Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Blueprint Medicines - BPMC - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 27th Sep 21
China, India: Richer or Poorer? The Asian Pacific Financial Markets Forecast - 27th Sep 21
Stock Market Bubble Valuations Dot Com 2000 vs 2021 - 27th Sep 21
Gold When the Tight Economic Rope Slackens - 27th Sep 21
The U.S. Government Plans to Default on Debt the Dishonest Way - 27th Sep 21
Stock Market Retest of the High? - 27th Sep 21
Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
Will Biden’s Neo-Populist Economic Doctrine Support Gold? - 25th Sep 21
Markets Deflationary Winds Howling - 25th Sep 21
Crude Oil Price Piercing the Sky: Where Will We See the Black Gold by Xmas? - 25th Sep 21
Cryptocurrency policy choices and consequences - 25th Sep 21
The Next Emma Raducanu UK Tennis Star Pleasing the Crowds at Millhouses Park Sheffield - 25th Sep 21
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Europe has a Financial Nuclear Option that Nullifies the Greek Blackmail

Politics / Eurozone Debt Crisis Jul 08, 2015 - 11:44 AM GMT

By: Atlantic_Perspective


Since the Syriza government took power a few months ago, Alexis Tsipras backed (or controlled) by Varoufakis, assumed a defiant position based on the assumption that “We owe Europe so much money that we´ve got you on our hands. If you (Europe) want to see some of that money back, we determine the rules”.

This is pure blackmail. But Europe has a much more powerful trump card up its sleeve.

As written before in The Atlantic Perspective, Greece can´t pay back all its debt and a write down is a mathematical must. You can find our specific proposals to solve the Greek crisis once and for all, in the following articles:

The definitive solution to the Greek crisis

Delusional Greeks commit mass Hara-Kiri (read the section titled “The card that was never played”)

But instead of using the sensible, logical and effective approach we propose, both the Greek government and the European leaders chose to adopt a confrontation policy, fuelled by ideology. Christine Lagarde wanted grown-ups on the table. That message should have been be directed to Europe too.

The ongoing negotiations are a farce

In a perfect world, both the Greeks and the Europeans would negotiate in good faith, trying to get a deal that serves the interests of both sides in a balanced manner. Unfortunately, neither side is negotiating in good faith.

The Germans are only concerned with not allowing a debt pardon precedent, while the Greeks just want the debt to go away and that´s it. Neither side is actually negotiating a sensible solution to the current situation.

The ongoing negotiations are not about the Greek situation at all. Greece is just a pawn in a much bigger game. Germany can´t let Greece off the hook, as that could result in a wave of leftist governments taking over Europe. The Spanish and Portuguese elections are just around the corner. Risky, risky...

The European Union can go on without Greece. But if Spain falls, then the domino effect begins and the European Union would quickly unravel. This is a not a good time to be Greek, or European for that matter.

Europe´s financial nuclear option

If and when Alexis Tsipras basically tries to bully Europe into accepting whatever nonsense he wants, Europe has basically two options:

1. Accept Tsipras proposal and take the risk of the far-left taking over Europe. Soon, most European countries would be Greece.

2. Saying “NO” to Greece and losing the money lent to Athens. Losing? Maybe not...

Europe has a financial nuclear option: printing back the Euros lent to Greece.

In case the negotiations reach a deadlock, Europe can tell Mr Tsipras: “You have zero leverage over us. Zero. What we lent you and “lost”, we can just print back. You are the weakest link, bye-bye”.

Of all the billions of Euros lent to Greece, surely a good portion came back to Europe in the form of Greek imports, investments, capital flight, etc. The European bureaucrats and the army of statisticians at Eurostat can determine how much that was. Whatever amount did stay in Greece, Europe can just print back. Greek debt problem solved. That´s the Atlantic Perspective.

Copyright © 2015 by The Atlantic Perspective.

The Atlantic Perspective is an opinion blog, aimed at explaining and providing solutions to some of the world´s most relevant issues.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


08 Jul 15, 18:52
Whose Nuclear Option? The Greek's? The IMF & ECB's?

Lest I'm mistaken, the Greeks happen to have a printing press that can print Euro notes, do they not? On that basis alone, I would say that the leverage is decidedly on the Greek side. Dare the IMF & ECB entertain that (nuclear) option?

Post Comment

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