07-04-2015, 10:21 PM
A referendum on bailout terms that has morphed into a plebiscite on Greece's future in Europe has created the first real splits in Prime Minister Alexis Tsipras' ruling coalition. Four members of the right-wing Independent Greeks, uneasy bedfellows whose 13 votes Tsipras' left-wing Syriza party needs for a majority, defied him in the space of 24 hours by urging Greeks to accept more austerity in return for cash.
Tsipras loses 4 allies ahead of Greek referendum - Business Insider
No one quite knows how a Grexit would be engineered, but the case for it runs like this: with 11 million people, Greece represents 3.2 percent of the population and 1.8 percent of the output of the 19-nation euro zone’s 10.1 trillion-euro ($11 trillion) economy.
Greece Tugs at Euro’s Heartstrings Amid Economic Case for Exit - Bloomberg Business
By now it should be clear to all that the only reason why Germany has been so steadfast in its negotiating stance with Greece is because it knows very well that if it concedes to a public debt reduction (as opposed to haircut on debt held mostly by private entities such as hedge funds which already happened in 2012), then the rest of the PIIGS will come pouring in: first Italy, then Spain, then Portugal, then Ireland.
Did The IMF Just Open Pandora's Box? | Zero Hedge
It is exactly the case that only a "No" vote at this point would allow Greece to continue a negotiation which has already seen one of the three Troika members side with the Greek position. Should Greece vote "Yes", it will make any future negotiation with the Troika impossible, and while the country will get a few months respite the resultant bank run after the bank reopen with the ECB's blessing will mean that all Greece will do is buy itself a few months time. Only this time all the debt will still be due.
Did The IMF Just Open Pandora's Box? | Zero Hedge
In this way, while the outcome of the Greek situation is currently unknown, it has also become moot, because at this very moment, politicians from Spain's Podemos to Italy's Five Star movement are drafting memos demanding that the IMF evaluate their own debt sustainability. Or rather unsustainability. Perhaps more importantly, these same politicians will now dangle the prospect of an IMF admission that they, too, deserve a haircut as the catalyst to be elected into power.