Grexit Daily News – 23 July 2015


23 July 2015  — “I am become death the destroyer of worlds”

It has been a while since I posted an entry on GrexitDailyNews. I was waiting to see how the agreement on Bailout III will be received internally and externally.

It is safe to say there is little joy and little hope that any resolution to the Greek problem is in sight. I have addressed this in various ways in the last few days, even trying to see things slightly more optimistically (see here).

What I want to focus on today is the apocalyptic effect capital controls are having on the economy. It is needless to say how damaged the economy became since the election, due to the almost total disinterest of the government while it was valiantly negotiating win our ‘enemies’.

Capital controls are killing economic activity. In an environment where manufacturing is entirely dependant on the import of raw materials the inability to make external payments means production has stopped. Weeks after the introduction of controls there is no mechanism in place to authorise payments.

The significantly reduced cash flow and the vertical drop in consumer sentiment are chocking the life of any SME still in operation. Capital controls will stay in place for a long while, as bank balance sheets are significantly impaired. Certainly they cannot be lifted before the banking resolution legislation comes into effect in January. Does anyone seriously think that there will be any solvent businesses left if this keeps up for a few more months?

You know all this already, so why do I bother saying it again? The reason is I am angry. Angry that we keep fighting over VAT increases for the islands and tax cuts for farmers while the economy is dead. Angry that we keep listening to the ‘democratic’ rants of this fiend Kostantopoulou and the soviet nonsense of Lafazanis. Angry that we have to watch Varoufakis become the standard bearer of fantastical revolutions. Angry that we have to watch that dangerous fantasist Kammenos fly around the country spouting nonsense.

When Tsipras caused the uncontrolled bank run that necessitated capital controls by announcing the Greferendum, he became our Oppenheimer, the destroyer of our world.




33 thoughts on “Grexit Daily News – 23 July 2015

  1. LeaNder says:

    Iannos, I have no idea what “capital controls” means, so far I had the impression it flowed wherever iz was sure to gain. Apart maybe from more conservative tools of less gains, but supposedly more reliable, state bonds.

    do we have capital controls concerning Greece now?


    • LeaNder says:

      Sorry, Iannos, I must have been semi-absent yesterday. I understand now what you mean.
      Two poles – capital flight – capital control.

      Control is without doubt poison for the economy. I have no idea though, how one could differentiate between capital flight and legitimate business transactions. Could there be rules in place and what we hear concerns average citizen only?

      “Certainly they cannot be lifted before the banking resolution legislation comes into effect in January. ”

      My impression was that it will be successively lifted. They cannot seriously want to kill the Greek economy.

      Sorry, I can understand your concern.


  2. Tsipras caused the bank run?

    Well, the ECB is not doing its job in providing enough liquidity. It should provide liquidity, whatever the political situation in Greece. Even if a referendum is called. The democratic process in Greece cannot be held hostage by the European Central Bank!

    If the “no” vote would have let to increased speculation about a Grexit, so has the threat of Grexit from the European leaders, to vote “yes”.

    The ECB could have ridden all that out, and provided unlimited liquidity, until the crisis had subsided.

    If the banks now still cannot move money abroad, that is not Tsipras fault. HE does everything to ensure Greece commits to the agreement reached on the 13th. Yet, the ECB is still not providing unlimited liquidity, only increasing ELA at the last count by a miserly 900m.

    So do not blame Tsipras for the capital controls. In fact, I would like to know in detail if importers who really need raw materials from abroad, really cannot pay their suppliers and get their goods. Some exceptions surely exist. Who does a Greek importer phone to get excemption from the capital controls?

    Somebody else who thinks ECB is not doing its Central Banking job of lender of last resort adequately:


    • LeaNder says:

      “Well, the ECB is not doing its job in providing enough liquidity.”

      Not even Yanis Varoufakis claims that his the job of the ECB. Strictly, I would like to have an institution guaranteeing my limitless liquidity too. 😉

      I have to admit that I was occasionally hesitant concerning nakedcapitalism, maybe mainly since I wonder if there ever was a different “basic law” in the world but more or less “naked capitalism”. And, while I have no idea how they fiance the enterprise they may have to please, somehow.

      Yes, I agree, it seems/feels to have gotten worse lately, bubbles seem to bubble chase bubble. Thus I appreciate that Yves Smith has circled in on one of the giants of the industry that got a bit of attention, even in the context of the Greek/European crisis recently on the German French Arte channel, Goldman Sachs. But strictly, couldn’t it be helpful to hire someone that knows the business? Especially someone from a firm that apparently handles high profile costumers like states?


      • LeaNder says:

        It’s pretty embarrassing really to see the multitude of errors or typos in my above ill-reflected responses. Not accuse, but I excuse for that of course. But yes embarrassed as I am, I accuse myself to not have paid more attention..

        Notice, more generally speaking, at this point in time, I do not really question the motivation of people that do documentaries like the one about Goldman Sachs. What I ask myself is really: And this strictly would need more elaboration: to what extend the focus on one payer hides a series of other players or maybe keeps us from seeing a larger pattern.

        The documentary tells us that Goldman Sachs earned, how much? about 500 Million?, by helping the Greek state. Pretty much the same amount is what someone else earned via his speculation. One single American, who to the extend I recall won a lawsuit against the state. someone residing in some economical oasis out the US, while being American and he owns some type of fund.

        Strictly, I stumbled across the guy in a different context, and did not even bother to store his name either on my synapses or as link.


      • LeaNder says:

        ” I accuse myself to not have paid more attention..”

        Accuse myself of not having paid more attention.

        Gone for a while. But watching.


  3. mikenetherlands says:

    I don’t think you can expect that the ECB, European taxpayer, is paying for an gambling government.

    As I said before, the politicians in Brussel simply didn’t had the mandate from there voters to do what the Greeks wanted at that time. And the European public opinion was against them. They were wasting there time.
    The correct way was at that time, hold a referendum after let say a month. And the question sold be at that time, do you want to stay in the European family (euro) and must we sign on the dots or do you want the GSR (Greekz Sotsialistitsjeskich Respoeblik) and the drachme. That should be fair.

    They were telling Fairy tales, insulted the European voter and were committing suicide.


  4. The ECB, and a great many malicious leaks from the Netherlands Financial Minister, were aimed at provoking banking instability in Greece as a negiotiating tactic.

    Anyway, I was just reading on a Twitter feed from Greece that capital controls will be relaxed in 10 days. What that means, I am not sure.


    • mikenetherlands says:

      Absolute not! The discussion was going on for weeks going on in our and the german newspapers to stop that! The public opinion was boiling up here and if he didn’t do what he did he shouldn’t be the Netherlands Financial Minister any more.

      Today Yanis Varouvakis told in an interview he lived in four continents. Yes, but not in Holland or Germany. If he did he new the mentality here. You should understand that nee and nein are red lines. No is no here! Stop it is stop it. Not 10 days extra, That is the way we are raised. Noting will chance that! It is our mentality.

      Bij the way, Dijsselbloem is an socialist, not an liberal.


  5. “Bij the way, Dijsselbloem is an socialist, not an liberal.”

    LOL, That must be the quote of the day!

    The Dutch, as the Germans have not lost a penny on the loans to Greece.

    However, the Germans last week, when they privatised the remnants of Hypo Real Estate, a banking disaster greater than Lehman Brothers, did not have any red lines about losing money to that bank.

    Nobody cared though, because they were all too excited to worry about Greece.

    The press reported something about 1bn losses for the taxpayer from previous capital injection, which was of course a complete lie. It was more like 8.5bn, with another 100bn of so of bad debt still outstanding in a Hypo real Estate Bad Bank.

    So, rest assured, your fury about Greece is the result of careful manipulation by the press, which only wants you to know one thing, but then sweep another thing completely under the carpet.

    It seems to be working. And public opinion from people who do not know anything about the subject, (financial restructuring of loans) is , I am afraid, completely irrelevant. As are their mass-media manipulated feelings.

    The fact is Greece would be helped by taking a more lenient attitude (if you know economics, you know that must be true) and would benefit from cooperation. If Greek economy is growing, more chance of loans to be paid back. So everybody should try that, instead of financial waterboarding, administered by the “socialist” Dijsselbloem. (and others!)

    Ps: I can see your point of view, though, when you are telling us your experiences of your Greek holidays, but they are not going to be like the Dutch, are they? And you can be scammed in Chania harbour, as much as in Central London, or probably Amsterdam. they only need to know that you are a tourist, and your cocktail will cost Euro10.


    • @eurogate101
      Dijsselbloem is member of the Dutch social-democratic party and I do not think he considers himself a socialist.
      However there are so many different kinds of socialists (as there are protestant dominations) that labeling someone socialist is pretty useless.
      What drew my attention was your observation,
      “ And public opinion from people who do not know anything about the subject, (financial restructuring of loans) is , I am afraid, completely irrelevant. As are their mass-media manipulated feelings.”
      Thanks for pointing that out for us. I also found the Greek referendum a silly move and Yanis blabbering over democratic values a bit over the top.
      I disagree however with your opinion that nobody has lost a penny on the loans given to Greece.
      Maturities have been extended, interest payments brought down to virtually nothing. In other words free money at hardly any cost.
      Amazing that you, with your banking knowledge, do not consider this as a loss for the lenders.
      As far as leniency is concerned. The Greek have swindled themselves into the euro zone, the squandered the profits they made out of that swindle. They’ve been bailed out once, bailed out twice and now demanding a third bail out.
      Its not going to happen. So the Greek better prepare a for a return to the Mickey Mouse money they used before.


      • mikenetherlands says:

        “The Greek have swindled themselves into the euro zone, the squandered the profits they made out of that swindle.”

        And that is the problem. The Greeks elected their corrupt politicians, not we. And if you are going to Brussel with an attitude, give us the/our money and quick, we are proud Greeks, it is not the result of careful manipulation that public opinion from people who do not know anything about the subjects is against you, it’s your one stupidity!

        And an expensive stupidity, because I agree with Pim, after this action of Syriza it is better to prepare for a return to the Mickey Mouse money that the Greeks used before. And that will be an disaster for Greece, not for us.

        @Pim, you are correct, I only objecting by calling every politician from our country our Germany an neo-libelist. It’s the same mistake.


      • @mikenetherlands
        Ok, but let’s suppose he’s right. The Dutch and the Germans voted a majority of neo-liberals into office. Isn’t that our right to do so?
        Why do the Greek think that our voting results can be ignored (result of manipulation by the popular press) and only their voting system (50 free seats for the biggest party) is democratic?
        Why should we all bow in awe if 60% of the Greek population vote against an offer that is no longer on the table?
        Why should our politicians ignore the fact that the majority of their voters no longer wish to drop more money in a bottomless pit?
        I recall that the Greek popular press tried to organize a boycott against Dutch products, because we didn’t object (like Greece did) to the wish of the former Yugoslavian republic Macedonia to call itself Macedonia.
        Instead, the Dutch popular press is full of stories over the plight of the Greek people. Softening us up for the idea, that a third bail-out might work and won’t cost us more money. It won’t work.
        Greece better made a fresh start with their own money. It won’t be easy but can be done. Perhaps Greece should take an example from Iceland, which was in dire trouble because of the credit crisis but choose to work with their lenders instead of insulting them.
        The stupidity of eurozone101 is best illustrated on his own blog where he suggest that all debts will disappear after Greece has reintroduced the Drachme.
        They won’t. But if you have proofed you can run your own money system in a sensible way, we (the eurozone) can discuss a haircut to lessen your burden.


  6. mikenetherlands says:

    Elsevier, 14 February 2015. “The loans to Greece so we have already stamped some 100 billion euros. Loss Netherlands: EUR 8 billion euro. Three years ago the interest rates were lowered on the loans to Greece; a part did the first ten years nothing has to be paid; if so what was earned, were the Greeks who made a profit, and the term was expanded to thirty, forty years”.

    I back you pardon? Is this manipulation of the press? And I am not furies on you or Greece or the Greeks in general, I am furies about your government(s).

    And the only thing I try to express is that it is all political and because of that it was real stupid to try to get an better deal in the way Tsipras did.
    An much better tactic had been Bhuuu, hu, hu, we Greeks were a bit stuped, please help us. Please! HELP!

    De Jager promised in 2012 that every euro with interest woud be return and Rutte promised his voters not one euro to Greece anymore. When they had done it this way Greece now had a dream-deal.

    And don’t try to find some logic in our system, we lost 800 miljoen euro on a stupid train, the Fyra, and nobody cares. Money is not the problem here, it’s all psychologic. And politics. And don’t think the old fashion trade union talk of Tsipras will convince anybody here . Can’t you fight them, you can joy them and odd your chances.

    And he didn’t scrammed me, because I told him in Greek that he was enas megalos kleftis, and many things more. It was all an misunderstanding after all and he gave me the drinks for free.


  7. “And he didn’t scrammed me, because I told him in Greek that he was enas megalos kleftis, and many things more. It was all an misunderstanding after all and he gave me the drinks for free.”

    LOL, Obviously, they must some magical words, I will try to remember them when I am next over-charged in Greece!


    • mikenetherlands says:

      As i told you, I learned Greek from the street during my holidays. Ella, fré, malakkas imme? Pjos imme, Onasis? Megalos kleftis ise Gamo XXXX, etc. Loud. And that was the problem, the team of Tsipras didn’t know the right words in the right place. There tune was wrong. This what I told the owner of that bar is absolute not academic. In fact, it was backstreet-greek, but very, very clear to the person. And it worked out.

      Maybe Efklidis Tsakalotos finds the right words, tune in Brussel. I hope it with all my hart for the Greek people. He is born in Rotterdam, so who knows. Varoufakis is in many things write, but he didn’t speak the right “language” on the right place. That was the problem.


      • Varoufakis is a self-centered hedonistic daydreamer who overplayed his hand and made certain what the majority of the Greeks didn’t want.
        Exit from the eurozone. To his credit. He did it singlehanded and it took him only 6 months.
        The only realistic option left is the Schauble option. Al others are a waste of money and a waste of time.
        Varoufakis is not a bad academic, but he was a lousy minister of finance. The Greek deserved better.


    • mikenetherlands says:

      In my opinion is there an other problem. All the economics around Varoufakis are educated in an anglo saxon country. Schäuble studied Freiburg en Hamburg, Germany, Jeroen Dijsselbloem studied in Wageningen, Netherlands.

      If I read your point of view, my point of view, the point of view of Schauble or Dijselbloem they are quite close. We are quote different persons with different backgrounds. But share the same opinions.

      I think that is because we live in very strange part of the continent of Europa. A part with Napoleon, Wars, the center of the holocaust, the cold war in our backyard. Like we don’t understand the Greeks, the people outside this part of Europe don’t understand us.

      Only a few people wanted the euro here in 2002. We don’t en didn’t want an federal europa. Most people here in Holland are still missing the florin.
      The people here didn’t want an united Europe with Romania and Poland etc. They didn’t wanted an euro with Greece, Italy. The people were against it. Europe is not populair here. It never was.

      But we got the euro. Against our will. And now things are going wrong and the people are angry.

      And you should think, why don’t they leave the euro? Because they don’t want that neither! They don’t want to go foreward or backward. It’s an kind of Schizophrenia. And that confused Yanis’s team in my opinion. It is not logic.They were searching for logic solutions, this part of Europe is not logic. It is the result of an crazy and violent history.

      In my opinion Yanis and his team didn’t understand a clou of us. When I hear the interview on his blog with Mariano Alonso and Luis Martin I am only thinking, didn’t you know that? Really? Are you really surprised?

      Yanis Varoufakis is a fine person. And an briljant academic. I like him. But he is not the diplomat and pragmatist you have to be to survive Brussel. And ZYRIZA is an concept from long ago. Something like the old CPN with Marcus Bakker. The party merged with three other parties to GreenLeft in 1991. And that was the end of radical-left in the Netherlands.


  8. Interest costs in Greece:

    Everybody can look up the interest rates from the ECB which were available since the Eurocrisis started. They were never higher than 0.5%. Now they are 0.05%. So virtually nothing. That is what banks pay when they borrow money from the ECB.

    Greece, however pays 6.6bn interest a year. About 2% on average.

    Now, Greece owes 320bn. If it paid interest on all of that at 0.05% interest, the interest should be 160 million a year.

    Maybe the Greeks should say “enas megalos kleftis” to the ECB and its European creditors!


    • Whereas I don’t know what “enas megalos kleftis” means, I have a fair idea what is being said.
      In my opinion the Greek have used this manner of behaving already from the time Tsipras is in office.
      They better had tried, “when in Rome, do as the Romans do”.
      Or, if you want to be part of the eurozone, respect the rules of the eurozone.
      But if the Greek are too proud of to independent to respect these rules, get the heck out of the eurozone.
      Two other platitudes that might come handy for future occasions. “Don’t bite the hand that feeds you” and “beggars can’t be choosers”.


    • Mostly technical humdrum that won’t solve anything unless the Greek address the underlying problems. But what do I care.
      Perhaps the Greek should have a referendum on that subject too.


  9. Come on Guys,

    iGlinavos needs encouragement to believe that, although he does not see it at present, there are solutions out there somewhere. I always appreciate a different point of view, but all the cheap jokes about the Greek people and their plight is not very constructive or encouraging. I can also present you with reams of very believable reasons why Greece is in the mess that she is and they are very different to your narratives. Humour is fine but balance it off with a bit of sense.

    I also sense that, in a perverse way, iGlinavos is trying to prod all of us to come up with some original & creative ideas that he has not thought of yet.


    • iGlinavos seems to me less ideological inclined than all the other Greek bloggers I read and I find that appealing.
      The only thing I can contribute are the thoughts of someone not living in Greece. If that is useless to him, he should stop reading my comments or ban me altogether. I have a blog account myself and I know that is within his power.
      It appears to me that Syriza wanted to turn Greece into some kind of Cuba in western Europe. Fine with me, but things get a bit unrealistic if you think you can do that whilst staying in the eurozone.
      At its beginning Cuba was very popular with the intellectual left.
      None of them actually lived in Cuba or had plans to move there. All of them preferred the comforts that the capitalist society offered them.
      I am not blaming them for that, just pointing out a fact.
      The same happens now. One can hardly underestimate the hypocrisy from the left.
      Does this mean I disagree with the ideals from Syriza? Not at all. If there was a time to bring about a change, it is now.
      But you can’t eat your cake and have it. And as long as Greece stays in the eurozone, it will have to abide to the rules of the eurozone.
      Don’t know if this of any help for iGlinavos, but it is the best I can offer.


      • mikenetherlands says:

        Exactly. If iGlinavos asks me not to post here, I will not do that again. Banning me is not necessary.

        I think it is interesting for him to see how different we are thinking. Rheinischer Kapitalismus. Johannes Calvin. The Holocaust, and the way we have forgiven our neighbors, the Germans.

        Why we got angy when the Greeks asked for war repairs? The Inferno of Rotterdam? And the other war damage here? Be ashamed Greeks was the public opine here.
        But the behavior of the Dutch population in the second world war was not so heroic as the Dutch people you want to believe…… The jews who returned from the nazi camps had to pay for their clothes and not to forget to mention their taxes from the years they spend in the camp…. So a bit of hypocrisy?

        It is the complex history of Europe what brought us in this situation, not the money. I think that Dutch and the Germans are willing to pay that one trillion Euro Varoufakis is talking about. If the Greeks please, please leave the eurozone. Because, Calvijn, who does’t work shall not eat.

        See how the Greeks are spoiling their children. How they help them all their live. See how an Dutch father talk to an child who made a mess of his life. First get your live in order, than you can get SOME help. Maybe, if your mother agrees. And thát is the problem, not the money.


      • I would like to encourage everyone to keep posting comments. I do not have the time to reply to all of you, but I greatly value your contributions and thoughts.


  10. iGlinavos> The reason is I am angry. Angry that we keep fighting over VAT increases for the islands and tax cuts for farmers while the economy is dead. Angry that we keep listening to the ‘democratic’ rants of etc etc… (hm, politicians)

    The old rulers are corrupt, the new rulers are incompetent, the foreign rulers are oppressive, and the Greeks continue their eternal struggle to find a sustainable formula for democracy (i.e. both for their own domestic democracy and for the State as a Grand Utopian Concept; these are very different animals).

    Not much has changed since the good old days of Pericles and Plato. We’re still looking for the ideal “state” 😉


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