Greek Prime Minister Alexis Tsipras and Russia President Vladimir Putin. Reuters
Leonid Bershidsky. Bloomberg: Did Putin Sell Out Greece?
There's been a rash of conspiracy theories about secret concessions that Russian President Vladimir Putin is supposed to have made to Western leaders. The latest asserts that Putin could have helped Greece exit the euro but reversed course at the last moment, thus pushing Greek Prime Minister Alexis Tsipras into the cold embrace of European Union leaders.
The Greek newspaper To Vima reported earlier this week that Tsipras had asked Putin for a $10 billion loan so that Greece could transition back to the drachma. If it reintroduced the national currency, it would need foreign reserves to back it up, and Greece was out of euros. According to the report, Russia floated the idea of a $5 billion advance on the construction of a gas pipeline through Greece, a branch of the Turkish Stream project that Russia and Greece agreed to build in June.
WNU Editor: I guess the Greeks now have nothing better to do but talk about conspiracies. But the part of this report that did get my attention was former Greek Finance Minister Yanis Varoufakis's description and explanation on why it would be very difficult (if not impossible) for Greece to leave the Euro and set up its own currency ....
.... To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military’s might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available.
Wow .... I can now understand why Greece had to accept the EU's terms.
1 comment:
When I first learned of the Greek debt situation and the negotiations with the EU I had posted here that Germany would cave to all Greek demands and then some simply because they have to much invested in the EU, flawed as it is. It seems I was wrong.
At the time, I assumed the Greeks had a plan to exit the EU. I didn't realize no such plan existed. I had no idea the Greek government was this stupid to go into negotiations with essentially NOTHING!! Had I have realized this my prediction would have been different.
Actually the so called "conspiracy" seems quite plausible and worth investigating rather than simply saying the Greeks "have nothing better to do." It seems almost inconceivable to me that the Greek government would go into this without a plan to exit the EU. Even if the threat to exit the EU is only a bluff, it's hard to fathom the Greek government would not have had the plan in place. Perhaps they really did think they had Russian backing that did not materialize.
As for the remarks of the former Greek Finance Minister, it seems inaccurate to compare the Greek situation to Iraq, When Iraq transitioned to a new currency, Iraq was an active war zone, it had a weak corrupt and generally ineffective central government, wrecked infrastructure, and a population deeply divided on sectarian lines. Greece does face any where near these kinds of problems. By making this comparison it seems to me that this man is making excuses for a failure to properly prepare.
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