MERKEL : NO DEBT RELIEF FOR GREECE ! REALLY ?

What Angela Merkel said is quite clear !   Neither she nor Germany want to agree to a reduction of the Debt of 240 Billion  Euros which Greece owes to its creditors. 

What is not clear is " Have Merkel and Jean-Claude Juncker   (the President of the EU Commission) understood the mood of other countries in the EUROZONE ? 

Have they understood why in several countries extremists were elected into the EU Parliament in August 2014 and why at present there are strikes and protests flaring-up in Spain, France and Greece and perhaps very soon, elsewhere also ? 

It seems that the answer is that people want to avoid  "EUROZONE austerity" !   Some Leaders have been even more blunt by saying they do not want their countries to become "German Colonies" !

They say Germany seems to impose its will or solution everywhere !  Since 2010 Greece has been granted huge loans not to leave the EUROZONE but these loans did not solve the "economic" problems of the country !   Instead the measures of austerity imposed on the Greeks stifled the country !   It would have been a better solution if Greece had abandoned the EURO ! 

Now, as a result, the same question has arisen again, but a "Grexit" from the EURO is not the solution envisaged !  Only more austerity !  What is even worse is that a debt "reduction" is out of the question;  repayment of all the 240 Billion Euros is  expected !    

Greece cannot repay the Loans !   Merkel and Germany, however, do not want to envisage what could happen if Greece decides to leave the EUROZONE, and perhaps, even the EU ! Would or could this lead to other countries also leaving ? 

It is clearly the time NOW that all the ills in the Treaties of the EU need to be examined !   David Cameron has demanded this for a long time !  

Not to examine these problems now will only lead to more  problems in the future ?  The final abandonment of the EU  dream would then be upon us !

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GREECE : A SUBSTANTIAL DEBT WRITE-OFF ?

Everyone now anxiously awaits the conclusion of EUROZONE meetings to learn whether there will be a substantial write-off of the 245 Billion Euro loans to Greece.   This is what Greece needs to be able to reorganise itself and to put the economy back on a sound footing !  It is what everyone really expects ! 

What will happen if the EUROZONE refuses such a write-off ? Would other countries not also want debt write-downs ? That would become a dangerous precedent, now and in the future !  

Of course the EUROZONE must be positive and at least offer something to help Greece !  Would this not be to suspend all repayments for... 5 or 10 years with no interest being charged   on the debt for that period ? 

Would this not save the face of everyone in the EUROZONE ? It would avoid having to consider immediate changes to Treaties for this and other current, unconnected problems !

However Greece and Alexis Tsipras, the Prime Minister, would feel helpless with such a decision !  He would then lack the means to introduce all the measures he promised before being elected !  With all the oustanding debt, Banks would never be prepared to lend more to the Government !  

The only open option left for Tsipras, would be to leave the  EUROZONE, adopt the Drachma and make a hefty devaluation ! This must also include the devaluation of Euro liabilities !

After this he should have the means to reinvigorate Greece as he promised he would !  If he is even then, not allowed to achieve his promised objectives in the framework of the EU, Greeks will again start protests in the Streets and will want to become independent of the EU ! 

Greeks want to start living again ! 

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EUROZONE CRISIS PROVOKED BY GREEK ELECTION ?

The victory in the Greek General Election by the radical left SYRIZA party, led by Alexis Tsipras, has caused an earthquake of reactions.  Although the result confirmed all recent expectations the disarray of politicians in Germany, Brussels and Athens is astounding !  

First of all, the underlying facts ; 

Greece (population 11.3 million) has enormous loans of 245 billion Euros from the EUROZONE, the IMF and the European Central Bank which it cannot possibly repay.  Draconian  measures to reorganise Greece, were imposed by the EUROZONE when the loans were granted.  Yet 30% of the workers in Greece are at present unemployed !  Greek business in general has collapsed.  Tsipras declared that he would demand a massive reduction of the 245 billion Debts or Greece would leave the EUROZONE !  

What were the reactions ?  

All EUROZONE leaders this week, in particular Angela Merkel the German Chancellor, refuse to consider a partial write-off of the debt;  they certainly do not want to change EU treaties either, as  this would encourage other countries (Italy, Spain, France) to seek more favourable conditions in line with the Greek hopes !

Some of the problems which have now surfaced in fact date back to 1981 when Greece joined the EU and to 2001 when the EURO was introduced : the accounts presented then were not truthful but gullibly accepted by the EU ! 

Later loans were granted to help Greece but also to prevent it leaving the EUROZONE.   Greeks have suffered increasingly ever since and Tsipras won the election last week because he promised to reorganise Greece and restore Greek pride !  He was elected but wants less Greek debt to be able to fulfill his Election promises !

This week Eurozone Ministers are urgently discussing what can and cannot be done, but also weighing the conséquences.  It is like a game of poker; who will blink first ? 

Tsipras waits patiently.  He seems to have the upper hand !  If the EUROZONE, led by Merkel, refuses to write-off a substantial part of the Greek debt, he could withdraw Greece from the EURO, adopt the former Drachme and in this way obtain the finance he needs to reorganise life in Greece !

Other consequences for the EUROZONE would be probable attempts by other countries, France and Spain, to obtain more favourable operating conditions ! 

Previous articles in this Blog have already indicated what is expected of Jean-Claude Juncker, the President of the EU Commission, particularly in connection with Immigration and Migration.  

In good "American" a can of worms seems to be opening up and numerous other closely linked EU problems must also be dealt with.This means that some EU Treaties may have to be modified, i.e. updated and modernised !

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APRES LES ELECTIONS EN GRECE...

 

"Attention,le rouge est une couleur qui déteint très fort"

 

met en garde le caricaturiste Daniel IRRMANN MARIN !

PUTIN STILL HIDING THE TRUTH !

Can anyone understand what Putin really wants ?  He claims that a new truce is needed for the problems in Ukraine, yet at the same time is equipping Russian Rebels living there with armaments and soldiers !

Photographic evidence is available proving that Russian vehicules have crossed the border into Ukraine but Putin always denies this !  Why ? 

There are only two real reasons.  Firstly, Putin still dreams of annexing at least Eastern Ukraine, where the majority of the population is of ethnic Russian origin, in the same way as he grabbed Crimea.  Secondly, this would restore his waning image in the eyes of Russian citizens, at a time when Western Sanctions are really biting and provoking the collapse of the Rouble ! 

Putin must deflect attention from problems at home ! He has gagged the Press but people are feeling the effect of rising prices.  The real question now is, would he dare to risk a war with the West over Ukraine ?  

 As he has gagged the Press, the solution could be for the West to direct news bulletins from all directions into Russia via the internet to explain what is really going on.

Sparse food supplies, the crumbling Rouble, missing soldiers, are already sowing seeds of doubt about Putin.  News bulletins and the word of mouth could do the rest to topple him !

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DRAGHI "EURO CURE" COULD BE DANGEROUS !

The "Quantative Easing" (QE) system which Mario Draghi is using could become dangerous for the future of the EURO and for the EUROZONE !  His system envisages the mass printing  of Banknotes and the mass creation of Credit, which is step one of QE !  

Technically, in the Balance Sheet of the European Central Bank (ECB) the Banknotes and Credit Created will probably be booked in "current monetary assets" and as "unearned reserves" in a special Reserve account above the Current Liabilities and Provisions ! 

QE is not an unknown system !  It normally has the aim of smoothing temporary "shortages or surpluses" of money or credit over a forseeble, short period of time !   For many decades Bankers have used a similar system called "Over-night" contracts to balance their daily "exposure".  Interest is payable/receivable on such very short-term "arrangements" !

It seems that Mario Draghi wants to buy "short or medium term loans" from banks at a rate of 60 Billion Euros a month over 18 months.  The ultimate total amount could become "huge" !

The hope and intention is that the banks in turn will loan the money they receive, to Industry in their country, to "kick-start" the economy and reduce unemployment !  The profit for the ECB in doing this, is the interest income it receives on the loans until their maturity ! 

The danger lurking in the system for the EURO arises if Banks do not, or cannot, make the expected loans to Industry !  Everyone already knows that printing too much money, which then becomes "surplus to requirements", provokes inflation !

This is particularly true in the EUROZONE context because interest rates are purposely kept very low.  To protect their interests, Citizens now prefer to buy durable assets rather than invest money in Financial loans or Bank accounts which pay little or no interest. 

If inflation gets out of hand, Mario Draghi must reduce the amount of money in circulation.  This is, in fact, the second QE principle !  In addition interest rates may also need to be increased ! 

If nothing is done, it is certain that operators on Financial Markets will sell their surplus EUROS. The direct consequence of that would be the depreciation in value of the EURO and an increase of inflation in the EUROZONE, due to more expensive imports.

During a short period only, the volume of exports  would benefit from the lower cost of Euros;  this benefit would then be cancelled by wage increases to cover rising living costs ! 

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FIFA : WHAT CAN STOP BLATTER BEING RE-ELECTED ?

The deadline date for officially becoming a candidate to participate in the election to become the next FIFA President is next Thursday, January 29, 2015.

There are several conditions and rules which must be observed by all Candidates.  It is the Ethics Committee of FIFA which will check the integrity of all candidates and whether they have complied with the conditions.

There is also an ad hoc Electoral Committee of which Domenico Scala is Chairman.  It will supervise and verify the correctness of the Electoral Process. 

So far, so good !  The next real question is :  "What can be done to stop Sepp Blatter seeking re-election as President of FIFA in 2019 and 2023" ?  He has already been President for 16 years, but he wants to oversee the World Cup finals in Russia in 2018 and probably in Qatar in 2022,  especially in view of all the ongoing problems surrounding the nomination as Hosts of those two countries !

At present there are four or five candidates who would like to contest the Election on May 29, 2015 but it is not certain they can obtain the Backing of 5 of the 200+ Associate Members of FIFA.   Blatter however is confident of being re-elected at least for a fifth term of 4 years !  Can anyone stop a sixth term ? 

There seems to be only one possible and practical solution.  All candidates should swear during their pre-election meetings that they will change the FIFA Articles of Association to prevent any person again becoming President for more than TWO terms of 4 years ! 

If Blatter is re-elected he will not change the Articles of Association.  He needs FIFA, it is his Life and his Sinecure !  The only remaining practical option remaining would be for UEFA and other such Associations to withdraw from FIFA !  It would then no longer be a "World Force" !

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