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Wednesday, 15 February 2012

The Finance Ministers of the European Union keep Greece ‘hanging on’ until the next elections.

Set me free, why don't you babe?
get out my life, why don't you babe?
'cause you don't really love me
but you keep me hanging on

Today, there was another episode in the continuing story concerning the €130 bln emergency aid package that had been promised to Greece, when the country would carry through €3.3 bln in additional austerity measures. I have been angry about this deal at ‘gunpoint’, as it would choke the Greek economy in an economic coma.

And I was further outraged by the fact that the “leading” Euro-countries Germany and The Netherlands (definitely not leading by example) didn’t want to approve of paying the first tranche of the aid package, before they had a signed contract of the parties that form the current Greek cabinet and a majority vote of Greek parliament.

Let me be clear: Greece made a lot of financial/economic mistakes in the past and has been totally wrong by sending in fraudulently altered statistics that strongly exaggerated the economic health of the country in order to enter the Euro.

But still the country doesn’t deserve to be treated like a pariah state. And the Greek people don’t deserve to be starved into an economic coma.

However, instead of helping this country to get on its feet again economically, this is exactly what the European ministers are doing. And that’s a real shame.

But today, everything bothering the German, Finnish and Dutch minister seemed out of the way and everything looked to be clear for paying the first tranche, when Greek Finance Minister Evangelos Venizelos promised that the missing €325 mln in austerity measures had been covered today and all autographs would be put under the austerity contract tonight.

Indeed, everything was clear… until German Finance Minister Wolfgang Schäuble and Dutch Finance Minister Jan Kees de Jager pulled another rabbit out of the hat. While everybody expected that the first tranche of the emergency package would be approved tonight, these ministers of the strongest Euro-countries stated, that they would like to postpone the emergency aid until after the Greek elections.

Greece would receive just enough money to ‘stay alive’ without defaulting and when the elections showed the right result, the first tranche of the €130 bln package could be paid. It looked like the beginning of a soap opera that puts ‘the Bold and the Beautiful’ in the shade.

Here are the pertinent snips of this story from Het Financieele Dagblad (

Germany, The Netherlands and Finland pressed the Euro-group to postpone payment of the promised €130 bln in emergency aid until the Greek elections in April.

This was stated by the press agency Reuters, based on anonimous sources in Brussels. The Euro-countries are considering to delay the support to Greece and to pay only the amount deemed necessary to avoid a Greek default.

A sources stated to Reuters that especially Germany, Finland and The Netherlands are steering towards postponement. Just like the other Euro-countries, they are not convinced at all that the Greek leaders are dedicated enough to carry through the promised austerity measures after the elections have been held in April. They are still awaiting the leaders of the largest Greek political parties, that should sign the promise to carry through the austerity measures also after the elections.

A conference of the European finance ministers, planned for Wednesday afternoon, was canceled because Greece didn’t meet all obligations for the emergency package yet. Apart from that, however, the leader of the Greek conservative party, Antonis Samaras, stated that he signed the contract to carry through the €3.3 bln in additional austerity measures.

Greece was not amused to say the least, when it learned from the European attempt to postpone the emergency package for Greece. Greek president Carolos Papoulias reacted furiously in the direction of Germany, Finland and The Netherlands. Here are the pertinent snips from a story in Het Algemeen Dagblad (

Greek president Carolos Papoulias ranted in outrage at the German Finance Minister Wolfgang Schäuble. Schäuble would have acted derogatory upon the heavy strains that the Greek population must do to stay in the Euro-zone. Also The Netherlands and Finland received a rant.

“Who is Herr Schäuble to act arrogantly upon Greece. Who are the Dutch and who are the Finns?”, according to the 82 year old President. The three countries are very sceptical about the Greek promises to reform the country in exchange for more financial aid and would aim towards postponement of the next emergency package. Schäuble stated at the radio that Greece threatens to become a 'black hole' for emergency aid.

Papoulias reacted furiously and said that he wouldn’t accept such language of the German minister.’We have always fought proudly in order to not only defend our own freedom, but also that of the rest of Europe’, he stated during a visit to the Greek Defense Ministry.

But a few hours later another episode in the soap opera was broadcasted. Chairman of the conference of Finance Ministers and Luxembourg Finance Minister Jean-Claude Juncker stated that an agreement on the Greek emergency package was close. Again Het Financieele Dagblad (

An agreement on the second Greek emergency package can be finished next Monday. The Euro-group of Finance Ministers received on Wednesday-evening the necessary guarantees of the Greek leaders and a fulfilment of the missing austerity measures of €325 mln

Besides that, there is an analysis on the sustainability of Greek debt after 2020, which gave chairman Jean-Claude Juncker the trust that ‘the Euro-group will be able take the necessary decisions on Monday February 20.

However, according to Juncker there are ‘further considerations necessary’, concerning the mechanisms to reinforce Euro-zone control on observance and execution of the negotiations made.

Phew, that is a relief. Now everything with the Greek emergency aid package is hunky-dory. Or isn’t it? I won’t believe this until the first money from the €130 bln emergency aid has been transfered. Also the Euro-zone can’t be trusted anymore, as it seems to change the conditions for Greece on the fly…

Today, the news was also published that the Greek economy contracted by an annual rate of 7% in 2011Q4. And the situation in 2012 might be far, far worse. It is really disgusting what happens to Greece currently and I want to repeat my words from the earlier mentioned article:

…personally, I get more and more haunted by the feeling that the (uncontrolled) default might actually be better for Greece, than the austerity measures that have been forced upon Greece: at least as long as Greece can stay in the Euro. Leaving the Euro would almost turn the country in a third-world country within Europe, with a currency that nobody wants and nobody trusts.

A default would be terrible for Greece, but than the country would know what it was up to and could start to move forward.

Now, Greece is treated like the girl in the aforementioned Kim Wilde / Diana Ross song. The Euro-zone doesn’t really love the country, but it just keeps it hanging on. In the meantime, Greece shows resemblance with a man with a rope around its neck, who is still standing on a wobbly stool, knowing that it could fall any minute by the hands of Germany and The Netherlands.

Worse than the forced austerity measures on Greece are the sneering remarks of the Dutch and Germany Finance Ministers. Two true hypocrites that act like the most well-behaved children in the international Euro class-room, but worry on their increasing budget deficit (especially Jan Kees de Jager has things to worry about), their dropping exports and their contracting economy in the meantime. And let’s not forget that Germany was one of the first countries to infringe the European Stability and Growth pact.

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