Thoughts From Athens…

Through my writing and traveling I am extremely fortunate to be in touch with a host of extremely smart, extremely well-connected people in all sorts of weird and wonderful places and one of those people happens to reside in Greece.

My 'source' (who I shall refer to as Socrates) sends me regular updates from the middle of the turmoil and those updates are always full of great insight. Today's note was particularly important ahead of the upcoming meeting with the EU and, I am delighted to say that Socrates has given me permission to post his thoughts so I'll hand over to him:

Just wanted to give you a brief update on Greece.

First of all let me start from the fact that we still have not elected a president. If you remember the reason we went to elections was that we did not agree on the who the next president would be.. Obviously not the real reason but that was the argument… As of Feb 12 we are in breach of our constitution because we were supposed have elect a president prior to that date. However we still do not know who the candidate will be.. Rumor has it that it will be Avramopoulos the current European commissioner for Migration (ex MP of New Democracy) but a few obstacles have come up.

The fist one is that Junker does not want him to leave and does not want a left wing guy from Syriza taking control of migration issues within Europe.. So Junker is against it. The second reason is that the hard left part of Syriza is going ballistic.. they obviously do not want a right wing guy taking the presidency.. So for once more we are in limbo… do not know what is going to happen.. Syriza is supposed to announce its candidate tomorrow. Nevertheless, they can pick anyone they like.. this time the votes go 180, 151 and on the 3rd round the candidate with the most votes gets elected president. So the president will be elected, the question is now who will it be.

The Greek president does not have much authority, its mostly an honorary position, but he holds one very important right. He can call for early elections anytime if he believes there is a national emergency. So his time it matters who the next president will be.

Coming to the rest of our problems.. I think its obvious now to everyone that the New government has no idea on how to handle things.. On the one side they go blaming Europe and on the other they ask for money and more time.. they believe that but arranging protests in Greece they will achieve something but its obvious they will not. My information tells me there is zero chance of getting a deal today and personally I find it very unlikely we will get a deal anytime soon. However, even if we do get a deal that’s when the real problems start for Syriza.

I am not sure the new government has realized how this would work. Even if they sign.. no money will flow into Greece unless Greece passes the relevant laws through the parliament… And as you can imagine.. the left wing of Syriza will not sign any of these agreements… So I am very afraid that Greece will be forced either to early elections again or to a referendum..

The new government is currently very popular in Greece and this has to do with the media propaganda going on.. If you read the Greek news you will think that this is the best government to ever govern Greece. That they care about Greeks, that they are the first to really negotiate on behalf of Greeks etc etc.. What no one is saying is that we are looking like fools and we are being ridiculed.. All the big media are being blackmailed by the government and they cannot say anything they want.. the first signs of communism are already here..

However I am not sure what would happen if a vote was called under strained conditions. Ie. Capital controls or if for one month pensions and salaries were not paid due to lack of cash.. Then i guess popularity would deteriorate.. Nevertheless, never forget how patriotic and stubborn Greeks are.. After this hideous propaganda Greeks might prefer due to national pride to leave the euro and blame it for once more on the Germans.

One more thing to note… money is flying out of Greek banks.. The ECB on Thursday raised the cap on ELA funds to 65 bn from 59.. I can tell you with great certainty that this amount has already left the banking system.. and the ECB will be forced to raise the ELA amount again.. If not expect capital controls to occur pretty soon…

I really hope I am wrong… but things are becoming very dangerous in Greece. The media propaganda is becoming worse and worse and people do not seem to understand the reality they are in…

2 thoughts on “Thoughts From Athens…

  1. Interesting. Probably explains Europe’s intransigence. They hope to break the leftist coalition over its own legislative hurdles. Syriza’s only real choice is to not give in and convince people of Spain, Italy, and Portugal that they will face the same fate unless the Troika groups can be made to change policies. Classic setup for civil violence. Europe’s bureaucrats seeking status quo protecting their corruption and a desperate populace willing to try anything but the status quo.

    1. Interestingly enough, Bruce, Syria’s approval ratings are at 81% now and climbing so that alone will be enough to embolden them I think. The Greeks are, buy their own admission, a very stubborn group so the Mexican stand-off could play out very badly as I really feel that these guys will not blink and the EU will have to…. which opens up a far bigger can of worms…