Oil on the Brain: Political Triumphalism and Oil and Gas in Greece

Last night I attended a book launch by Vassilis Kikilias at the Athens Concert Hall. Mr. Kikilas, a former basketball player turned New Democracy (ND) politician, presented a book he edited entitled “Exclusive Economic Zone: from Strategic Movement to Economic Solution.” The book is based on extensive contributions by three experts in the field, one of whom is Solon Kassinis, the Director of Energy at the Cyprus Ministry of Commerce, Energy and Tourism. Mr. Kassinis  is at the forefront of Cyprus’ exploration programme, and someone well placed to advise Greece on how to proceed.

The launch was attended by several political figures, including Andreas Loverdos, Minister for Health (PASOK) and Stavros Dimas, Minister for Foreign Affairs (ND). Many of comments made during the introductory speeches can only be described as a very premature triumphalism. Others were dreary political canards. These included:

·   Cyprus, like Greece, was sitting on trillions of Euro of hydrocarbon reserves

·   Greece could only develop these reserves as a member of the Eurozone

·   Greece needed a strong military in order to develop these reserves

·   Turkey had been outwitted and outmanoeuvred

·   A new era of politico-economic supremacy was at hand.

It was disenheartening to see hydrocarbon development linked to Eurozone membership. The idea that Greece could only develop hydrocarbons as a member of the Eurozone is absurd. Countries such as the UK, Norway, the United States, Russia, Saudi Arabia, and many others have somehow managed to develop oil and gas using their own currencies.

It was also disappointing to see that familiar argument that a strong military was the only guarantor of security, and therefore required for the development of oil and gas. I don't want to get into this debate extensively in this post, but whenever politicians start talking up the military as a guarantor of economic development, I think we have objectively left the sphere of rational discussion. Particularly when we know how Greek military procurement has been used in the past 30 years, and what the current state of the military is. 

None of these comments is meant to underestimate the positive steps made by the Greek government in the past 3 months. An international invitation for non-binding seismic exploration has been issued, and several bidders have responded. According to Kathimerini, these include ION Geophysical, TGS-NOPEC, Dolphin Geoservices, CGG Veritas, Spec Partners, Spectrum Geo and Fugro Multiclient Services. This will be the first large-scale, state-of-the-art seismic exploration in approximately 30 years, and I have high, informed hopes that it will be successful.

But as everyone should know, the fact that exploration is starting, and the fact that gas reserves have been discovered in Cyprus’ Block 12, does not mean that it is a foregone conclusion that billions of Euro are going to flow into Greek government coffers. There is a lot of work to do first:

a.  First and foremost, the seismic programme needs to be implemented and then followed by exploratory drilling. This will likely take 2 years to complete in any detail, and will depend on the terms offered by Greece in the licensing process, as well as on the future credibility and negotiating ability of the Greek government.

b.  The technical complexity of recovery, particularly south of Crete, should not be underestimated. These are likely to be both deepwater and deeplevel deposits, which will require expensive extraction.

c.  Once extraction takes place, the hydrocarbons will need to be transferred onshore, either by pipeline or vessel, and then refined and distributed. This calls for billions in investment up front.

Moreover, it is going to take a very rational and sustainable government policy to ensure that any hydrocarbon income is spent well rather than squandered on white elephant public sector projects of the kind seen in the past. In most countries, large-scale hydrocarbon discovery and extraction inevitably leads to higher inflation and misspent resources. The term “Dutch Disease” has been coined to illustrate this phenomenon.

To put it bluntly, it would be a tragedy if oil and gas income were to replace cheap foreign credit as a driver of over-borrowing, over-consumption and political corruption in Greece. Why does this not sound like such a remote possibility?

Finally, we cannot discount further political turmoil between Greece, Cyprus and Turkey. It is irrational to expect the current zero-sum interpretation expressed last night of the exclusive economic zone to be implemented in full. It may be far better to resolve the EEZ issue around Kastellorizo, and between Turkey, Greece and Cyprus through some form of operating consortium which includes Turkey rather than excludes it. This would provide real leverage for solving the Cyprus issue, and would open up other opportunities for cooperation between the three countries. These opportunities are far higher than the potential costs of excluding Turkey and if handled properly would radically transform the political and economic climate in the Eastern Mediterranean.

This assumes, of course, that Turkey will follow a rational policy and negotiate in good faith, not the militaristic, zero-sum maximalist policy which it has followed in the past. It also assumes the same of Greece and Cyprus. These assumptions may be too much to hope for. I was struck, however, that none of the speeches last night focussed on precisely how Cyprus had dealt with precisely this issue.

I have for several years been in favour of a rational oil and gas exploration programme in Greece--see my proposals for Greek recovery as an example, slide 37. I have communicated this urgency to members of the Papademos government. I also believe that domestic energy exploration and eventual exploitation will in fact be far more important in the energy mix than renewable energy. If we count lignite use, this is in fact already the case.

But what is extremely disturbing is the eerie fin de siècle triumphalism that pervaded yesterday’s speeches by politicians. These are people with no experience in oil or gas, who bear no personal responsibility for the decision to start exploration, and who’s two political parties have been responsible for bankrupting and corrupting the country. There was not one iota of self-reflection and sensitivity at this. If a chequebook were available, I have no doubt they would have already spent the hypothetical oil & gas money before it was even available.

None of this bodes well for Greece, its economy, its people or its environment. Many readers will no doubt dislike what I write next even more than what I have written until now.

Without the guarantee of a non-political, professional and long-term approach to oil and gas development in Greece, perhaps the best thing that could happen is that 100% of any theoretical hydrocarbon income is ring-fenced for debt service.

Although definitely unpalatable, if we look at the record of the use of EU subsidies since accession in 1981 or the massive public sector loans of the 1990s and 2000s, there is absolutely no confidence that any Greek political party, driven by the familiar temptations of patronage and corruption, will be able to manage this income properly.

Greece should therefore start work immediately on an integrated strategy for oil and gas development, and how this will affect the broader energy mix and economic development. It should develop risk assessments and contingency planning for a range of occurrences, ranging from oil rig fires to oil spills or industrial accidents. It needs to allocate authority for emergency responses, and ensure that proper budgets, authority and accountability are in place.

It should set out a plan for how it will prevent corruption and unintended consequences of oil and gas development. It should sign up for the World Bank’s Extractive Industries Transparency Initiative.

It should consider tendering for a long-term management consortium led by a foreign national oil company such as Norway’s Statoil or a services company such as Schlumberger to manage the entire development process. And it should clearly state how the oil and gas income will be used, and how the entire development will be financed.

Without such safeguards, it remains to be seen whether oil and gas development will be used for the objective good of the country, or whether it will be only the latest of a long series of credit bubbles that will inflate the economy and the irrational expectations of voters and politicians along with it.

© Philip Ammerman, 2012

Navigator Consulting Group

www.navigator-consulting.com

The ECB, LTRO and the EUR 2 trillion Big Bazooka

In the fall of 2011, several analysts, myself included, suggested that a commitment of EUR 2 trillion in public and private sector funding would be necessary to secure the refinancing of sovereign debt obligations in 2012, together with refinancing of certain private sector loans. (See related posts at bottom of page).

In a subsequent post, Towarda Grand Deal on Bank Refinancing and Sovereign Loans, (December 2, 2011) I outlined the structure of the apparent solution, which I repeat below in italics:

The scale of the problem is therefore clear: governments must refinance a large amount of bonds maturing in 2012 (these numbers do not include the United States, the United Kingdom, or other indebted countries such as Turkey). Banks are reluctant to refinance, or unable to given the Greek PSI and increased capital requirements. 

A grand deal would seek to solve these two factors in parallel, using the following steps: 

1.  Extending ECB lending as well as maturity terms to banks. This would require quantitative easing for the private sector by the ECB, and also extending maturities from 1 year to possibly 5 years. 

2.  As part of such an agreement, banks agree to repurchase a certain share of Eurozone sovereign debt, most likely in the range of 60-65% of total outstanding debt.

3.  The IMF steps in with a formal austerity programme for Italy and Spain, enabling them to refinance part of their needs using ECB-IMF resources. It is likely that IMF-ECB resources of at least EUR 200-250 billion will be needed. 

4.  The ECB is given limited authority to continue secondary market sovereign bond repurchases, perhaps by another EUR 100-150 billion. 

5.  The banks agree to participate in the European Financial Stability Facility (EFSF) capital increase, perhaps to EUR 800 billion. This add about EUR 400 billion to the fund, which is then used to repurchase sovereign bonds as well as possibly bank refinancing. 

6.  The Eurozone adopts much stricter rules on the public finances of its member states. It is not impossible that a "new Eurozone" emerges. 

7.  The European Banking Association (EBA) delays its core capital increase, or alternatively allows an exemption for central bank guarantees or ECB credit lines. It is difficult to see exactly how this would work, but some solution will no doubt be found. 

It’s interesting to see how this has worked in practise:

a.  The ECB proceeded with a Long Term Refinancing Operation (LTRO) for the private sector, extending over EUR 1 trillion in low-interest 3-year loans, with January and February 2012 (see The Mother of all Carry Trades, January 14, 2012). The banks have in turn used this liquidity to participate in sovereign bond auctions: French and Italian yields have fallen. Points 1 and 2 of my forecast were accurate.

b.  The IMF has not, so far, stepped in with additional refinancing for Spain and Italy. They have been able to refinance through normal channels, eliminating the need for an IMF programme. Point 3 of my forecast has not materialised.

c.  The ECB has continued its secondary sovereign bond purchases, intervening particularly heavily in the Italian market in December 2011. As predicted, however, it has had to stop given political opposition to sovereign bond buying, and due to LTRO. Point 4 is confirmed.

d.  The EFSF capital increase is occurring, although it is being split with the parallel and simultaneous expansion of the ESM. Germany has now indicated that it is not opposed to a capital increase, providing that other Eurozone countries follow suit, and has also signalled that the EFSF and ESM may operate in parallel, with resources likely to exceed EUR 800 billion. Point 5 is confirmed.

e.  Stricter financial conditions on Eurozone public finance were agreed this past Friday in Brussels. Several countries have adopted a constitutional “debt brake” as suggested by Germany. Greater coordination and enhanced penalties are now in force. Point 6 is confirmed.

f.   The European Banking Authority (EBA) has not backed down on its proposal to raise core tier 1 capital levels. This is leading to continued problems in bank operations, although LTRO has provided a temporary easing. Point 7 of the forecast has not materialised.

So 5 of 7 predictions made in my post of December 2011 were realised by the early March 2012.

If we take the liquidity and loan interventions made since September 2011, we see that the EUR 2 trillion limit has indeed nearly been reached, at least in theory:

·    EUR 1,018 billion in LTRO phase I and II by the ECB

·    EUR 70-80 billion ECB secondary market bond purchases in the fall of 2011

·    EUR 780 billion EFSF financing (which corresponds to EUR 440 bln lending) in mid-2011 (capital has not yet fully raised, but recent auctions have been successful)

·    EUR 700 billion ESM expansion (neither operational nor funded), and also not taking into account funding already committed to EFSF.

There are, however, several main problems with this “optimistic” scenario:

a.  Neither the EFSF nor ESM are fully funded: the ESM is not even operational.

b.  The LTRO has been granted by the ECB to banks, with the quid pro quo that banks would purchase sovereign debt. So far, this has materialised, but given the amount of bank deposits at the ECB, it’s clear that fears have not yet receded. It’s therefore an open question whether a future financial crisis can be adequately addressed by these two mechanisms.

The third problem is that already mentioned in my earlier posts: the ECB has expanded its liabilities by over EUR 1 trillion with LTRO and over EUR 120 billion with sovereign debt purchases. There has been no commensurate expansion of its own assets. Absent a capital increase, we can expect two potential impacts in the future:

a.     A euro devaluation, or

b.     The exacerbation of yet another financial crisis due to doubt on ECB solvency.

What is striking to any objective observer is just how difficult it is for the Eurozone to agree upon and implement what amounts to a standard fiscal policy during a time of crisis. Any number of analysts and commentators have been warning that more firepower is needed. Instead, we have seen funding commitments but no actual funds (EFSF, ESM); LTRO rather than straightforward Central Bank quantitative easing; continual reassurances (particularly from Germany) that no more is needed—until the next crisis sweeps away Europe’s defences.

The fate of the European economy now rests in the hands of approximately 25 banks and whether they will be willing to buy higher-interest French, Italian and Spanish debt in 2012 with low-interest loans they have taken from the European Central Bank.

It’s a really strange way to run a railroad. But great business if you can get it.

Related Posts

Andthe World Holds its Breath

October 9, 2011

ZeroHour Approaches

September 23, 2011

ItalyDowngrade

September 20, 2011

© Philip Ammerman, 2011

Navigator Consulting Group

www.navigator-consulting.com

Greece should sell islands to Turkey in Gratitude for the Troika bail-out.

Christoph Leitle, President of the Austrian Economic Chamber, has stated in an interview in Profil Magazine that Greece should sell uninhabited islands to Turkey as a sign of thanks for the European bail-out of Greece.

In the interview, he states (my translation, original text follows):

Over the long term, I see a very important convergence between the EU – that is to say, Greece – and Turkey. With such a gesture [selling islands to Turkey], one could perhaps even solve the Cyprus conflict. The surrender of part of own sovereignty would be a sign of thanks for the help. [referring to the bail-out].

Langfristig sehe ich eine sehr wichtige Konvergenz zwischen der EU – also Griechenland – und der Türkei. Man könnte mit einer solchen Geste vielleicht sogar den Zypern-Konflikt lösen. Der Verzicht auf Teile der eigenen Souveränität wäre ein Zeichen der Dankbarkeit für die Hilfe.

It is difficult to exaggerate just how insulting this idea is. 


The entire interview also confirms one very unfortunate fact: that European solidarity is apparently little more than a myth. As Leitl states

With every new bail-out package, the anti-Greek feeling in all Europe increases. With this, we will have to deal with a demagogic-populist movement.

Mit jedem neuen Hilfspaket steigt die Anti-Griechenland-Stimmung in ganz Europa. Wir bekommen es da mit einer demagogisch-populistischen Bewegung zu tun.

George Papandreou’s decision to trust in this myth will certainly go down as one of the greatest strategic errors in Greek history. It remains to be seen whether he or any other members of the Greek political class will pay the price for it.

(c) Philip Ammerman, 2012 

Navigator Consulting Group 

www.navigator-consulting.com 

Looting and Burning in Athens: Nothing to do with the Austerity Protests

Based on press reports last night and today, some information on the looting and burning of property in Athens follows. 

There were between 1,000 – 1,500 people, primarily young individuals operating in small groups, who participated in the looting. They were prepared; they had hoods and face masks, weapons and tools for breaking and entering. There are between 40-45 buildings or stores that have been destroyed by a combination of looting and burning. Others have been damaged less extensively: they were looted, or their facades were damaged, but they were not burned. The police report that over 500 molotov cocktails were thrown last night.

Owners of stores, including the Attiko theatre, report that they were first asked for bribes not to have their customers attacked. In the case of the Attiko, the owner apparently made one payment, and his customers left undisturbed. However, another group of looters started burning another entrance to the theatre. The entire building was finally burnt to the ground.

The police managed to make between 72 and 74 arrests (it is not clear if this arrest number pertains to the looting/burning or to subsequent street fights with the police). Most of the people arrested have a prior arrest record for similar incidents.

According to Kostas Pretenderis of Mega TV, “70 of the 74 people belong to a single political party”, without naming the party.

The staging point for the attacks was the Law School of the University of Athens. The premises were occupied on Thursday. On Friday, the administrative director of the Law School emailed the Rector of the University that the Law School was under occupation, and requested that all legal methods be taken to ensure their eviction.

The University Rector sent a request to the Police by mail to the Police headquarters. According to an article reported by Skai’s website today, the prosecution reports that two letters were received yesterday, 13.02.2012, sent by postαl delivery, signed by the Rector. The first states that the Law School will end its classes between 10-12 February and requests the guarding of the premises. The second, dated 10.02.12, reports the occupation of the Law School, by unknown students, and that authorities of the Law School have no access to the building. However, it also reports that there are no reports of damage. The letters are dated 13.02.2012, i.e. after the looting in Athens.

Adonis Georgiades, the ex-LAOS MP, reported yesterday that according to Article 3 of the ammendments to the law on university asylum, there is no longer any need for a specific request, or a request in a specific format, by university authorities to the police. In other words, the email sent on Friday was sufficient to prompt an investigation. Such an investigation never took place.

Skai reported today that in the wreckage of the occupied Law School, professors found a strong smell of gasoline in one room, and elements used to start fires.

A common complaint is that individuals arrested are frequently released by the legal authorities within any meaningful prosecution or fine. They are certainly not jailed. Several of those arrested for violence (including the attempt to burn the Municipality of Athens) are well-known figures; others are children of well-known figures.

As usual, not a single political figure has resigned to take responsibility for the events.

Conclusions

It is extremely important in the first instance to disassociate the looting which occurred with the protests against the austerity and government reform plan passed on Sunday evening.  These two events have become conflated in many international media sources, which reported on Sunday and Monday headlines to the effect that “Athens burns while the Parliament votes on austerity”.  

As with many similar events, it is clear that the violence was carried out by a relatively small group of individuals who were not directly related with the main political organisers of the protests. This was confirmed once again not only by political leaders on TV, but by first-hand accounts I have from unionists and participants in the marches.

However, it is also impossible to speak of a total separation between the mob’s organisation and political forces. There is abundant evidence from these and other events that several key organisers are linked directly and indirectly to certain political parties. They are linked directly, in that several key looters arrested are long-standing, senior members in the youth or university student branches of these parties. They are linked indirectly in that these members have been shown through arrest records, telephone intercepts, and university political activity to be large-scale organisers of a political nihilism which is linked to criminal activity. This activity involves drug distribution and sales of counterfeit software and DVDs, often within university premises.

A false political ideology provides cover for illegal activity; the illegal activity in turn is justified by this ideology, i.e. the “struggle against the state” and the usual rhetorical suspects.

The question as to why the police and legal authorities cannot or choose not to launch a full-scale legal prosecution of these individuals and networks is unknown. In theory, they have every legal right to do so. We can surmise, however, that there are multiple reasons:

a.     Objectively, there are no resources to do so. This was the case even before the recent austerity cutbacks. The Greek court system faces a massive backlog of criminal cases, a penal code which does not include sufficiently deterrent punishment for civil crimes, and overcrowded prisons. Even if these individuals were arrested, they would soon be allowed to go free, either because they would not be prosecuted, or because they would be allowed to buy off their sentence.

b.     Subjectively, there have been many instances where the police and the prosecution has been prevented from acting due to direct and indirect political interference. The direct interference occurs when politicians intervene in the arrest process to protect their constituents. The indirect interference is far more discouraging: the police knows that it is vastly outnumbered in certain areas of Athens. There is a tacit agreement on “go” and “no go” areas, where the police will simply not intervene. If they do crack down, the implicit threat is that police will then be targeted. This has already happened in the past on several occasions.

This same threat, incidentally, has been in force for years against university administrators and professors. Although universities technically now have full control over their campus security, in reality they cannot enforce this. They don’t have the financial resources to hire private security forces. Nor can they cannot rely on the police or the legal system. One well-known professor once told me that after every occupation, he knows which store he has to go to in Monastiraki to buy back his stolen computer hard drive.

As a result, it’s clear that the university staff must turn a blind eye to illegal behaviour, if they are to safeguard their own lives and property.

This post deals with the sad reality of a certain nexus of events, people and institutions in Greece today. On the one hand, we have a policing and legal system which has, since the late 1980s, been set up to protect and serve a political elite rather than enforce the laws of the land. On the other hand, we have a growing number of disaffected youth with no serious job prospects who turn instead to political utopianism and crime.

The result of this is seen in events which occur every week in Athens. Once in a while, the enormity of one event – burning and looting 45 buildings – becomes so large as to be impossible to ignore. But for every large even, there are thousands of small ones which illustrate how the system works.

If you want to see what the reality is, go to Exarchia Square on a Friday night, and walk down Stournari Street to Patission Avenue past the Metsoveio University building. 

This reality is not going to go away, and has nothing to do with austerity votes or reform. It’s been there since the late 1980s, growing each year and becoming institutionalised. And I have yet to see any serious solutions for it.

Related Posts

Finding the Loch Ness Monster: The Continuing Search for Higher Education Reform inGreece

December 19, 2010

© Philip Ammerman, 2012

Navigator Consulting Group

www.navigator-consulting.com

The Mother of all Carry Trades (ii)

In case you are still wondering how things work in terms of ECB liquidity, read today’s article on Bloomberg: Draghi $158B Free Lunch Boosts Bank Profits.

Banks are benefiting from a European Central Bank subsidy that could reach 120 billion euros ($158 billion), enough to pay every bonus at financial firms in London for the next 24 years at today’s levels.

Royal Bank of Scotland Group Plc, BNP Paribas SA (BNP) and Societe Generale SA are among more than 500 banks that took 489 billion euros of three-year loans from the Frankfurt-based ECB at a December auction. The loans carry a 1 percent annual interest rate, less than a quarter of the 4.3 percent average yield on euro-denominated senior unsecured bank debt of all maturities in the past year, according to Commerzbank AG.

With borrowing estimated to hit a record 1.2 trillion euros after a second auction later this month, banks may save 120 billion euros over three years. That could boost 2012 profit by about 10 percent for lenders in Italy and Spain, according to estimates by Morgan Stanley.

“This is very much a free lunch,” said Arnd Schaefer, an economist at WestLB AG in Dusseldorf, Germany. “Banks can get money for just 1 percent and then lend it on for much more. That’s pretty good.”

The ECB is flooding the banking system with cheap money in a bid to avert a credit crunch after the market for unsecured bank debt seized up last year and funding from U.S. money markets disappeared. Any bank in the region can borrow an unlimited amount, provided it pledges eligible collateral. Lenders won’t face curbs on bonuses or dividends.

Don’t you love ECB’s version of quantitative easing? And this was only the first round - there's a second round planned for the end of February. 


Angry yet? 

Related Posts

The Mother of All Carry Trades

January 14, 2012

Explaining the Carry Trade

January 15, 2012

© Philip Ammerman, 2012

Navigator Consulting Group

www.navigator-consulting.com

A New Era of Political Fragmentation in Greece

Monday morning dawns, and with it the absolute fragmentation of the present Greek political system has begun. 

A total of 45 MPs of LAOS (2), PASOK (22) and New Democracy (21) voted against the new memorandum, and have therefore been expelled from their respective parties. 

This leaves both New Democracy and PASOK fatally weakened before the elections, which based on previous agreement must be held by the end of April 2012. 

Although there is no guarantee that the expulsions will not be reversed in time for the elections, it is certain that lasting damage to both major parties have been done. Together with popular discontent against the austerity measures, it is highly likely that any imminent election will result in a coalition of at least two, and probably four, parties.

What is uncertain is which side of the political spectrum these will be on. One scenario is for a government led by New Democracy, supported by LAOS, the Democratic Alliance led by Dora Bakoyianni, and any other centrist or right-wing independents. This scenario is highly uncertain due to bad blood between Samaras and Bakoyianni over the succession battle at New Democracy will have to be put aside in order for a cooperation to take place.

A governing coalition of the left is equally uncertain due to the same factors. Although the four centre- and extreme-left parties collectively dominate the polls, differences between some, namely the Communist Party, makes cooperation difficult or impossible.  

Two outcomes of this Troika-forced memorandum are clear: 

a. If Antonis Samaras leads a next government, it is highly likely that the civil service and the parties of the extreme left will engage in a campaign of active civil disobedience. This will be characterised by violent strikes and occupations, and will fatally slow any implementation of public sector reform and privatisation. State-owned companies or parastatals such as the Public Power Company (DEH) will be nearly impossible to privatise. 

b. It will be almost impossible for any Greek government to pass any equivalent austerity legislation in the future. We should not forget that Greece had, before last night, already passed three broad austerity packages (in May 2010, July 2011 and October 2011) as conditions of the first and second bail-out packages. Last night was the fourth. The first three were only possible due to party discipline at PASOK: all other parties voted against the packages. Last night, the only way this law was passed was through the same process: party discipline, and an unprecedented 45 expulsions. 

The fact that any future governing coalition will have less of a margin for error, and will therefore have further difficulties in maintaining the discipline needed for a vote, effectively means that passing further such laws will be impossible. 

As a result, one could conclude that there is only one solution for an interim government to manage the crisis: extend the life of the Papademos government for another 2 years. 

It remains to be seen in the coming days whether Antonis Samaras will take the plunge and push for elections as planned in April, or whether he will suppress his personal ambition and continue the coalition government. 

It also remains to be seen whether such an option would be voted by the remaining PASOK and New Democracy members even if it were raised. 

In any case, Greece has clearly arrived at a new and dangerous stage of absolute political fragmentation. This outcome is a clear result of Troika policy, which has rammed through austerity bills without regard for either the narrow or broad political capacity of the country. In terms of "reform" strategy, this is a deal killer. 

Led by Germany, the Eurozone creditors and the IMF have managed to kill any political stability in this country, and with it any hope that real structural reforms will ever be implemented. 

Through a combination of theoretical economic policies which show little regard for basic financial practise or the Greek reality, and through their own double-dealing rhetoric in which they temper domestic political considerations by trashing Greece to their domestic electorates, they've managed to turn both the Greek people and the political system against them, and against "reform". 

What happens next is unknown.

© Philip Ammerman, 2012 

Navigator Consulting Group 

www.navigator-consulting.com