MOODY’S DOWNGRADES EU CREDITORS: It’s the beginning of the End.

Slog’s Bankfurt Maulwurf claims victory and vindication

Germany, the Netherlands and Luxembourg had the outlooks for their Aaa credit ratings lowered to negative by Moody’s Investors Service this morning, citing “rising uncertainty” about Europe’s debt crisis, the risk of Greece leaving the eurozone, and the growing likelihood of massive bailout bills in Spain and Italy. On the whole, they seem like pretty sound reasons to me.

The IMF has, as I predicted, written off Greece. The Greek elite is, in turn, not even trying to hide how little effort they’re exerting to put their own public sector feathered-nest in order.  The managements of Greek state-run enterprises seem to be so forgetful, they forgot to implement government decisions concerning wages cuts for thousands of employees at state-run enterprises (DEKO) and other state bodies and organizations. And the Coalition itself omitted to pass the legislation forcing them to do it.

The Troika arrives in Athens today, and will be vociferous in pointing out the non-compliance. (I doubt if they’ll bother to mention that all the  forgotten public sector cuts have been dumped onto the already flatlining private sector). It is just possible that the Troikanauts will say “That’s it, no more money”, but unlikely: with Spain and Italy in bond-yield intensive care, this would be bad timing.

Spain’s two-year bond yield saw its biggest one-day move since the eurozone debt crisis broke out in early 2010, closing at 6.53 per cent. “Spain is close to losing access to markets entirely,” said John Stopford, a senior fund manager at Investec Asset Management. “It’s not sustainable to borrow at these levels for very long.” He’s not wrong: Spain is entering the Greek Twilight Zone.

“You have seen the events of the last fortnight,” said The Slog’s long-standing mole in Frankfurt, “and I have last Spring predicted that the eurozone would shatter by the Autumn. Also that the banks and lawyers would stop Känzlerin Merkel. All this has happened, and [my interest group] is now reassured that the risk to German solvency is receding”.

In Berlin-am-Brussels, this time there is no emergency summit, no grandiose fantasy plan, no Zen Bazooka. It is disturbingly quiet on that front. Draghi over the weekend referred to the euro somewhat unrealistically as ‘irreversible’, but the decision doesn’t lie in Frankfurt’s ECB: it lies with Bankfurt Germans and Berliner politicians. Mario’s assertion is publicly contradicted by the growing weight of German policymakers who state that Greece has reached the end of the road – and should remove itself from the eurozone as soon as possible.

Until last week, it was the end of the beginning of Euroblown. Now it is the beginning of the end.

92 thoughts on “MOODY’S DOWNGRADES EU CREDITORS: It’s the beginning of the End.

  1. “and I have last Spring predicted that the eurozone would shatter by the Autumn”.
    Mmmmm, not convinced……There’s still the option left of, ‘Control P’……
    And when it looks like the sky is about to cave in, that’s exactly what they will do. There’s no Fat Lady waiting in the wings folks, just a whole lot more misery….


  2. Pingback: CONFIRMED AT LAST: The attempted cover-up of how JP Morgan torpedoed Lehman Brothers | A diary of deception and distortion

  3. Fervently hope you’re right John … however a small voice is telling me to have ten bob each way on there being yet another fudge to keep the appalling euro-project going just a little longer. Gloomily expect to hear an announcement about “agreement being reached” with Greek politicians about a positive way forward that will ensure returning growth in the Greek economy by 2014/15. Further funds will therefore be made available on the usual “stringent conditions”.

    What an old cynic I am turning into …


  4. Off topic again @kfc but still concerning ex prime ministers and making my blood boil. I picked up on this a few days ago on Guido Fawkes Blog. Apparently our past (incredibly wealthy) PM’s are still sticking their snouts in the tax payers trough to the tune of £100k + a year to “meet the cost of public duties”… Say’s it all really….


  5. Since it has been pointed out that none of the banksters have banker qualifications, TBliar clearly qualifies as one too through his lucrative association with JP Morgan. Effectively this is a thinly disguised plea “please don’t hang ME from a lamp post”.


  6. It was a good plan… punish Greece as the example of what can happen, terrify Europe into acquiescence, starve Greece out the Euro over the summer (no decision on aid til at least September), once Greece is gone the German courts approve the ESM in time to shore up Spain, and Italy with pretend money that will come from taxes that enslave the continent for half a century… if it works, yeah… genius.


  7. Ioannis

    Punish Greece? Surely your government can do it for you? Surely more cost effective, and given the sentiment of the Agencies? Do not imagine for one moment that a Grexit is the answer to any of this. It would be the beginning of a nightmare for Greece – but at the hands of the Americans. Who, since they control most of the media, will keep Greece’s screams muffled.

    Can the German courts rule against the Grundgesetz? It is the heart of what has made Germany strong, for all its absorption of the bankrupt DDR.


  8. Pingback: John Ward – Moody’s Downgrades EU Creditors : It’s The Beginning Of The End – 24 July 2012 | Lucas 2012 Infos

  9. KFC

    Tony Blair is right though. Hanging bankers won’t help matters.

    You need to hang the occupants of Whitehall, the politicians, big business leaders, the senior Military officers, university intellectuals … anybody in power or has influence, but takes no responsibilities. Something that would equate to Stalin’s purges of the 40s perhaps?


  10. I would ask for what Viking Jack thinks of this.

    What is it that makes Germany’s Mittelstand so great? What makes them so resourceful and powerful as a body, when other countries, notably France and Italy, can’t touch it.

    Is it the fact that someone who owns a business feels responsible for that business – but also feels responsible to those who work for them?

    When I was at Uni, we visited a company in Oxford and the manager (owner?) spoke of one of his “operatives”. I asked him if he had a name, the manager said that he did not, it was easier to sack them if you didn’t get personal. Ask yourself why that business is not doing so well as a German one, for all Britain’s turning on the printing presses so that they have ample money to borrow.


  11. More important than the IMF writing off Greece is the fact that the ECB has clearly written off Spain and Italy. For the last 6 weeks at least they have put a floor in the market such that Spanish yields did not rise about 7% and Italian yields did not rise above 6%. They have clearly decided they can buck the markets no longer and the market is now pushing yields much higher. The question is whether there will now be unstoppable momentum behind the upswing that could very quickly tip Italy and Spain into the exact same position as Greece. In that case not even Germany will have the funds to save them. It will be game over.


  12. I live here… I know how much of a nightmare it REALLY is, and I know how much worse it will be when we leave the Euro (I have gone back to farming for example)… but Germany is in charge… all and any support begin and end with them… the decision is ultimately out of Greece’s hands. Merkel and company supported the Greek PRO EU party’s that they ACTUALLY caused the problem, why?… crooks always hang out together… these people (Greek and German politicians responsible) should be charged with treason… against Greeks and Germans. I think you are under the impression that there is an alternative (like Greeks that want to stay in the Euro but renegotiate). As far as the Americans go… they started all this to shatter Europe, and Germany was gullible enough to follow through to the end. In the end we are forced to make deals for our 300 million barrels of oil with the American’s and Israeli (last month) and promote our energy ties with Russia, and shipping ties with China… we will choose the more viable long term options while Europeans pay Germany back loans for a century.


  13. In a non-rigged market, my guess is that Spanish yields would be around 15%. Spain has nowhere to go. Its main and formerly vastly profitable (at all levels) industry, house construction, is bust and will remain so for a decade or more. It has seen a massive increase in population in recent years, many of whom now have no job and can’t even afford to return to Ecuador or Morocco or Rumania. The banks are sitting on a huge raft of bad debts, most of which are yet to be admitted and will get worse as house prices fall further. There are hundreds of Ebillions involved, which Spain can never cover (and in my opinion should not be covered by others, either). A whole multi-layered regional/provincial government structure has been unwisely built on peak tax income levels, now far lower. A couple of million officials are getting very worried, with good reason. Back to the family farm! Tourism is suffering because for the British, their main market, Spain is expensive on the one hand but offers quite basic tourism on the other. Many other non-EU destinations are cheaper and better. Whatever happens, the living standards of the last 15 years cannot and will not be sustained and a big, painful downward adjustment is on the way. In the long term, Spain will join southern Italy, Portugal, Greece etc in a southern EU bloc with very different characteristics from the north. That will take some adaptation, but the alternative is for the south to get stuck in and do the things the north does. Not very likely, I think, they have had hundreds of Ebillion of grants since joining the EU and look at the result. Nada de valor.


  14. We’re going to need a hell of a lot of traditional style lamp posts for that appalling bunch and a fair few miles of piano wire.


  15. I think there is a very good argument for Greece defaulting on the EUR3.5B in bond redemptions that it cannot possibly pay for itself on August 20th…default on everything else too and be on its way out of the door before Spain totally blows everything apart by Autumn

    Spanish Sovreign, Banks and Regions are all totally bust ….probably to the tune of at least all of the ESM fund…(mebbe more like double if you write down empty half built properties back to goat grazing values)

    If Greece defaulted next month, I believe that there would be an awful winter ahead with surviving on ‘humanitarian aid’ (hopefully with US, Russia, China falling over each other ?)…..followed by investment in Greece (run by the foreign investors not given to the Greek Govt), returning wealthy (taxed or jailed) and talented younger Greeks (to turn it around) and Tourists by the plane load as the Euro/Drachma devalued. (Taking Roger Bootle’s plan).

    Greece will simply be sidelined as ‘too small to bother with’ if it stays in the EZ…….Any EU firepower left (?) will have to be spent on Spain and Italy to kick the can for a few months more….Cyprus, Portugal, Ireland and the rest will suffer the same fate.

    I agree with JW, that we are watching the beginning of the end…..and I doubt that even Super-Mario printing a couple of Trillian Euros could save it now….Besides, Angie and Woofie are on hols for next 3 weeks and the ECB dare not press Contol P behind their backs !!


  16. Ioannis

    a very interesting and informative reply, thankyou.

    As far as the Americans go… they started all this to shatter Europe, and Germany was gullible enough to follow through to the end.

    Were the Germans gullible – or forced by hands unseen? Viking Jack has already provided credible evidence that the German MSM is ultimately controlled by the US.

    The other scenario is that Germany was trying to do its duty and hold the EU/Eurozone together, in the only way it knows how. The alternative would be terrible, not just for Greece, but for everyone.

    Somehow, I get the impression that the US is doing one thing with one hand, whilst doing something else with another. Neither hand knows that the other exists, and so the pile of derivatives grows, and scares many.


  17. I really cant understand how the UK has so far escaped all of this with its its incredibly low borrowing rates. I think its about time that the UK received (with interest) the full whirlwind and financial comeuppance it so richly deserves. What s holding the international money markets back?


  18. Very, very well said. We have funds til the end of July, IF loan funds are reinstated it wont be til end of September… oops, too late. Like giving oxygen to a corpse.


  19. We are still in the feudal stage in many of our businesses. As a long time employee of a large company, I would say that the biggest chasm is between the upper management and the board of a company. The upper management may get a bit snooty sometimes but on the whole are professional and know something of the business. The board rarely bother to connect with the workforce, are rarely seen on the shop floors of the factories and usually know nothing whatever of the products. Often they appear only once a month! The structure of German boards, involving workplace representatives, is better in this respect. I would make it compulsory for all board members to (a) visit the shop floor of a different factory every month, including those handy places in rural Canada and (b) where possible, eg in consumer industries, try out the product at board meetings. Where this is not possible, the board should find a way to get customer feedback into their meetings once a month, plus a report from the shop floors on their problems.

    The try-out idea is because I am fed up with rotten UK consumer products, so badly designed that nobody at the top can ever have tried them out. Or indeed anyone else. I go out of my way not to buy UK mechanical or electrical products, simply because I know the German one costs 10% more but will work and there will be spares.

    Overall we need a much better connection between those at board level and the rest of the business they purport to direct.


  20. It’s a waste of resources. These fat cats have licked up all the cream, now its about time they did some real work to pay off their massive debts to society. They should not be hung up from lampposts, but put onto Workfare schemes instead.


  21. Exactly. Please can we now refrain from mentioning that odious individual. The stench of high hypocrisy is getting overbearing.


  22. Mark

    Britain does not need to borrow money. Therefore the money markets are left out of the party that would otherwise occur. They must make their profits in Euroland since they cannot from Britain.

    Were it not for level playing-fields, Spain might find the pressure reduced (a little).


  23. Simply the fact that there are currently weaker fish to fry.

    The UKs turn will come, as will Russia, the US and Japan. Large scale synchronised defaults is what comes next. CTRL+P will only speed up the process.

    To quote a great many intelligent yet marginalised minds:

    “keep stacking bitches!”


  24. Gemma… I totally agree with your assessment that German media is American “influenced” but I would add that so are the banks…

    “Germany’s Deutsche Bank has agreed to pay $202m (£125m) to settle charges it defrauded the US government over the resale of risky mortgages.”

    The Americans are ALWAYS saying onething and doing another, one of the reasons Greece was looking for a strong, loyal partner by joining the Euro, as Americans have gone as far as supporting fascist dictators to advance their influence in Greece. I simply believe that the American banksters… showed the German bankers the neat trick of lending money to those that can’t pay it, making money off that, then when it fails, push the responsibility of paying the loans onto the taxpaying public, while still making money off the assets, etc, etc. If you look closely you can see that Germany did with Greece and others exactly the same thing that Sachs did to the US. I don’t know who thinks they are playing who… Germany or the States… I just feel like this playing around is badly timed considering the reality of the markets. Of course Greeks have more pressing issues (than fairness, or who did what, blah blah blah)… trying to survive winter warm, and fed, hopefully without civil war.


  25. And to anyone from Greece:

    The default is coming no matter what. And it will not be as apocalyptic as the MSM would have you believe. It won’t be easy but you’ll be back on your feet long before the others who follow you.

    he who defaults first, defaults best.


  26. The mkts are picking off the weakest first…ie” Greece, then they went after Spain, jumping over Portugal as that will fall with Spain, then Italy, France and Belguim will get sucked in and then the whole problem is way too big to bail…the UK will follow the collapse of the Euro.

    When I say mkts, it is not some group of speculators, that could perhaps be stopped, but all participants makeing their own decisions and collectively becoming the Mkt….as such it is an unstoppable force.


  27. Ahahahaha… what I have been trying to explain to all the old folks in my village living off pension! Well… 300 million barrels of oil will ease the pain probably.


  28. The initial chaos will pass quickly and the US will “rescue” Greece (for the above reasons). Your natural resources means that the effects of inflation may pass more quickly than expected and the buying power of any new currency could just about hold up. The EU has scaremongered the effects of a Greek default for too long, it’s true outcome will be rough but survivable.

    I still advocate a QE for the people. Literal money drops to peoples accounts with the proviso that it is first to be used to pay down debt.

    Pensioners would be somewhat protected by this. And there’s always gold….


  29. Then it is not the Germans, but as ever – – – German banks.

    A different animal?

    Deutsche Bank was involved heavily in the Sub-prime lending and it is my guess that much of the money that was lent to the peripherals came from that very source. Remember that with tight lending regulations, it could not lend out those profits in Germany!

    The French wanted to retain the looser banking regulations across the South. I wonder just how much the Americans were involved in that decision? Sensible banking regulations – such as would have prevented the sub-prime issue in the UK (!!) would have helped many an economy.

    Remember it is still possible to get a mortgage in the UK without a credit check*! You cannot get a mobile phone contract in Germany without one. That is how big the divide is between the dour Krauts and the spendthrift Anglos.

    *Something like 50% still, and that with tightened regulations. Truly amazing.

    Had the Eurozone banking regulations been harmonized, along German lines, the problems for the peripherals would have been very clear from the start. But then, the solution would have been a lot less painful.

    The ratings agencies should have been more contrite, and fessed up at the time of the Eurozone inception. Greece with international borrowing at (say) 10% would have made things difficult for Greece, but not impossible. Greeks would have quickly realized that they needed a government bent on sorting out their economy, not fudging the issue with yet more borrowing – at a time that they should have been very, very careful. The EU and ECB have their part to play in this charade too.


  30. Black gold, yellow gold, sunlight gold… we got gold. Well, as you may know… despite German pressure to sell off our gold, and other resources dirt cheap in a purposefully distressed market… we kept all of our gold (because it was obvious that Germany was not sincere about solving the problem), and will be digging up some more…

    “The two mines would produce about 350,000 ounces of gold annually when they enter full production in 2015, making Greece one of Europe’s largest producers.”


  31. Carys

    Feudal business economics should have gone out with the Tudors.

    In Germany, a director expects to have good coffee in his restaurant. That means when he sits down at the table, he has the best coffee. That also means that everyone else in the factory also gets the best coffee because he sits down in the same hall as the rest of his staff.

    He parks his car next to a lathe turner, he drinks coffee at the same table. Even if he is not part of the conversation, he cannot escape hearing the mutterings. Germans are not cowed by a boss, by the way.

    Are you getting a picture of why Germany’s Mittelstand are successful?

    As to “Rotten Consumer Products” – – – if you buy (or bought, better said) German products – Leitz, Karcher, Bosch and Leifheit to name a few – then it is very likely that you bought something that was designed by me.


  32. Carys

    in a non-rigged market, Britain would have interest rates approaching 6-8% with all that would mean for the spending power of the older and more sensible generation.

    It would take the pressure off the Eurozone, as the money could be invested sensibly in the UK and US.


  33. ” Deutsche Bank was involved heavily in the Sub-prime lending and it is my guess that much of the money that was lent to the peripherals came from that very source. Remember that with tight lending regulations, it could not lend out those profits in Germany!”

    exactly… think of it as money laundering US fraud profits…. except in this case the criminals got paid (interest on loans, collateral) instead of having to pay a crooked banks fee’s. As far as all the “what if” scenarios… that is all bittersweet to Greeks now… because there was always so much more authorities could do… before it got this way. It was all very unavoidable… if the German “powers that be” ever intended to help Greece (which looking back seems unlikely)… either way they are being downgraded because the world now understands that Germany is either being run by people very incompetent at dealing with economic crises… or worse, an opportunistic, saboteur nation… either way, if they can’t handle their business… the markets will reflect that uncertainty… and they have.


  34. think of it as money laundering US fraud profits

    It was all legal in America. Can you begin to see a picture forming here? The US has poor regulation which allows it to pump up its GDP figures (along with a host of other measures such as the profits from derivatives).

    because there was always so much more authorities could do… before it got this way. It was all very unavoidable

    Think who may have been helping them in this. I doubt it was the Germans. Sure, the banks made hay whilst the sun was shining – but just imagine the shouts of joy from the British had they had the wit to do anything so gauche! They merely fiddled with derivatives …

    world now understands that Germany is either being run by people very incompetent at dealing with economic crises

    Read Klaus Kastner’s blog,, with whom I am largely in agreement, and you will get the impression of politicians out of their depth. Greek, German, British … … A simple, straightforward default by Greece in 2008-10 would have sorted out the entire mess. It would have hurt, it would not have been the end.

    I am pretty sure that with 95% of derivatives held in the US (from a source now forgotten, apologies) it was they who were terrified as much as any German.


  35. Chris

    and how will the Americans “rescue” Greece, I wonder?

    Under what circumstances will the Americans make money from Greeks who now have no protection from Europe?

    Better the devil you know?


  36. My apologies… my numbers were wrong…

    It’s closer to 30 Billion (that they know of) barrels of oil, 300 billion over 25 years.
    Plus a HUUUge natural gas find.

    “Notably, the IMF and EU governments, among them Germany, demand instead that Greece sell off its valuable ports and public companies, among them of course, Greek state oil companies, to reduce state debt. Under the best of conditions the asset selloffs would bring the country perhaps €50 billion”

    Germany just wants to get it at a good price… so they play dirty. Greece (as in 1915, betrayed by supposed supporters) will simply save itself… as usual.


  37. @gemma. I couldn’t possibly comment on the financial machinery that the US would use to get its feet under the Greek table. And the lack of european “protection” will mean the Greeks will welcome them with open arms (turkey and friends being not too far away)

    Greece would make a lovely outpost for US military interests and then there’s the Aegean sea, filled with all sorts of lovely energy rich stuff that they could get at a knock down price as greece’ new best friend.


  38. Dunno if the EZ will shatter by autumn, but I have previously said that something will happen in the 3rd Q. This might be the Big Reset if Merky can get away with it politically…


  39. @Mark, neck feet, neck feet, neck feet. Get a few per lamp post then, still doesn’t solve all the piano wire though….


  40. Ultimately the US at least was smart enough to realize in 2008, that this could destroy the world economy and then put their money where their mistakes were… they borrowed like crazy and tarp’d and Obama packgd as much as they could politically to shore up the banks, and convince the markets they had the clout to ride it through… additional funding was needed, and QE printing facilitated. They enlisted the other big economy’s of the world to do the same and keep the worlds engine going during this lapse of American economic pace setting… and most of them came through and took on debts and QE’d and so forth… one holdout?… Germany… having their bank crisis to contain, had to inject huge sums into their banks, investment firms, and auto industries and stop all lending in an effort to shore up the losses and build deposits back up to the point where they would not be harmed by their “partners” problems… unwilling to extend themselves further on PIGS… and knowing it would be absorbed by the govt. and costs could be spread to the EU tax base… took the “wait and see” conservative approach to dealing Greece’s very small problem (in the beginning… while announcing in 2008-9 that all sovereign debt would stay sovereign)… this of course was 2 chinks in the armor of the Euro’s supposed infallibility. The markets can smell a rat… that began the unraveling of Euro credibility and cohesion. It has always been Germany’s unwillingness to show the markets a strong united front, that has allowed the speculation… so they privatized the profit and socialized the losses onto European tax payers. Just like the banks in the States.


  41. @kfc: Blair’s sort-of right. Because originally, the bankers only did what was asked of them by HIS govt’s Chancellor and he ducked out of it all by proclaiming Gordon Brown as a “brilliant Chancellor”. History says otherwise. The better people to hang would be Blair himself and the other political elites who conspired to bring about the catastrophe.


  42. @gemma: absolutely. I’m by no means suggesting that Greece going under the wing of America is a lovely thing for all parties. It will simply be a matter of necessity, after all America won’t want the loans actually repaid in dollar terms. They’ll just quietly, slowly take all of Greece’ stuff.

    America has been at this kind of thing for a long time, Greece is simply ripe for the picking.


  43. Gemma… we’ve hosted both German and American overlords in the past, from much national experience I can tell you that (at least towards Greeks) Americans are better overlords… we are a small country so we must always align ourselves with greater powers… you try having Turkey for a neighbor… 2 months ago they re-drew maps of Greece’s oil bearing seas as actually belonging to them… I would rather have the US Navy defend my naval rights as a Greek in the Aegean Sea than Germany… who exhibits loyalty issues anyway.


  44. @Ioannis You seem convinced, like many Greeks, that leaving the euro will be terrible for Greece. Some of your compatriots are under the illusion that one day the old EU featherbedding will return, but clearly you are not, so what is your logic? It seems evident from the outside that a return to the drachma is a vital first step.


  45. Putting it back on the hard pressed young family with increased mortgages should the Mervyn ‘wise owl’ King choose/forced to go down that route.

    There is no easy solution Gemma for something that’s taken many years in the making to get wrong and more pain not less is on its way if those badged elite are bereft of ideas.


  46. Hmm. We did devalue the £ by about 30%. Our usual trick, and the real reason why we never joined the Euro. I must admit, though, that lenders to the UK (foreign ones) must be incredibly sure that the devaluation will eventually be reversed, as it has partly already. Otherwise they are on to a certain loser. As for Gemma’s comment about Britain not needing to borrow money (below), would that it were so. Unfortunately we have an annual deficit that is still growing and also of course we need to refinance expired loans. The day when the UK has no net borrowing requirement should be the cause of a great national celebration, but you can bet that some politician will come up with a reason to spend future income now, however thin. A country that finances its annual recurring spending by borrowing from abroad is living right on the edge. Capital spend is OK (if the projects are sensible) but financing the NHS and other spending from the next decade’s tax income was never a great idea, and when growth is < 0, it's positively bad.


  47. @Mark: A major factor in low UK bond yields is that the BoE’s QE money has virtually all been used to buy govt debt, thereby creating a demand market for it, meaning lower prices. We are not supposed to notice this.


  48. You haven’t been reading my posts logically or you would have deduced that I have no fear of Greece leaving the euro as evidenced by the fact I did NOT vote for the pro EU party’s that Merkel and co. were campaigning for in our last “election”. I have been in favor of Greece leaving the Euro since 2010… I just insist that if we are to be bullied and slandered by the ignorant masses, then it will be when and how we say, when it works for US. The summer is almost over… the wells will be productive end of 2014… we are just trying to get extension so we can leave at more convenient time. My “compatriots” as you say… have known since 2010 that Germany was not sincere in their commitment to aiding us OUT of the solution, instead of further in like they have… so we have delayed austerity and public asset sales in advance of the inevitable Euro melt down. Why would we sell 300 billion in oil to Germany for the paltry 50 Billion they were offering… the insitence that we “reform” as they are putting it now … includes provisions to sell off our oil and natural gas rights… so, no thank you… we can wait.


  49. It’s a testimony to the skill and guile of the elite class that rule the UK in interpreting the wise words of a famous cigar smoking politician and using them to good effect when speaking truth in time of financial war.

    Bodyguard: We are one of the richest counteries in the world
    Truth : In terms of debt.


  50. Well said. Dictats from abroad are rarely welcome. TBH I think the Greeks have generally played a blinder. Yes they’ve absorbed a lot of punishment, and become the bad boy of the EU. But on the other hand they’ve taken billions from their bullying overlords that they are never going to pay back and are in the enviable position of nearly dictating the terms of their own default. Given that they are the creaky cornerstone in the crumbling EU house. they can basically say how and when it falls. I’m willing to bet that Greece gets the next tranche if bailout cash after some troika posturing. The fact is that there is no other option for now and there’s probably one more kick left in the can.

    Are the greek authorities crooks? probably. Smart crooks? Definitely.
    if you compare them to the Germans whose export boom will blow up in their face and they’ll be left on the hook for billions in sovereign liabilities. All the while, Greece will be on the road back to normality.

    I wish Ireland would show some of the same savvy, unfortunately we’ll probably be the last of the PIIGS to walk the plank and we’ll suffer all the more for it.


  51. FFS – is there anyone left who doesn’t claim to have predicted:
    • the bank meltdown
    • the sovereign debt crisis
    • the collapse of the Euro

    Let’s just take it as read that everyone was right, everyone saw it coming, everyone predicted it, as long ago as 1847.

    Apart of course from Gordon Brown, who asserted that he had abolished boom and bust.


  52. Unfortunately, all that German management know-how and financial nous doesn’t seem to extend to running the euro.


  53. Pingback: Moody's Downgrades EU Creditors: It’s the beginning of the End

  54. Toby

    sadly, you are right. The Germans do not run the euro – the EU do. Along with their ECB and whoever wags the both of them, they are making a right royal mess of it. Had the Germans had their way from the start, the banking regulations would have been tightened up across Europe – and whilst painful for the periphery, it would have stopped any silliness by Spain and her builders (amongst others). Somehow, someone else got their way and the banks got away scot free – as usual.


  55. M
    you are right; there are no easy solutions, QE being one of the poorer ones! That it has come to the point where ratings agencies downgrade countries the night before a bond auction makes ones ears prick up. Someone, somewhere, is not playing by the rulebook – if such a thing ever existed. There is a real lack of level playing fields, and the Brits are not helping by pulling their corner.


  56. Carys

    Sorry, I missed that.

    A country that finances its annual recurring spending by borrowing from abroad is living right on the edge.

    That is a statement that the ratings agencies should have taken notice of in 2002. Had they done so, things would have gotten tough for the peripherals – but at at time when it was still possible to avoid a real problem.

    I agree entirely with your statement about borrowing for capital investment, that is prudent as it will bring its own returns. Indeed it would have helped bring the deficit under control. When the markets wake up to all this, they will have one big party at the UK’s expense.


  57. Dead H
    that is what markets do. You hit the nail on the head when you say that they are not just some group of speculators. That they are individual and make their own decisions does not mean that they are not open to manipulation by the likes of the Goldman Wolves. Far from it; they are the more open to it. That it remains “their own decision” does not mean that it was under circumstances that were dubious (= ratings agencies acting maliciously, Libor rates fixed etc. etc.)


  58. @Gemma: I dunno. It’s possible the markets are simply giving the UK the benefit f the doubt (ie: believing that the Uk is serious about getting on top of its debt mountain). Time will tell…..


  59. BT

    no doubt in the matter whatsoever. It is merely that people can make more money with Britain printing than by not supporting it. Whatever the reason, when it comes to the point that they make more money trashing the place, believe me, it will happen.

    Perhaps it is somethin to do with 7% interest rates in the Eurozone??


  60. Ioannis

    you are welcome to them!

    My view is that Greece has better partners in Europe than from the other side of the Atlantic – but I would suggest that for the UK as well. But hey! who am I to speak? It isn’t my country, Greece is yours. I just wish you had some responsible people in government!!


  61. Pingback: MOODY’S DOWNGRADES EU CREDITORS: It’s the beginning of the End / Η MOODY’S υποβαθμίζει πιστωτές της ΕΕ: ​​Είναι η αρχή του τέλους « eleutheriellada

  62. @Gemma: “…when it comes to the point that they make more money trashing the place, believe me, it will happen.”

    We’ve already been trashed by Gordon Brown and his socialist government! If the markets want to trash the trash … well …


  63. Gemma… at the moment our “partners” in Europe have destroyed our economy and left us on the verge of anarchy, civil war. We also believed that Europe was the better choice that is why we closed the US base in Athens, and joined the Euro… but Europe is now run by Germany… and they’re stance towards Greece as a “partner” has been painfully obvious… even yesterday our “partner” Germany had most of their govt. campaigning to the press that we should leave… openly proposing what they previously said they would NEVER allow to happen… they are lying, opportunistic, betrayers… and as far as choosing to side with the US, China, Russia, etc. well… it’s not like our “partner” Germany is giving us much of a choice in the matter, now that they have run our country into the ground we must seek help even from sources we may not prefer… since Germany has thrown us to the wolves. Also… at this point, looking at the future of the Euro… and the European Union in general… I see more long term stability coming from those country’s. Mostly though we will be forced to turn to the US, and others BECAUSE Germany is forcing us out of the Euro. So were not exactly CHOOSING the US… but Germany’s Eu does not have our best interest in mind, and does not want us around… so what do you want us to do?


  64. Gemma… I to wish you had some responsible people in government. Could someone please tell German politicians to stop slandering Greece constantly… never gonna sell any state assets for as long as people believe there is instability here… and since the world seems to have bought all the fantasy character assassination that Germany has been lying about… it is difficult to get anything done when you are being undermined, and sabotaged… but I guess Germans have proven that just short of and invasion… this is the only way they can deal with Greeks.


  65. Ioannis

    your partners in Europe have destroyed your economy – are you sure the Americans won’t help that along a little? Your current government has not done anything to make matters better, only worse. Saying that it is the fault of Europe is to say that your politicians did not do what they should have done when the time was right. Believe me, when your American friends turn up, you will have more problems: not because the Americans are friendly (they are not) but because your government will make the same mistake as it did with Europe. Your government will do nothing.

    As to Europe being run by Germany? If but it were. There would have been a lot more pain for a start, issues would have been dealt with. The EU bureaucracy is as ineffective as your government, and that is being kind. Please remember that the press in Germany is not the government. Each paper has its own views, some of them find it easy to make Greece look foolish. Believe me, it is not hard to do when your government has been as effective as it has been.

    Who, may I ask has run your country into the ground? Not the Germans: your government needed no help on that score. As mentioned, when your Americans come to help, it will get no better because their help will be to help themselves. The undermining and sabotage is in reality ineffective Greek politicians who miss opportunities that stare them in the face. How is one to deal with people like that? Telling them to do something means only that they will consider every possible alternative, spend weeks doing it and then having come to a decision, fail to implement one word of it.

    Are you surprised that the Troika is a little upset by this behaviour? I taught remedial kids with more ability to get things right than your politicians.

    Your 300 million barrels of oil will be sold at a knock-down price to the American big business not the German big business. It is your choice who you enslave yourself to thanks to proud Greek politicians who sold Greece a decade and more ago.


  66. Gemma… I would imagine you limit yourself to mainstream news sources because your statements are an amalgamation of the worst kind of populist bollocks. The reason Germany was just downgraded is BECAUSE of the job they have done “leading” the EU since 2009, not because your financials are weak… you have profited greatly from the crisis… not to mention all the money in Switzerland, eh? Regardless… the worlds serious financial media has been openly talking about Germany’s failure with EVERY country that needed they’re “Union” help.for literally years now… and yet somehow you are obsessed with Greece’s shortcomings? Ha!… you are delusional. In regards to Greece’s “leaders”… I did not vote for them, never have. Also, no one has any idea what kind of horrific awakening we received in 2009 when the truth about our hidden debts began to roll in… so I am well aware of what got us to the point of 2009. But this article was not about that… this article was about how Germany has bungled it’s efforts to deal with this crisis… and on all accounts its been a spectacular failure on the whole world is on the brink of a complete fiscal meltdown as a result… that is why the news, the down grades… so please don’t insult everyone by trying to change the subject by blaming the Greeks as having anything to do with German incompetence. The reason the Euro is dropping and the worlds markets are running scared… is Germany, not Greece… but nice try. Additionally, since you are just concerned with yourselves, and your money why don’t you leave the EU? by all analysis of the subject… Europe would work it out… and eventually be better off. Ahhh… yes there is always the inflation you are avoiding… listen I know you are used to getting the cake, for free, eating it, not having to pay for it, and not gaining any weight either… but in this instance you can’t get your cake and eat it too. Whatever… your bankers will just make up the rules as they go along any way… why are you even complaining? is your economy doing badly? NO… so what do you care? just got to be in charge? just have to have the final word?


  67. Pingback: Έφτασε η αρχή του τέλους | αἰέν ἀριστεύειν

  68. BT

    the problem in the UK seems not to be Brown, or Cameron, but the whole lot of them. Like the Greek politicians, they seem incapable of doing anything more taxing than working out that they have two thumbs with which they can twiddle the day away with.

    Brown may have done things at the behest of his masters, and there is sufficient evidence right here on this site. That does not mean that only he is to blame for all this.

    Put bluntly, Britain needs answers, not more people to lay blame. That is easy, answers are not. So far the right-wingers have not shown any inclination to find any answers beyond trashing the system even further.

    Perhaps you are right? What do you need markets for when the government can do it for you at far greater expense?


  69. Ioannis

    Just one moment …

    “not to mention all the money in Switzerland” – – – is that Greek money in Switzerland or is it London? New York?

    It seems your elites have been as disingenuous as any. Your rants are misplaced. The solutions you need must be found in Greece, and you cannot keep blaming the Germans for being successful. Were JW to understand that Britain lost out on a huge opportunity in exporting to Europe, things might look a little different. But this is written by someone with a British perspective on the issues that sees Germany doing things that are wrong – but were practiced to far nastier degrees by the British in the past.

    I will remind you that German workers have seen their incomes drop in the last decade, and retaining their competitiveness. If Germany leaves the Eurozone, it is they who will suffer, not those making the money. In the mean time, the peripherals saw their workers get 40% wage increases thus making them less competitive – in a world that requires more competitiveness not less.

    The point of the Eurozone was that countries less well developed than Germany could hitch a ride and become more competitive. They had ideal circumstances with mere 3% interest rates. Instead (and with the help of the EU and other hands unseen) they lapped up the free money and splashed it out on viaducts crossing valleys that nobody wanted, let alone used. They could have been a little more circumspect. But corruption begets corruption, and the resulting mess can only be blamed on those who were successful at a time when yours was not.

    You had a golden opportunity. Now let us see you waste it again when the Americans come to pilfer all your goodies. Then you really will have cause to whinge. You will have been let down again!! It will be the Americans buying it all, and “getting the cake, for free, eating it, not having to pay for it, and not gaining any weight either” at your expense – again. Somehow your arguments hold less water each time you open your mouth.


  70. Additionally, because you haven’t been paying attention… WE are not the ones that have been working with the Americans.

    Don’t worry, either way… it all works out in your favor, as both you and your American pals will be able to buy oil and natural gas in Drachma instead of Euro… as was planned. American and German banks have been working together and doing the same thing in both of their continents from the beginning… irresponsible lending, followed by government funding and the absorption of bank losses and their conversion to sovereign debt, so the people can pay for the scams of the banks… then their governments USE the crisis as reasoning for consolidation of power, tax increases on poor people, and cuts in services, and destruction of the pension system. The US did it with their own people, Germany is a little more sensible and only sabotages other people… same scam, same banks, same “leaders” that caused all this, then continued to this day to be the biggest profiteers of what is truly an economic war. Greece has no friends… at least we don’t now.


  71. If you choose to live in what happened in 2001… no one can help you. This discussion was about the down grades, and why they happened, yesterday. Since you cannot stay on course in a conversation (due to lacking any response to the points I have made). I will not waste my time with someone that is always is changing the topic, and will not spend even 30 seconds thinking that maybe there is a reason why the WHOLE WORLD, not just Greece feels that Germany has failed in it’s handling of the crisis. Then again, we are not the master race so how could the WHOLE REST OF THE WORLD have any idea of what they are talking about. You keep trying to draw me into a discussion about Greece when this is about the IMMENSE danger that Germany has placed the worlds economy out of selfishness, intolerance, a lack of vision, and bad leadership. Ultimately Moody’s downgrading Germany is not about it’s financials but it’s leadership, it’s direction… and regardless of what country you live in… the markets reflect reality, and that is why been downgraded… bad management. That is what’s happening TODAY. I will engage in this useless, topic shifting debate with someone that squawks baseless generalities, and irrelevant mythology as the answer to valid questions about the ACTUAL subject of conversation… if you can’t come up with a relevant, informed reply… not just your fairy tales, and slander. Please just don’t answer. Reason, facts, and logic… I can listen to.


  72. ‘In Berlin-am-Brussels,’
    Love it,
    One thing that bothers me, there’s a notion that the longer Germany can drag this EU crisis out, the more it benefits Germany..
    For example, when the EU failed states have to pay 6% plus interest on their loans, ie. the yields, investors seek a safe haven in German bonds or bunds, which reduces the yield and makes it cheaper for Germany to borrow money,


  73. Pingback: Έφτασε η αρχή του τέλους |

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s