I'm sure communist Prime Minister Alexis Tsipras would liken this move to Franklin Delano Roosevelt's 1933 "bank holiday," but he's got even more sinister motives for it than FDR did:
Greece's five-year financial crisis took its most dramatic turn yet, with the cabinet deciding after an eight-hour session that Greek banks would remain shut for six business days and restrictions would be imposed on cash withdrawals. The Athens Stock Exchange would also not open Monday, financial sector officials confirmed.
The moves were meant to staunch the flow of money out of Greek banks and spur the country's creditors to offer concessions before a bailout program expires Tuesday. The accelerating crisis has thrown into question Greece's financial future and continued membership in the nineteen-nation shared euro currency — and even the European Union....
A decree published early Monday in the official Government Gazette stipulates banks will not open Monday morning and would remain closed through Monday, July 6th. The finance minister could decide to shorten or extend that period.
Withdrawals from ATMs will be capped at sixty euros ($66) daily. The decree said ATMs would be working at the latest twelve hours from its publication, meaning cash machines should open by early afternoon. [emphases added]
Makes perfect sense in context. Tsipras's "Coalition of the Radical Left" got elected back in January on an anti-"austerity" (pro-gimmie-gimmie) platform, which was a license to unrepentantly demagogue fiscal responsibility and demand more E.U. handouts in perpetuity. Cutting off the access of Greek citizens to their liquidity - which they already knew was coming or there wouldn't have been the run on Greek banks - will piss them off even more, and that anger will be directed not at the stupendously irresponsible Tsipras, but at Greece's E.U. creditors, most especially Germany. Which makes the timing of his demagogic anti-E.U. referendum all the more "convenient," almost as if it's the excuse to which he's been building up to take Greece out of the E.U. and into an alliance with Putin's Russia.
However, recent polling seems to indicate that that may be more of a gamble or Tsipras than he may have anticipated:
Two opinion polls published Sunday indicated that more Greeks want to stay in the eurozone and make a deal with creditors than want a rupture with the country's European partners. Both polls were conducted before Tsipras' referendum call, but they provide an indication of public sentiment.
In the poll by Alco for the Proto Thema paper, 57% said they believed Greece should make a deal while 29% wanted a rupture of ties. A Kapa Research poll for To Vima newspaper found that 47.2% would vote in favor of a new, painful agreement with Greece's creditors, compared to 33% who would vote no and 18.4% undecided.
3-2 against bailing in one survey, 2-1 against it in the other. Which leaves the question of whether Tsipras would abide by the voters' expressed will and meekly knuckle under or flip his own people and the Euros the bird and just pull a coup. He is, after all, an awfully long way down this revolutionary road to this game of fiscal chicken. He may decide that he's gone too far to turn back now and be humiliated.
Meanwhile, the government of the commonwealth of Puerto Rico is also "going Greek":
Puerto Rico cannot pay its $72 billion in debts, and its creditors will have to shoulder part of the burden, the New York Times reports.
"The debt is not payable," García Padilla said. "There is no other option. I would love to have an easier option. This is not politics, this is math."
IOW, it's politics, because he's never paid attention to the math beyond how much borrowed cash was landing in Puerto Rico's accounts.
Governor Alejandro García Padilla and his staff said they likely would see significant concessions.
A not-so-veiled threat about what will happen if they don't see those concessions.
The U.S. territory has more municipal bond debt per capita than any state, the Times noted, and the market already has been hit by municipal bankruptcies in Detroit, Stockton, California and others.
As a commonwealth, Puerto Rico isn't allowed to enter bankruptcy.
They are therefore defaulting, which is much better for them because that way their creditors get bupkis.
The governor said the impoverished island cannot afford to keep asking its residents to sacrifice with tax hikes and pension cuts, so the debt holders, many of which are private investors in the United States, will have to step up.
i.e. Get stiffed and screwed like a Miley Cyrus blowup doll, with no thought given to how and why Puerto Rico got so overextended in the first place, because they have no intention of altering those fiscal policies.
This is the wave of the near future, my friends: a default cascade, both domestic and international, with all the extended hands inevitably looking to pick Uncle Barry's empty pocket. And since America's debt crisis is even worse than the Greeks'....well, who's going to bail us out when everybody else already left us holding the bag?
If you want to see a good metaphor of what's already in motion, watch the World Trade Center towers burn and then pancake. You might say a picture is worth $72 billion.
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