FacebookTwitterGoogle+RedditEmail

Europe’s Trapdoor Slams Shut

Buenos Aires.

Nothing has changed with the ‘new’ agreement between Greece and its European ‘partners’ because the Greek so-called ‘impossible triangle’ stands in their way.

The three mutually incompatible vertices of the Greek ‘impossible triangle’ are :

(1) The Syriza ruling party staying in power.

(2) Reversing the current Troika austerity programs.

(3) Greece staying in the euro.

The uncompliable list of promises made to the Greek people by Syriza has now been replaced by an equivalent uncompliable list of promises made to the Troika.

The European soul-searching exercise is thus over, leaving no further room for self-correction.

The Troika is back in Athens with yet heavier boots on the ground pushing for the very same things it always wanted –and needs– from exemplary Greece.

Meanwhile, government money is running out fast, as we speak.

Near term payments of all sorts have been jeopardized with no solution in sight.

Major events –including a referendum– are highly probable very soon in Greece, way before the June ‘agreed’ reset date which can’t solve anything anyway.

Thus, the stage has been set for the Pan-European Grand Project to come apart at the seams.

The 2010 – 2012 press rehearsal is over, now it’s for good.

Adrift in European shallow waters, the Greek ship will now run aground into unchartered political rocks.

Europe’s own trapdoor has slammed shut.

Vertex 1

Syriza’s DNA is hard-wired to Vertex 1 because political parties are conceived and grow in their quest to exercise power.

Staying in power is Syriza’s obvious ‘raison d’etre’, the very reason it became a political party in the first place.

Syriza will do ‘whatever it takes’ to stay in power, including some extending and pretending to buy some time, political lies included with full blown ambiguity ruling the process with the tacit approval from both sides.

That’s what the Feb.20 ‘new agreement’ was all about, nothing else.

Thus, bank runs have been avoided for a short while.

So Vertex 1 is here to stay.

Don’t waste time fighting it.

Vertex 2

After the February 2015 elections, reversing the current Troika austerity programs is a “must” because:

(a)  Greeks voted Syriza into power with the specific mandate of doing just that. Greeks just can’t bear an additional inch of austerity.

(b)   Syriza invited nothing less than its right-wing arch-rival (!) the Independent Greeks party to form a majority coalition on the exclusive basis of sharing the common goal represented by Vertex 2.

(c) Any ‘agreement’ has to be approved by the Greek parliament.

Not reversing the Troika austerity programs would immediately melt down Syriza’s foundation with no political engineering solution anywhere in sight.

As Vertex 2 is Syriza’s passport for ruling Greece, they’ll never tear it up.

Otherwise, anomy will rule Greece, dragging down Europe’s weakest flank, the PIIGS.

Let’s not be fooled then by the supposed ‘new’ agreement.

Greece is still same old Greece, the same you and I know no matter how many “wired” tourists roam about country-wide retail merchants.

The only difference is the (short) time gained by the (short) punt just kicked a few (short) yards away from the goal line.

Any ‘solution’ without Vertex 2 would turn enfuriated Greeks to the streets.

If Vertex 2 is not complied with, Vertex 1 would automatically flash red-hot political and social alarms (**)

So Vertex 2 is also here to stay.

Get used to it.

Vertex 3

Accordingly, the only variable left for possible modification within such ‘impossible triangle’ is staying in the euro (Vertex 3) meaning that tomorrow morning most Greeks would have to wake up as competitive and organized as most Germans, Dutch or Finns, something that simply can’t happen.

Massive loans and investments would also need to arrive to the Hellenic Republic overnight.  That won’t happen either.

Furthermore, if Greece stays in the euro, it would find it impossible to reverse the current austerity programs (Vertex 2) and, thus, Syriza would not be able to stay in power (Vertex 1)

So, as Vertex 1 and  2 are cast in concrete with mutually reinforcing bondage, the triangle discussed so far is truly, really impossible.

Enter Alexander the Great

So here comes the Alexander-the-Great moment for Greece whereby the Gordian knot has to be cut apart, high and dry.

Because no matter the rationale or how the problem is sliced… or temporarily postponed… by having Vertex 1 and 2 firmly embodied into the Greek current power structure, the final outcome necessarily means the devaluation of the Greek currency, namely the euro (or rather the Deutsche Mark?)

And that means Grexit.

Additionally, repudiating the USD $ 0.5 Trillion real, effective sovereign debt (***) would jump start the Greek economy with primary account surplus on the ‘get go’ similarly to what happened in Argentina.

Russia and/or China would probably (and eagerly) take it from there for their own good reasons.

So with Vertex 3 demolished, the “impossible triangle” is instantly solved and both Greece and Euclidian geometry would find themselves back in business… with a lot of hardship ahead.

Costs

There will be no shortage of costs, both inside and outside of Greece, both inside and outside of Europe.

But such costs would be far lower for everybody than having Greece turn into an anomic state.

Greeks know this already and Europeans are finally finding out.

There will also be additional Grexit losses because of the euro area GDP reduction.

That’d be another Eurozone problem, not Greece’s, something which Brussels, Paris and Berlin should have thought about long ago.

So make no mistake: the Greek ‘impossible triangle’ can be solved in great style as Alexander the Great had in solving the Gordian Knot.

Former Fed Chairman Alan Greenspan agrees 100% with this.

He should know.

Jorge Vilches is a financial op-ed columnist based in Buenos Aires, Argentina. He can be reached at: jorgevilches@fibertel.com.ar

This story was originally published by  IIPRC (“The Independent International Political Research Center“).

More articles by:

Jorge Vilches is a financial op-ed columnist based in Buenos Aires, Argentina. He can be reached at: jorgevilches@fibertel.com.ar

September 20, 2018
Michael Hudson
Wasting the Lehman Crisis: What Was Not Saved Was the Economy
John Pilger
Hold the Front Page, the Reporters are Missing
Kenn Orphan
The Power of the Anthropocene
Paul Cox – Stan Cox
Puerto Rico’s Unnatural Disaster Rolls on Into Year Two
Rajan Menon
Yemen’s Descent Into Hell: a Saudi-American War of Terror
Russell Mokhiber
Nick Brana Says Dems Will Again Deny Sanders Presidential Nomination
Nicholas Levis
Three Lessons of Occupy Wall Street, With a Fair Dose of Memory
Steve Martinot
The Constitutionality of Homeless Encampments
Kevin Zeese - Margaret Flowers
The Aftershocks of the Economic Collapse Are Still Being Felt
Jesse Jackson
By Enforcing Climate Change Denial, Trump Puts Us All in Peril
George Wuerthner
Coyote Killing is Counter Productive
Mel Gurtov
On Dealing with China
Dean Baker
How to Reduce Corruption in Medicine: Remove the Money
September 19, 2018
Bruce E. Levine
When Bernie Sold Out His Hero, Anti-Authoritarians Paid
Lawrence Davidson
Political Fragmentation on the Homefront
George Ochenski
How’s That “Chinese Hoax” Treating You, Mr. President?
Cesar Chelala
The Afghan Morass
Chris Wright
Three Cheers for the Decline of the Middle Class
Howard Lisnoff
The Beat Goes On Against Protest in Saudi Arabia
Nomi Prins 
The Donald in Wonderland: Down the Financial Rabbit Hole With Trump
Jack Rasmus
On the 10th Anniversary of Lehman Brothers 2008: Can ‘IT’ Happen Again?
Richard Schuberth
Make Them Suffer Too
Geoff Beckman
Kavanaugh in Extremis
Jonathan Engel
Rather Than Mining in Irreplaceable Wilderness, Why Can’t We Mine Landfills?
Binoy Kampmark
Needled Strawberries: Food Terrorism Down Under
Michael McCaffrey
A Curious Case of Mysterious Attacks, Microwave Weapons and Media Manipulation
Elliot Sperber
Eating the Constitution
September 18, 2018
Conn Hallinan
Britain: the Anti-Semitism Debate
Tamara Pearson
Why Mexico’s Next President is No Friend of Migrants
Richard Moser
Both the Commune and Revolution
Nick Pemberton
Serena 15, Tennis Love
Binoy Kampmark
Inconvenient Realities: Climate Change and the South Pacific
Martin Billheimer
La Grand’Route: Waiting for the Bus
John Kendall Hawkins
Seymour Hersh: a Life of Adversarial Democracy at Work
Faisal Khan
Is Israel a Democracy?
John Feffer
The GOP Wants Trumpism…Without Trump
Kim Ives
The Roots of Haiti’s Movement for PetroCaribe Transparency
Dave Lindorff
We Already Have a Fake Billionaire President; Why Would We want a Real One Running in 2020?
Gerry Brown
Is China Springing Debt Traps or Throwing a Lifeline to Countries in Distress?
Pete Tucker
The Washington Post Really Wants to Stop Ben Jealous
Dean Baker
Getting It Wrong Again: Consumer Spending and the Great Recession
September 17, 2018
Melvin Goodman
What is to be Done?
Rob Urie
American Fascism
Patrick Cockburn
The Adults in the White House Trying to Save the US From Trump Are Just as Dangerous as He Is
Jeffrey St. Clair - Alexander Cockburn
The Long Fall of Bob Woodward: From Nixon’s Nemesis to Cheney’s Savior
FacebookTwitterGoogle+RedditEmail