It has not been a good week for Greece: first we learned that its treasury has run dry as Greece have stop paying all taxes ahead of the elections (and likely after), making further reforms virtually impossible as the government simply does not have the cash to promote economic changes; then we found out that first two then all four of the largest Greek banks have submitted Emergency Liquidity Assistance requests to the ECB to preserve liquidity in light of a deposit run that is picking up pace. And yesterday, adding insult to injury, Spiegel leaked that while seeking preapproval from Merkel for his QE program to be announced next week, Draghi told the Germans that Greek bonds won’t be among the securities monetized by the ECB.
It almost makes the Greeks wonder what’s the point of staying in the Eurozone and keeping the Euro if all it leads to is 50% youth unemployment, 25% total unemployment, and unprecedented pain and suffering as a result of the internal devaluation that will continue indefinitely since Greece, courtesy of the Euro, is unable to engage in an external one.
Of course, the Greek population will be able to voice its opinion next Sunday when it holds general elections, which will almost surely be won by Tsipras who has threatened on numerous occasions to renegotiate the Greek bailout, something Germany has made quite clear is not a topic for debate, and that a Grexit is assured if Greece thinks it can hold Europe hostage with threats of Eurozone collapse.
And just to make things interesting, overnight Russia told a beleaguered Greece, and specifically its hurting farmers, that it “may lift its ban on food imports from Greece in the event it quits the European Union” according to Russian Minister of Agriculture Nikolai Fyodorov who spoke in Berlin on Friday.
“If Greece has to leave the European Union, we will build our own relations with it, the food ban will not be applicable to it,” Fyodorov said as reported by Tass.
In other words, Russia has casually thrown out feelers to Greece (and any other peripheral European country) and given it the option of joining the greater Russian sphere of influence (because the USSR 2.0 and satellites is still not trademarked), should it decide that 5 years after the first Greek “bailout” things for the country caught in an endless depression are as good as they will get with a bunch of Goldman bankers in charge.
Fyodorov also said that European Union countries, which felt discomfort from the slump in proceeds from exports of foods to Russia, were asking Russia to cushion the impacts of the Russian food import ban by expanding other types of imports. “We are looking at such possibility,” he said, adding that these countries offer new formats of cooperation in those areas that are not covered by the Russian food sanctions.
One such format apparently is the “hint” that should the European Union finally implode after years of kicking the can, then Russia will be more than happy to pick up the pieces.
Insanity? Perhaps, but just 48 hours ago crazier things happened, when a central bank which until Monday telegraphed the rock solid determination of its monetary policy not to mention the Swiss Franc’s floor, shocked the world when it became the first western bank to admit defeat in currency wars which have cost it a balance sheet the size of its GDP.
The ball is now in Greece’s court.
