Sunday, July 05, 2015

We Interrupt This Referendum, Part 1

Here's all we need to know about the difference between voting "όχι" or "ναί" on the referendum in Greece:  a "no" vote means, in the words of the current prime minister, "I can assure you that the next day, I will be in Brussels and there will be a deal;" a "yes" vote means that the next day the replacement prime minister will be promising to go to Brussels and secure a deal.

Meanwhile, the poor, literally, Greek people-- the working poor, the unemployed poor, the pensioned poor, the unpensioned poor, the urban poor, the rural poor-- should, no matter which way the vote goes, say hello to their little friend... Cyprus.

The Greek banks require capitalization.  Capitalization means money.  It can come from "equity" arrangement; it can from debt issuance; and/or it can come from seizing the money that actually belongs to somebody else, that somebody else being the depositors.  Clearly, nobody is going to subscribe to an offering of stock in the Greek banks.  Just as clearly, the Greek banks cannot issue debt in the capital markets, and the Greek government requires its own recapitalization in the form of issuing short-term notes to the Greek banks in exchange for euros. 

No recapitalization of the Greek banks, which are tied hand foot to the ECB system, will be forthcoming without there first being a bail-in, a seizure of a portion of the deposits that the banks supposedly hold in trust, a trust guaranteed by...well not by the ECB since the monetary union is nowhere near that unified, but rather by the Greek government.  

Given that government's deliberate delay in imposing capital controls. the big account holders, with the big money,  have already moved significant portions of their funds outside the jurisdiction of the government.  That leaves....everybody else.  That leaves maybe 10 million (I'm guessing) or so people whose individual accounts average (and I'm merely guessing) €13,000 who are about to get a haircut by Jack the Ripper that will take the average account size down to about €9000.  How's that for sticking it to the IMF, the ECB, the European Commission?

Some people call that a haircut. Some people call the referendum "democracy."  Democracy is when "no" and "yes" mean the same thing.

The  "no" that matters is the "no" to Syriza's deluded pretensions at "negotiatons."  The  "no" that matters is the "no" to Syriza's delusions of actually being a government.  The "no" that matters is the "yes" to repudiating the debt in its entirety. 

July 5, 2015

1 comment :

  1. Anonymous4:20 PM

    (Matt) Think this basically corresponds to what Mavroudeas said:

    "SYRIZA failed not only strategically but also tactically. It did not touch the deep state structure that continuous to be manned by obedient servants of the Greek oligarchy and, on top of that, SYRIZA used more of them in several crucial positions. For example, SYRIZA did not acquire control of the central bank and also accepted or even appointed several ‘men of the system’ in the directorship of commercial banks and other crucial public enterprises. SYRIZA emptied the state coffers by stupidly paying all the due tranches to IMF and the international creditors. Thus, once the referendum was called the EU, in close co-operation with the Greek bourgeoisie, created a condition of asphyxia for the banking sector and obliged SYRIZA to impose very severe capital controls on the very day that the huge mass of Greece’s badly paid pensioners (that support also another big portion of the population) were paid. In this way a referendum that was going to be an easy NO to troika’s demands victory was turned into a close call."

    Mavroudeas seems to be a member of Syriza. My question then would then be: How is it that the "left wing" permits the "right wing" to run the show? With the apparent success of the No vote, now the latter perhaps gets a new lease on life, we shall see.

    Can't wait to see the usual suspects ascribe this to the "tactical genius of Tsipras" (pronounced "Cyprus") or what not. If they are really smart they they will focus on this instead, which if true, is truly despicable:

    "The Communist Party" - KKE - "betraying all the communist traditions in Greece, declared that it will put in the ballot box its own ticket. Practically, this means that is suggests an invalid vote and it implicitly helps the YES campaign." Sectarian abstention.

    Bottom line is that the logic of actual events confirmed the argument to move to expropriation in January. The Greeks didn't need tactical "pedagogy", they needed action on what they already knew and had granted 6 months ago!