REVEALED: How the Troika bailout is ACCELERATING Greek insolvency.

Hellenic bailout, Troika method. (Reconstruction)

Why Athens is robbing Greek institutional bank accounts

Slog’s Brussels source confirms Mish’s GET site analysis

“I was wondering when someone would spot this,” said The Slog’s Brussels Mole this morning, “but yes, there’s no getting away from it….just by getting the bailout on these [Brussels Accord] terms, Greece is going backwards”. Thus did this EU official confirm the incredible analysis published by professional business site Mish’s Global Economic Trends this morning: although Greece needed the capital (aka ECB non-cash wobblymoney) forthcoming from the Troika to avoid outright messy default, the terms of the 159-page report guarantee that the situation in Athens will deteriorate more quickly.

My Brussels Mole would not, I know, mind me telling you he works there in a relatively junior EU capacity. But one Fifth Columnist in the Kingdom of the Dined is still a Prince if he can confirm damning analyses.

“I’m sure a lot of investors are fully aware of the hari-kiri clauses in the SEAPG [see below]” he told me, “but the media have been slow on the uptake. Or maybe they just see the Greek tragedy as worn to a shred, it’s possible. Either way, the analysis is spot on…whether it was designed to do what it’s doing, well…I can only guess.”

Can’t we all? Was this Christine and Wolfgang’s revenge for not pulling off the Greek amputation last month? Who knows? What’s clear however is that Greece isn’t just treading water now….it’s descending some slimey steps to the sea bed with every step it takes.

After The Slog used Athenian sources to establish embezzlement of public institutional funds by the Papademos Government last week (a story as yet untouched by MSM hacks) Mish publisher Mike Shedlock picked up the story…following which MGET reader Brett bit the bullet and read all 159 pages of Greece’s bailout agreement, the snappily titled Second Economic Adjustment Programme for Greece. What a hero – and what gems he found.

This is what the analysis shows beyond any doubt.

Accepting that Greece is of course technically and entirely insolvent, Brett confirms that it raided University accounts held at the Bank of Greece to complete the bailout-related bond swap last month. And he adds, “We know the bond swap offer (450 million Euro) for issue XS0147393861 was rejected and is payable on May 15 (6 Weeks to go). Somehow it [Greece] has to pay this before the next [bailout] tranche.”

Crucially, he adds:

‘Of the 7.4 billion it received in the first tranche a Greek government official stated that “Greece would use this money to pay 4.66 billion euros to the European Central Bank and other eurozone national central banks for the capital amount of a three-year bond that expired yesterday”…..This leaves 2.74 billion over 3 months to survive with. Even if you believe the 1% deficit for 2012 forecast (complete nonsense on page 99) Greece is in arrears 1.25 billion per month. This consumes entirely the remaining distributed money from the EU & IMF. Plus there is 5.2 billion Euros of Treasury bills due in April and May.

Mike Shedlock asks rhetorically at the end of the piece, ‘..somehow Greece needs to come up with money for April 20 and May 12 redemptions…Is there another rabbit in the hat? I really do not know, but I do know that hats cannot hold an infinite supply of rabbits’.

Talking to Slog contacts in Athens over the last three weeks, the main struggle from here on will be finding a hat to steal. To complete the English Law swap, the Papademos to Venezelos Conglomerate of Bollocks hoovered up 70% of the entire further education budget last month in one midnight raid. As Mich observes, not one investor has bought a Greek 1-year bond since the March bailout.

Given that I still think there is a treble issue here – immediate, cynically hidden obligations, medium term derivative obligations, and the terms of the Troika bailout – my take on this is that either the Athens Government rapes every budget it can find in the Bank of Greece (busy itself printing unauthorised euros already) or it defaults probably on April 20th – and definitely on May 12th. But I’m all predictioned out when it comes to Greek default, because Greek default entered Room 101 via the Ministry of Truth last month: and in Room 101, a default is not a default, subordination never happened, the Bundesbank never banned ClubMed bonds as collateral, and Mario Draghi is a Pope who sh*ts invisible money in the woods.

Raping or printing, lying or denying, these elites are utterly untrustworthy. What I suspect they may not realise is that professional investors know this now: as a result of playing according to Goldman Sachs Rules, the EU has doomed the eurobond market. It may very well have doomed the entire EU as well.

Related: TOP FRANKFURT BANKER TELLS SLOG: ‘EUROZONE WILL SHATTER BY THE AUTUMN’

91 thoughts on “REVEALED: How the Troika bailout is ACCELERATING Greek insolvency.

  1. Pingback: John Ward – REVEALED : How The Troika Bailout Is Accelerating Greek Insolvency – 5 April 2012 | Lucas 2012 Infos

  2. If I may make a comment here, this is not so much Germany forcing, but as much Greece not wanting to default.

    Germany is intransigent, Greece is scared to move. Everyone is terrified of the derivatives mountain.

    • @Gemz: Yep, I’d go along with much of that.
      I wonder if Greece is stalling for time until the results of test drilling for oil in the sea are available…

      • @BT

        Goodness only knows. If there is oil, they had better watch out: the Americans will be hard on the heels of the Germans to give them a hard time.

      • Believe me if there is oil… we are most worried about the Germans and Americans giving Turkey a green light.

      • Very first oil drilling in Greece in 1972 when the Junta Militar was still running this country.After that the story is known with the 12 mile zone in the Aegean Sea.

      • Oh and I forgot,the agreement for the “test drilling” in 2013 concerns 12 spots in Greece.Nobody would ever invest money in drilling in a “dead” country if they weren’t certain there is something.What a coincidence in the timeline

      • @lorencit: Yep, I here what you say. I suspect that because the much earlier ‘discoveries’ were shelved for unknown reasons, the current Greek kleptocrats want up to date confirmation of oil’s existence before they do a ‘moony’ to the EZ & possibly the EU. Oh to be a fly on the wall of Merky’s bunker if that happens…ha-ha.

        @John: Dunno about Turkey poking its nose into Greek territory but it’d probably benefit with American support …in terms of heavy drilling gear, extraction technology and getting it to market. The Americans know about oil. Obviously, Greece would have to ensure that whatever deals it reached with them were significantly beneficial to the Greek nation.

      • @BT… I don’t think you understand, when I said Green light I didn’t mean green light for them to make a deal with Greece… I mean green light for Turkey to invade Greece and re-annex the islands they NEVER stopped claiming and of course the oil involved… as recently as last month they were hemming and hawing about how Cyprus did not have the right to drill in their own waters without Turkish involvement… even going as far as to insinuate they would forcibly stop them… basically stating they are willing to invade an EU country.

      • @John: No, I understood your comments as you intended. Viz my comment “Dunno about Turkey poking its nose into Greek territory“. Turkey is a member of NATO.

      • @richy: That’s an interesting chart, but given that it covers a period of 52 years (1960-2012) might be a tad misleading. Whatever, given Greece’s seismic history it must be a serious consideration for oil extraction planning.

    • What we are witnessing is the robbing of a nation by unelected bankers.
      From the moment that PM Papademos was installed by shameful EU intervention, the only objective has been to extract as much of the remaining greek assets as possible. If it had been for the greek people they would have defaulted in 2010, and told the leeches to bite a lemon.
      They did not, sadly, and are bled dry ever since, with the consent and collaboration of the EU.

      • @Terp

        they do it all over the world. Their only aim is to make money. What they do not realize is that you make more money by sharing it than by hoarding it.

        Had the Greek nation been in charge, they would have defaulted in 1998. When they didn’t they left for Melbourne and Chicago. The result is the mess we have now.

      • If it had been for the Greek people we would never have joined the EZ and the euro at first place.Most of us knew what was coming our way .But all the government weren’t listening to the Chambers when we were sending letters and memorandums.Now the state robs the Chambers along with the Universities and people commit suicide in front of the Constitution.Personally i was hoping that nobody else would have to go through all that but once again,i was proven wrong.But the entire game expands to another dimension too…anyway

      • You´re right Gemz, it is happening everywhere, but this greek tragedy is, as lorencit pointed out, a whole new dimension:
        A group of select banks has installed two puppet governments in countries of the Union, in front of everyones eyes and with the help and explicit approval of the EU, The rule of law has basically been suspended to preserve the teethering status quo. Where can we go from here but down?

      • Papademos was a big ‘mate’ of Andreas Papandreou, who was nothing more than a liar and a thief. Hardly surprised by Papademos, given the company he use to keep.

    • “Greece is scared to move”

      ..or they’re scared to move before elections. ruling class has to secure itself first….

  3. None of this is a surprise in Greece… by now we don’t need numbers to feel the broomstick slowly creeping up our… I only hope the collapse comes after April 20 (I have a private unemployment policy and my last stipend is the 15th).

      • My theory… the IMF will chip into the IMF’s “firewall” and save Greece (at least til the fall)… because of the upcoming presidential election… but honestly?… who the hell knows?

    • I agree ,but it’s not to our best interest,the best for us should have been a default at least in 2011..maybe serves the banks’ interest though. On the other hand who’s left but the banks ruling the entire world.
      Hell knows for sure,if you look in Google maps,has a location, shows Greece.Probably the entire Mediterranean

  4. I foresee a Military Coup in Greece and a Revolution in Italy

    btw… ‘Raping or printing, lying or denying, these elites are utterly untrustworthy.’

    Should be carved in stone and on the foreheads of all the Peons

    • Here’s what that pensioner fellow who shot himself yesterday in front of the Greek Parliament building left on his suicide note:

      “I believe that youth who have no future will one day take up arms and hang the national traitors upside-down in Syntagma square just as the Italians did in 1945 to Mussolini.”

      • Since the rule of law seems to be suspended in Greece, it probably is the best advice thats left to give them.

      • Bone Idle.
        I have to say I admire what he has done, choosing the only way he had left for him to fight back, rather than the anonymous gradual slave like, slow descent into death, which is likely to have been his future prospect, ending up as just another statistic.

        Of course that sort of thing will never come to the UK, pensions are fine, savings are safe, UK credit rating is rock solid,the IMF need never bother us, the debt is sustainable, house prices will be going up again & everything will be fine.

        ” Tis better to die as a lion, than live a 1,000 years as a dog “

  5. I’d have thought in this brave new world of trillions a couple of billion here or there is small stuff – seems to me like the ECB could easily find this level of [funny] money. Though does beg the question as to why Greek public sector accounts have been raided??? Could be that something that ought to be easy is not being pursued – though why not?? Another agenda maybe?

  6. looking at timetable:

    20 apr – Greek bonds rollover
    29 apr – Greek elections first proposal date or..
    06 may – Greek elections second proposal date
    12 may – Greek bonds rollover

    it looks as Greek political class prolongs the show just till elections, after that hell may breake loose, they will have their trophy already

  7. The MSM will wake up on Tuesday when Whitehall’s emergency evacuation plan swings into inaction to haul stranded Easter holidaymakers from the Spanish Costas and Southern Europe. Hey, The Sun is sure to rally an armada of brave ‘little ships’ to pluck stranded Brits from the beaches of Dunkirk aand Calais. Frau Merkel will order a fleet of road tankers to head from Berlin for France to refuel them as a good will gesture.

    • @Send in the clowns: “MSM will wake up on Tuesday when Whitehall’s emergency evacuation plan swings into inaction to haul stranded Easter holidaymakers from the Spanish Costas and Southern Europe.”

      Emergency evacuation plan? Did I miss the reason for this?

  8. I still don’t get why anyone would think that Greece will choose to leave. At the moment it still has an umbilical cord to the German largesse, so why choose to cut itself off? Are the Greek people asking for it? No. They are scared stiff of actually having to stand on their own feet and make their way with a standalone economy. Having the accounts of Universities raided would be the least of their concerns if they left. We would be sending food parcels to them.

    • The reason we don’t want to leave the Euro is because we are more scared of leaving our political class (that got us into this) in charge than we are of a little Teutonic oversight. As far as an umbilical cord to German largesse… what largesse?, people are literally blowing their brains out from hunger… as 81 cents out of every bailout loan Euro (that we will pay 100% of) goes directly back to the EU as repayment… and we are supposed to re-start a completely crushed economy on the scraps… you obviously aren’t actually READING these blogs. In reality, Greece has the ability to be 100% self sufficient when it comes to food production (something most EU country’s can not do) so when the time comes… we will have all the food, oil, natural gas, and minerals we need, thanks. We’ve stood on our own 2 feet here for 3500 years… until Germany left us with 15,000,000% inflation (still a world record) and then ducked out on the reparations and loans they STILL owe. Why am I bothering… you probably still believe Saddam had WMD’s

      • You have made wrong assumptions from my few paragraphs, and have my personal views upside down, as I would have recommended the Greeks to cut and run years ago, and think that they are enslaving themselves further by each bail out, purely to keep those with yachts in Greek harbours in their riches.

        But my point is, that polls of the Greek people, and the massive protests reported almost daily, are not the Greek people asking to leave the Euro. So why do we in the UK (on this blog) speculate that it is about to happen?

        You ask “what largesse”… err… have you not remembered that you have had a few hundred billion Euros so far to pay back your debts. Some of it came from my pockets (UK taxpayer). And they are YOUR debts. You chose to spend a fortune on white elephant stadiums for the Olympics, do you remember?

      • lar·gess also lar·gesse (lär-zhs, -js, lärjs)
        n.
        1.
        a. Liberality in bestowing gifts, especially in a lofty or condescending manner.
        b. Money or gifts bestowed.
        2. Generosity of spirit or attitude.

      • My husband ,who has the greek citizenship along with the british one and i ,who still have the british citizenship along with the greek one,we pay double taxes in both states.I hope this answers any questions.
        Regards

      • “You need more knowledge and less opinion.”
        Strange, you are taking my comments in the wrong way, as if I am against you in some way. My point of view expressed was that you Greek people are not calling to leave the Euro, so why are we (UK) outsiders speculating so much that you will. You have had many years living off cheap/free Euro money, and will continue to get more for many years to come… so why would you choose to cut yourself off from it?

      • If we were leaving off cheap or free money… we wouldn’t have a problem at all… that’s the point.

      • I thought there were many thousands already having to daily get free food from “soup kitchens” in Athens?

      • Yeah, because you haven’t defaulted and left the Euro. The UN will probably be sent in to manage dishing out food if you do.

      • One factor you are not calculating: the soul.Not everything is counted in cash.The UN can help me sow my garden with vegetables and distributing them to whoever needs it most.And I reassure you i am not the only one.It will be a long time before we will need the UN here,unlike to what some may wish.
        Have a nice evening.

      • Actually… the tide is turning, as both party’s supporting the bailout/troika are polling at less than 20% each, and most left-wing anti-austerity party’s are gaining a lot of support… also, it seems just a little childish to say that no one is protesting to leave the Euro when half of Athens was on fire the last time they voted on the bailout matter… have you forgotten the 100,000 people fighting with police, and waving “NO TO THE EURO” signs? You REALLY have no idea what you’re talking about, but I am sure that is a comfortable, and familiar place for you to be. We will see how much support the future of the EU has after our elections. Remember, we don’t have the luxury of a democratically elected representative govt. so when you say “Greeks” don’t want to leave the Euro… try to understand that at the moment we never got a chance to vote on the matter and also don’t have any say in the matter… except for civil war.

      • I have to admit it. Jon Earle is right. Food would be a serious issue. Yes, i also admit that among the other Greeks i am mostly considered as a traitor, as having sold my soul to the devil, or the next closest thing, the banks, although i am just a humble computer engineer. But i reassure you. Despite being blessed with natural sources, mostly unexploited, Greece has gone through extensive sovietisation for the past 40 years. What we experience now is the usual death of yet another soviet economy. Sovietisation in practice, means abolishment of wealth production in favour of an enormous state of dependent clerks and ‘businessmen’ parasites who support a corrupt regime. For the sake of it and the votes going along with it, Greece has held a hostile environment for businesses starting from mid 70’s, peaking at the start of 80’s and ever since. This persecution has been given a morality cloak in the form of marxist dogmata, dominating the national education for a generation, rendering running a large business immoral. All kinds of production have been nearly extinct. Food including, of course, as more than 85% is imported. I am surprised it took us so long to collapse, i thought it would happen soon after the Olympics. Cheap money, mentioned above, might be an explanation. So, i, the traitor, support that this country must be desovietised, all the thourough demoralization of so many years must be rolled back, the engine should be repaired and start over. This takes time, that is, money which we don’t have. Yes, we will starve, if the plug is pulled off right now. I traitor say we should find strong leaders to take this last bailout money and enforce this desovietsation, otherwise amputators wait at each misstep. We might then produce our food.

      • Of course I read it. You said “it defaults probably on April 20th – and definitely on May 12th. But I’m all predictioned out when it comes to Greek default”.

        My point is, the Greek people do not desire to leave the Euro. And all the fat cats in the Greek government and the EU do not want them to. You say they are “technically and entirely insolvent”, but this has been the case for years. Political will can defy economic logic for many many years.

        When I see the Greek people waving flags “leave the Euro, now” in their tens of thousands every night… then will be the time to talk of them being likely to leave.

      • Actually… the tide is turning, as both party’s supporting the bailout/troika are polling at less than 20% each, and most left-wing anti-austerity party’s are gaining a lot of support… also, it seems just a little childish to say that no one is protesting to leave the Euro when half of Athens was on fire the last time they voted on the bailout matter… have you forgotten the 100,000 people fighting with police, and waving “NO TO THE EURO” signs? You REALLY have no idea what you’re talking about, but I am sure that is a comfortable, and familiar place for you to be. We will see how much support the future of the EU has after our elections. Remember, we don’t have the luxury of a democratically elected representative govt. so when you say “Greeks” don’t want to leave the Euro… try to understand that at the moment we never got a chance to vote on the matter and also don’t have any say in the matter… except for civil war. ooops posted in the wrong spot the first time.

      • John, you say I have no idea what I am talking about… I am only expressing the results of polls of your own fellow citizens. A quick google to find the numbers…

        http://articles.businessinsider.com/2012-02-27/markets/31102999_1_greece-pasok-new-democracy

        “Overwhelmingly, however, most Greeks express desperation to stay in the EZ. This is reflected in recent opinion polls: according to a poll conducted in February for Skai TV and Kathimerini, 70% of respondents said a EZ exit and return to the drachma would make Greece’s situation worse and 61% said they viewed the euro favourably.”

        That was in February. So do you want to retract your comment?

      • No… because you can’t retract a statement you never made, I never said that a majority of Greeks wanted to leave the Euro…in fact I responded to your statement that we did not by giving you the reason why (I am above repeating myself… if you can’t follow a conversation, then you’ll have to scroll up the page a bit). The fact that you aren’t even following the original conversation simply proves you quite literally “don’t know what you are talking about.” so thanks for that. The polls regarding the popularity of differing political party’s and the polls regarding public opinion on staying in the Euro are different (thought I would give you a break and help you figure it out… good luck). Thanks for playing.

  9. Of course the devious, nay ‘smart’ Americans plead for amputation in order to snap up the Oil Leases as their own free of EU interference

    • I think the deal is… Germany pushes EU into the ground, then leaves… leaving wayyyy less competition for the American dollar and then Germany gets to buy Europe (at more reasonable prices)… and the Americans get their Greek military stronghold in Greece back… and of course everyone enjoys cheap oil without having to deal with the middle east…

      • John (the Greek one) Earlier up this thread you were saying that people in Greece fear a Turkish invasion. I just do not understand that fear, its not clear to me exactly what you mean by “our islands” that may be invaded. Are you saying Cyprus (different country surely?), Crete, other islands or what? I cannot see NATO standing by and allowing Turkey to do that, partly because as you point out immediately above it looks as if America is shaping up to be in the front seat for that oil themselves. If Turkey invaded Greece and NATO did nothing, NATO will be finished as much as the EU, then the whole western alliance will go down the plughole.

      • Something Greeks have learned over a long time… when it comes to international relations, empire, war, resources, and betrayal… anything can happen (1914-15,WWII, and many others)… please don’t believe that NATO, or the EU are in some way either effective, or permanent deterrents of military instability… I think in the next 30 years… if it concerns oil, water supply, or food all bets will be off for small, relatively unimportant countries like Greece.

  10. If this oilfield is economically viable, both Russia and the USA will be very interested indeed. Add to the mix Turkey’s interests and the usefulness of Greece to the USA in the event of conflict with Iran, and we are heading for some difficult times.

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  12. Pingback: Revealed: How the Troika Bailout is Accelerating Greek Insolvency

  13. “not one investor has bought a Greek 1-year bond since the March bailout.”

    This says it all. The private investor has left the building leaving only the taxpayers to pick up the Greek debt.

    Meanwhile the Greeks are rioting in the streets scaring off the summer tourist.

    I don’t know what date Greece will leave the
    Euro but I do know that there are forces across the Atlantic trying to keep the lid on until November.

    Good luck with that!

  14. @john …’ if we revert to Drachma’s we’ll never be able to pay our bills.’

    The whole point of a default is that you don’t pay the (external) bills. Looks like a good solution to me. Press reset, start again.

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