ATHENS IMPASSE: Draghi’s BoG move breaks deadlock

Troika quits Athens ‘very happy with austerity progress’

Geopolitical tussle for East Med/Aegean riches hots up

Yesterday, The Slog pointed out, ‘It’s emerged that the ECB’s Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans….Mario Draghi is giving the signal that anything goes rather than having Greece default.’

Up until then, the Troikanauts in Athens were describing their meetings with the Samaras Government as ‘deadlocked’. I added at the time, ‘they’re becoming adept at leaking to all and sundry how the Athens Coalition’s projections on tax collection are “ridiculously over-optimistic”.

But suddenly this evening CET, Greek MSM paper Kathemirini reports that ‘A three-hour meeting between government ministers and officials representing the country’s international creditors — the European Commission, European Central Bank and International Monetary Fund, known as the troika — ended on Sunday with the IMF envoy Poul Thomsen saying there had been great progress in finalizing a package of 11.5 billion euros in budget cuts for 2013 and 2014.’

“The meeting went well. We made great progress. We will take a break and come back in early September,  Thomsen was quoted as telling reporters after the meeting with his counterparts from the EU and ECB, Finance Minister Yannis Stournaras and Labor Minister Yiannis Vroutsis.

The key phrase there is ‘come back in early September’. Over the last 96 hours, the Troika had reported back to Berlin-am-Brussels and Frankfurt to say that, unless they were given more resources to keep the show on the road, the Greeks would default, and as their repayment plans were all over the place, the IMF was likely to pull out immediately.

At last, the music had stopped…and Draghi had the parcel. He had no choice but to free up more money. Effectively, he gave the Bank of Greece access to ECB funds – the sort of deal France continues to lust after. The sort of deal which will allow Greece to meet its late-August debt repayment schedules.

There are two factors that forced his hand. First, despite the poker bluffing of recent months, the private eurobanking system is not ready for a full-on messy Greek default with incalculable derivative consequences. But probably of greater weight over the last few months, there is no doubt that the East Med-to-Arab-Spring Cold War is heating up – and the full scale of the undersea wealth under the waters around Greece has become clearer.

Forgive me for labouring this point, but with every day that passes, more evidence comes to the fore supporting the geopolitical considerations in play. Tomorrow, Israeli President Simon Peres flies into Athens. Talking to Greek broadcaster Mega TV, Peres stressed the importance of energy cooperation among Israel, Greece and Cyprus and underlined that Turkey has to respect International Law when it comes to recognition of the Exclusive Economic Zone of Cyprus.

Already, the Israeli President is schmoozing the Greek media bigtime. Talking about the historical bonds between Greece and Israel, for example, Peres revealed a personal story: that his father hid in a Greek monastery during the Second World War. Oiveh, and they didn’t convert him? What kind of salesmen were they?

But the Americans are worried by the Turks, NATO partner or not. This might have something to do with the growing realisation over at State that Recep Erdogan is a taramasalata short of a meze. Erdoğan has now convinced himself that Turkey is  the one true “owner” of the Olympic flame, and indeed the Olympic spirit itself. He argues that a short distance from Antalya, is Mount Olympus. To be more precise than Erdo the Odd, it’s 96 kms away to the South-West…but let’s not get hung up on the detail here.

On Mount Olympus, the ground is heated naturally by methane in the subsoil.  The legend of the Olympic flame, it seems, comes from this area: ergo sum, the Olympics are Turkish. Indeed, during Erdogan’s meeting with Olympic Games chief Jacques Rogge last week, the Turkish PM said that Turkey demands the Olympic Flame thus be returned home….conveniently timed to coincide with Turkey’s bid for the Olympic Games of 2020. That’s one way to influence the IOC, I suppose.

This methane heating thing seems a bit smelly to me, especially as we are talking legend re this one. Also, I’m no classicist, but in the little I did learn of ancient history at school, I don’t recall anyone called Kemal or Fazil racing for the finishing line in the Greek games. However, the major flaw in this rewritten Recep rubbish is that, um, at the time of which he babbles, the area was Greek. The ancient city of Olympos lies in ruins today, but it was founded in Hellenistic times, becoming part of the Roman empire in 78 BC. Nothing called Turkey figures very highly at the time.

The chief of Greece’s London Olympics mission Isidoros Kouvelos told Athens News yesterday, ““I would cordially like to invite Mr. Erdogan and his minister Mr. Kilic to ancient Olympia, to where the Olympic Academy resides, so they can both attend some interesting lectures on Olympic history”.

Joking aside, the Turkish desire to retain (and maintain) a nationality foothold in the Cyprus area goes back 55 years, according to British Foreign Office papers released last week. Turkish Cypriot leader Fazil Kucuk noted after a meeting with Turkey’s Foreign Minister on January 16, 1957, that the Turkish Cypriot community would not agree to anything but partition…that is to say, he was not willing to go with the principle of majority self-determination – despite the fact that those of Greek origin make up just over three-quarters of the island’s population. British Colonial Secretary John Reddaway confirmed on June 29, 1957, that the Turkish government opposed a unitary state in Cyprus. Bit of a shame he didn’t have the spine to tell Ankara to go forth and multiply, really.

But fast-forwarding to 2012, the bottom line is this: the Americans, the Sprouts, the Israelis and the Turks have a lot at stake here. What happens to the Hellenic Republic is about far, far more than debt. Stay tuned.

ALSO AT THE SLOG TODAY: ‘Multicultural Britain’ wakes up to face some harsh realities.


51 thoughts on “ATHENS IMPASSE: Draghi’s BoG move breaks deadlock

  1. “early September”

    Well they have 11 days from the start of the month to get their house in order. The 12th keeps coming up as a day to mark in the calendar. It’s looking a lot like your prediction of US sponsored amputation of some months ago John. Later than expected but no less intended.


  2. Central Athens sits above the largest goldfield in the world,The unexploited mineral reserves of the Peloppenese dwarf those of the Congo,Greece’s 2,000 or so islands lie above oil field’s larger than Saudi Arabia.Unfortunately,Greece’s current liabilities exceed current assets.This is called insolvency.I do not doubt that in the next few weeks Spain ,Italy and France will announce vast reserves of natural gas and hitherto unexploited diamonds whose potential value is limitless.If i was a German taxpayer,I would be getting nervous about the ECB.


  3. Just my wicked mind but, can you imagine the the panic in the US if Spain, then Portugal followed by Italy were also to discover trillions of Euros in reserves in oil and natural gas…..


  4. So the days of club med countries being encouraged to run greater and greater deficits safe in the knowledge their prudent nothern cousins will foot the bill may finally be drawing to a close…!!!

    Expect mucho public sector strikes, mucho feet stamping, mucho claims that capitalism just isn’t fair etc etc

    I look forawrd to the day when I will finally return to the med – but I want to be having lap dances (from high class lookers) for pennies on the (gold) dollar – I won’t be returnin till then.


  5. “majority self-determination” would have resulted in the minority being bullied or worse. At least that’s the way to bet.


  6. The ECB is printing like there is no tomorrow, Merkel is turning a blind eye to it all, the bond markets are milking it for all it’s worth.
    HeyHo, life goes on….


  7. Gemma: i absolutely agree. And politicians/central bankers/horse traders/pillagers wonder why they’re universally despised!


  8. “Oiveh, and they didn’t convert him? What kind of salesmen were they?”

    Careful here please… The Orthodox Religion and speaking from the view of the Greek Orthodox Church does not force Christianity to anyone.

    So as I do not question or mock your views show the same curtousy…


  9. @John Ward…”The date today is July 23rd. Slog contacts in Athens and Paris – and a former bondholder representative – have concurred over the last 24 hours on one thing: Greece will default before that September money comes through. ”

    John, remember this comment?
    Maybe you remember this comment too….

    @Kennyboy (several times)….
    see below:-
    For the sake of any doubters, here’s what WON’T happen:-
    1. Germany leaving the euro
    2. France, Italy and Spain likewise
    3. Greece voting to leave the EU
    4. Greece actually getting a referendum on the issue
    5. The UK likewise
    6. UK interest rates increasing

    Here’s what WILL happen:-
    7. Greater integration of members of the EU
    8. Proposals touted for a central EU government
    9. Quantities of EU-held gold sold to Rothschild, Rockefeller and Blankfein
    10. EU banks recapitalised by EU taxpayers
    11. Bank mergers & acquisitions planning nearing completion.

    The “Wishful Thinking” deadlines will come and go. The Euro project will however continue on course.


  10. “What happens to the Hellenic Republic is about far, far more than debt.” The story of my country repeated. Never thought to see it in my lifetime..Still it would be misleading to convey the message that the Greek people is not to blame..Letting your destiny surrendered to so called “charismatic” politicians comes with a hefty price one or two generations later..Now it’s time for me and my kids to pay for mistakes that took place well before i was even born.We should have known better,but we didn’t and sadly we still don”t.


  11. Democracy is two wolves and a sheep decide what to eat by majority vote. Liberty is when the sheep is armed.


  12. Odd, isn’t it? The way nations seem to go bankrupt just after finding loads of oil but before they are able to exploit it.


  13. Actually many of the jews who hid here were converted…for the duration!
    My father in law converted and found hiding places for about 40 jews. He was not a priest, he did the conversions himself.


  14. Tasso my father always maintained that Greece was the lucky country – ie lucky enough to be fought over. He meant it’s geo-political importance from the beginning of its history, plus its culture. Don’t know how old you are but within our pensioners’ lifetimes we’ve had the Truman Doctrine, the junta, inclusion into the EU (upgrading of our infrastructure / EU boundary with Turkey & Fyrom), and now this. MOST of this didn’t feel lucky on the ground or at the time, but taking a long step back, it was. Sad to say though our politicians have degraded in that time in lockstep with their gravy-train boondoggle EU partners.


  15. Sorry, should add: and its geopolitical position created the conditions for our culture, from pre-Mycenaean to Byzantine to Ottoman to the unhappy present. At the moment we’ve degraded ourselves by throwing in our lot with bad company – (the same should be said for much of the EU/EZ) – in an age openly and shamelessly dedicated to financial corruption…I hope this will change.


  16. dearieme

    They already were; from the start of’ EOKA and the Greek Governments efforts to annex Cyprus the Turks were treated very badly. Cyprus was a lovely island until ethnicity became a problem. The events of 50 years ago have been ‘sanitised’ by those with axes to grind, but those of us who were there remember them well.



  17. my point entirely…you don’t want a guy like me to come right now; so I won’t…I’ll wait till you’re begging me to come over and spend money


  18. I must admit all these new found riches seem really strange to me (if they were there surely they would have been exploited by now, the med is a mill-pond compared to the North Sea or Gulf of Mexico and as for gold that would have been dug up long ago).


  19. VJ

    it makes interesting reading in connection with your comment that the US was instrumental in getting Turks admitted to Germany. I wonder if the same departments are involved?

    It seems an odd thing to do – the US supporting Islam. But then, I suppose anything that turns a cent is considered a possibility, regardless of any collateral damage.


  20. It is odd. There was some debate several months ago about why Greece’s oil/mineral deposists were known about a few years ago but never exploited. No explanation produced, so far.
    Perhaps the Greek political elites guessed that the EU/EZ gravytrain would hit the buffers and decided to milk it as long as possible and to keep their own wealth in reserve for when that happened.


  21. Kenny , to some of us seems as the wishful thinking is done mostly in Brussels .Humbling economics and maths don’t go away because of some commonly agreed-upon lies reality .I can agree with you if you want, that every god has both believers and disbelievers , that true and false are constant companions .I can go Zen and echo buddhist sayings like ” if you understand , things are just as they are . If you do not understand , things are just as they are .” But the nagging maths ( at least for greece ) will not go away and evey solution will create as many problems as it would solve.


  22. Financial corruption manifested or rather disguised as growth and free market. Greed is a more accurate term though so, have little hope something will change in what seems to be (in)human nature.


  23. Totally agree. The Soviets managed to avoid reality for 50 years but the hard, cold facts of economic reality could not be dictated away. Problem is the wreckage they left behind is still impacting lives negatively 20 years after the collapse of ‘Paradise on Earth’.
    The EU can avoid the collapse by doing excatly what Kennyboy states but the longer the delay the worse the hangover.
    In any case anyone with money to invest should not be leaving it in the Eurozone as this will only encourage Brussels to continue its efforts to save the project which is irreversible!


  24. Oil companies knew of the existence of oil in the MED as far back a sthe 1970’s… at that time the idea of pumping oil out of the sea was technically much more difficult, and certainly more expensive than continuing to get it more easily from the Arabs. Now as water based drilling technology has progressed and become better and more cost effective… it has become more feasible. BT is right in a sense except for one slight modification… the Greek political elite have long guarded Greece’s national assets (beaches, forests, gold mines, etc.) and kept them from development for the simple reason that they have been slowly, quietly giving, or other wise granting them to friend and family of their own for kickbacks, bribes, or other forms of renumeration. They are hesitant to privatize enterprises or develop resources only until they can figure out how they can possibly steal the most of it. As far as gold… they have always been pulling gold out of the ground in Greece… last few years there has been a heavy emphasis on environmental protections as a way to save these lands for tourism development… of course now that the economy is broken… the environment or tourism?, not so important. Now a Canadian company has stepped in to see if they can navigate Greece’s crooked leaders and BS regulations to make a profit…

    “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.”


  25. We would never want an exploitive scumbag looking for dirt cheap lap dances for pennies on the dollar to come out AT ALL… just keep moving to Turkey or maybe the Ukraine would be best… that way you can just buy a wife to exploit further. There will NEVER be a time in Greece that someone like you will be welcome… and you would die before any Greek begged you to come… so make alternate plans, don’t come.


  26. Ioannis

    it gets worse: any EU citizen arriving in Britain is immediately entitled to all social benefits.

    That is because the British government cannot prove that these people have not been in the country for five years as is required under EU law. Since they cannot prove that they have not been resident for five years, they must pay benefits as soon as anyone arrives.


  27. W-O-W! I am actually a British citizen, and even though I don’t live or work there, I find this extremely unfair to British society… this is really outrageous… why aren’t Brits taking to the streets?


  28. “Britain: Muslim Polygamists to Get More Welfare Benefits”

    Ha ha ha ha ha……..!!

    I would be laughing at your naievty over there in blighty at the thoughts of your taxpayers funding hareems only it’s quite certain that the treasonous fools that “govern” Ireland will most likely do the same thing here eventually.


  29. @Gemma: I’n not sure you’re entirely correct on that.
    Nevertheless, *if you are*, the solution for the govt is quite easy: they should pass the burden of proof to the immigrant. That would not be unreasonable. One wonders why the hell this wasn’t done yonks ago.


  30. BT

    the burden of proof would be quite an easy thing to sort out administratively. But most people in the UK are unaware of this loophole, so the government does nothing. Well, it works, right? Why fix it? It takes money to arrange these things …

    Essentially you could have a voluntary residence register for those EU immigrants wishing to make future use of such arrangements. Those not wishing to partake need not do so (= rich Greek magnates living in London for example).


    I have no idea why the UK has not tackled this issue. Perhaps they cannot sort something out within EU law. If you have UK citizenship you will know that there is no registration system for people there, and there is intense feeling against the imposition of such a system. With a government such as is to be found in the UK, I can easily understand this. The Dutch have had a registration system since the time of Napoleon – indeed that was when all* Dutch people were first required to have a surname (family name). Some didn’t think it would last long, and there are a few silly answers given such as “Nooitgedacht” (Can’t fink of nuffin) and “Naktgeboren” (= birthday suit) and the more common “van der Klooster” “van Rhenen/Veenendaal/Dijk/Breukelen” etc.

    However, I cannot see the problem with a voluntary system. However, the details of EU law would need clarifying.

    *Richer and more influential people such as my ancestors, the de Vlaminghs did have family names alread.


  31. Super Feck

    does Ireland have a registration system for residents? Is there a system for EU immigrants to register voluntarily if there is not?


  32. Goodness… I didn’t even think of it that way… British people pay to support Muslim harems… they say Greece is f’ed up.


  33. @Gemma: Completely agree with the voluntary register idea.

    It could simply be explained to immigrants thus: “if you think you may wish to claim welfare in the future it is your responsibility to register upon arrival to provide proof of residence in the UK when required”.

    Eligibility for future welfare would begin from the day they first registered. Anybody who failed to register would be denied welfare.

    It is so simple…..


  34. BT

    the problem as I see it is that the UK government might have to apply this to all citizens (equal rights and all that?). The EU law needs to be taken into account here. Britain, after all, takes great care not to infringe these laws as other countries do (NL, F etc).

    The system would be “easy” as I said; but that does not mean it will be done. If it is not in the public eye, why bother? After all, any money needed to pay for everyone is simply printed at the Bank of England after all. It is a little like this idea of “free energy” – only in economic terms.


  35. @Gemma: “the problem as I see it is that the UK government might have to apply this to all citizens (equal rights and all that?).

    British citizens have no problem proving their identity and if I ever wanted to claim welfare and was faced by some crat demanding that I prove 5yr residency in the UK, I’d give them a good bitch-slapping ;-)


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