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With no agreement in sight, and default all but certain, Greece will have to pivot East for help

As the prospects of a Grexit grow, Greece may be obliged to go against the European hardliners and turn to Russia for the vital economic help it will undoubtedly need.

Alex Christoforou

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Post originally appeared on Russia Insider, written by Alexander Mercouris

The Greek bailout negotiations are stuck.  So are the parallel negotiations Greece has been having with Gazprom.

Why is this and what are the implications?

The big news last week is that (1) Greece failed to reach an interim deal with the Eurogroup finance ministers at the summit in Riga on Friday 24th April 2015, with Greek finance minister Yaroufakis getting a severe dressing down and the meeting breaking up after a short interval; and (2) that Greece did not sign the deal with Gazprom last week that had been heavily trailed since Tsipras’s visit to Moscow.

A few days ago I wrote a piece for Russia Insider in which I said that the reason the EU Commission had rushed out an announcement of its anti-trust claim against Gazprom was concern about the possible Greek deal with Gazprom.

I have since had a lengthy discussion with a source in Athens. He confirmed to me that the Greek government in the end balked at the Gazprom offer (which was ready for signature on 23rd April 2015) following warnings from the EU Commission that its terms were contrary to European law – i.e., to the Third Energy Package.

I was told by my source that the Greek government could not in the end bring itself to defy the EU Commission on this issue because of its fears that this would jeopardise its negotiations with the EU finance ministers at the Eurogroup meeting on the following day.

In fact the negotiations at the Eurogroup got precisely nowhere. Far from Greece’s refusal to sign a deal with Gazprom having bought for Greece goodwill, the failure to do so left Greek finance minister Yaroufakis playing at the meeting from a desperately weak hand.  Without the $5 billion he might have had from Gazprom, he was left begging for money, which predictably he failed to get.

Greece’s negotiating strategy actually makes little sense and points to a divided and inexperienced government. There was no point in making overtures to Moscow if Greece was not prepared to follow them through. It was totally predictable that the EU authorities would object to whatever deal Greece made with Russia or with Gazprom.  If Greece was not prepared to defy the EU authorities on this question, it should not have proceeded at all. As it is the Russians must be annoyed at being led up the garden path, while the European leaders have been antagonised and persuaded that Greece’s anti-austerity posture is ultimately a bluff.

They are probably right to think so. The very latest opinion poll shows that 72% of Greeks still want to keep the euro and still want Greece to come to a deal with the EU. Only 23% don’t.

Taken in combination with Greece’s failure to sign a deal with Gazprom, this will have told the EU leaders that Greece will in the end come round, so no concessions to Greece are necessary.

Syriza is now paying the price for the way it won its election victory.  Syriza promised the Greek people that they could have both an end to austerity and keep the euro.  That was a promise Syriza could not keep because it was outside its power to do so. The promise always looked a reckless bluff that would leave both Greece and Syriza desperately exposed if it were ever called.

The Syriza government’s options are now very stark.  Since a deal with Gazprom has been ruled out, Greece has to choose between either backing down and accepting an indefinite extension of austerity — possibly with a few minor cosmetic concessions — or being forced out of the euro.

As things stand I think it is more likely Greece will try to back down. The political cost of doing so will be very high and I am not sure that in that case the present Greek government will survive, at least in its present form. However the cost of a Grexit in political terms is probably even greater and I suspect that the Greek government will do everything it can to avoid it.

There remains however a high probability that Greece will be forced out of the euro whatever happens.

Ultimately Greece’s debt burden is unsustainable and it is simply not realistic to think that Greece can maintain present levels of austerity indefinitely. Unless there is a fundamental shift in European policy to allow an easing of austerity — of which there is no sign — a Grexit looks ultimately inevitable.  In the end what is not economically sustainable is not politically sustainable either.

Recent comments from Germany suggest that some German politicians are now belatedly coming round to that view. It is an open secret that German finance minister Wolfgang Schauble wants a Grexit, which he sees as the only way to bring this saga to an end.

Here it is important to dispose of an argument that has recently been gaining currency including in Greece itself.

Several people including Wolfgang Munchau of the Financial Times are now saying that there is legally no reason why Greece cannot retain the euro even if it defaults and that this is what it should do.

Legally speaking these people are absolutely right. Indeed that is precisely what should have been done in 2010. Greece should have been allowed to restructure its debts (which means in effect default on them) so as to put them on a sustainable basis, while remaining in the Eurozone and keeping the euro.

The Eurozone is a currency union, not a transfer union, and there was no logical or legal reason why other Eurozone states or institutions should have assumed responsibility for Greece’s debts by bailing Greece out. Certainly Greece should not have been given a bailout it could never hope to repay. That incidentally was actually illegal on any objective reading of the treaties.

It is now too late for this. The EU cannot allow Greece to default on the huge sums it owes the EU’s institutions and keep the euro. It would set a completely unacceptable precedent that other deeply indebted Eurozone states that have received bailouts might be tempted to follow. For that reason the other Eurozone states and the European authorities will not entertain it.

What is most likely to happen is that if, or rather, when Greece defaults, after a short interval and probably during a weekend, the ECB will withdraw support from Greece’s banks. The Bank of Greece will in that case have no option but to print drachmas to support the banks. At that point Greece’s membership of the Eurozone will be over.

The immediate effect of a Grexit would be catastrophic for Greece. There will be little confidence in the new currency, there would be a run on the banks, most of which would crash, and inflation would spiral.

At that point Greece might have little choice but to turn to the one country that is its largest bilateral trading partner and which is the only country that would be in a position to provide it with the food and energy it would need to get through.

That country is Russia – Europe’s biggest energy and food producer.

However if the Russians help Greece it will be on their terms.

Setting aside speculation about Mediterranean naval bases (which Russia doesn’t want and doesn’t need) that would almost certainly involve some resurrection of the Gazprom deal.

Once Greece is outside the euro, EU leverage over Greece ends.

Southern and eastern European states unhappy with the EU’s anti-sanctions and anti-Gazprom policy have nonetheless felt obliged to go along with it because they do not want to risk loss of their EU structural or bailout funds or their hopes of joining the euro.

If Greece is ejected the Eurozone it is no longer in that position.

Structural and bailout funding will have be forever lost. It is not being provided now and will certainly not be provided in future if Greece leaves the euro and defaults.

Having been thrown out of the euro, there will be little or no prospect of Greece ever rejoining any time soon, certainly not while it remains in default on its liabilities to the EU’s institutions, so the hope of one day joining the euro will not be there.

There is no mechanism to expel a country from the EU. In the event of a Grexit, Greece would remain a member of the EU and would still share in the benefits of the common European market.

Greece would however be free to make whatever deals with Gazprom it saw fit, regardless of whether the EU Commission said they were legal or not. The EU Commission could bring legal action against Greece, but in the absence of central EU funding it is difficult to see what practical effect that would have.

Greece would also be free to veto sanctions against Russia if it disagreed with them without having to fear retaliation if it did so.

I do not say that this is what will happen if there is a Grexit.  Ultimately it will depend on how the political situation within Greece evolves in response to a Grexit. However the option to act independently would finally be there. Whether the Greeks make use of it once they have it is another matter.

References:

http://russia-insider.com/en/greece-russia-and-eu-prospects-grexit-loom/6108

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Tape recorded evidence of Clinton-Ukraine meddling in US election surfaces (Video)

The Duran Quick Take: Episode 114.

Alex Christoforou

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RT CrossTalk host Peter Lavelle and The Duran’s Alex Christoforou take a look at new evidence to surface from Ukraine that exposes a plot by the US Embassy in Kiev and the National Anti-Corruption Bureau of Ukraine (NABU) to leak Paul Manafort’s corrupt dealings in the country, all for the benefit of Hillary Clinton during the 2016 U.S. presidential election.

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Via Zerohedge


Ukraine’s Prosecutor General Yuriy Lutsenko has launched an investigation into the head of the Ukrainian National Anti-Corruption Bureau for allegedly attempting to help Hillary Clinton defeat Donald Trump during the 2016 US election by releasing damaging information about a “black ledger” of illegal business dealings by former Trump campaign chairman Paul Manafort.

The Hill’s John Solomon, Ukrainian Prosecutor General Yuriy Lutsenko

“Today we will launch a criminal investigation about this and we will give legal assessment of this information,” Lutsenko said last week, according to The Hill

Lutsenko is probing a claim from a member of the Ukrainian parliament that the director of the National Anti-Corruption Bureau of Ukraine (NABU), Artem Sytnyk, attempted to the benefit of the 2016 U.S. presidential election on behalf of Hillary Clinton.

A State Department spokesman told Hill.TV that officials aware of news reports regarding Sytnyk. –The Hill

“According to the member of parliament of Ukraine, he got the court decision that the NABU official conducted an illegal intrusion into the American election campaign,” said Lutsenko, speaking with The Hill’s John Solomon about the anti-corruption bureau chief, Artem Sytnyk.

“It means that we think Mr. Sytnyk, the NABU director, officially talked about criminal investigation with Mr. [Paul] Manafort, and at the same time, Mr. Sytnyk stressed that in such a way, he wanted to assist the campaign of Ms. Clinton,” Lutsenko continued.

Solomon asked Lutsenko about reports that a member of Ukraine’s parliament obtained a tape of the current head of the NABU saying that he was attempting to help Clinton win the 2016 presidential election, as well as connections that helped release the black-ledger files that exposed Trump campaign chairman Paul Manafort‘s wrongdoing in Ukraine.

“This member of parliament even attached the audio tape where several men, one of which had a voice similar to the voice of Mr. Sytnyk, discussed the matter.” –The Hill

What The Hill doesn’t mention is that Sytnyk released Manafort’s Black Book with Ukrainian lawmaker Serhiy Leshchenko – discussed in great length by former Breitbart investigator Lee Stranahan, who has been closely monitoring this case.

Serhiy Leshchenko

T]he main spokesman for these accusations was Serhiy Leshchenko, a Ukrainian politician and journalist who works closely with both top Hillary Clinton donors George Soros and Victor Pinchuk, as well as to the US Embassy in Kyiv.

James Comey should be asked about this source that Leshchenko would not identify. Was the source someone connected to US government, either the State Department or the Department of Justice?

The New York Times should also explain why they didn’t mention that Leshchenko had direct connections to two of Hillary Clinton biggest financial backers. Victor Pinchuk, the largest donor to the Clinton Foundation at a staggering $8.6 million also happened to have paid for Leshchenko’s expenses to go to international conferences. George Soros, whose also founded the International Renaissance Foundationthat worked closely with Hillary Clinton’s State Department in Ukraine, also contributed at least $8 million to Hillary affiliated super PACs in the 2016 campaign cycle. –Lee Stranahan via Medium

Meanwhile, according to former Fusion GPS contractor Nellie Ohr, Leshchenko was a source for opposition research firm Fusion GPS, which commissioned the infamous Trump-Russia dossier.

Nellie Ohr, a former contractor for the Washington, D.C.-based Fusion GPS, testified on Oct. 19 that Serhiy Leshchenko, a former investigative journalist turned Ukrainian lawmaker, was a source for Fusion GPS during the 2016 campaign.

“I recall … they were mentioning someone named Serhiy Leshchenko, a Ukrainian,” Ohr said when asked who Fusion GPS’s sources were, according to portions of Ohr’s testimony confirmed by The Daily Caller News Foundation. –Daily Caller

Also absent from The Hill report is the fact that Leshchenko was convicted in December by a Kiev court of interfering in the 2016 US election.

A Kyiv court said that a Ukrainian lawmaker and a top anticorruption official’s decision in 2016 to publish documents linked to President Donald Trump’s then-campaign chairman amounted to interference in the U.S. presidential election.

The December 11 finding came in response to a complaint filed by another Ukrainian lawmaker, who alleged that Serhiy Leshchenko and Artem Sytnyk illegally released the documents in August 2016, showing payments by a Ukrainian political party to Trump’s then-campaign chairman, Paul Manafort.

The documents, excerpts from a secret ledger of payments by the Party of Regions, led to Manafort being fired by Trump’s election campaign.

The Kyiv court said that the documents published by Leshchenko and Sytnyk were part of an ongoing pretrial investigation in Ukraine into the operations of the pro-Russian Party of Regions. The party’s head had been President Viktor Yanukovych until he fled the country amid mass protests two years earlier.

-RadioFreeEurope/Radio Liberty (funded by the US govt.).

So while Lutsenko – Solomon’s guest and Ukrainian Prosecutor is currently going after Artem Sytnyk, it should be noted that Leshchenko was already found to have meddled in the 2016 US election.

Watch:

Meanwhile, you can also check out Stranahan’s take on Leshchenko being left out of the loop.

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‘I will take over as Brexit Party leader’: Nigel Farage back on the frontline

Nigel Farage says that if the UK takes part in European elections, he will lead his new Brexit Party.

RT

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Via RT


Former UKIP leader Nigel Farage has announced that he will lead his new Brexit Party into the European elections if UK MPs decide to delay Brexit beyond May 22.

Farage, who has ostensibly appointed himself leader, told various media, including the BBC and Sky News on Friday morning: “I will take over as leader of the Brexit Party and lead it into the European Elections.”

It comes after the Brexit Party’s leader, Catherine Blaiklock, quit over a series of alleged Islamophobic statements and retweets of far-right figures on social media.

It is not yet thought that Farage has officially been elected as leader, as the party does not, as yet, have a formal infrastructure to conduct such a vote.

The right-wing MEP vowed to put out a whole host of Brexit Party candidates if the UK participates in the upcoming EU elections in May, adding: “If we fight those elections, we will fight them on trust.”

On Thursday night, the EU agreed to PM May’s request for a delaying to Brexit beyond the March 29 deadline. Brussels announced two new exit dates depending on what happens next week in the UK parliament.

The UK will have to leave the bloc on April 12 unless British MPs agree to May’s Brexit deal. If the withdrawal agreement is passed by next week, EU leaders have agreed to grant an extension until May 22.

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Baltics cannot rely on Germany any more

The matter is NATO today is not as strong as it is supposed to be. And it is not only because of leadership blunders.

The Duran

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Submitted by Adomas Abromaitis…

On March 29 Latvia, Lithuania and Estonia will celebrate 15 years of becoming NATO member states. The way to the alliance membership was not simple for newly born independent countries. They have reached great success in fulfilling many of NATO demands: they have considerably increased their defence expenditures, renewed armaments and increased the number of military personnel.

In turn, they get used to rely on more powerful member states, their advice, help and even decision making. All these 15 years they felt more or less safe because of proclaimed European NATO allies’ capabilities.

Unfortunately, now it is high time to doubt. The matter is NATO today is not as strong as it supposed to be. And it is not only because of leadership’s blunders. Every member state does a bit. As for the Baltic states, they are particularly vulnerable, because they fully depend on other NATO member states in their defence. Thus, Germany, Canada and Britain are leading nations of the NATO battle group stationed in Lithuania, Latvia and Estonia respectively.

But the state of national armed forces in Germany, for example, raises doubts and makes it impossible not only defend the Baltics against Russia, but Germany itself.

It turned out, that Germany itself remains dissatisfied with its combat readiness and minister of defence’s ability to perform her duties. Things are so bad, that the military’s annual readiness report would be kept classified for the first time for “security reasons.”

“Apparently the readiness of the Bundeswehr is so bad that the public should not be allowed to know about it,” said Tobias Lindner, a Greens member who serves on the budget and defense committees.

Inspector General Eberhard Zorn said (https://www.reuters.com/article/us-germany-arms/germany-not-satisfied-with-readiness-of-submarines-some-aircraft-idUSKBN1QS1G7) the average readiness of the country’s nearly 10,000 weapons systems stood at about 70 percent in 2018, which meant Germany was able to fulfill its military obligations despite increasing responsibilities.

No overall comparison figure was available for 2017, but last year’s report revealed readiness rates of under 50 percent for specific weapons such as the aging CH-53 heavy-lift helicopters and the Tornado fighter jets.

Zorn said this year’s report was more comprehensive and included details on five main weapons systems used by the cyber command, and eight arms critical for NATO’s high readiness task force, which Germany heads this year.

“The overall view allows such concrete conclusions about the current readiness of the Bundeswehr that knowledge by unauthorized individuals would harm the security interests of the Federal Republic of Germany,” he wrote.

Critics are sure of incompetence of the Federal Minister of Defence, Ursula von der Leyen. Though she has occupied the upper echelons of German politics for 14 years now — and shows no sign of success. This mother of seven, gynecologist by profession, by some miracle for a long time has been remaining in power, though has no trust even among German military elites. Despite numerous scandals she tries to manage the Armed Forces as a housewife does and, of course, the results are devastating for German military capabilities. The same statement could be easily apply for the Baltic States, which highly dependent on Germany in military sphere.

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