Welcome To The Bitchery

Polls are showing “No” in the lead by about 5% or so. If this ends up being true for the final tally, I would not call it a decisive vote. In light of the fact that Tsipras and other Greek leaders have repeatedly said that this vote is not a referendum on leaving the Euro, it can basically be interpreted as a referendum on Syriza leadership. Without a decisive margin, a legitimacy crisis seems very possible. This to me seems to fit in with the desires of EU leadership, whose actions and statements appear to be aimed at regime change in Greece. Tsipras keeps saying that a “no” victory will give the Greeks greater bargaining power, but I fail to see the logic in this given the fact that he rejects the idea of returning to the Drachma. Polls show that around 80% of Greeks wish to keep the Euro. I guess we will see what happens.

Some random stuff:

Greek leadership appears to have made zero preparation for leaving the Euro. This would be a very complicated process, and in my mind, Syriza should have initiated preparations soon after taking power, even if they were only a contingency plan (I think having such an insurance policy would have been a reasonable and responsible action to take). I would think such actions, above all other things they could do, would increase their bargaining power. Such preparation would have to be kept as secret as possible to keep capital in the country, but I believe secrecy would be impossible, so we would have heard something about it. Also, Greek leadership maintains total denial regarding a currency change. A currency switch would have to happen very fast, in order to prevent capital flight, but the preparation takes a good long time. All of this, plus the fact that there is very little operating capital within the nation of Greece, more or less indicate that a return to the Drachma is not going to happen.


The IMF has still not declared a default, but has however issued statements to the effect that Greece will never be able to pay off its debt under the current conditions, and that “reforms” have caused damage that will make payments more difficult going forward. The IMF is actually recommending a principal writedown (Note that this is not coming from IMF leadership, but from actual IMF economists, who are often ignored by the politically appointed leadership). I also found out that many of the loans associated with the bailout have interest rates that will increase after several years.

The Greek military is uncharacteristically large for a nation of its size. Expenditures are unreasonably high. Many cuts have been made and new purchases for anything not under contractual obligation have been cancelled. Care to guess who the main suppliers of these weapons systems are? …….Ding ding! Germany and France. (Of course contract law is applied selectively also-remember that France breached contract with Russia when they decided not to deliver that Mistral class aircraft carrier). If Greece backed out of some of these buys, they would gain some breathing room (Two submarines and a bunch of F-16’s were mentioned- and remember it is not just the cost of the systems themselves, training and maintenance are huge expenses). Of course Germany and France have neither suggested cancelling these contracts. Pension cuts however, are definitely on the table and being pushed for by EU leaders (mainly the Germans), and pension payments are contractual obligations as well. I think Chomsky nailed it when he said that austerity is just another word for class war.

I guess we will see what happens once the referendum results are final.

Share This Story

Get our newsletter