Update: Greek banks will be closed for another two days because the ECB has refused to extend any more lines of credit beyond the bare minimum to keep them from failing, about 89€bn, but not enough to satisfy nervous depositors. The struggle between European capitalists and Greek socialists is become more defined, now that the Greek people have convincingly backed their elected representatives. Capitalists in Europe lead by the Germans are pressing the Greek government to come up with a financial repayment plan that according to them re-establishes Greek credibility. Translated, that means more austerity measures that drastically cut public outlays. The elected socialists lead by Alexis Tsipras want restructuring of the Greek debt to make it more affordable to repay. That translates into an eventual "haircut"--a reduction in the expected interest rate--for Greek bond owners. So far that is out of bounds for the troika--the country's international creditors and the German central bank.
Germany's hardline towards Greece may not be going over with its major euro partner, France. Angela Merkel and Francois Hollande met in Paris to discuss the latest crisis besetting the unified currency. Both said they respected the result of the Sunday referendum. For his part Prime Minister Tsipras removed his combative finance minister Yanis Varoufakis, and replaced him with an Oxford educated economist Euclid Tsakalotos. Tsakalotos told Sinn Feinn supporters in March that the Greek bailouts were "more about northern banks than southern peoples". He also quoted FDR's famous line about fearing fear when the President took on Wall Street and its oligopolists in the midst of the Greatest Depression. According to Tsakalotos Greece has already made the biggest fiscal shift per capita of any nation since the 2008 Panic. Still greedy capitalists want still more corporatists reforms labeled "austerity" that would only serve to shrink the Greek economy further. Greece has lost a quarter of its GDP and one-third of its people face severe poverty. A solution must transcend ideological differences and be based on compromises demanded by Greece's rapidly deteriorating economy and geopolitical realities. Greece's forced exit from the euro zone would creat havoc in financial markets, force a rebirth of the drachma, and perhaps force it into the waiting arms of the Putin. Nobody, including the Greeks, likes a bully.
{05.07.15}Forget the corporate party line about Greece--how a profligate public sector sector drove Greece into the poor house--the truth is not going to be told by a media owned by corporate plutocrats. The truth is the banksters were more than willing to shovel debt onto Greece's balance sheet and get well paid for doing so. The plutocrats shoved Greece over the cliff of fiscal stability so they could feast on the remains of the state. What happened to Greece is not unlike what happens to a popular restaurant or the corner bakery when it is taken over by the Mafia, only a larger scale.
Greece got hammered by the Great Financial Panic of 2008 brought to you by the scam artists on Wall Street packaging mortgage backed securities that were essentially worthless. These criminals were aided and abetted by the rating agencies, S&P, Fitch, Moody's who gave top ratings to junk. Everybody was making money and the poison spread world-wide because "the system" is global. Greece's insolvent domestic banks got more $30bn from the Greek taxpayers to bailout the hardcore corporatists now demanding their rents (interest) from Greece.
The banksters in turn forced the government to guarantee their debts and substitute taxpayers for private investors who made a bee-line to the exits. To emphasize who was in control the international financial cartel forced the Greek prime minister to resign when he refused to drink the cool-aide of a second massive bailout. He was replaced by one of their own, the Vice-President of the ECB (European Central Bank) They also upped the "vig" in 2009 by devaluing Greek bonds which made the yield on Greek debt even more expensive, which in turn made more difficult for the government to refinance existing bonds. When the yield on Greek bonds hit 50%, parliament was forced to agree to the second, even larger bailout. Just when you think you are out, they force you back in!
Banksters had their best year ever stripping Greece of her assets in 2011 because the debt deals required the government to sell assets as a condition of the loans. Think of Mafia boss Hyman Roth carving up Cuba's action among his cronies. The plutocrats call it "austerity" giving their unpatriotic dismembering a cloak of moral rectitude. Pensions have been cut in half and sales taxes, the most regressive, have risen more than 20%. All of this to pay the bloodsuckers their money.
Here's the bottom line on this post: the plutocrats never counted on a democratic socialist government coming to power that would lead the people in just saying no to the crooks in the final crunch. Greeks are finished voting in as of now, and they are rejecting the latest glass of cool-aide by 61% with 80% of the vote counted. Greeks may suffer more turmoil and deprivation in the months to come, but they will do it with their dignity and their democracy in tact.