Greek expulsion from the euro would demolish EMU’s contagion firewall
EUROPE - Should EMU leaders choose to cut off liquidity support for the Greek banking system they might find that their contagion defences are a fiction. We know from memoirs and a torrent of leaks that Europe’s creditor bloc came frighteningly close to ejecting Greece from the euro in early 2012, and would have done so with relish.
Former US Treasury Secretary Tim Geithner has described the mood at a G7 conclave in Canada in February of that year all too vividly. “The Europeans came into that meeting basically saying: 'We’re going to teach the Greeks a lesson. They are really terrible. They lied to us, and we’re going to crush them,'” he said. “I just made very clear right then: if you want to be tough on them, that’s fine, but you have to make sure that you’re not going to allow the crisis to spread beyond Greece.”
German chancellor Angela Merkel did later retreat but only once it was clear from stress in the bond markets that Italy and Spain would be swept away in the ensuing panic, setting off an EMU-wide systemic crisis. The prevailing view in Berlin and even Brussels is that no such risk exists today: Europe has since created a ring of firewalls; debtor states have been knocked into shape by their EMU drill sergeants.
The eurozone is not an inch closer to fiscal union. There is a wearying array of “two-packs” and “six-packs” and other such measures to police sinners, capped by a Fiscal Compact of staggering folly, yet nothing has been done to place monetary union on viable foundations.
Should EMU leaders choose to cut off liquidity support for the Greek banking system – forcing a return to the drachma – they might find that their contagion defences are a fiction. Everybody is tired of Greece’s endless agony. It is precisely when you are most tired that your judgment fails you.
Eurozone no longer obliged to save Greece, Merkel ally says
GERMANY - In an interview with Rheinische Post newspaper published on Wednesday Michael Fuchs said Greek politicians could not now blackmail their partners in the currency bloc. "If Alexis Tsipras of the Greek left party Syriza thinks he can cut back the reform efforts and austerity measures, then the troika will have to cut back the credits for Greece," he said.
“The times where we had to rescue Greece are over. There is no potential for political blackmail anymore. Greece is no longer of systemic importance for the euro.” The remarks are the clearest warning yet to Greek voters from a senior German politician that Athens might lose support if it flouts the terms of its 240 billion euro EU/IMF bailout after early elections next year.
Fuchs, deputy parliamentary floor leader of Merkel's Christian Democrats, has frequently expressed frustrations felt by many politicians and the German public about the pace of reform and political hold ups in twice-rescued Greece.
Largest Nuclear Plant In Europe in Emergency Shutdown
UKRAINE - Ukraine reported an incident (non-nuclear) which was a transformer short circuiting, not an accident which is used for radiological issues. This was carried across the nuclear industry forums that talked about it. The case was closed on that basis. As reported at Zero Hedge: Two days ago we reported of the odd coincidence of a 2nd emergency shutdown at Ukraine’s Zaporozhye Nuclear reactor – Europe’s largest nuclear power plant - following our earlier fears of disinformation. Today, we get information of a leaked report sourced from three different places – unconfirmed for now (but RT is trying to verify) - that Ukrainian nuclear scientists misled the public and a radioactive leak has been detected - citing the country’s emergency services claiming that levels of radiation are 16.3 times the legally permitted norm.
Gulf States Fear Iranian Takeover of Yemen
MIDDLE EAST - An Arabic-language newspaper in London reported Thursday that pro-Iranian militias in Yemen have tightened their grip on the country – to the extent that they have taken over the country's national bank. As a result, Gulf states have withdrawn their support for Yemen, leaving the road open for a full takeover by Iranian-backed groups.
According to A-Sharq al-Awsat, the Houthi rebel groups took over a number of government offices this week, including the country's civil aviation authority, and the Bank of Yemen. The Houthis are a Shi'ite Islamist group that has claimed that Shi'ites in Yemen are mistreated. The official told A-Sharq al-Awsat that Sunni Yemeni groups were becoming “very upset” at the continued coup the Houthis are apparently conducting. Islamist groups, including one backed by Al-Qaeda, are likely to take action in the near future – dragging the country even deeper into civil war.
Gulf states, led by Saudi Arabia, have apparently given up on Yemen, effectively admitting that it will eventually fall to Iran's domination, the newspaper said. The states have cut off assistance to Yemen, and are withdrawing personnel, the report added.
Half of All Children Will Be Autistic by 2025
USA - For over three decades, Stephanie Seneff, PhD, has researched biology and technology, over the years publishing over 170 scholarly peer-reviewed articles. In recent years she has concentrated on the relationship between nutrition and health, tackling such topics as Alzheimer’s, autism, and cardiovascular diseases, as well as the impact of nutritional deficiencies and environmental toxins on human health.
At a conference last Thursday, in a special panel discussion about GMOs, she took the audience by surprise when she declared, “At today’s rate, by 2025, one in two children will be autistic.” She noted that the side effects of autism closely mimic those of glyphosate toxicity, and presented data showing a remarkably consistent correlation between the use of Roundup on crops (and the creation of Roundup-ready GMO crop seeds) with rising rates of autism. Children with autism have biomarkers indicative of excessive glyphosate, including zinc and iron deficiency, low serum sulfate, seizures, and mitochondrial disorder.
A fellow panelist reported that after Dr. Seneff’s presentation, “All of the 70 or so people in attendance were squirming, likely because they now had serious misgivings about serving their kids, or themselves, anything with corn or soy, which are nearly all genetically modified and thus tainted with Roundup and its glyphosate.”
Washington has Managed To Create A Chinese-Russian Alliance
CHINA - The Washington morons have managed to create a Chinese-Russian alliance. China believes Russia will be able to overcome the current economic problems, and is ready to offer whatever assistance is needed, China’s Foreign Minister Wang Yi said in an interview with Hong Kong’s Fenghuang television channel on Sunday. “We believe that Russia has opportunities and knowledge to overcome the current problems in the economy. The Chinese-Russian relations of strategic partnership are at a high level, we are always supporting and helping our friend. If the Russian side needs it, we shall offer all possible support we may have,” the foreign minister said.
Ramifications of the "War on Terror"
GERMANY - The debate over the racist "PEGIDA" mobilization continues in Germany. Following the recent mass demonstration in Dresden "against Islamization" with 15,000 people participating, members of the German political establishment have begun recommending that the demonstrators be taken "seriously" and that their demands - at least partially - be met.
German Muslims are already beginning to feel the ramifications of this agitation. Verbal and even physical attacks, over the past few months, are on the rise, for example, arson attacks against mosques. Muslims are being submitted to massive pressure: Parallel to the "war on terror," unleashed after 9/11, Islamophobic propaganda significantly intensified also in Germany, including government measures such as indiscriminate dragnets against Muslims.
Right-wing extremist organizations are increasingly expressing their racism with the more fashionable Islamophobia, while Islamophobic prejudices are beginning to take deep root in the German population. According to a recent survey, such positions have led to a greater "readiness for action."
Ailing King Abdullah is rushed to hospital
SAUDI ARABIA - Saudi Arabia’s ailing King Abdullah was admitted to a hospital today for medical tests. The 91-year-old king underwent a number of medical checks at the National Guard’s King Abdulaziz Medical City hospital in the capital Riyadh. As the news broke, Saudi Arabia's stocks dipped raising concerns for the stability of the world's largest oil exporter and top US ally in the Gulf. The health of the monarch is watched closely since any changes in leadership could have an impact on the stability of one of the world’s largest oil producers. Saudi Arabia is an absolute monarchy with no elected parliament. The king has sole power to ratify legislation and appoint ministers.
Synthetic Vegan Cheese from Human DNA Strands Coming Soon?
USA - A San Francisco based, synthetic biohacker group has made hundreds of headlines for creating cheese without the use of cows. Young biohackerspace people from BioCurious and CounterCultureLabs make up the group. Interestingly, they have dubbed the product 'Real Vegan Cheese' because they claim that other vegan cheese-like foods are merely substitutes. Genetically engineered bakers yeast is inserted with DNA strands, some of them human - to cut down on allergies they said - to make the yeast into a "milk" protein creating factory. But no actual mammal DNA is used. The yeast stays behind for the end product. They say: "To create our proteins, we study animal genomes, choose milk-protein genetic sequences, and synthesize those genes."
Offshore wind farms drawing electricity from grid
UK - Offshore wind farms are drawing power from the National Grid to keep turning and prevent them icing up in subzero temperatures, it has emerged. The turbines need to idle slowly when temperatures plunge in calm conditions to stop ice forming and to power hydraulic systems that turn the blades into the wind. Critics of wind farms, which cost three times as much as conventional power stations per unit of energy produced, said it was “another example of why wind farms are difficult and expensive to manage”. The phenomenon was pointed out in the Telegraph’s letters page by Brian Christley, of Conwy, who said that “over the weekend just gone, the coldest of the year so far, all 100-plus offshore wind turbines along the North Wales coast were idling very slowly, using grid power for de-icing”.
UK elections: All bets off
UK - With a few months to go until Britain’s next general election all bets are off. At least, so said Ukip leader Nigel Farage after his party won its second by-election in as many months in November. It is hard to disagree with his analysis.
Britons will decide next May whether to give David Cameron’s Conservatives the chance to govern alone or to replace him with Labour’s underwhelming leader Ed Miliband. But in truth, it is looking increasingly unlikely that either party will win a majority in the House of Commons. Having gone more than 80 years without a formal coalition government, Britain is likely to follow the example of most other EU countries and become a country of coalitions.
Cameron’s referendum pledge increasingly looks like his party’s death sentence. It is difficult to say whether a referendum is more or less likely than a year ago. Labour and the Liberal Democrats successfully resisted a planned law that would have made a plebiscite in 2017 legally binding. Whether they can still resist agreeing to a vote in May is unclear. Like the election itself, all bets are off.
Ukraine Poroshenko proposes a new international meeting
UKRAINE - The president of Ukraine Petro Poroshenko, announced at a press conference in Kiev Monday, December 29, will talk to his Russian counterpart Vladimir Putin on January 15 in the Kazakh capital Astana, during a meeting attended by Angela Merkel and François Holland.
Ukraine in ‘full-blown financial crisis’
UKRAINE - Ukraine's GDP shrank by 7.5 percent from January till November 2014, as foreign exchange reserves fell to their lowest level since 2009, and inflation jumped to 21 percent by November, admits the head of the Ukraine's National Bank, Valeriya Gontareva.
The country's foreign exchange reserves shrank to $9.9 billion, as Kiev gave Naftogaz an estimated $8.6 billion to buy gas and settle state guaranteed Eurobonds. $3.1 billion went to settle the debt with Russia's Gazprom, Gontareva explained.
The conflict over Russia's reunification with Crimea has killed more than 4,700 people has also killed the economy. Ukraine's national currency, the hryvnia, has lost half of its value by November. The last IMF estimate showed that Ukraine needs another $15 billion, on top of the $17 billion the Fund had already agreed to allocate.
IMF suspends financial aid to Greece
USA - The International Monetary Fund has said it is suspending financial aid to Greece under its huge rescue program until a new government is formed. IMF spokesperson Gerry Rice said discussion on the completion of the sixth review of Greece's bailout will resume once a new government is in place. The decision comes after Greek lawmakers failed to elect a new president in a final round of voting. It leaves the country facing an early election that could derail the international bailout programme it needs to keep paying its bills.
Why is Greece in a mess?
GREECE - Greece was living beyond its means before it joined the euro in 2002. Public spending soared as euro stability encouraged lending, but Greece failed to tackle widespread tax evasion and wasteful inefficiencies, especially in the bloated public sector.
The budget deficit - the difference between spending and income - spiralled out of control. The 2008 financial crisis revealed that Greek debts were far greater than had been officially reported. Greece needed an emergency credit lifeline to stay afloat. In 2010 the EU and International Monetary Fund (IMF) granted Greece a massive €110 billion (£86 billion; $134 billion) loan, disbursed in instalments. By 2012 it was clear that more help was needed, so a new €130 billion loan was granted.
The EU-IMF bailout was conditional on the Greek government enacting tough austerity measures - drastic spending cuts in healthcare, education and other public services. The cost for Greece has been very high: about one-third of Greeks are now at risk of poverty or social exclusion, unemployment has soared to more than 25% and opposition to austerity has delayed many reforms.
Greece itself has managed to balance its budget, though it still has colossal debts of €319 billion. In 2013 it achieved a budget surplus of €1.5 billion - the first since 2002. Greece is still fragile, dependent on its international credit lifeline. It cannot borrow again in the markets until its bond yield comes down. Much has changed since the 2010-2012 crisis - but worries about the euro persist.
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