Originally published March 11 2015
Looming financial collapse of Greece spells beginning of the end of global debt Ponzi scheme
by J. D. Heyes
(NaturalNews) The European nation of Greece is in deep financial trouble, and it doesn't look like its neighbors are going to open up their treasuries to bail it out this time around. More than that, what the country's new leadership is planning could eventually spell the end of the euro.
In recent elections, the Syriza party won heavily on promises to reverse conditions of austerity placed on Greece after the country received more than $250 billion in loans from the International Monetary Fund and the rich nations of the continent. Greece's financial situation had grown untenable in the aftermath of the Great Recession of 2007-2009 after its economy tanked due to declining revenues and high pension costs.
The leader of the far-left party, Alexis Tsipras, "plans to dance wildly on the crumbling edge of the Eurozone," reports the Financial Times, "to scare its thriftier members into accepting his demands." In other words, Tsipras' government is threatening to abandon previously agreed upon austerity measures even while officials are spreading out across Europe in an attempt to convince creditors to restructure the deal.
Would a Greek exit mean the beginning of the end?
"These would include debt repudiation, the unravelling of structural reforms, and rehiring thousands more civil servants," FT reported. "On this account Syriza would return Greece to the failed clientelism of the past and embolden anti-austerity parties everywhere."
A number of EU leaders have expressed an interest in "Grexit" -- Greek exit from the Eurozone -- even if it risks a further breakup of both the zone and especially its currency, the euro.
Most of Greece's debts are owed to other European Union states, and those governments would harbor the consequences of a Greek default or a Grexit. That's likely why Greek Finance Minister and economist Yanis Varoufakis is currently making the rounds in European capitals rather than dealing directly with the "troika" of the European Central Bank, the IMF and the European Commission, FT noted.
Already, Varoufakis has made a dire prediction -- that, if Greece decides to abandon the EU, then other nations may be tempted to follow suit, leading to a collapse of the currency.
"The euro is fragile, it's like building a castle of cards [and] if you take out the Greek card the others will collapse," he said, as reported by the financial news website FXStreet.
"I would warn anyone who is considering strategically amputating Greece from Europe because this is very dangerous," he continued. "Who will be next after us? Portugal? What will happen when Italy discovers it is impossible to remain inside the straitjacket of austerity?"
The stage is set for a collapse of the euro?
The "new deal" he is seeking envisions 10 times the current level of investment in the country by the European Investment Bank, FXStreet reported.
But that's not likely to happen. Most EU leaders envision Syriza as a cabal of unskilled political leaders who have no experience and whose message is better suited for the radicalism of a college campus.
Still, some observers believe that Greek's new Leftist leaders are merely being honest -- with the Greek people, sure, but also with EU leaders. They don't see the country's debt as sustainable without massive new investments, and no one is in a rush to make those investments -- so the house of cards is getting perilously close to collapse.
And, apparently, the EU's leaders don't really want to hear that.
"Of course, this is no different than the situations of Italy, Portugal, Ireland, Spain, the UK, France, Japan -- or even the US -- which is precisely why it's being considered such a horrendous foul for Greece to publicly speak as it is now," observed Chris Martenson, at the Peak Prosperity blog. "Such honesty does not have a welcome place in modern politics, and more dangerously, it threatens confidence in the entire system."
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