Editorial: Greece's Bounced Cheque At The Bank Of Clemency

Tim Haïdar

"Money isn't everything - but it's a long way ahead of what comes next."- Sir Edmund Villiers Minshull Stockdale, 1st Baronet (1903–1989)

On Sunday, the results of the so-called "Greferendum" on whether the Greek state would accept another bailout from its creditors came back with an unambiguous message. Some 61 per cent of the 9.9 million Hellenes able to vote, returned a resounding "ôχι" (No) to a further donation-with-clauses from the "Troika" of international creditors: the European Commission, European Central Bank (ECB), and International Monetary Fund (IMF).

Stocks around the world plunged and oil prices took as much as a five per cent dive after this unprecedented result and the start of a perilous journey into the unknown for the 19-nation Eurozone.

Now comes the interesting bit. The results of the Greek plebiscite have opened up a Pandora’s box of possible havocs and bedlams, including a full blown default for the southern European nation, its expulsion from the euro area and the dangerous resurrection of the bygone drachma as the national currency.

This year the Hellenic Republic still has to meet 25 payments for its troika creditors and treasury bill holders, totalling some €24 billion ($26.6 billion). The IMF last week released an analysis document stating that Greece was already shouldering a burden of "unsustainable debt" and would possibly need a write-down on its fiscal obligations. Global financial services firm, JP Morgan Chase, has reported that: "there is now a high likelihood of Greek exit from the euro, and possibly under chaotic circumstances."

Interestingly, while the European economic powers hold the sword of Damocles over the head of 11 million people, it seems that some economic clemency exists in the world.

The EU-affiliated European Bank for Reconstruction and Development (EBRD) has recently handed discount supermarket chain, Lidl, more than €800 million to develop its brand across Eastern Europe. And let us not forget the $29 trillion dollars that the Federal Reserve bank awarded to "distressed" companies during the 2007-2009 global financial crisis. Aforementioned Doomsayer, JP Morgan Chase, received some $100 billion more in this "Great Too-Big-To-Fail Largesse" than Greece’s total compound debt of $356 billion.

Mercy is obviously a subjective quality…..

All the while, the Russian Federation and the BRICS New Development Bank (NDB) are waiting in the wings to provide a helping hand to the lame duck of the European continent. And Greece may just be the first nation to welcome the warm embrace of the NDB, as the dominos of Southern Europe wobble about to topple.

In their marble halls, Western leaders seem to be callously oblivious to the fact that Dominos lying flat make a wall….

Tim Haðdar is the Editor In Chief at Oil & Gas IQ. Reach Him At Twitter Or OGIQ


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