‘Ah, but where will we get the money if we vote NO?’

1. Even if we don't ratify the EU Permanent Austerity Treaty on My 31st and we can't access the ESM, we are small but important for the EU financial system and so funds will be found elsewhere outside the ESM structures to lend to us. This would certainly be the case if such assistance was in the words of the ESM; indispensable to safeguard the financial stability of the euro area as a whole. Remember ‘contagion!’

2. If the EU doesn't come up with the money, we are entitled to apply to the IMF and their interest rates and conditions were more favourable than those of the EU/ECB! This is the same back-stop that all EU countries are entitled to as members of the IMF. After all, more EU countries have accessed IMF support than EU support in the last decade: Latvia, Lithuania, Poland, Bulgaria, Romania, Hungary, and Estonia.  
 
3. Sweden and Britain both advanced loans at a favourable rate to supplement our first bail-out. Norway has a pension reserve fund of over €500bn and might be similarly inclined. When Argentina defaulted, it was kept afloat by a number of countries until it re-entered the markets.  

4. In the unlikely event that we get no loans and have to close the deficit we can do so through instituting a progressive taxation system, including a wealth tax - we have over 20,000 declared millionaires - to fund social services.
 
5. The remaining money can be found through renegotiating (partially defaulting on) foreign debt.  This would take courage and resolve but would ultimately be successful.  The debt will have to be renegotiated a few years hence anyway.

6. Regardless of the Treaty vote, Ireland is guaranteed funding under the current programme as long as it meets its targets. Michael Noonan, said recently, 'There is a commitment that if countries continue to fulfil the conditions of their programme the European authorities will continue to supply them with money even when the programme is concluded . . . The commitment is now written in that if we are not back in the markets the European authorities will give us money until we get back in the markets.

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First published online @ http://www.indymedia.ie/article/101689

"How can one speak of default in future tense when we’re already bankrupt?"

Greece saved for an uncertain fate!

How can one speak of default in the future tense when we’re already bankrupt? . . . Don’t you see the people scouring through refuse and sleeping on pavements? Those who led us to bankruptcy—the troika and the government—now claim they want to save us from bankruptcy. It’s incredible!”

—Míkis Theodorákis, Greek composer and songwriter.

If Greece’s latest €130 billion loan was to be used for fiscal stimulus, it might be worth the commitment. Because that kind of money could put a lot of people back to work and kick-start the economy fast.

But the loan isn’t going to be used for stimulus. It’s going to be used to recapitalise the banks and pay off creditors, neither of which will do anything to boost activity or create jobs.

So, why bother? Why dig an even deeper hole if it achieves nothing?

If that’s the case, Greece should just default now and begin rebuilding the economy ASAP. There’s no point in putting it off any longer.

The “troika” (European Central Bank, European Union, and International Monetary Fund) demanded another €3 billion in spending cuts, even though unemployment is tipping 20 per cent and the economy shrank by 7 per cent in the last quarter.

What sense does that make? You don’t have to be a genius to see that Greece won’t reach its budget targets if tax revenue continues to fall, because everyone’s either been sacked or taking a pay cut.

It will just make a bad situation even worse. But the troika doesn’t worry about these types of things.

They don’t care that their economic theories have failed miserably so far, or that their “austerity” measures have been a complete flop.

They just keep plugging along, making the same mistakes over and over again, impervious to the criticism of reputable economists, oblivious to the abysmal results.

They remain steadfast in their commitment to belt-tightening, convinced that a strict diet of breadcrumbs and water is the best way to nurse an ailing economy back to health. It doesn’t bother them that the facts prove otherwise.

The Fitch ratings agency isn’t convinced that austerity will work; in fact it lowered Greece’s rating, saying that they now think a default is “highly likely.”

Similarly, a “confidential report” that was given to euro-zone finance ministers suggests that there’s a high probability that the slump in Greece will get worse and that the country’s debt-to-GDP ratio will still be 160 per cent by 2020, a full decade after the implementation of austerity measures.

So even if Greece sticks with the hairshirts and follows the troika’s diktats to the letter, its debt could still be at “unsustainable” levels eight years from today.

Why? An article in the high-circulation German weekly Der Spiegel puts it clearly:

Of course, the €130 billion would not solve the problem. It is only intended to buy time. Time until the financial markets have stabilised to the extent that they can handle the actual bankruptcy of Greece without a chain reaction. Without bank failures, no knock-on effects through the loss of credit insurance and no interest for the remaining problem of explosion of the Euro-zone countries.

They’re all heart!