Meanwhile, the EFSF robs Petros to pay Pavlos
The US Treasury’s Assistant Secretary for International Finance Charles Collyns had a meeting with Greek Finance Minister Yiannis Stournaras in Athens on Wednesday morning. The official Greek media version was that Collyns ‘expressed the support of US-Finance Secretary Tomothy Geithner to Greece and his confidence in Greek efforts. Yinannis Stournas briefed Collyns on the situation of the Greek fiscal condition, and the key challenges of the Greek economy’.
In fact, Washington sources told The Slog last night BST that Collyns – a confidante of both Geithner and Stournas – was on a specific mission to impress on Greek Finance bosses the US Treasury’s sincerity in offering Greece “almost unqualified support in the event of a return to the drachma”. The White House is betting on the strong likelihood of Greece becoming formally insolvent before any more bailout monies are available from Berlin-am-Brussels.
Charles Collyns is uniquely placed to deliver the message credibly to the Athens government: he was at the IMF for many years, and is a personal friend of Geithner going back a long way; but significantly, he is also an old classmate and close friend of Yiannis Stournaras himself.
As The Slog reported earlier his year US Government covertly attempted to isolate Greece from the eurozone last March, in a bid to both make the country an important and loyal base for military intervention against enemies in the region, and itself play a beneficial role in the exploitation of Greece’s energy and mineral assets under the Aegean ocean. This move shows that the Obama White House remains determined to follow this course of action. A number of informed sources in Europe believe that the Greeks have had all the EFSF monies they’re going to get. On that basis, they would probably default on or around August 20th.
One day soon – allegedly – that EFSF will become the ESM. But it’s becoming increasingly hard to see how future bailouts are going to work given the likely contributors to the fund. As Yanis Varoufakis noted on his blog yesterday, on August 20th Greece is due to borrow €3.2 bn from the EFSF, in order to pay back the ECB. This idea is potty enough, but are we now to believe that Spain can cough up €600m for Greece, while borrowing another €3bn for itself?
That the whole ball of wool is unravelling could not be clearer given examples like these. Yanis Varoufikas urges Greece not to borrow the next tranche. I think he’s farting against thunder on that one. But as the American moves suggest, the money may well not be forthcoming anyway.