Greek Prime Minister Alexis Tsipras will be meeting Russian President Vladimir Putin tomorrow (on Wednesday 9 April). Since getting elected on the promise that Greece will not get humiliated by the EU by crippling austerity measures, Tsipras and his finance Minister Yanis had been making visits to EU partners to resolve the financial impasse. Hitherto, solutions proposed by Greece are not acceptable to the EU troika. The day of reckoning for a Grexit seems imminent.
Would the visit to Russia be a final attempt to sidestep EU by asking Moscow to bankroll a bailout? Russia already had been hammered by sanctions imposed by the western powers. While Russia is not bankrupt, its finances had been dealt a crippling blow by the sanctions. How much can Russia extend a helping hand and what will be the consequences be like if Tsipras return with a prize catch (read more here)?
Pundits are beginning to feel the spectre of a Grexit becoming a reality. With a mountain of debt that could not possibly be repaid, EU’s medication for Greece is to continue funding and accumulating more debt even if austerity measures are imposed. It is tantamount to giving more drugs to an addict just to keep him alive and coming back for more. That too is not a solution.
Tsipras new government is sandwiched between the rock and a hard place. It is not a comfortable position to be in. Greece has retaliated with demands for €279bn as compensation from Germany in Nazi war reparations. This is probably a shot in the dark, possibly just to put Greece is a higher moral ground should Greece defaults. An unnamed senior official told the Telegraph:
“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.
We may have to go into a silent arrears process with the IMF. This will cause a furor in the markets and means that the clock will start to tick much faster.”
They want to put us through the ritual of humiliation and force us into sequestration. They are trying to put us in a position where we either have to default to our own people or sign up to a deal that is politically toxic for us. If that is their objective, they will have to do it without us.
We will shut down the banks and nationalize them, and then issue IOUs if we have to, and we all know what this means.”
According to the Telegraph, Greece is preparing for the next step by minting the now defunct drachma again. Whether this is just another threat and political rhetoric remains yet to be seen after Tsipras visit.
It is certainly getting greasy again.
Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.