Hidden in the small print

By Rossa:

“…One of the preconditions imposed on Greece for a deal is that it signs into law European rules that would put euro zone authorities at the ECB and in Brussels, rather than Athens, in charge of identifying and closing or breaking up sick banks.

This in turn could lead to a shake-up of the sector that could see some banks close, with losses pushed onto bondholders and possibly even large depositors. In such circumstances, there would be little that Athens could do to prevent this….”


Karl Denninger at Market Ticker says about this..

“…The second Greece’s Parliament enacts the legislation demanded by The Troika and Herr Merkel, if they do pass it, they will hand over the entire nation’s deposits in the banking system and forfeit the right to prosecute any of the people responsible for the obviously-false marks taken on the assets that underpin those deposits.

That includes both the bankers inside Greece and at the ECB where the “collateral” is being held.

Since the ECB will then be in charge it may mark those “assets” however it wishes and thus steal as much of the deposits as it wishes without any means, other than the people of Greece taking up arms and literally invading Brussels, to stop it. Worse, once this is enacted it is irreversible as the theft will likely be accomplished within hours, long before the Greeks can demand an election and revoke their consent through peaceful means…”

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4 comments for “Hidden in the small print

  1. Ed P
    July 14, 2015 at 3:56 pm

    Angela (Frau not Herr!) Merkel has now achieved what Adolf failed to do, without a shot fired.

    • Old Geezer
      July 15, 2015 at 9:02 am

      Not yet, there could be a serious backlash building in Southern Europe.

      • July 15, 2015 at 5:18 pm

        How many divisions have they got. 🙂

        More importantly how would a Greek army get from Greece to Brussels or Berlin? EasyJet?

        No the ECB might be able to do that with relatively liquid capital like bonds and T-Bills (which I doubt they have), but collateral in the form of land, property, Greek companies, etc) would remain in Greece and even if the ECB claimed immediate title, they’d have to go to Greece to get physical possession.

        It might take a few days, but the Greek government could nationalise the assets with an ECB haircut and bail-in and then let the Paris Club sort it out. It would take decades and the ECB would get a fraction of the face value.

        At least the IMF sees the futility of what the ECB is attempting (additional funding, no haircut or debt relief, GDP contraction, penal enforcement, etc.,)

        You can’t make Greeks into Germans by EU diktat.

  2. Ed P
    July 15, 2015 at 11:45 pm

    Tsipras seemed at first as if he would be the fearless warrior all the disillusioned states craved. Then he morphed into a cardboard cutout – his refusal to countenance Grexit (when it’s the only sensible and viable option) will doom the country to be Germany’s bitch for many years. Standing up to the Troika bullies would have given all the other oppressed Med states the encouragement to protect themselves as well.
    Sich Heil Herr Schauble

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