Originally published April 18 2015
Greece begins selling assets, could nationalize banks, as government scrambles to find cash - "Grexit" crisis heats up
by J. D. Heyes
(NaturalNews) The weakest nations in the Eurozone continue to get weaker, financially, and it seems there is no end in site as the entire continent's economy remains moribund, save for industrial Germany.
Nowhere is the economy worse than in Greece, where the socialist government has threatened to nationalize the country's banks and cease payments on a bailout loan made just a few years ago to keep the it solvent.
As reported by Britain's Telegraph newspaper, in addition to bank nationalization, the government is making drastic plans to introduce a currency -- the old drachma -- parallel to the euro in order to pay its bills, unless the EU steps up, again, to ease its repayment demands.
The paper further reported:
Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund....
'We will pay our people first'
Syriza strode into power last year by promising to end the strict budgetary austerity imposed on Greece as a condition of getting a financial bailout of about $250 million in 2012.
"We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer," said a senior official, The Telegraph reported.
"We may have to go into a silent arrears process with the IMF. This will cause a furore in the markets and means that the clock will start to tick much faster," the source continued.
While Greece managed to scrape together enough cash to make a payment on the IMF loan by April 9, the government is quickly running out of money and is currently selling off its assets.
Would a Greek exit from the euro crash the currency?
Financial news site Zero Hedge noted that other financial analyst firms think the failure to continue payments on the IMF loan will cause a snowball effect, barring further action by the EU and ECB -- further action being a) lend Greece more money; or b) change the terms of the current bailout repayment scheme.
Forcing the EU to change its lending scheme would essentially undo the initial agreement, of which austerity was a major provision; Syriza appears to want to force the EU's hand, The Telegraph noted:
The view in Athens is that the EU creditor powers have yet to grasp that the political landscape has changed dramatically since the election of Syriza in January and that they will have to make real concessions if they wish to prevent a disastrous rupture of monetary union, an outcome they have ruled out repeatedly as unthinkable.
Since then, Greece made a payment on April 9, but they no longer have enough to make the next payment in early May of $1.08 billion, let alone the $1.84 billion that they need to pay their own government workers.
"The fact is that Greece is out of the markets and it has been redeeming its debts for the last few months using its own scarce liquidity. It can't go on," Greek Finance Minister Yanis Varoufakis said.
Despite the lack of cash, the head of the euro's finance ministers, Jeroen Dijsselbloem, said it would be "morally indefensible" for the country to default on its loan, according to The Telegraph.
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