Greece Roundup
- A “yes” vote in favor of servitude has now reached a slight majority according to some Greece referendum polls. How accurate the polls are is an issue.
- Yanis Varoufakis, Greece’s finance minister, said he would resign if Greeks voted Yes in Sunday’s referendum on the country’s bailout. “I will not sign another extend and pretend agreement”, said Varoufakis.
- Greece to run out of essential food and medicine within days and banks down to last €500 million.
- Daily allowance of cash from ATMs has dropped from €60 to €50.
- Three quarters of business leaders think Greece will be forced to leave the eurozone in the next 12 months.
Vote for Servitude Takes Slight Lead
Reuters reports ‘Yes’ Camp Takes Slim Lead in Greek Bailout Referendum Poll
Supporters of Greece’s bailout terms have taken a wafer-thin opinion poll lead over the ‘No’ vote backed by the leftist government, 48 hours before a referendum that may determine the country’s future in the euro zone.
The poll by the respected ALCO institute, published in the Ethnos newspaper on Friday, put the ‘Yes’ camp on 44.8 percent against 43.4 percent for the ‘No’ vote. But the lead was well within the pollster’s 3.1 percentage point margin of error, with 11.8 percent saying they are still undecided.
Given a volatile public mood and a string of recent election results that ran counter to opinion poll predictions, the result is in effect completely open.
Credit ratings agency Fitch said the banks were already effectively bust and would go to the wall within days unless the European Central Bank increases emergency liquidity assistance to help them cope with a wave of withdrawals.
There has been little time for campaigning but Tsipras is due to address a mass rally of ‘No’ supporters in Athens’ central Syntagma Square outside parliament on Friday evening, while ‘Yes’ campaigners plan a rally at the old Olympic Stadium.
Greek Banks Down to Last €500 Million
The Telegraph reports Greece to Run Out of Essential Food and Medicine Within Days and Banks Down to Last €500m
Greece is sliding into a full-blown national crisis as the final cash reserves of the banking system evaporate by the hour and swathes of industry start to shut down, precipitating the near disintegration of the ruling coalition.
The daily allowance of cash from many ATMs has already dropped from €60 to €50, purportedly because €20 notes are running out. Large numbers are empty. The financial contagion is spreading fast as petrol stations and small businesses stop accepting credit cards.
Constantine Michalos, head of the Hellenic Chambers of Commerce, said lenders are simply running out of money. “We are reliably informed that the cash reserves of the banks are down to €500m. Anybody who thinks they are going to open again on Tuesday is day-dreaming. The cash would not last an hour,” he said.
Dwindling Food and Medical Supplies
Also consider Food and Medicine Shortages for British Tourists in Greece ‘Within Days’.
British holidaymakers in Greece will be unable to buy food or medicine within days if a deal is not reached to reopen the banks, the head of a leading business body has warned.
Constantine Michalos, president of Athens Chamber of Commerce, said there could be “shortages on the shelves” by early next week and tourists could be left without “basics”.
Mr Michalos warned that shops will begin to close on Friday and not reopen because they are unable to import products due to the bank closures. He said the bank closures had limited the ability of shops to import new stocks because Greece is currently frozen out of a cross-Europe system of money transactions.
IMF Says Greece Needs Another €60 Billion Bailout
Finally, please consider Greece Needs €60bn in New Aid, Says IMF.
Greece needs more than €60bn in new financial help over the next three years and faces decades under a daunting mountain of debt that will make it vulnerable to future crises, the International Monetary Fund has warned.
In a new analysis that lays out Greece’s economic dilemma in stark terms, the IMF on Thursday called for Europe to grant the country “comprehensive” debt relief, arguing for the doubling of the maturities on its debts from 20 to 40 years.
The fund’s assessment is likely to provide succour to the Syriza-led government which is campaigning for a No vote in a referendum on Sunday. But the IMF also blamed it for the country’s deteriorating situation.
What’s It All About?
The old bailout agreement is off the table. The creditors pulled it when Tsipras announced a referendum.
Greece has already been bailed out to the tune of €180 billion or so. However, Greece needs yet another €60 billion “bailout”.
Total eurozone exposure to Greece, counting Target2 liabilities, may top €250 billion depending on how much cash has been pulled from Greek banks in the past two weeks.
Greece cannot possibly pay back €250-€310 billion, and it won’t. Merkel understands this. For political reasons, she cannot say that.
With sentiment in Germany and the other creditor nations against another bailout the only point of a “yes” vote is one of revenge. The creditors will topple Tsipras and likely install another Troika puppet.
That is what the referendum is really about.
A vote either way will not fix a damn thing. A “yes” vote is without a doubt a vote for extend-and-pretend servitude, but a “no” vote without reforms is equally useless.
The question at hand is: Who is the master and who is the slave?
We could have and should have been in this position four or more years ago, with only €60-€80 billion at risk. Bailing out the bondholders cost that much.
Regardless of the outcome, it appears to me the business leaders are correct. About 75% of them think Greece will be forced to leave the eurozone in the next 12 months unless Russia quickly comes to Greece’s aid.
Stranded in Limbo
This all has sort of a surreal nature to me reporting from Iceland where Liz and I are on vacation. Just this morning, Liz overheard a conversation from two Greek citizens speaking in English.
They felt lucky to be able to get on a plane for their vacation, but they are also worried about being stranded here.
If there is no money for jet fuel or critical services, we could easily see vacationers stranded in Greece. And if Greek airports get shut down, Greek citizens could be stranded abroad.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com