Posts Tagged ‘Foreign Policy’

Zeno’s Endgame in Greece

Friday, April 17th, 2015

It’s appropriate that Zeno (the paradox Zeno) was Greek, since Greece appears to have entered Zeno’s Endgame. The country edges ever closer to default, without actually defaulting. Or without the Greek government actually ceasing to spend radically more money than it takes in, because the ruling left-wing Syriza Party would rather destroy the Greek economy than give up their bloated welfare state. Their latest plan is to raid pension funds to keep that welfare state going just a little longer. “This is the last bit of cash that the Greek state has.” “Honey, let’s cash in our 401K so we can buy some heroin!”

Sorry if this sounds like every other update on the Greek debt crisis over the last six years. It’s a vitally important story, which is why I keep covering it, but it’s also the story of a host of people making the same stupid, easily avoidable mistake again and again rather than making the hard choices necessary to deal with the problem.

A few other links of interest on the Greek debt endgame:

  • So Greece went hat-in-hand to the IMF: Can we put off making some debt repayments? IMF: (Laughs) Oh wait, you’re serious! Let me laugh harder!
  • Speaking of the IMF, this should be good for a laugh.
  • Greece’s phony baloney budget surplus disappears.
  • Looks like Greece’s creditors have finally reached the depression phase of the Kubler Ross grief cycle. “Greece’s international creditors signaled they are losing hope that Athens will do what is needed to unlock bailout funds before it runs out of money.” Do tell.
  • A timeline of Greece’s bills coming due. “Debt interest payments are piling up. It has to pay off an €80m interest bill to the European Central Bank (ECB) on 20 April and €200m to the International Monetary Fund (IMF) on 1 May. But the one that is stirring jitters around Europe is a €760m (£550m; $810m) interest payment to the IMF that is due on 12 May.”
  • Gameplanning a Grexit.
  • Tune in next week! Same bankrupt time! Same bankrupt channel!

    Greece Buys Time By…Buying Their Own Debt?

    Wednesday, April 8th, 2015

    Although Greece was slated to run out of cash on April 9, they seem to have “scraped together enough cash to meet the I.M.F. payment, in part by extracting liquidity from quasi state entities.”

    One of the ways they did that was raising 1.1 billion Euros from bonds, all sold to domestic investors. And who would some of those “domestic investors” be? Would you believe Greek banks?

    These short-term bonds, which have been issued by the country’s largest banks and carry the guarantee of the Greek government, are not being sold to foreign investors. They are being issued to the only entity that would dare buy them: themselves.

    In the last four months, some of Greece’s largest banks, including Piraeus, Alpha and Eurobank — have self-issued more than 13 billion euros’ worth, or $14.3 billion, of these government-guaranteed bonds.

    Wounded by vanishing deposits and bad loans, Greek bank bonds are about as toxic an investment as can be found. The banks are on life support via an emergency lending program overseen by the European Central Bank, via which they have access to short-term loans from their own central bank.

    But to secure this credit line, about €71 billion (more than half the deposits outstanding in Greece), these banks need to provide collateral to the Greek central bank.

    In essence, what Syrizia has done is carried out a similar maneuver to that the EU insiders have been carrying out since the European Debt Crisis broke: Dumping their bad bonds onto taxpayer-funded entities. But the problem for Greece is that their maneuver is like a Ponzi scheme that depends on getting more funds from people already in the Ponzi scheme.

    That doesn’t strike me as a sustainable model.

    No wonder Greece is drawing up plans to nationalize banks (rather than, of course, stop spending money they don’t have). That’s rather like selling your seed corn to buy heroin. (That piece also notes that “Greece spends a larger portion of its GDP — 17.5 percent — on pensions than any other country in Europe.”)

    Hell, even recently bankrupt Cyprus is saying that Greece is screwed unless they implement actual reform. As opposed to Syriza’s current “reform” proposals, which include “no wage or pension cuts.”

    Oh, and they’re flogging reparations from Germany yet again. Because it worked so well the last five times they floated the idea.

    But Greek Prime Minister Alexis Tsipras seems to have only the faintest grasp of reality as it is:

    Consider the case of a household whose members chronically live beyond their means. They have no savings and their bank account is constantly in overdraft. Rather than cutting back, they obtain multiple credit cards by hiding their true financial situation, but those credit cards are soon maxed out. In desperation, they turn to financially responsible cousins to help them through, again hiding the true scale of their spendthrift ways. Finally, the family defaults on its loans, triggering loss of home, car and other possessions. But instead of recognizing that they were the architects of their own misfortune, they consider themselves victims of the mortgage, car loan and credit card companies. And they even vilify their generous relatives for refusing to lend more money.

    Greece’s problems have not been caused by austerity, but by decades of irresponsible spending and corrupt behaviour. Expecting that a debt problem will be solved by more debt simply defies common sense and reality. Believing this myth will only make the debt hole that Greeks have dug themselves even deeper, and the challenges of climbing back out ever more unlikely.

    Iran To Start Using Faster Uranium Centrifuges As Soon As Deal Is Final

    Wednesday, April 8th, 2015

    Still analyzing the Iran nuclear deal, but this is hardly encouraging:

    Iran will begin using its latest generation IR-8 centrifuges as soon as its nuclear deal with the world powers goes into effect, Iran’s foreign minister and nuclear chief told members of parliament on Tuesday, according to Iran’s semi-official FARS news agency.

    If accurate, the report makes a mockery of the world powers’ much-hailed framework agreement with Iran, since such a move clearly breaches the US-published terms of the deal, and would dramatically accelerate Iran’s potential progress to the bomb.

    Iran has said that its IR-8 centrifuges enrich uranium 20 times faster than the IR-1 centrifuges it currently uses.

    So the end result of Obama’s deal to slow Iran’s nuclear weapons drive will be to accelerate Iran’s nuclear weapon’s drive…

    (Hat tip: Jihad Watch.)

    Eurocrat Summarizes Greek Problem

    Monday, March 23rd, 2015

    Sure, Jose Manuel Barroso, the former president of the European Commission, is a self-interested Eurocrat, but here he provides a nicely concise statement of the obvious concerning Greece’s problems

    Greece’s problems can be laid at its own door and the country needs to provide a clear commitment to reform to reach an agreement with its creditors, Jose Manuel Barroso, the former president of the European Commission, told investors in Hong Kong.

    “The Greek people went through extremely difficult moments, hardship. But these difficulties of Greece were not provoked by Europe,” Barroso said in an address at the Credit Suisse Asian Investment Conference in Hong Kong.

    “It was provoked by the irresponsible behavior of the Greek government.”

    “The situation of Greece is the result of unsustainable debt that was created by the Greek government, mismanagement of their public finances, huge problems with tax evasion and tax fraud [and] problems of the administration,” he said, noting that the country had also misled the European Union by filing false figures on its economy.

    A nice statement of the problem. To which I can only add: And Greece continues to compound the problem, because it refuses to reduce government spending to match receipts. And it refuses to do because it’s welfare state is unsustainable.

    All this talk of bailouts, relief, reparations, agreements and grexits is just filigree on the essential problem: Greece’s government spends more money than it takes in and refuses to change its ways.

    Greece: Turning and Turning in a Narrowing Gyre

    Thursday, March 19th, 2015

    It appears we may finally be reaching the endgame of the endgame on Greece.

    Greece is suffering a bank run and owes just over $2 billion in debt payments due Friday, but shows no signs of having the money or meeting the Troika’s conditions for obtaining more. Quite the opposite. Greece’s left-wing Syriza government is increasingly acting like an erratic heroin addict refusing to check into rehab and howling through the streets at night in search of an angry fix, heedless that there’s an arrest warrant out in his name.

    “The International Monetary Fund, one of Greece’s main three creditors, was reported to have called Greece ‘the most unhelpful client’ the Fund has dealt with in their 70-year history.”

    “During the teleconference, the Greek representative said his government wasn’t prepared to talk about the country’s finances with technical experts and instead wanted European Union leaders to discuss the issue at a summit in Brussels, one of the European officials said.”

    I’m sure telling your bank that you’re “not prepared to discuss my finances” when asking for your fifth bridge loan would go over really well.

    Also this: “There was a general feeling that the Greek side is completely out of touch with reality.”

    You think? How about the fact that Greek parliament just passed a raft of anti-austerity spending measure, which is rather like a man with stage 4 lung cancer lighting up a couple of stogies in route to the operating room.

    Some are wondering if Syriza wants to see Greece kicked out of the Euro.

    EU institutions seem far more ready for what lies ahead. “The European Central Bank (ECB) is preparing for a possible Greek exit from the euro zone.” Conversely, EU insiders have also floated the idea of imposing capital controls to prevent Greece from leaving the euro.

    And the one person whose opinion matters the most? “German Chancellor Angela Merkel said Thursday that Greece has no choice but to carry out economic reforms if it wants to receive more financial aid, dashing any hopes Athens might have had for a softening in Berlin’s stance.”

    Carrying out real reforms (like stop spending more money than the government takes in) is what Greece in general, and Syriza in specific, has steadfastly refused to do. And the reason they refused is that the European cradle-to-grave welfare state has become more sacred to voters than the capitalist economics and fiscal discipline necessary to support it.

    This is not a recipe for happiness.

    There’s a chance that all of this is posturing on both sides, and that a kabuki compromise involving small reforms in exchange for still more loan extensions may yet kick the can a few more feet down the road. But there is every sign that EU institutions have finally tired of Greece’s show, and are willing to see the final curtain drop. And the Greeks are about to learn that the vengeance of the gods of the copybook headings cannot be delayed indefinitely…

    Should Jews Leave Europe?

    Wednesday, March 18th, 2015

    I was going to put this long Atlantic piece on whether Jews should leave Europe or not into the Friday LinkSwarm, but I think it deserves it’s own post.

    A few excerpts:

    France’s 475,000 Jews represent less than 1 percent of the country’s population. Yet last year, according to the French Interior Ministry, 51 percent of all racist attacks targeted Jews. The statistics in other countries, including Great Britain, are similarly dismal. In 2014, Jews in Europe were murdered, raped, beaten, stalked, chased, harassed, spat on, and insulted for being Jewish. Sale Juif—“dirty Jew”—rang in the streets, as did “Death to the Jews,” and “Jews to the gas.”

    In Greece, a recent survey found that 69 percent of adults hold anti-Semitic views, and the fascists of the country’s Golden Dawn party are open in their Jew-hatred.

    Yes, I think we all remember the perfidy when Jews marched on Athens and held guns to the heads of elected officials until they agreed to take loans from Germany.

    Anne Frank has become an obsession of modern anti-Semites. Her story—universally known, and deeply affecting—is a threat to the mission of the Holocaust-denial movement, and her youth and innocence challenge those who argue that Jews are innately perfidious. In Rome last summer, the slogan “Anne Frank is a liar” was spray-painted on walls in the former Jewish ghetto.

    Read the whole thing.

    Between this and that long Grahame Wood piece on the Islamic state, it appears as though readers of the Atlantic are finally being brought up to a level of awareness of the rise of Islamic radicalism that readers of The Weekly Standard achieved some 15 years ago. Progress.

    Maureen Dowd Smacks Hillary

    Sunday, March 15th, 2015

    Maureen Dowd, a deeply uneven writer, is never more interesting than when she’s taking down hubris-swollen Democrats, especially if their last names happen to be Clinton.

    This is manifestly true of her most recent column, an open letter to Hillary.

    It has come to our attention while observing your machinations during your attempted restoration that you may not fully understand our constitutional system. Thus, we are writing to bring to your attention two features of our democracy: The importance of preserving historical records and the ill-advised gluttony of an American feminist icon wallowing in regressive Middle Eastern states’ payola.

    Snip.

    Instead of raising us up by behaving like exemplary, sterling people, you bring us down to your own level, a place of blurred lines and fungible ethics and sleazy associates. Your family’s foundation gobbles tens of millions from Saudi Arabia and other repressive regimes, whose unspoken message is: “We’re going to give you money to go improve the world. Now leave us alone to go persecute women.”

    Dowd is, as usual, strongest on the foibles and hubris of the Overclass, and weakest on people living outside that bubble and anything to do with policy. But if there’s one thing Dowd knows (and owes her reputation and Pulitzer to), it’s the Clintons.

    Read the whole thing.

    (Hat tip: Instapundit.)

    LinkSwarm for March 13, 2015

    Friday, March 13th, 2015

    It’s Friday the 13th, spring is in the air, and SXSW crowds are flocking into downtown Austin. Here’s a LinkSwarm:

  • Nothing says “Religion of Peace” quite like threatening to burn children alive. (Hat tip: Jihad Watch.)
  • Any deal with Iran is likely to push more Sunnis to support ISIS.
  • Over 100 release Guantanamo Bay detainees have returned to jihad.
  • Another legal challenge to ObamaCare, this one based on the right to privacy.
  • Paul Krugman declares war on pizza.
  • Obama’s illegal alien “dreamers” favored over the legal spouses of American citizens.
  • Is there anything quite so hilarious as a VA manager mocking veteran suicides?
  • The dysfunction in NBC’s news division went far beyond Brian Williams.
  • When Ted Kennedy offered the help the Soviets against Reagan.
  • “The Cinematic Railroading of Jameis Winston”. (Hat tip: Instapundit.)
  • The Victmhood Identity Politics Left: La la la, I have my fingers in my ears and my Twitter on block, so I can’t hear you!
  • You may be cool, but you’ll never be Robert Downey, Jr. as Tony Stark giving a 7-year old his bionic arm cool…
  • Greece Snarls At The Hand That Feeds It

    Wednesday, March 11th, 2015

    Angela Merkel tamped down a party revolt to extend the Greek bailout terms by four months. And her reward for extending that lifeline? Greek Prime Minister Alexis Tsipras reviving demands that Germany pay World War II reparations to Greece.

    Before Syriza came to power, the rest of the EU and the Troika seemed content to play along with the Greece farce (extending further loans in exchange for yet more empty promises of reform) at least a little while longer. However, Syriza’s virulently anti-EU and anti-Germany rhetoric seem to have finally exhausted their patience with the show. It seems even Europeans have limits to the abuse they’re willing to take from perpetual welfare recipients. It’s bad enough to underwrite a freeloader, but evidently having to put up with constant insults from them was too much.

    At this point, everyone knows Greece will neither reform nor pay back their debts to the Troika (or anyone else). That’s why Europe has finally started taking a real hard line with them, insisting on inspectors on the ground to see reforms are actually implemented.

    Either Tsipras has severely overplayed his hand (quite possible), or he is deliberately preparing to use Germany as the theoretical scapegoat for exiting the Euro.

    To say that Tsipras and Syriza has no plan B to escape the crisis is misleading, since their cunning “insult our creditors into giving us more money” doesn’t even count as a plan A.

    A bailout from Russia? It’s not like Putin is rolling in dough following a fall in oil prices and his continuing isolation over his invasion of Ukraine. Let Putin subsidize Greece all he wants. (And I doubt a Greek navel base would give him any advantage over what he has in Sevastopol.)

    Greece could have avoided all this many years ago if their government had just stopped spending more money than they took in. Given their addiction to a bloated welfare state, this is the one thing they have proven singularly unwilling to do.

    I doubt Syriza has thought through just how nasty a divorce from the Eurozone might turn out. Never mind asking they repay their debts, I’m thinking a complete halt to all bank transfers between the Eurozone and Greece, and international foreign exchanges refusing to list a newly floated drachma. People hate having their welfare benefits cut, but they really, really hate being unable to buy food…

    Greece has finally reached the stage of socialism where they’re run out of other people’s money, and the results are not going to be pretty.

    Experience is a dear teacher, but fools will learn from no other…

    Boko Haram Pledges Alliegence to the Islamic State

    Saturday, March 7th, 2015

    So Boko Haram (or Group of the People of Sunnah for Preaching and Jihad, if you prefer the full name) has now pledged allegiance to the Islamic State. It’s like the Voltron of Radical Islamic Lunatics.

    Significance? Maybe very little, unless every other Sunni Islamist group starts pledging fealty to the Islamic State as well, in which case future historians may pinpoint the declaration as the official start of World War III.

    In either case, it’s yet another foreign policy triumph for the Obama/Clinton/Kerry team. Expect them to issue a denouncement in the form of a strongly worded hashtag any time now..