Showdown Over Greece Escalates

The tensions over that element of the ongoing collapse of the transatlantic financial system centered on Greece, escalated over the weekend.  Greek ministers arrived in Brussels on Saturday to renew negotiations with the EU and IMF, while Greek PM Tsipras publicly stated that there will be no deal without debt relief and no cuts to pensions and wages.  If Europe desires the split and the continuation of subjugation we will make the big decision to say ‘no’ and fight the battle for the dignity of the people and our national sovereignty, Tsipras said.

Meanwhile, an Ambrose Evans-Pritchard article posted on Sunday, June 14, says that a radical wing of Syriza will put forward a plan for an Icelandic-style default and nationalization of the banks.  According to Evans-Pritchard, the plan being circulated by 30 MPs from the Aristeri, or Left Platform, includes capital controls and the establishment of a sovereign central bank able to stand behind the new financial system.  The proposal also considers a return to the drachma, or a dual currency arrangement.  A Syriza MP told Evans-Pritchard, “This goes way beyond the Left Platform.  We are talking serious numbers. We are all horrified by the idea of surrender and we will not allow ourselves to be throttled to death by the European Monetary Union.”  Another Syriza MP is quoted saying, “The banks will go ape-s*** of course. We are aware that there will be a lot of lawsuits, but at the end of the day we are a sovereign power.”

Also according to Evans-Pritchard, European officials examined `war game’ scenarios of a Greek default in Bratislava on Thursday, admitting for the first time that they may need a Plan B after all. “It was a preparation for the worst case. Countries wanted to know what was going on,” said one participant to AFP.

In other news, the Frankfurter Allgemeine Zeitung reports that a negotiator involved in the talks between the EU and Greece said that the IMF torpedoed a compromise proposal from Jean-Claude Juncker last week.  The compromise was not really of substance, in that Juncker was only proposing to postpone cuts in pensions and military spending.  But even that was too much for the IMF, which was opposed to any bartering.