Still sure?

Union Europaea delenda est. This is one of the core positions on this blog. And as we watch the stresses building up within the EUnion as a result of the economic 'down-turn' it would seem the EUnion is firmly on it's way to oblivion. People more knowledgeable then I have said it was always going to be thus. But the collapse seems to be here, for real now. The question is: How much damage will be done, most importantly to us, mere citizens?

The deal struck by EUnion leaders last Thursday wasn't. It was immediately apparent when the first news broke. But over the last days more and more details have come out that illustrate the utter fatuousness, the complete emptiness of what was concocted by Frau Merkel and Napoleons retarded nephew.

The 'leveraging' consists of trying to lure outside investors by covering the first 20% loss on bonds that in all likelihood will incur 50-70% losses, at the least. That's and interesting and attractive opportunity isn't it? Invest in the EUnion and suffer losses of only 30-50 cents on the euro, instead of the full hit.

Hopes of BRIC involvement were dashed earlier, when Brazil bluntly said 'Thanks, but no thanks'. After the summit, Sarkozy shuttled off to China to ask pretty please for help. In a moment of complete insanity, the EFSF even suggested issuing bonds in Chinese Yuan. The Chinese, culturally inflicted with a higher form of politeness, did not refuse so bluntly. They just refused to commit. Which in Chinese terms is pretty much the same answer the Brazilians gave (minor update: See what I mean?).

The much ballyhoo-ed 50% haircut does NOT slash Greek debt in half, as the evidently completely illiterate reporters and anchors of the Dutch news wanted you to believe. That haircut is only for private sector investors. Since the majority of Greek debt paper is held by governments, Greek debt will be reduced by 28%, at most. And this is assuming that banks will fully commit, which they haven't yet and maybe never will. That was another teensy detail, like the participation of the BRICs, left open in the deal from last Thursday.

All in all the deal is an empty vessel of promises that will not be kept. The EUnion leaders have set themselves up for failure. The crisis will return in a few weeks. And as the stress increases, the call for the ECB to start the presses will mount as well. And when that happens we will all be Greeks, victims of corrupt politicians, undemocratic adherents to a non-viable ideology, that will not stop until all the economies of the EUnion are exhausted and lie in ruins before us.

That includes our own government, our parliamentary system, our MSM and the entire spectrum of 'social partners'.

Collectively, they are force-feeding us the message that it is good to lose our savings, if it means the EUnion will linger on for another few years. That pulling the plug on this misbegotten adventure will result in even more ruin. That's is what they said at the beginning of this crisis. That is what they are still saying now. But the costs of keeping the EUnion on life support have mounted exponentially and continue to rise.

With the new, expanded Greek bail-out, the Dutch are on the hook for 7.8 bln euros (NL). The 30 bln sweetener offered to banks that take the 50% haircut will cost us another 1.8 bln. But this is only the case if all euro zone countries, even the basket-case PIIGS, contribute. If not, we will be on the hook multiples of that number, increasing our sovereign debt. If then our AAA credit rating is downgraded, this will cost us a minimum of 8 bln in increased interest, YEARLY!

Imagine this: If a 1 billion budget cut all but obliterates the Royal Dutch Armed Forces, what 8 bln yearly extra interest payments alone will do, never mind the rest. Are you still sure, at this stage, that pulling out is more costly?

8 reacties:

Sue zei

Quite frightening that the EU elites are willing to put their push for power above the lives of all Europeans.

P Cadier zei

One thing Mrs Merkel has got rig is that if the Euro fails then the EU fails. She should therefore be glad that us Brits are preparing for this, instead of burying our heads in the sand like the so-called europhiles. It is these "lovers of Europe" in the Greek sense of the word, who have brought Europe to it's knees. The eurosceptics have been proved to be the real europhiles. Had we been listened to the peoples of Europe would be in a happier state right now.

MFS - The Other News zei

The telegrapgh gives today a similar prediction as yours, the Question i'm asking myself how much effect will it have on the US as well?The coming test on Nov 9 to shut down U.S. Radio and Tv communications could be the rehersal for the real deal in a near future.

DP111 zei

Politicians who are responsible for the loss of savings of the ordinary citizen, should be tried for the crime of Grand Theft and Fraud, as well as treason.

Klein Verzet zei

Hi MFS. Which test is this? I have not heard about this. Do you have a link?

Anything going wrong in the eurozone will undoubtedly impact the US. As far as I know, a couple of the big league US banks are hanging by a thread. If anything were to happen to the Euro debt paper they hold, it would spell the end for them.

At least, it has the Obama administration spooked. Recent statements by Obama himself are a strong indicator, as was secretary Geithner coming over to tell our euro-slime we need to leverage the EFSF.

Klein Verzet zei

Agreed on principle. However, I don't know how that could be achieved in legal practice.

Klein Verzet zei

What is truly frightening is the fact that it is our own politicians, people we gave our vote, that abuse their mandate in this manner. I just cannot get my head around the scale and scope of the betrayal.

MFS - The Other News zei

Hi KV.
Here's the link to the 'test story':


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