Best of the Week
Most Popular
1. Climate Change Mass Extinction - Birds, Bees and Bugs: Going Going Gone - Richard_Mills
2.A Purrrfect Gold Price Setup! - Peter_Degraaf
3.Who Finances America's Borrowing? Recession Indicator for Independent Thinkers Part 2 - F_F_Wiley
4.America’s One-sided Domestic Financial War - Raymond_Matison
5.Gold Price Summer Doldrums - Zeal_LLC
6.Two Key Events Will Unleash Gold - Jim_Willie_CB
7.Billionaire Schools Teacher in NAFTA Trade Talks - Richard_Mills
8.Get Out Of Crypto Cannabis Bubble Before It Pops and Move Into Bargain Basement Miners - Jeb_Handwerger
9.Stock Market Could Pullback for 1-2 weeks, But Medium Term Bullish - Troy_Bombardia
10.G7 Chaos, Central Banks and US Fed Will Drive Stock Prices This Week - Chris_Vermeulen
Last 7 days
Trumponomics Stock Market 2018 - The Manchurian President (1/2) - 21st Jul 18
The Death of Japan's Real Estate Dream - 21st Jul 18
SMIGGLE Amazing Mega Shopping Haul, Pencil Cases, Smigglets and Giant Back Packs! - 21st Jul 18
Cayton Bay Beach Caravan Park Holiday - What's it Like? - 21st Jul 18
Gold Stocks Investment Wanes - 20th Jul 18
Diversifying Your Stock Investing Strategies is Smart Investing - 20th Jul 18
Custom Global Stock Market Indexes May Be Sounding Alarms - 20th Jul 18
S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty - 19th Jul 18
Stock Market Technical Picture - 19th Jul 18
Gold Market Signal vs. Noise - 19th Jul 18
Don’t Get Too Bullish on Gold - 19th Jul 18
Bitcoin Price Rallies to Upper Channel – What Next? - 19th Jul 18
Trump Manchurian President Embarrasses Putin By Farcically Blowing his Russian Agent Cover - 19th Jul 18
The Fonzie–Ponzi Theory of Government Debt: An Update - 19th Jul 18
Will the Fed’s Interest Rate Tightening Trigger Another Financial Crisis? - 18th Jul 18
Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks - 18th Jul 18
Stock Market Longer-Term Charts Show Incredible Potential - 18th Jul 18
A Better Yield Curve for Predicting the Stock Market is Bullish - 18th Jul 18
U.S. Stock Market Cycles Update - 18th Jul 18
Cayton Bay Hoseasons Caravan Park Holiday Summer 2018 Review - 18th Jul 18
What Did Crude Oil - Platinum Link Tell Us Last Week? - 17th Jul 18
Gold And The Elusive Chase For Profits - 17th Jul 18
Crude Oil May Not Find Support Above $60 This Time - 17th Jul 18
How Crazy It Is to Short Gold with RSI Close to 30 - 16th Jul 18
Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18
Stock Market Uptrend Continues, But... - 16th Jul 18
Emerging Markets Could Be Starting A Relief Rally - 16th Jul 18
(Only) a Near-term Stock Market Top? - 16th Jul 18
Trump Fee-Fi-Foe-Fum Declares European Union America's Enemy! - 16th Jul 18

Market Oracle FREE Newsletter

5 "Tells" that the Stock Markets Are About to Reverse

The Number One Lesson From Greece

Politics / Eurozone Debt Crisis Jul 26, 2015 - 06:43 PM GMT

By: Raul_I_Meijer

Politics

There’s arguably nothing that’s been more hurtful -in more ways than one- to Greece and its Syriza government over the past six months, than the lack of support from the rest of Europe. And it’s not just the complete lack of support from other governments -that might have been expected-, but more than that the all but complete and deafening silence on the part of individuals and organizations, including political parties. 

It’s no hyperbole to state that without their loud and clear support, Syriza never stood a chance in its negotiations with the Troika. And it’s downright bewildering that this continues to get so little attention from the press, from other commentators, and from politicians both inside Greece and outside of it.


This gives the impression that Greece’s problems are some sort of stand-alone issue. And that Athens must fight the entire Troika all on its own, a notion the same Troika has eagerly exploited.

It’s strange enough to see the supposedly well-educated part of the rich northern European population stay completely silent in the face of the full demolition of the Greek state, of its financial system, its healthcare and its economy. 

Perhaps we should put that down to the fact that public opinion in for instance Germany is shaped by that country’s version of the National Enquirer, Bild Zeitung. Then again, the well-educated in Berlin allegedly don’t read Bild.

That no massive support movements have risen up in “rich Europe” to provide at least financial and humanitarian aid, let alone political support, can only be seen as a very significant manifestation of what Europe has become.

Which is something that “poorer Europe” should take note of, much more than it has. There is no solidarity, neither at the top nor at the ground level, between rich and poor(er) in the EU. 

That in turn greatly enhances the need for Europe’s periphery to support one another, whether at government level or in the streets of Madrid, Milan etc. But that’s not happening either.

There have been sporadic declarations of undoubtedly well-intended support for Syriza from the likes of Podemos in Spain and M5S in Italy, but it’s been words only, and only on occasion; that’s where solidarity stops.

Brussels likes it just fine that way. They can pick off the weaker nations one by one, instead of having to deal with a united front. And that should count as a tactical failure for all of these nations.

As Greece has shown, fighting Brussels on your own is simply not a good idea. But Greece had no choice, it was left abandoned and exposed by the other countries in similar conditions as itself. 

We can speculate as to why that happened – and keeps on happening. Kindred spirits to Syriza in Portugal, Italy, Spain, Ireland may be too focused on their own economies and circumstances. Or on their own political careers. Alternatively, they may simply be too scared of the Troika to take a stand against it.

In that light, Beppe Grillo’s words this week denouncing Alexis Tsipras are utterly unfair and not at all helpful, even if perhaps to an extent understandable. 

Italy’s Plan B For An Exit From The Euro 

Tsipras couldn’t have done a worse job of defending the Greek people. Only profound economic short-sightedness together with an opaque political strategy could transform the enormous electoral consensus that brought him into government in January into the victory for his adversaries, the creditor countries, only six months later, in spite of winning the referendum in the mean time.

An a priori rejection of a Euroexit has been his death sentence. Like the PD, he was convinced that it’s possible to break the link between the Euro and Austerity. Tsipras has handed over his country into the hands of the Germans, to be used like a vassal. Thinking that it’s possible to oppose the Euro only from within and presenting oneself without an explicit Plan B for an exit, he has in fact ended up by depriving Greece of any negotiating power in relation to the Euro.

Now, it’s no secret that I appreciate Grillo, and I think people like him are sorely needed in order to get rid of what Beppe in his ‘flowery’ language calls the “Explicit Nazi-ism [..] by Adolf Schauble”. And I do understand that he must get the message across to -potential- M5S voters that he does not intend to fold in face of the Troika’s demands as Tsipras has supposedly done.

But at the same time he completely ignores his own lack of support for Tsipras, the fact that he left him to fight the entire Troika on his own. Sure, Grillo visited Athens on the day of the latest referendum, but that is woefully inadequate. If anything, it seems to depict a lack of vision.

Beppe Grillo seems unaware that his criticism of Tsipras risks isolating himself when it comes time for Rome to be in the position Athens has been in since at least January 2015.

Moreover, Grillo has never had the fully loaded Troika gun pointed at his head and that of his people, the way Tsipras did. As a matter of fact, one might well argue that Tsipras gave in to a large extent precisely because he could not be sure enough that the likes of Grillo would follow him, and support him, if he would have chosen Plan B. 

That is to say, if he would have refused to give in to the Troika demands and elected to leave open the option of a Grexit, in whatever form that might have taken.

On top of that, Grillo seems to forget that Tsipras never came into the talks with a democratic mandate to leave the eurozone. And the other side of the table was well aware of that, and used it against him.

After the next round of Italian elections, Grillo may well find himself in a similar position, and if he does he will call undoubtedly on Tsipras for support.

Podemos, Syriza, M5S and others should present themselves, very publicly, as a front. That should hold regular well-publicized meetings, issue clear and strong declarations of solidarity and support for one another, and make sure all of it gets a prominent place in international media. 

The ruling class has organized itself, and the ruled won’t be able to fight them unless they do the same. You either do it together, or it’s not going to happen.

Grillo calls on Italy to use its massive €2 trillion debt as a threat against Germany, suggesting that, once Italy leaves the eurozone, it can be converted into lira. That threat would be a lot more credible if the entire periphery would present itself as a front. 

And that front should perhaps even include France’s Front National and Marine Le Pen, or Britain’s Nigel Farage. One could argue that they would be strange bedfellows, but battling Brussels alone, as Tsipras has been forced to do, hardly looks to be the best way forward. 

And unless and until there is a viable way forward, the European periphery will continue to move backward. That’s the number one lesson from Athens. Where the Troika is about to re-enter its trenches.

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)© 2015 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Raul Ilargi Meijer Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules