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Greek Government to Eurozone: “We Don’t Need No Stinking Bailouts!”

Written by Gary North on February 2, 2015

It is a delight to watch. The new Greek government, which is Communism lite, is sticking it good and hard to the idiot European bankers who loaned Greece far more money than Greece is able to repay. The government is telling the Eurozone to cancel the debts.

This would mean that the Eurozone will be asked by northern European bankers to pay off Greece’s debts. With what? It has no money to spare. So, the European Central Bank will have to create it. But it is inflating already to keep the economy from sinking into recession.

“Not our problem!” says the Greek government.

What can the Eurozone officials do? Greece says it will not accept any more bailout loans. “Don’t lend us more cheese. Get us out of the trap.”

The bankers are wetting their Depends. “But Greece promised to pay!” This government did not promise to pay. A wimpy Keynesian government did, and the socialists before that. That was then. This is now. This government is promising not to pay.

The finance minister is now playing chicken. The two cars are heading toward each other at 40 kilometers per hour. It will soon be 50. We will get to who sees who veers off first.

A head-on collision is what is needed: a Greek default and the break-up of the Eurozone. This would call into question the entire European Union experiment. But we probably will see one of the parties veer off. If it’s Greece, the Eurozone will pay through the nose.

Eurozone officials are increasingly worried that Greece’s brinkmanship over its bailout will plunge the country into financial chaos after its finance minister said on Sunday that it would take up to four months to agree a “new contract” with creditors.

Yanis Varoufakis, Greece’s newly appointed finance minister, said Athens would reject any further loans under its international rescue plan, despite Greece’s €172bn bailout expiring at the end of the month. He also said he expected the European Central Bank to prop up the country’s weakened banking system until a longer-term settlement could be reached.

Mr Varoufakis said Greece had been living for the next loan tranche for the past five years. “We have resembled drug addicts craving the next dose. What this government is all about is ending the addiction,” he said, noting it was time to go “cold turkey”.

His comments on Sunday underscored the fears of eurozone officials that the Greek government was unaware of the precariousness of its financial situation.

“Everybody [in the eurozone] wants a deal,” said one senior eurozone official. “But through their actions and their rhetoric, the new government is making a lot of people upset. They are putting themselves in an impossible situation.”

Mr Varoufakis was speaking in Paris on the first leg of a European tour intended to garner support for a renegotiation of its debt burden. Greece’s anti-austerity government roiled markets during a tumultuous first week in power with 40 per cent being wiped off the value of Greek banks following announcements to reverse spending cuts and privatisations.

Despite a more emollient tone from Alexis Tsipras, Greece’s radical leftwing prime minister, over the weekend, EU officials have been dismayed by Athens’ repeated rejection of a bailout extension — and refusal to co-operate with the troika of international creditors. German officials were also irritated at its refusal to engage with Berlin, although Mr Varoufakis said he had now been invited to the German capital.

This government is telling Mrs. Merkel’s government to go fish.

No government in the Eurozone has ever told the Germans to do this. If Greece gets away with this, other government’s will.

German voters know it’s a heist, but they aren’t in charge. German bankers are in charge. Germany is like all other Western governments . . . except Greece. The bankers call the shots.

Greek banks have lost 40% of their stock market value since the election of this government a week ago. In Greece, bankers are not in charge any longer.

Continue Reading on www.ft.com

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