- Jul 04, 2015 · Greece risks a collapse of the medical system, power black-outs, and an import blockade, if the Greek people reject creditor demands in a make-or-break ...
EU warns of Armageddon if Greek voters reject terms
"Without new money, salaries won't be paid, the health system will stop functioning, the power network and public transport will break down," warns President of European Parliament
Greece goes to the polls to decide its fate Photo: AP5:08PM BST 04 Jul 2015397 Comments
Greece risks a collapse of the medical system, power black-outs, and an import blockade, if the Greek people reject creditor demands in a make-or-break referendum tomorrow, the EU's highest elected official has warned.Martin Schulz, the president of the European Parliament, said the EU authorities may have to prepare emergency loans to keep basic public services functioning and to prevent the debt-stricken country spinning out of control next week."Without new money, salaries won't be paid, the health system will stop functioning, the power network and public transport will break down, and they won't be able to import vital goods because nobody can pay," he said.Mr Schulz earlier called for the elected Syriza government to be replaced by "technocrat" rule until stability is restored.The alarmist warnings are part of an escalating pressure campaign by European leaders as Greeks decide their destiny in what has become – despite attempts by Syriza to present it otherwise - an in-out vote on euro membership after five years of economic depression and mass unemployment.
Yanis Varoufakis, the Greek finance minister, said his country is on "war-footing" and accused the eurozone of trying to terrify Greek voters into submission.
Yanis Varoufakis
"What they're doing with Greece has a name: terrorism. Why have they forced us to close the banks? To frighten people. It's about spreading terror," he told El Mundo.
The complete break-down in trust between Syriza and the EU-IMF inspectors comes as polls show the "No" side neck and neck, each driven by powerful emotions in the bitterly divided country.
An estimate 40,000 people gathered for a rally for "No" side on Friday in front of the Greek parliament, drawn by a star-casting of Greek singers and defiant appearance by premier Alexis Tsipras.
Some 18,000 thronged a nearby stadium for the "Yes" campaign, blowing whistles and waving Greek and EU flags, many afraid that Greece would be blown out of the EU altogether after 34 years, and cast into oblivion.
The crisis has reached a point where the Greece's manufacturing system is grinding to a halt. Crucial imports and raw materials have been stuck in ports since imposition of capital controls and the shut-down of the banking system a week ago.
Industrialists cannot pay suppliers outside the country unless they are deemed a top priority by an emergency payments committee at the Greek treasury. Hundreds factories and mills may be forced to close down as soon as next week.
Mr Varoufakis angrily dismissed "malicious rumours" that Greece's banks are drawing up plans to seize a share of all deposits above €8,000 in a so-called "bail-in". This is far below the EMU-wide deposit guarantee of €100,000.
The claims have been widely aired by Greek television and the conservative press, though no sources have been identified.
Louka Katseli, the head of the Greek banking association, said the reports were fiction.
The situation is clearly desperate, however. Mr Varoufakis told the Telegraph earlier that Greece's banks will run out of cash over the next two days. "We can last through to the weekend and probably to Monday," he said. Greeks were still able to withdraw €60 a day - in reality down to €50 – with local cards from ATM machines earlier today. Foreign cards have no limit but it is far from clear whether that can continue.
Mr Varoufakis appears ready to sit out a long siege if necessary. "We have six months stocks of oil and four months stocks of pharmaceuticals," he said.
The finance ministry is allocating much of the country's scarce liquidity for imports of food to avert a disaster as the tourist seasons reaches a crescendo. He said there is no risk of food shortages.
Romano Prodi, former chief of the European Commission and Italy's ex-premier, said it is the EU's own survival that is now a stake as the botched handling of the Greek crisis escalates into a catastrophe. "If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"
"I would like to know how Merkel, Juncker, or Lagarde can possibly take it upon themselves to throw Greece out of the euro. It is true that irrational behaviour always recurs in history. The First World War broke out over a minor incident. Let us hope this is not our Sarajevo," he said.
It has emerged that European members on the board of the International Monetary Fund tried to suppress the publication of a report by the IMF showing that Greece's debt is "unsustainable" and that the country is in grave need of debt relief.
This validates the claim by Syriza that a deal without debt restructuring fails to go to the root of the problem, and merely ensures another crisis later. Angry staff members at the IMF leaked parts of the paper to the German press, forcing full publication.
The EMU creditors have so far refused to offer any debt relief. The danger is that this hard line will backfire, forcing Greece to default on an estimated €340bn of liabilities to the eurozone system. This would entail vastly greater losses for the creditors.
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EU warns of Armageddon if Greek voters reject...
Here's the problem as I see it: "What's best for the Greek average person is not best for the world Financial System".
This is why this is such a problem. However, the European Union cannot continue to make Greeks suffer if there is no way out of their predicament ever. They need some way to go bankrupt and then recover. Otherwise, this whole thing is going to just get worse and worse for Greece and for all of Europe too.
However, the world financial system doesn't really care what happens to the average Greek person, even if they die from this (many already have).
So, this is the problem and the paradox of this situation. If you make the Greeks suffer it will further destroy Greece. But, if they break free the world financial system likely will suffer as a direct result.
But, it's not fair to the Greeks as a nation to give them literally no way out and just to suffer for nothing the next 100 years or so. IF Europe gets away with this the world will lose all respect for the European Union treating one of their own this way. Imagine if this were one of the 50 U.S. states being treated this way?
Saturday, July 4, 2015
EU warns of Armageddon in regard to Greek Voters
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