Preston Clive
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Preston Clive in Preston Clive - THE IRRITATED AMERICAN, Wielding The Digital Hatchet,

GREXIT?...AND THE COMEDY ROLLS ON IN BRUSSELS

"Whoops, sorry guys, I meant to write something totally different. Gimme a moment." (c Metro Goldwyn Mayer)

By Preston Clive

This is likely the day we've all been waiting for. Crunch day. Sundown at the OK Corral. Zero Hour. 

Greece has obviously annoyed the German Finance Minister Wolfgang Schaeuble over the past two weeks to the extreme degree that he simply doesn't care that he appears--to at least a segment of his own country's press and populace-- as too brusque in his dismissal of Greece's formal request for an extension of the existing bailout program .  .  .  austerity measures technically included in tact.

The italics on the word technically are used advisedly, because this is the problem: Germany does not believe for a moment that the Greek Syriza government is committed for a hot second to the austerity measures built into the existing program. He thinks that--famously using the term Trojan Horse--the Greek plan is a trick to get bailout money to keep the country afloat within the euro zone and the banks solvent, then, money in place, begin a unilateral ex post facto loosening of their commitment to the austerity measures.     

It's always a pity whenever something that is Pure Sterile Business turns so emotional that everyone is walking around so hotheaded that their scalps are about to, Tex Avery-like, blow off and straight up with such force that the haircut must be scraped off of the ceiling with a pancake spatula.

With the level of total absurdity ratcheting up to soaring new heights with the report just filed with Alexis Tsipiras allegedly claiming that Greece Likely Sent The Wrong Letter formally requesting the loan extension it seems as if anything, no matter how odd, can happen with each tick of the clock. The wires were abuzz yesterday with the apparent fact that the Greeks "blinked" and agreed to the current bailout program with all of its tough repayment parameters and strict austerity measures .  .  . which the disbelieving Germans took a pass on.

Now Tsipiras is claiming they sent the wrong letter by mistake--that they meant to send a letter that asked for the loan and included a more detailed description of the Greek's adherence to the overall bailout program into which it fit. 

At least he didn't claim the dog ate the letter. 

With the ECB making concrete preparations for the exit of the Greeks from the eurozone, it may well be that the fear of god has been zapped into the bellies of Tsipiras, Varoufakis et al. How far the Greeks are willing to go in their request with the provision of concrete stipulations of adherence to austerity, this is info still closely guarded and is anybody's guess. And this is going to be the keycard granting the Greeks continued participation in the Euro, and the ability to continue treading water with functioning, liquid banks, and avoidance of total withdrawal leading to emergency capital controls wrought on massive outflows of badly needed money.

I don't want to gloss lightly over the first sentence of the preceding paragraph, vis a vis the ECB: according to an article in Der Spiegel, translated as follows:

The European Central Bank (ECB) is preparing for a Greek exit from the monetary union ... Information obtained by SPIEGEL, an internal simulation games how the rest of the eurozone could be held together.

As far as the Germans go, yesterday gave us the first concrete signs of a divergence in approach to the Greek request: it was reported that Dutch Minister/Eurogroup CEO Jeroen Dijsselbloem, and EU Commission chief Jean-Claude Juncker were a little thrown off by Berlin's fistpounding NO WAY to the formal Greek request. Helsinki diverged from the two chiefs and gave a double thumb's up RIGHT ON BROTHER to the German snub.

Now, with more concessions of specificity spewing forth from Syriza, it's looking like Germany is going to get the directional steps towards continuity that they were looking for. Of course, with anti-austerity parties in Spain and Italy watching with slavering jaws at how this situation plays out (with no doubt that they were hoping for win for Syriza, giving hope for themselves in the immediate future) the hardliners are swinging the hammer with brutal strictness to keep everything in line and everyone in order. No cutting the line, no breaks on the reduced price school lunch.

We are eyeballing what the next couple of hours bring. My sense is that the Syrizan dream of breaking free from the often draconian shackles of austerity (in an insanely deteriorated economy) will have, in the end, turned out to be a mirage, but for perhaps a few token concessions. Point here, deadline stretch there.

Preston Clive

2/20/2015***