advances they made last summer with the help of Iran, his major backer in the region, and the Hezbollah fighters that Tehran backs and which have provided important battlefield support for Assad.

 

But the Syrian leader has drawn comfort from the withdrawal of the threat of U.S. bombing raids following a deal under which he has agreed to give up his chemical weapons.

 

Shi’te Iran has already spent billions of dollars propping up Assad in what has turned into a sectarian proxy war with Sunni Arab states. And while the presence of Iranian military personnel in Syria is not new, military experts believe Tehran has in recent months sent in more specialists to enable Assad to outlast his enemies at home and abroad.

 

Assad’s forces have failed to capitalize fully on advances they made last summer with the help of Iran, his major backer in the region, and the Hezbollah fighters that Tehran backs and which have provided important battlefield support for Assad.

 

But the Syrian leader has drawn comfort from the withdrawal of the threat of U.S. bombing raids following a deal under which he has agreed to give up his chemical weapons.

 

Shi’te Iran has already spent billions of dollars propping up Assad in what has turned into a sectarian proxy war with Sunni Arab states. And while the presence of Iranian military personnel in Syria is not new, military experts believe Tehran has in recent months sent in more specialists to enable Assad to outlast his enemies at home and abroad.

To summarize: in an act of complete disregard for the official diplomatic song and dance, both Israel and the US are now providing military support to Iran, which in turn is providing military support to Syria, which is also getting military support from Russia. And now, just to make things more interesting, the same labyrinth of “military support” is about to be unleashed in the Ukraine, whose western half is just as likely getting arms and military equipment (not to mention funding)from the West under the table, while Russia, whose main Black Sea port is in the Ukraine’s Crimean peninsula, is arming the Eastern part of the Ukraine.

What can possibly go wrong?

IMF report: ‘Debt is good’. What are these people smoking?

IMF report: ‘Debt is good’. What are these people smoking?.

February 18, 2014
Sovereign Valley Farm, Chile

Probably every kid in the world has at some point dreamed of having a time machine and being able to travel back to the past… usually to see dinosaurs or something like that.

Time travel is an almost universal fantasy. And if I could snap my fingers and turn the pages of time, I’d be seriously curious to check out the thousand-year period between the decline of the Western Roman Empire and the rise of the Renaissance.

They used to refer to this period as ‘the Dark Ages’ (though historians have since given up that moniker), a time when the entire European continent was practically at an intellectual standstill.

The Church became THE authority on everything– Science. Technology. Medicine. Education. And they kept the most vital information out of the hands of the people… instead simply telling everyone what to believe.

People living in that time had to trust that the high priests were smart guys and knew what they were talking about.

Interpreting facts and observations for yourself was heresy, and anyone who formed original thought and challenged the authority of church and state was burned at the stake.

Granted, human civilization has come a long way since then. But the basic building blocks are not terribly different than before.

Anyone who challenges the state is still burned at the stake. And our entire monetary system requires that we all trust the high priests of central banking and economics. Those that stray from the state’s message and spread economic heresy are cast down and vilified.

You may recall the case of Harvard professors Ken Rogoff and Carmen Reinhart who wrote the seminal work: “This Time is Different: Eight Centuries of Financial Folly”.

The book highlighted dozens of shocking historical patterns where once powerful nations accumulated too much debt and entered into terminal decline.

Spain, for example, defaulted on its debt six times between 1500 and 1800, then another seven times in the 19th century alone.

France defaulted on its debt EIGHT times between 1500 and 1800, including on the eve of the French Revolution in 1788. And Greece has defaulted five times since 1800.

The premise of their book was very simple: debt is bad. And when nations rack up too much of it, they get into serious trouble.

This message was not terribly convenient for governments that have racked up unprecedented levels of debt. So critics found some calculation errors in their Excel formulas, and the two professors were very publicly discredited.

Afterwards, it was as if the entire idea of debt being bad simply vanished.

Not to worry, though, the IMF has now stepped up with a work of its own to fill the void.

And surprise, surprise, their new paper “[does] not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised.”

Translation: Keep racking up that debt, boys and girls, it’s nothing but smooth sailing ahead.

But that’s not all. They go much further, suggesting that once a nation reaches VERY HIGH levels of debt, there is even LESS of a correlation between debt and growth.

Clearly this is the problem for Europe and the US: $17 trillion? Pish posh. The economy will really be on fire once the debt hits $20 trillion.

There’s just one minor caveat. The IMF admits that they had to invent a completely different method to arrive to their conclusions, and that “caution should be used in the interpretation of our empirical results.”

But such details are not important.

What is important is that the economic high priests have proven once and for all that there are absolutely no consequences for countries who are deeply in debt.

And rather than pontificate what these people are smoking, we should all fall in line with unquestionable belief and devotion to their supreme wisdom.

Hayek On Keynes: “Economics Was A Sideline For Him” | Zero Hedge

Hayek On Keynes: “Economics Was A Sideline For Him” | Zero Hedge.

Keynes will be remembered as “a man with a great many ideas that knew very little economics,” Friedrich Hayek notes in this brief interview and when challenged on his ‘parochial’ knowledge of economic history he was “not sheepish in the least… he was much too self-assured.” Hayek’s perspective casts Keynes in a very different light than his fan’s apostolic adoration might suggest, “he wasutterly contemptuous of anything that had been done before.” While Hayek describes Keynes as one of the most intelligent people he had known, he perhaps sums up the man’s work in this brief phrase – “economics was just a side-line for him.” As we note below, many describe Keynesian policy as ‘dumb’, however a more appropriate word would be ‘foolish’.

Hayek On Keynes

Keynesian Policies: Not Dumb, Just Foolish (via the Ludwig von Mises Institute of Canada)

A lot of my Austrian friends refer to Keynesian policies as “idiotic,” “stupid,” etc., but that’s not really accurate. Indeed, the Keynesian policy prescriptions are so counterintuitive–they so defy common sense–that only very intelligent people with plenty of schooling could have the confidence to utter them with a straight face.

Rather than describing Keynesian policies as “dumb,” I think a more appropriate word is foolish, because the technical analyses of IS/LM curves, talk of the “liquidity trap” and so on, utterly ignore political realities. A great example of this is Matt Yglesias and his handling of Argentina. Back in May 2012–not that long ago, by any stretch–Yglesias held up Argentina as a model for the eurozone countries. He wrote:

Spain is in a complete economic crisis…But perhaps there is a way out, one suggested by the recent experience of Argentina, a nation that’s currently enjoying full employment. 
…[W]hen the world economy hit a snag in 2001, trouble emerged for Argentina. Unrelated hidden risks were revealed elsewhere in the global investment landscape and everywhere people got nervous. The foreign capital began to abandon Argentina, reducing investment, employment, and incomes. This in turn sharply reduced the Argentine government’s tax revenues and led to calls for sharp budgetary consolidation…Protesters and rioters took to the streets. President Fernando de la Rua’s party took a beating at the polls. Argentina defaulted on its external debt, broke the rigid linkage between the peso and the dollar, and went back to pursuing an independent monetary policy….
Default and devaluation were hardly a party. They destroyed the country’s banking system and wiped out many Argentines’ savings. But it did work. Argentina has grown rapidly in subsequent years and its unemployment rate has fallen steadily…

So Yglesias was recommending that Spain and other troubled countries ditch the euro and default on their sovereign debts, so they could free their printing press from the shackles of Brussels. The obvious Austrian (and generally free-market) response would be to warn that debasing the currency is hardly the path to prosperity, and that “solving” a crisis in this way would merely sow the seeds of a greater problem down the road. The prosperity coming from the printing press was an illusion.

Well, the economy in Argentina is now “melting down”–Yglesias’ own term. But our fearless Keynesian pundit has nothing for which to apologize. He explains in a January 2014 post:

With Argentina’s economy melting down, I’ve gotten various queries from people asking whether I regret having praised the country’s successful 2002 devaluation and default back in 2012 as an example for Spain and Greece to emulate.
The answer is: absolutely not!
Argentina is a country that has not, historically speaking, been well-governed. In fact one reason that the 2002 default was necessary was that Argentina  previously embarked on a deeply misguided currency board scheme. To say that Argentina’s 2002 default and devaluation was the right thing to do and that there are important lessons to be learned from it is not to say that all countries should always emulate Argentina in all respects.

So there you have it, folks: Countries that historically have been ill-governed should follow Argentina’s lead by defaulting on their debts and debasing their currencies, but they should stop right before the bad consequences of these actions come home to roost. Simple as pie. Sort of like giving a bottle of Jack Daniels to some frat guys and sending them to the library to study–what could possibly go wrong?

The Chart That Really Has The Fed Worried | Zero Hedge

The Chart That Really Has The Fed Worried | Zero Hedge.

While complaining (just this morning once again) that its fiscal policy that is dragging growth, we suspect The Fed knows full well just how screwed the US is. The following chart comparing GDP growth to the elder demographic of the population offers some serious doubts that the Fed will ever be able to step away. With the Boomers retiring en masse, 65-or-overs will represent over 20% of the population within a decade and thus no economic growth. Japanization here we come… and no end to QE or the entire status quo is over.

 

GDP growth correlates strongly with the percent of population over 65 (with Greece, depression and Japan, hyper-QE the stand-outs)

 

It doesn’t look good for the US…

 

You can’t print more young people to change this percentage… so they’ll have to keep printing money to prop up asset markets to maintain the bumpy illusion of growth.

 

Chart: @M_McDonough

Angela Merkel Furious At Nuland’s “Fuck The EU” Comments | Zero Hedge

Angela Merkel Furious At Nuland’s “Fuck The EU” Comments | Zero Hedge.

A few short months after Putin cornered the US state department into a disastrous foreign relations dead end with the false flag Syrian escalation which achieved none of the predetermined nat-gas-to-Europe pipeline ambitions, instead alieanting the US from both staunch allies Saudi Arabia and Israel, the Russian president has just managed to inflict yet more pain on US foreign policy this time by infuriating (even more) a core US ally in Europe – Angela Merkel. Just two days after the phone recording of Victoria Nuland emerged in which she not only made it explicitly clear it was the US who was the puppetmaster behind the Ukranian opposition with the traditional CIA tractics as was expected all along, but also explained just how the US freels toward the EU with the now infamous “Fuck the EU” comment, Angela Merkel called the obscene remark “absolutely unacceptable.”

And then, Nuland not knowing when to stop, proceeded to insert foot in mouth just a little deeper: “”I am not going to comment on private diplomatic conversations. But it was pretty impressive tradecraft. The audio was extremely clear,” she told reporters during a visit to Kiev.”

At least she indirectly complemented Putin on being smart enough to not only intercept what appears to have been an unencrypted phone call, but to release it at just the right time as the entire world’s attention turns to Russia and by extension, the Ukraine.

Because in retrospect Putin does deserve praise: having won the Ukraine over Europe’s cries of horror, he has also managed, in the past year, to alienate the US from Israel, Saudi Arabia and now, Germany. And all this without saying a single word, let along firing a shot.

So now that we know the apriori winner, the loser has no choice but to engage major damage control, which is borderline delusional. From Reuters:

[Nuland] said she did not foresee damage to relations with opposition leaders, saying they “know exactly where we stand in respect of a non-violent solution to the problem.”

 

Of relations with Russia, she said Washington and Moscow had “very deep, very broad and complex” discussions on a range of international issues including Iran and “frank and comradely discussions” on Ukraine.

 

U.S. officials did not deny the authenticity of the recording and said Nuland apologized to EU colleagues for the comment.

 

Angela Merkel, already furious with Washington for several months over reports that U.S. officials bugged her own phone, found Nuland’s remarks “totally unacceptable”, a spokeswoman for the German chancellor said.

Yet, it’s one thing to delude oneself that the US is still the undisputed world’s superpower, it is far worse to express the kind of hubris that Nuland did, when she communicated and discussedconfidential US geopolitical strategy on an unencrypted phone line – traditionally a fireable offense, if not worse.

In Washington, U.S. officials said Nuland and Pyatt apparently used unencrypted cellphones, which are easy to monitor. The officials said smart phones issued to State Department officials had data encryption but not voice encryption.

 

In Nuland’s call, apparently recorded about 12 days ago when Ukrainian opposition leaders were considering an offer from Yanukovich to join his cabinet, she suggested that one of three leading figures might accept a post but two others should stay out. In the end, all three rejected the offer.

The biggest loser here, however, continues to be the Ukraine, whose people are facing a cold winter without assurances they will have Russian nat gas, and a government that is a chess piece in an ongoing power play between Europe and Russia, now that the CIA has taken a back seat. Incidentally, Russia made it quite clear that it demands Ukraine’s full allegiance and as Russian finance minister Anton Siluanov told reporters overnight, Russia  would withold its second loan payment to the troubled nation unless the Ukraine, which owes a “not insignificant” sum for natgas, makes the payment.

In other words, just like Greece has become a money “tolling” intermediary for the ECB and German banks, in which Europe pretends to bail out the crushed country when in reality it is just funding debt payments to its own banks, so the Ukraine has now become an intermediary, in which loan payments from Russia go to pay… Russia’s Gazprom. And in the process Russia pulls the Ukraine from the European sphere of influence and back into that of the New Normal USSR.

Game, set, match Putin. Again.

But wait, there’s more. Because Putin, unsatisfied with simple making a mockery of the US State Department, decided to rub it in some more. The Hill reports:

Rising animosity between the former Cold War powers was on full display Friday when Russia chose a former figure skater who tweeted out a racially charged picture of President Obama for the symbolic lighting of the Olympic cauldron.

 

Russian President Vladimir Putin hoped hosting the first Games since the 1980 Moscow Olympics, which the U.S. boycotted, would showcase a “new Russia” emerging from the ashes of the Soviet Union as he enters his 15th year in power.

 

Instead the U.S. and its western allies have consistently painted the picture of a corrupt autocracy.

 

The media’s focus on the persecution of gays in Russia, terrorism and Russia’s lackluster infrastructure – many hotels don’t have potable water even though the Games are estimated to have cost more than $50 billion, the most ever – have further infuriated the Kremlin.

 

“I understand how the press here works. They need hot issues in order to be read, to have high circulation,” Sergey Kislyak, Putin’s envoy to Washington, told The Washington Diplomat last month.

That’s ok – as long as the US population can keep itself distracted from the sheer implosion of US standing internationally by looking at tweeted images of decrepit toilets and busted Sochi plumbing from a self-indulgent US press corps, and continue feeling good about itself, then all is well. After all, that’s just what Putin wants.

Greece Is Still Bankrupt |

Greece Is Still Bankrupt |.

February 6, 2014 | Author 

A ‘Flood of Good News’

As der Spiegel recently reported, the Greek government is intent on smothering its reluctant creditors with good news (in order to be able to accumulate a reasonable amount of such, the last ‘troika’ assessment has apparently been subject to numerous delays):

“A SPIEGEL report that German Finance Minister Wolfgang Schäuble is considering a third rescue package for Greece has electrified the struggling nation. Athens wants to impress its creditors with a stream of good news. But it still has a long list of unkept promises. New loans are welcome, but don’t ask us for any new austerity measures. This pretty much sums up Athens’ reaction to Germany’s reported willingness to approve further loans to Greece to cover the country’s multi-billion euro projected financing gap in 2015-2016.

Although there was no official reaction to SPIEGEL’s report, published on Monday, government sources say that Berlin’s intentions were known to Prime Minister Antonis Samaras, adding that Germany will not pull the rug from under Greece’s feet, especially with the European election due in May.

But the Greek government has also made clear that it will not accept a new round of measures or a continuation of what are perceived by many in Greece as the asphyxiating and humiliating controls by the troika of European Commission, European Central Bank and International Monetary Fund.

Finance Minister Yannis Stournaras is preparing Greece’s position ahead of the troika’s arrival. With a fresh round of bargaining looming on the new loans, he promised an avalanche of “impressively good news” in the coming days to show that Greece doesn’t need any further belt-tightening. It only needs to press on with its structural reforms, he said.

According to a Greek Finance Ministry official, the good news will include the first increase of retail sales in 43 months, and the first rise in the purchasing managers’ index in 54 months. The “super-weapon” in Stournaras’ arsenal, however, is the hefty 2013 primary budget surplus, now estimated at €1.5 billion, well above the official budget forecast of €812 million.

The same official said the expected good news was the reason why Athens doesn’t want the troika to return earlier to conclude a much-delayed round of inspections that started in the autumn.Stournaras is expected to present Greece’s accomplishments to German officials when he visits Berlin later this week. The final details of his trip are still being worked out. Athens also plans a return to the markets by the end of 2014 in what it believes will be a definitive sign that the Greek economy is out of the woods.

With the leftist opposition alliance Syriza leading most opinion polls, some observers say the Greek government needs to be able to show success soon. Athens was therefore quick to react to the reports about new loans, telling the public it should not fear a new wave of measures.

(emphasis added)

By all accounts SYRIZA would indeed win elections if they were held today – by a solid margin of almost 8% over its nearest rival New Democracy, the party of current prime minister Antonis Samaras. Electoral support for his coalition partner PASOK – for a long time the ruling party in Greece – has all but disappeared. Even the Stalinist KKE is set to grab a bigger share of the vote.

The upcoming European as well as municipal elections in Greece are bound to see SYRIZA winning comfortably. Meanwhile, the coalition’s majority in parliament has shrunk to a mere three MPs. It won’t take much to topple it, hence all the frantic activity described above.

Greetings from Charles Ponzi

So what’s the problem if there are all those good news, including a ‘hefty primary surplus’? As an aside, said surplus is already greedily eyed by various Greek bureaucrats who have suffered salary cuts which they are currently challenging in court. As the WSJ recently reported, a few European finance ministers held a ‘private meeting’ over Greece recently, to which their Greek colleague wasn’t invited. The problem? The month of May:

“Top officials peeled away from colleagues after a gathering of euro-zone finance ministers in Brussels on Monday evening for a private meeting to discuss mounting concerns over Greece’s bailout. Greek Finance Minister Yiannis Stournaras, who was briefing the press in a building across the street at the time, wasn’t invited.

High-level officials from the International Monetary Fund, the European Commission, and the European Central Bank, as well as senior euro-zone officials and the German and French finance ministers were present.

The meeting reflects anxiety that Greece could yet disturb the relative calm in euro-zone financial markets. But the issue is unlikely to come to a head until May when Greece needs to repay some €11 billion ($14.85 billion) of maturing government bonds.

The private meeting, confirmed by several people with direct knowledge of the talks, comes as Athens struggles to meet some of the conditions set by its official creditors for further payouts from bailout funds. The Monday meeting was held to discuss how to press Athens to forge ahead with unpopular reforms to its labor and product markets, and how to scramble together extra cash to cover a shortfall in the country’s financing for the second half of the year that is estimated at €5 billion to €6 billion.The meeting was inconclusive, people familiar with the situation said.

(emphasis added)

An € 11 billion bond repayment and a shortfall of  € 5 to 6 billion? Oh well, that’s why it’s called a “primary surplus” instead of just a “surplus”. “Primary” means it’s not really a surplus – only that it would be one, if not for the debtberg Greece must service. However, if servicing said debtberg costs more than Greece’s government can actually bring in, then its entire debt edifice remains a Ponzi scheme. Only, contrary to other governments that are able to finance their own Ponzi debt schemes in the markets, Greece needs Ponzi financing from elsewhere, or to be precise, from unwilling tax cows residing elsewhere. That is currently the main difference. The problem for all the other States is that it is important that people don’t start thinking too much about the essential Ponzi nature of government debt. If they do, then there might be another debt crisis. After all, nearly the entire euro zone sports a lot more debt today (both absolute and relative to GDP) than at any time during the most severe crisis months. That fact in turn means that the current calm in the markets really hangs by the thinnest of threads, propped up by misplaced confidence alone. Meanwhile, the much-lamented ‘banks-sovereigns doom loop’ has become worse by almost an order of magnitude in countries like Italy and Spain.

On the other hand, selling yet another bailout of Greece to the voters in creditor countries is quite a tall order at this stage, with the eurocracy already being subject to much scorn and revulsion (all of it well deserved).

What to do?


trojan-horse-239x300Helloooo, ‘European partners’ … thinking about me lately?

(Image source: The Web / Author unknown)


Let Us ‘Stipulate For All Times to Come’

Ludwig von Mises once wrote with regard to the inexorably growing mountains of government debt around the world:

“The long-term public and semi-public credit is a foreign and disturbing element in the structure of a market society. Its establishment was a futile attempt to go beyond the limits of human action and to create an orbit of security and eternity removed from the transitoriness and instability of earthly affairs. What an arrogant presumption to borrow and to lend money for ever and ever, to make contracts for eternity, to stipulate for all times to come!”

In the case of Greece, the eurocrats seem to have precisely such an arrogant presumption in mind:

“The next handout to Greece may include extending the maturity on rescue loans to 50 years and cutting the interest rate on some previous aid by 50 basis points, according to two officials with knowledge of discussions being held by European authorities.

The plan, which will be considered by policy makers by May or June, may also include a loan for a package worth between 13 billion euros ($17.6 billion) and 15 billion euros, another official said.Greece, which got 240 billion euros in two bailouts, has previously had its terms eased by the euro zone and International Monetary Fund amid a six-year recession.

“What we can do is to ease debt, which is what we have done before through offering lower interest or extending the maturity of loans,” Dutch Finance Minister Jeroen Dijsselbloem, who heads the group of euro finance chiefs, said yesterday on broadcaster RTLZ. “Those type of measures are possible but under the agreement that commitments from Greece are met.”

(emphasis added)

Good luck with that last one boys. Greece is still the same over-bureaucratized corrupt swamp it was prior to the bailouts. There will be a deep freeze in hell before the ‘commitments are met’.

Since we mentioned the banks earlier, here is the next non-suprise:

“As Greece seeks to meet its aid conditions and unlock more money from its existing bailouts, it’s also looking for ways to make the most of 50 billion euros that was set aside for bank recapitalization. The country had hoped some money might be left over for other financing needs. That now looks less likely because the Greek banks will need more capital, according to an EU official close to the bailout process.”

(emphasis added)

You really couldn’t make this sh*t up.

Conclusion:

This is what happens when unsound debt is artificially propped up instead of being liquidated. Now there is a never-ending drama. Creditors keep throwing good money after bad, into what appears to be a kind of financial black hole – money falls inside, but it looks like it will never come back. Meanwhile, the population of Greece has been so thoroughly ground into the dirt by the crisis that it is prepared to rather vote for Nazis and communists than continue with the situation as is. What a great accomplishment!


broken-euroQuick, this thing still needs some more glue …

(Image source: The Web / Author unknown)

EU Said to Weigh Extending Greek Loans to 50 Years – Bloomberg

EU Said to Weigh Extending Greek Loans to 50 Years – Bloomberg.

By Nikos Chrysoloras and Rebecca Christie  Feb 5, 2014 10:03 AM ET
Photographer: Angelos Tzortzinis/Bloomberg

A detail from a Greek national flag is seen as it hangs outside a street kiosk in…Read More

Related

The next handout to Greece may include extending the maturity on rescue loans to 50 years and cutting the interest rate on some previous aid by 50 basis points, according to two officials with knowledge of discussions being held by European autorities.

The plan, which will be considered by policy makers by May or June, may also include a loan for a package worth between 13 billion euros ($17.6 billion) and 15 billion euros, another official said. Greece, which got 240 billion euros in two bailouts, has previously had its terms eased by the euro zone and International Monetary Fund amid a six-year recession.

“What we can do is to ease debt, which is what we have done before through offering lower interest or extending the maturity of loans,” Dutch Finance Minister Jeroen Dijsselbloem, who heads the group of euro finance chiefs, said yesterday on broadcaster RTLZ. “Those type of measures are possible but under the agreement that commitments from Greece are met.”

Greek 10-year bonds rallied, with yields falling 33 basis points to 7.96 percent as of 4:02 p.m. Brussels time, the biggest drop in seven months. The Athens Stock Exchange Index jumped 2.4 percent.

Funding Gap

New money would help Greece fill a financing gap that has vexed European Union and IMF authorities working to make sure the rescue programs stay on schedule. European Union PresidentHerman Van Rompuy said last month that Greece must continue to tighten its belt even as “the people of Greece are still suffering from the consequences of the painful but nevertheless needed reforms that are taking place.”

Under the eased terms, all the bailout-loan repayments would be extended from about 30 years and rates would be cut by 50 basis points on funds from the 80 billion-euro Greek Loan Facility, which was created for Greece’s first bailout in 2010, said the officials, who requested anonymity because talks are still in preliminary stages.

As Greece seeks to meet its aid conditions and unlock more money from its existing bailouts, it’s also looking for ways to make the most of 50 billion euros that was set aside for bank recapitalization. The country had hoped some money might be left over for other financing needs. That now looks less likely because the Greek banks will need more capital, according to an EU official close to the bailout process.

Stress Tests

Greece is contesting requirements on how it should stress-test its banks, an exercise taking place before a European Central Bank review later this year, according to two officials. Hellenic banks face a mandate to keep their core tier 1 capital at 9 percent of risk-weighted assets, which Greece contends is too high. This has led to delays in its bank-assessment process, which in turn will determine how much money the banks need.

To win further easing of rescue terms, Greece is waiting for the EU statistical agency to confirm in April that it had a primary budget surplus, the balance before interest payments, in 2013. That’s the trigger set for possible debt relief. Greek Prime Minister Antonis Samaras said Jan. 30 that Greece’s primary surplus last year was more than 1 billion euros, higher than expected.

‘Not for Now’

Euro-area officials have mentioned the prospect of cutting interest rates further on the Greek Loan Facility part of the bailouts, “but this conversation is not for now,” EU spokesman Simon O’Connor wrote in an e-mail yesterday. He said focus remains on how Greece can meet its current bailout terms.

Samaras’s office declined to comment on the talks for a possible third aid package.

Officials from the so-called troika of the IMF, the European Commission and the ECB are due to return to Athens this month to renew work on whether Greece has qualified for another installment of money.

There are currently no plans for the troika of the IMF, the European Commission and the ECB to return to Athens in the near future because there is no prospect for an immediate completion of the ongoing review of the Greek program, according to two of the officials.

Finance Minister Yannis Stournaras aims for the review to conclude and a loan disbursement to be made before March, according to an e-mailed transcript of comments to reporters.

Germany’s Finance Ministry said this week it’s too soon to begin discussing extra help.

“Currently there’s no rush to decide anything,” Steffen Kampeter, deputy to German Finance Minister Wolfgang Schaeuble, said in an interview in Frankfurt this week. “We will be presented with all necessary data at the end of April, beginning of May. Only then will we be able to have a clear picture of Greece’s performance.”

To contact the reporters on this story: Nikos Chrysoloras in Athens atnchrysoloras@bloomberg.netRebecca Christie in Brussels at rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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