SYRIZA Forces Demand “Requisitioning” of Greek Central Bank

As of 10pm EDT on Sunday, July 5th, 2015, the Greek Interior Ministry Was Reporting the Following Results of the Referendum:

In today’s historic referendum, the Greek people have delivered a sweeping historical verdict against the neoliberal conception of Europe as expressed in the programs of genocidal austerity and killer cuts purveyed by the politically bankrupt eurogarchs of the European Commission in Brussels, the European Central Bank in Frankfurt and their partners in crime at the International Monetary Fund in Washington, D.C.. The Greek vote is a vote for civilization against its enemies. The Tax Wall Street Party congratulates the SYRIZA Party, Premier Alexis Tsipras, Finance Minister Yanis Varoufakis and their associates for this victory.

However, in the hours after the vote it has become clear through statements by Federica Mogherini, the Foreign Policy director of the EU Commission, Sigmar Gabriel, the SPD Party deputy chancellor of Germany, and Martin Schultz of the SPD, the President of the European Parliament, that powerful factions among the eurogarchs will oppose a rational solution tooth and nail. This is the moment when a rational politician would realize that since the Greek people have spoken, it is incumbent on all European leaders to either turn away from the failed austerity policies of the post 2008 era or else resign. Just as French President Jacques Chirac responded to a French vote against an oligarchical plan to reorganize Europe in a 2005 referendum – Chirac said, “ I have heard you” and he deemphasized these policies. It looks like the European leaders of today are not intelligent enough to do this.

Therefore, it is time to prepare for another round of attacks on Greece. As is widely known there is no mechanism to expel any country from the European Union or from the European Monetary Union aka the Eurozone. However, this goal could be reached in practice if the European Central Bank under Mario Draghi were to simply cut off all liquidity to Athens. Now the ECB is providing emergency liquidity assistance (ELA) on a very limited basis, after having shut it off almost completely last week. If the ECB fails to provide Euros, the Greek government might fall back on scrip. This is the point of view of the Finance Minister Varoufakis, who says, that Greece can issue IOUs in the same way that the American State of California did in 2008 during the Lehman Brother world derivatives panic.

However, there is a much better and more effective way than to have than to have recourse to such funny money. According to the coverage of Ambrose Evans Pritchard of the London Daily Telegraph cited below, a significant part of the SYRIZA bloc is considering the necessity of declaring a state of emergency, ruling by decree, and seizing control of the national banking system including the Greek Central Bank [1] The way this could be done would be to invoke emergency provisions of the Lisbon Treaty (the most recent treaty governing the operations of the European Union) and to sue Draghi of the European Central Bank for malfeasance and nonfeasance for failing to provide an adequate Greek money supply for stability as he is required to do under the Treaty of Lisbon).

This proposal, called requisitioning, could also be seen as a commandeering of the Greek Central Bank for the needs of national survival. It amounts to the seizure and deprivatization of the Greek Central Bank, as demanded by the Tax Wall Street Party for the past several years. It would also constitute a partial seizure of the European Central Bank, since the Greek Central Bank operates today as a defacto tentacle of the ECB in Frankfurt. The practical outcome would be that the Greek government could seize plates and printing presses currently used by the Greek Central Bank to print €20 notes under the authority of the ECB. In the future this would be done without regard to the ECB, and could be a step towards overcoming rigid centralization in the current Eurocratic system.

The relevant quotes from Ambrose Evans Pritchard are as follows:

“Syriza sources say the Greek ministry of finance is examining options to take direct control of the banking system if need be rather than accept a draconian seizure of depositor savings – reportedly a ‘bail-in’ above a threshold of €8,000 – and to prevent any banks being shut down on the orders of the ECB. Government officials recognize that this would lead to an unprecedented rift with the EU authorities. But Syriza’s attitude at this stage is that their only defence against a hegemonic power is to fight guerrilla warfare.”

“Hardliners within the party – though not Mr Varoufakis – are demanding the head of governor Stournaras, a holdover appointee from the past conservative government. They want a new team installed, one that is willing to draw on the central bank’s secret reserves, and to take the provocative step in extremis of creating euros.”

“’The first thing we must do is take away the keys to his office. We have to restore stability to the system, with or without the help of the ECB. We have the capacity to print €20 notes,’ said one.”

“Such action would require invoking national emergency powers – by decree – and ‘requisitioning’ the Bank of Greece for several months. Officials say these steps would have to be accompanied by an appeal to the European Court: both to assert legality under crisis provisions of the Lisbon Treaty, and to sue the ECB for alleged ‘dereliction’ of its treaty duty to maintain financial stability.” [2]

No sooner had it become evident that the anti-austerity NO vote had prevailed in Greece, the fanatical neo-liberal Martin Schulz, the SPD President of the European Parliament, began to rave, Time for Greece to get out of the Eurozone and procure a new currency, since no more Euros would be available in the wake of the defiance shown by the victory of the NO vote. Martin Schulz joins the wretched tradition of the German Social Democratic Party (SPD) going back to their many many crimes during and after WWI. Other eurogarchs joined in the raving.

This is the point where a reasonable politician would recognize the choice between a rational debt relief on the one hand and more insane deflation and austerity on the other. We can only hope that the French/German meeting of July 6th will clarify this issue, but so far the situation does not look auspicious. Interestingly enough, it is from London that certain voices of financial rationality have been heard, not surprisingly since the British interest always consists in creating problems for the Euro as they see it.

The London Daily Telegraph today publishes articles supporting the International Monetary Fund’s study which argued that Greece requires a 50 billion dollar cash infusion over the coming months, along with massive debt relief. This debt relief is also what US Secretary of the Treasury Lew has recommended, but, as the London Financial Times wrote, the US appears as, the helpless bystander in the Greek crisis. It would certainly be time for the US to remind Berlin of the needs of economic rationality. Inside the IMF, there is now a virtual civil war between staff members who are correctly arguing that a haircut for the creditors plus a significant cash infusion represents the only road. This contrasts with the insane ravings of Madame Lagarde who has been insisting that not one penny of mercy be shown to the stricken Greeks. Speculation is now surfacing that Lagarde’s bungling incompetence has become so extreme that she will either be ousted immediately or at the latest next year, when her current post Strauss-Kahn term in office will expire. In terms of resignations, Antonis Samaras of the reactionary and anti-worker NEW DEMOCRACY PARTY has resigned after the lost referendum – an example which Merkel, Draghi and Lagarde should imitate without delay.

The victorious Prime Minister Tsipras conferred tonight with Greek financial officials. On Monday morning he will participate in wide-ranging talks with Greek political leaders, with the goal of restoring the operation of the Greek banking system to normal. Tsipras also said that the issue of Greece’s debt will now be permanently on the table, implying a writedown. He also cited the IMF report which validates the SYRIZA argument that a debt restructuring and debt relief are required.

In the midst of these world historical events, Libertarians might well wonder whatever happened to their pseudo-populist hero Ron Paul aka “Stansberry” Paul. According to published reports, Paul has compared the Greek people to American “Welfare Queens”.