Tectonic shifts are underway across the continent. A leading IMF official has resigned, charging that incompetent bureaucrats and hacksrepeatedly ignored warnings about the impending crisis.
We’ve got a major bombshell in the announcement that the eurozone’s central bank is refusing Greek bonds as collateral, a move that sent Spanish share prices down and seems certain to add more intensity to a national tragedy. [The story's after the jump, grouped with out other Greek items.]
We got another harsh eurobankster warning, graphic eviden ce of what’s at stake in the event of euro breakup, the latest on the Spailout, a warning of a Spanish regional collapse, the flight of Iberian young to former colonies, and an airline that won’t be taking them.
From Greece, we’ve got another resignation from government, the return of electricity to a sweltering hospice, a Samaras meeting, another warning from another German, a visit from Bubba. a Prime Ministerial strike-breaking raid, more racist attacks [including a video].
From Italy, we’ve got a prime ministerial coup against provincial governments, a Sicilian mayor’s warning of civil war, a rating agency’s back-pat, and more legal worries for a seemingly resurgent Baron of Bunga Bunga.
There’s a Cyprus bank upgrade, a German business upbraid, suspicions of deep French agendas, and a very untransparent European Parliament.
We begin with a trio of videos.
BBC: Wildfires sweep across Southern Europe
Just as austerity cuts are demolishing firefighting services, an epidemic of fires has erupted in Greece and other countries along the southern edge of the continent.
From BBC News:
Associated Press: ‘The Dark Knight’ Paris Premiere Cancelled
The Colorado theater midnight Batman massacre carried out by a armor-clad gunman who told police “I am the Joker” has a European echo:
From Deutsche Welle: Greece – Crisis in sports
A stark report on the sad plight of competitive sport in the country that gave us the Olympics:
IMF economist resigns in anger
The International Monetary Fund, the critical third member of the Troika now engaged in the deconstruction of Europe for the benefit of investors, is riddled with incompetence and hacks, declares one of its leading economist in a tempestuous resignation letter.
What’s even worse, senior officials ignored clear warnings of the approaching economic crisis.
From Ian Talley of the Wall Street Journal:
A senior International Monetary Fund economist is resigning from the Fund, writing a scathing letter to the board blaming management for suppressing staff warnings about the financial crisis and a pro-European bias that he says has exacerbated the euro-zone debt crisis.
“The failure of the fund to issue [warnings] is a failing of the first order, even if such warnings may not have been heeded,” Peter Doyle said in a letter dated June 18 and copied to senior management.
Doyle is formerly a division chief in the IMF’s European Department responsible for non-crisis countries. He currently acts as an adviser to the Fund but is expected to officially leave in the fall.
“The consequences include suffering [and risk of worse to come] for many including Greece, that the second global reserve currency is on the brink, and that the Fund for the past two years has been playing catch-up and reactive roles in the last-ditch efforts to save it,” he said in the letter.
“After twenty years of service, I am ashamed to have had any association with the Fund at all,” he said in the letter. Mr. Doyle wasn’t immediately available for further comment.
Read the rest.
More from the BBC:
He writes of “incompetence”, “failings” and “disastrous” appointments for the IMF’s managing director, stretching back 10 years.
In the letter, dated 18 June and obtained by the US broadcaster CNN, Mr Doyle said the failings of IMF surveillance of the financial crisis “are, if anything, becoming more deeply entrenched”.
He writes: “This fact is most clear in regard to appointments for managing director which, over the past decade, have all-too-evidently been disastrous.
“Even the current incumbent [Christine Lagarde] is tainted, as neither her gender, integrity, or elan can make up for the fundamental illegitimacy of the selection process.”
Read the rest.
CNN has posted the full text of the letter [PDF].
Such are the minions of money now dissecting the prone corpse of material and human capital across the globe, selling off the parts and stilling any last, faint cadaveric spasms.
Another harsh eurobankster warning
They’re coming so regularly now you could almost set your watch by them.
But then the euro’s an increasingly hard sell this days, going these days for under $1.22, while the Canadian dollar is within a hair’s breadth of the U.S. dollar [98.70 cents, as we write].
The euro zone political commitment to the euro should not be underestimated, European Central Bank Executive Board member Benoit Coeure said on Friday in a warning to those doubting the single currency’s survival.
In a speech in Mexico City, Coeure said there was a lack of understanding about the euro zone’s approach to tackling the debt crisis and that he disagreed with those who said the bloc did not have the right tools to fix the situation.
“I would caution those who have doubts about the euro, that they underestimate the political commitment to it at their own risk,” Coeure said.
“The ambition to provide long-term foundations for EMU in less than a decade is a historical step of great significance,” he added.
Read the rest.
So what’s a stake? A graphic answer
David Keohane of FT Alphaville reports on a new JP Morgan Chase report speculating on the costs to Finland of a eurozone exit [insignificant, according to the banksters].
But what caught our eye was this chart from the bank report, showing the net international investment positions [NIIPs] of eurozone countries.
Here’s how Wikipedia defines the term:
The difference between a country’s external financial assets and liabilities is its net international investment position (NIIP). A country’s external debt includes both its government debt and private debt, and similarly its public and privately held (by its legal residents) external assets are also taken into account when calculating its NIIP.
A country’s international investment position (IIP) is a financial statement setting out the value and composition of that country’s external financial assets and liabilities.
Basically, the more a country appears on the right hand side of the chart, the greater its potential losses in the event of a eurozone exit or collapse. [For where the U.S. Stands, see this graphic nightmare.]
And look at Germany’s position, the best single illustration of why Angela Merkel is so desperate to destroy national budgetary autonomy.
And on to Spain. . .
Word of final Spailout total coming in September
We presume this means Spain will go through the same kind of vetting now underway in Greece.
The eurocrats are playing with fire in holding off on their announcement, given the high tensions inside the country, where growing numbers are taking to the streets in outrage over the austerian demands.
The exact amount that Spain will borrow from the euro zone to recapitalize its banks will only be determined in September, euro zone finance ministers said on Friday, after approving the terms of a loan of up to 100 billion euros ($123 billion).
In return for the loan, Spain will have to restructure its banking sector and its assets, and improve governance and regulation, the Eurogroup of euro zone ministers said in a statement.
But Madrid will also have to honor its government deficit reduction targets and commitments on structural reforms and rebalancing of its economy, undertaken under separate procedures of the European Union.
Read the rest.
Spanish region on brink of collapse
Following up on today’s earlier post about Spain, now comes word that one of the countries major regions is about to default.
The announcement sent Spanish stocks on the biggest plunge in the last two years and dropped stock markets across the continent.
From the London Telegraph’s Emma Rowley and Martin Roberts:
Spanish shares suffered their biggest one-day drop in two years, leading European markets’ plunge downwards, after a major Spanish region said it needed rescuing by its cash-strapped government and Continue reading