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Controlled default without Grexit: A silent, slow death for Greece

by system failure

As we approach the end of the four-month truce period between the Greek government and the institutions (ECB, IMF, European Commission), the battle between Greece and the lenders is getting tougher, as expected. Not only Greece, but also the eurocrats appear to be in a difficult position, with limited options under sensitive balances for them.

A non-option for the "emperor" Draghi would be to release his massive Quantitative Easing for Greece too, in order to avoid further dangerous uncertainty. Currently, the QE program is directed to all eurozone members except Greece which must be "punished" for not obeying anymore to the catastrophic neoliberal policies under the new government. This case would be catastrophic for the plans of the financial and corporate lobbyists, as it would signal to the other members that they could abandon austerity without consequences.

Another non-option would be to cut completely the funding of the banking system through the Emergency Liquidity Assistance (ELA), as this would leave no choice to Greece but to exit eurozone. However, this could be a multiple disaster for the elites' plans as Greece could immediately return to national currency, write-off significant part of its debt and start to recover gradually.

In such a case, the euro-empire would be forced to declare total war on Greece by blocking the Greek products and the new currency in any kind of transaction. Except that this could send the wrong message to new potential eurozone or even EU members, it could lead to a disaster in the geopolitical field too. Greece could choose the BRICS option as a huge new market for its products and currency. The countries of BRICS already make bilateral transactions in national currencies as they are trying to achieve complete independence from the dollar monopoly.

Greece has been invited already to become the sixth member of the New Development Bank of BRICS. (http://failedevolution.blogspot.gr/2015/05/evolving-fast-greece-closer-to-brics.html)

Therefore, the only option for the "emperor" and the eurocrats would be to proceed in a kind of controlled default without Grexit. In essence, the plan is already running under ECB guidance through the full control of limited liquidity to the Greek banks. The mainstream media inside and outside Greece are fully aligned with this plan, as the systemic parrots - journalists launched another round of catastrophic analyses.

You can hear now, in everyday basis, that the government should rush to close the deal with the lenders because the market actually collapsed. The target is double. On the one hand the government is pushed to compromise with the lenders away from its red lines, therefore slip progressively to their policies. On the other, the government will lose progressively the wide support of the Greek people.

At the same time, the war by the media leads to a vicious circle, as the increased uncertainty they create, drives market to deeper recession. By strangling further the economy and systematically reducing liquidity, the neoliberal dictatorship inside and outside Greece is forcing Tsipras administration to retreat far from its red lines.

The plan shows that the elites want to lead Greece quietly back to the path of the slow death in order to secure the final conditions in the Greek experiment. They have limited options and they fear that many things could go wrong. Tsipras should take advantage of this fact and prepare the country for Grexit, if he hasn't done it already.


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Comments

  1. Cocoabean15/5/15 19:37

    But Greek voters, like voters anywhere, like the gravy train. They want NO CHANGE. "Security". Tsipras knows this.

    Voters everywhere are most terrified of alterations or disruptions to their established consumption levels...even if they are entirely ARTIFICIAL.

    ReplyDelete
    Replies
    1. In case of Greece we are not talking simply about consumption. An entire society has been impoverished, the middle class and social state almost eliminated. We are talking about war conditions.

      Delete

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