Pardon me, but this seems as another “I told you so” moment in terms of the Greece crisis.
Many have stridently been calling for a Euro collapse on this Greece vote.
I argued otherwise,
But most importantly this signifies as the implicit desire to keep the current unholy central bank-government-banking system cartel or patronage system intact.
Proof of this is that the exigency to conduct bailouts has almost been representative of the creditor nation’s banking system exposure to crisis affected economies
Any signs that would risk the survival of this tripartite global political arrangement would translate to urgent or contingent collaborative actions, despite political differences.
Faced with the risks of a Greek default, the ECB and Germany have been working on a compromise. China’s recent declaration to help shore up Eurozone bonds or the bailout of Greece has also demonstrated such tight kinship on a global scale.
The current framework of socio-political institutions has been built around such symbiosis. It’s a relationship based on financial repression.
And unknown to most, the political elites will fight to maintain this status quo despite the unpopularity on the constituency.
And apparently events has been turning out the way I saw it.
From Bloomberg,
Greek Prime Minister George Papandreou won approval for his 78 billion euro ($113 billion) package of budget cuts and asset sales aimed at meeting European aid requirements and will face a second vote on the implementation of the plan today. Data today may show European consumer prices climbed in June, fueling the prospects of an interest-rate increase next week,
This comes even as the Greek populace, accustomed to welfare entitlements, seems to be vehemently against it.
From the Financial Times,
Violent protests escalated after the governing Panhellenic Socialist Movement (Pasok) had won the vote by a clear majority. Clashes between stone-throwing protesters and riot police firing teargas spread beyond Syntagma into the city’s main shopping streets. Angry demonstrators tore bollards from the ground and used them to smash paving stones and marble facades for ammunition. Rubbish bins were upturned, their contents spewed across roads and were set on fire...
Pasok won approval for the new four-year package of tax increases and spending cuts by 155 votes to 138 with five abstentions – all by members of the Democratic Alliance, a conservative splinter group. Two deputies were absent.
Fears that as many as five deputies would defect proved unfounded as only one, Panayiotis Kouroumblis, shouted “No” when it came to the vote. He was then expelled from Pasok.
With one exception, the conservative opposition New Democracy party voted against the package after Antonis Samaras, their leader, had once again rejected appeals for consensus by Olli Rehn, the European commissioner handling the crisis, and Angela Merkel, German chancellor.
As you can see politicians will lord it over their constituency by force. It’s repression, whether applied to politics (political repression) or economics (financial repression).
This is NOT to say that the Euro crisis is over. It’s been another dilatory ‘kick the can down the road’ tactic with repercussions down the road.
I DO NOT imply that Euro can’t collapse too. All conventional currencies based on central banking fiat money system, will remain under pressure, if the bailout policies persists and becomes entrenched.
For the Euro, it’s obviously not their appointed hour yet.
The point is:
This has been how the political institutions have been established, and this will likely be the general direction of policies...until the system reaches a 'tipping point' such that economic reality will work to undermine the existence of these institutions or when common sense and self discipline prevails.
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