The Plan To Kick Greece Out of The Eurozone!

• The Plan to Kick Greece Out of the Eurozone! 
  by MIKE WHITNEY, http://www.counterpunch.org/
  “Men and women of Greece, it is with a sense of dignity and patriotic duty, that we made the decision not to betray your hopes and aspirations…The pro-bailout parties did not simply want us to support a government that would impose more austerity, they wanted us to agree to measures that would increase poverty and desperation. We didn’t do them the favor.”
  – Alexis Tsipras, Chairman of the Radical Left Coalition (Syriza)
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  The endgame for Greece is now in sight. Attempts to form a unity government have failed and public opposition to austerity is growing. The uncertain political situation has triggered a bank run which drained nearly $900 million in deposits from Greek banks on Monday alone. Panicky Greeks are moving their money out of the country fearing that a default will collapse the banking system or that an unexpected return to the the Drachma will slash their life savings in half. Withdrawals are pushing yields on German bund to historic lows, signalling rising anxiety. Absent the European Central Bank’s Emergency Liquidity Assistance (ELA) program, the Greek banking system would have imploded already taking down creditors in Germany, England and France. But the ECB’s aid will not last forever nor is it unconditional. If the anti-austerity parties take power in Athens, the bailouts will stop, capital flight will accelerate, and the banking system will crash.
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  No one can say with certainty what the impact of a Greek default will be, but analysts estimate that the losses for financial institutions could be as high as 400 billion euros. That means the ECB may need to deploy emergency funds to backstop teetering banks that could be overwhelmed by the flood of red ink. If the central bank refuses to act as lender of last resort or to intervene with another round of bond purchases, matters will deteriorate quickly as debt-stricken countries slip deeper into crisis. What worries economists is that the Greek virus will spread to other countries that are already battered by high unemployment, negative growth, and rising yields on government debt. A default in Greece would send a message to investors that EZ policymakers are no longer committed to the euro-project. If that belief takes root, a euro-wide (capital) exodus will ensue increasing the chances of a breakup of the 17-member union. There are already signs that this process is underway as banks in both Spain and Italy have seen a steady uptick in withdrawals.
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  On Monday, German Chancellor Angela Merkel and newly-elected French President Francois Hollande promised to “consider measures to spur economic growth in Greece” provided that Greece continue to meet the terms of its bailout agreements. While Hollande tried to strike a more sympathetic tone than Merkel, he fully-backed her hardline policies saying that the austerity measures “must to be adhered to.”
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