Eurozone Formally Approves Second Greek Bailout

Source: PressTV

Eurozone countries have finally approved the second 130 billion euro financing package for Greece, which would save the country from going bankrupt in the short run.

"Euro area member states have today formally approved the second adjustment program for Greece," Luxembourg Prime Minister and the chairman of the eurozone finance ministers, Jean-Claude Juncker said in a statement on Wednesday.

Juncker said that the European Financial Stability Facility (EFSF) has been authorized by eurozone governments to release a "first installment" of 39.4 billion euros to Greece under the scheme, to be disbursed in several tranches.

Junker described the financial aid as "a unique opportunity for Greece that should not be missed," and said that a "strong commitment" from Athens to "fiscal consolidation, structural reforms and privatization" was required to return the Greek economy "to a sustainable path, which is in the interest of everyone."

In order to receive the bailout fund, which is funded mostly by eurozone countries and the International Monetary Fund, Greece had to adopt harsh austerity measures including massive cuts to its private and public sector wages, pensions, health and defense spending.

Greece has the highest debt burden in proportion to the size of its economy in the 17-nation eurozone. Despite austerity cuts and the bailout funds, the country has been in recession since 2009.

Greece’s first bailout, which was approved by Eurozone finance ministers on May 2, 2010, was worth 110 billion euros (147 billion dollars).

Despite numerous austerity cuts implemented by the government and bailout funds provided by international lenders, which are aimed at stimulating growth, Greek economy has continued to contract and is not expected to show expansion until 2013.

Greek Deal Leaves Europe on the Road to Disaster

Source: Bloomberg
Clive Cook

If Europe’s new plan for Greece succeeds, nobody will be more surprised than the politicians who designed it. At best, the arrangement is a holding action, one that fails yet again to deal with the much larger confidence crisis facing the euro area.

The deal announced on Tuesday starts with private lenders. Their representatives agreed to accept even bigger losses on Greek government bonds than previously discussed. The bonds’ face value will be cut by 53.5 percent, and they’ll pay a low interest rate, starting at 2 percent then rising later. Altogether, this reduces their net present value by about 75 percent, far more than deemed necessary just weeks ago.

If enough private lenders go along, that triggers the inter-governmental side of the plan: new official loans to cover Greece’s ongoing budget deficit and replace debt coming due. The terms include a lower interest rate on bailout loans as well as various other kinds of European Union taxpayer subsidy, folded in with greater or lesser degrees of stealth. The European Central Bank and national central banks, for example, will pitch in by channeling back to Greece the “profits” they have made on Greek bonds bought at deep discounts to face value. The International Monetary Fund is going to take part, too. 

Exactly how still isn’t clear.

If too many private lenders opt out, it’s back to the drawing board. Ditto if voters in Greece force the government to renege on promises to cut the minimum wage, make advance debt- service payments into an externally monitored account, change the constitution to prioritize debt repayment, accept oversight of public accounts by an on-site team of EU officials, and more.

That’s only a partial list of what might still derail the agreement. Even if it sticks, its designers don’t sound confident it will work. An official analysis leaked to the Financial Times discusses a “tailored downside scenario,” which, to many observers, looks more like a plausible central case.

Greek Police Union Wants to Arrest EU and IMF Officials

Source: Reuters / Montreal Gazette

ATHENS, Feb 10 (Reuters) - Greece's largest police union has threatened to issue arrest warrants for officials from the country's European Union and International Monetary Fund lenders for demanding deeply unpopular austerity measures.

In a letter obtained by Reuters on Friday, the Federation of Greek Police accused the officials of "...blackmail, covertly abolishing or eroding democracy and national sovereignty" and said one target of its warrants would be the IMF's top official for Greece, Poul Thomsen.

The threat is largely symbolic since legal experts say a judge must first authorize such warrants, but it shows the depth of anger against foreign lenders who have demanded drastic wage and pension cuts in exchange for funds to keep Greece afloat.

"Since you are continuing this destructive policy, we warn you that you cannot make us fight against our brothers. We refuse to stand against our parents, our brothers, our children or any citizen who protests and demands a change of policy," said the union, which represents more than two-thirds of Greek policemen.

"We warn you that as legal representatives of Greek policemen, we will issue arrest warrants for a series of legal violations ... such as blackmail, covertly abolishing or eroding democracy and national sovereignty."

The letter was also addressed to the European Central Bank's mission chief in Greece, Klaus Masuch, and the former European Commission chief inspector for Greece, Servaas Deroose.

Max Keiser: Financial Holocaust Looms as Germany Storms Greece

Source: RT

Protesters in Athens are clashing with police, some throwing stones and Molotov cocktails. Greece's coalition government managed to agree on a new austerity deal their creditors demanded.

But Eurozone finance ministers say they want to see concrete action before the second bailout worth 130 billion Euros can be handed over. The Greek Parliament is expected to vote on Sunday. But a junior coalition member says he will not back the new plan.

RT talks to Max Keiser, financial analyst and host of the Keiser Report.

The Geopolitical Stakes in Nigeria—Part I: The Curious Role of the IMF

Source: Boiling Frogs Post

F. William Engdahl

Nigeria, Africa’s most populous nation and its largest oil producer, is from all evidence being systematically thrown into chaos and a state of civil war. The recent surprise decision by the government of Goodluck Jonathan to abruptly lift subsidies on imported gasoline and other fuel has a far more sinister background than mere corruption and the Washington-based International Monetary Fund (IMF) is playing a key role. China appears to be the likely loser along with Nigeria’s population.

The recent strikes protesting the government’s abrupt elimination of gasoline and other fuel subsidies, that brought Nigeria briefly to a standstill, came as a surprise to most in the country. Months earlier President Jonathan had promised the major trade union organizations that he would conduct a gradual four-stage lifting of the subsidy to ease the economic burden. Instead, without warning he announced an immediate full removal of subsidies effective January 1, 2012. It was “shock therapy” to put it mildly.

Nigeria today is one of the world’s most important producers of light, sweet crude oil—the same high quality crude oil that Libya and the British North Sea produce. The country is showing every indication of spiraling downward into deep disorder. Nigeria is the fifth largest supplier of oil to the United States and twelfth largest oil producer in the world on a par with Kuwait and just behind Venezuela with production exceeding two million barrels a day. [1]

The curious timing of IMF subsidy demand

Despite its oil riches, Nigeria remains one of Africa’s poorest countries. The known oilfields are concentrated around the vast Niger Delta roughly between Port Harcourt and extending in the direction of the capital Lagos, with large new finds being developed all along the oil-rich Gulf of Guinea.  Nigeria’s oil is exploited and largely exported by the Anglo-American giants—Shell, Mobil, Chevron, Texaco. Italy’s Agip also has a presence and most recently, to no one’s surprise, the Chinese state oil companies began seeking major exploration and oil infrastructure agreements with the Lagos government.

Ironically, despite the fact that Nigeria has abundant oil to earn dollar export revenue to build its domestic infrastructure, government policy has deliberately let its domestic oil refining capacity fall into ruin. The consequence has been that most of the gasoline and other refined petroleum products used to drive transportation and industry, has to be imported, despite the country’s abundant oil. In order to shield the population from the high import costs of gasoline and other refined fuels, the central government has subsidized prices.

The European Central Bank Fiddles While Rome Burns

Source: Global Research
Ellen Brown

“To some people, the European Central Bank seems like a fire department that is letting the house burn down to teach the children not to play with matches.”               

So wrote Jack Ewing in the New York Times last week.  He went on:

“The E.C.B. has a fire hose — its ability to print money. But the bank is refusing to train it on the euro zone’s debt crisis.

“The flames climbed higher Friday after the Italian Treasury had to pay an interest rate of 6.5 percent on a new issue of six-month bills . . . the highest interest rate Italy has had to pay to sell such debt since August 1997 . . . .

“But there is no sign the E.C.B. plans a major response, like buying large quantities of the country’s bonds to bring down its borrowing costs.”  

Why not?  According to the November 28^th Wall Street Journal, “The ECB has long worried that buying government bonds in big enough amounts to bring down countries' borrowing costs would make it easier for national politicians to delay the budget austerity and economic overhauls that are needed.” 

As with the manufactured debt ceiling crisis in the United States, the E.C.B. is withholding relief in order to extort austerity measures from member governments—and the threat seems to be working.  The same authors write:     

“Euro-zone leaders are negotiating a potentially groundbreaking fiscal pact . . . [that] would make budget discipline legally binding and enforceable by European authorities. . . . European officials hope a new agreement, which would aim to shrink the excessive public debt that helped spark the crisis, would persuade the European Central Bank to undertake more drastic action to reverse the recent selloff in euro-zone debt markets.”

The Eurozone appears to be in the process of being “structurally readjusted” – the same process imposed earlier by the IMF on Third World countries.  Structural demands routinely include harsh austerity measures, government cutbacks, privatization, and the disempowerment of national central banks, so that there is no national entity capable of creating and controlling the money supply on behalf of the people.  The latter result has officially been achieved in the Eurozone, which is now dependent on the E.C.B. as the sole lender of last resort and printer of new euros.

Greece Is Under Economic Occupation

Source: RT

The austerity measures imposed on Greece by the EU will lead to a disintegration of social guarantees and the clearance sale of public property, argues filmmaker Aris Hatzistefanou, the director of Debtocracy documentary on the Greek debt crisis.

­The director of the documentary says “We wanted to explain that what happened in Greece is actually the same with what happened in Portugal, in Ireland or in Spain.”

“We are not lazy people who spend more than we earn,” he says.

“It is a structural problem of the world’s financial system and at the same time a structural problem of the Eurozone,” the filmmaker shares.

“The Eurozone is a system that creates deficit and debt on the European periphery while at the same time creating surpluses to the European core,” Hatzistefanou says.

The filmmaker claims that if several years ago nobody talked about this, now about 35 per cent of Greeks want to leave the Eurozone.

Greece is aware it is just impossible to pay a €360 billion debt so it is going to default, believes Aris Hatzistefanou, and in order to prevent the capital to leave the country the banking system should be nationalized, he says.

The few families that own the Greek economy and media have realized that foreign banks might come and take control of the country so these families do not want the IMF to come to Athens rescue, the filmmaker states.

In turn, the people of Greece have realized that the government has been lying to them and the austerity measures already taken cannot save the situation because deeper reforms and more radical measures are needed.

Aris Hatzistefanou stresses that Greek nationals are being blackmailed on a daily basis, being told if they do not accept the EU and the IMF conditions and austerity measures – “there will be hell”.

Greece has become a tax haven for a few [rich] and a tax hell for the majority of the population,” he says. 

“The Greek people are losing the rights gained in the 20th century.”

The humanitarian organizations that used to work in Africa are now coming to Athens to help people because a humanitarian crisis is on its way and that fact gives the right idea about the ongoing situation in Greece.

The next step for living under economic occupation Greece will be a massive privatization of public property and complete destruction of the social system, all this imposed by Brussels, Berlin and the Greek government, Aris Hatzistefanou states.

“They will try to sell off everything.”

“The Eurozone is on the brink of collapse either way so Greece should leave Eurozone,” argues Hatzistefanou.

“AT first we believed that the EU will be not only an economic and monetary union, but also a political union of the people,” says filmmaker, recalling the dictatorship period Greece passed and the Greek dream of peace and security within the EU. But it turned out later that “The EU and especially the Eurozone, is just a monetary union, a tool in the hands of foreign banks and corporations to ease their work and help to take control over the population of the European periphery.”

Towards Economic Collapse: Europe’s Debt Crisis has Spiraled out of Control

Source: The International Forecaster
Bob Chapman

As Chancellor Merkel and PM Sarkozy search for a solution that doesn’t exist they continue to lose credibility. Nothing of substance has been agreed upon that is legal and can be implemented. At the IMF Christina LeGarde is frantically waving her arms like a cheerleader telling anyone that will listen that if the six sovereigns in financial trouble are not aided the euro will fail and peace in Europe will disappear. The elitists are frantic because they cannot find a solution. LeGarde says without help there will be ten years of depression. She obviously hasn’t done her homework. Try 30 or more years. Sarkozy, Merkel and Jans Weidmann council member of the ECB has said the ECB cannot bail out governments by printing money. He is also head of the Bundesbank and said a key lesson of what is being proposed is the hyperinflation in Weimer Republic, which followed WWI. Over in Italy PM Berlusconi, who looks and acts like Benito Mussolini has been unseated and as a result the Italian bond market is on the edge of collapse. There is big pressure downward in stock and bond markets as a result and the US Treasury again attacks gold and silver hoping they can keep gold from breaking about $1,800. The PPT’s ability to achieve this is more than questionable.

At Cannes PM Sarkozy and President Obama discuss what a liar Israel’s PM Netanyahu is. Their candor was accidentally picked up by a supposedly muted speaker. What is now realized is that euro zone government bonds contain unexpected credit risks. All the European politicians and bureaucrats want to save the euro, but their promises and solutions are not worth the paper they are written on. They are so believable that China won’t lend them money. These characters have been kicking the can down the road since last spring with little or no long-term solutions, and no solutions to affect a recovery and create jobs. Austerity has replaced growth and that is expediting a failing economy, even in Germany. If economies don’t grow tax receipts fall and the ability to service debt is impaired. Big euro zone banks are broke just as their counterparts in NYC are. As this proceeds we ask how long can the ECB buy Italian and Spanish bonds?

In Greece a coalition has been made and Mr. Samaras has shown his true colors by backing Trilateral-Bilderberg Lucas Papademos, as interim PM. We hope Greek citizens realize that Papademos will sell them out. It is only a matter of when. The debt deal will probably be ratified, but at what price? Will it bring revolution or a coup? Who knows, but under the circumstances anything goes. 60% to 65% of Greeks oppose the bailout, but 71% want to stay in the euro, which is impossible.

The G20 and Globalization

Source: Corbett Report and Global Research.ca


TRANSCRIPT & SOURCES: 

Last week’s G20 Summit in Cannes, France is already being written off as a bust by the international financiers who were hoping to bolster the fledgling European Financial Stability Fund with international support and to implement a new global financial services tax which they claim will be the long-term solution to the ongoing global economic meltdown.

Germany and France Begin Talks to Break Up Eurozone

Source: The Guardian
Larry Elliott, Heather Stewart and John Hooper

Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue.

Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Der Spiegel: 'Consensus Is Growing' for ECB and IMF Takeover of Euro-Crisis

French Finance Minister Christine Lugarde, IMF

Source: The Daily Bell

Run For Your Lives' ... Euro Zone Considers Solution of Last Resort: The ink on the most recent European Union summit agreement was hardly dry before it became clear that it was insufficient. With investors now increasingly wary of Italy, the consensus is growing that the European Central Bank – and the IMF – will have to play an even greater role. But will it be enough? – Der Spiegel Online

 

Dominant Social Theme: We didn't want it. We didn't mean to suggest it. We don't think it's a good idea. But it looks like the European Central Bank and the International Monetary Fund will simply have to take a bigger role in solving this terrible crisis.

Free-Market Analysis: It is all too predictable. We've been writing for months on the possibility that the entire EU crisis is a kind of contrived one and this article post at Der Spiegel Online does nothing to discourage this supposition.

It's likely nothing more than a power elite dominant social theme, that the Euro-crisis is a deadly one and that the EU simply cannot figure out what to do. The meme is simple: Financial leaders with power and common sense must come to the rescue.

Isn't it obvious who the heroes are going to be? Why, the central bankers, of course! These good, gray men with careful phraseology and elliptical sentiments are the hope of mankind. When politicians dither and markets act irrationally these mavens of monetary price-fixing will get the job done.

A central banker is looking to lead the Greek unity government – which is unified with the efficiency of a shotgun marriage – and now Der Spiegel, Germany's leading elite mouthpiece, informs us that consensus is "growing" to have the IMF and ECB "play a greater role." What a coincidence.

Greek Government on Brink of Collapse Over Debt Crisis

Source: The Guardian
David Gow and Helena Smith

The Greek government stands on the point of collapse, with the country set for a general election over membership of the euro rather than the referendum planned for early December.

Calls for a national unity government embracing the opposition also intensified as EU political leaders and financial markets demanded an end to the regional uncertainty unleashed by a small country on the periphery of the eurozone and called for measures to prevent a slide into Europe-wide slump.