World View — European Council Deliberately Lied About Spain Bailout Policy

This morning’s key headlines from GenerationalDynamics.com

• Russia says it will suspend ‘new arms shipments’ to Syria
• European Council deliberately lied about its bailout policy for Spain
• Germany and France have negative bond yields, while Spain’s surge
• No relief in sight for Greece at Monday’s Eurogroup meeting

Russia says it will suspend ‘new arms shipments’ to Syria

Russia will deliver Mi-25 gunships to Syria on time

Russia has been continually embarrassed for its support of the regimeof Syria’s president Bashar al-Assad, which has been maiming,slaughtering and exterminating innocent Sunni Arabs. To show whatgood guys they are after all, Russia has announced that they will notdeliver any new types of weapons or sign any military contracts withSyria until the situation there stabilizes. However, Russia isleaving open the possibility of continuing to deliver weapons underold contracts. In particular, Russia will deliver a group of Mi-25attack helicopter gunships to Syria on time. Ria Novosti andRia Novosti

European Council deliberately lied about its bailout policy for Spain

For years, I’ve reported on numerous lies by European officials withreference to the euro crisis. Last year, European officials told onelie after another with respect to the various bailouts of Greece, andonce when EU officials were caught in a series of major lies aboutGreece a couple of months ago, Eurogroup chairman Jean-Claude Junckerwas quoted as saying, “When it becomes serious, you have to lie,” as I reported at the time.

So I guess it’s becoming “serious” again, because the EuropeanCommission told some outrageous lies coming out of the June 28-29meeting of the eurozone leaders. In “30-Jun-12 World View — Germany and Angela Merkel cave in to Italy and Spain”, I summarized the agreements, including themuch touted agreement that the European Stability Mechanism (ESM)bailout fund would be authorized to lend bailout money to Spain’sbanks, so that the debt will not appear on the books of Spain itself.

Well, apparently this was a full-throated lie by the EuropeanCommission (EC). It turns out that countries will need to provideguarantees in return for the bank aid that the ESM gives to thecountry’s banks. According to one euro zone official:

“There is some degree of mystification going on here… in the broader public who think that under current rules theESM could all of a sudden end up owning [the Spanish bank] Bankiawith the full risk of Bankia on the balance sheet of the ESM.This is very much not the case.”

EuroIntelligence notes that the EC is trying to blame “the broaderpublic” for this lie:

“It is preposterous to argue that the fault lies withthe broader public as he suggests. It was a deliberatemisrepresentation of a policy by the European Council. If thisofficial is right, it means that the ESM will not ever injectcapital into the banks. Now it all makes sense why we don’t need atreaty change. If you don’t change the policy, you don’t need tochange the treaty.”

This means that Germany and Angela Merkel didn’t cave in after all, ashad been reported at the time. The culture of fraud and extortion isalive and well. Reuters and Euro Intelligence

Germany and France have negative bond yields, while Spain’s surge

Last week, we reported thatDenmark’s central bank is “paying” a negative interest rate oncertificates of deposit, which means that it costs you something tostore your money in Denmark’s banks for safekeeping. On Monday,short-term debt offered by Germany and France had negative yields —0.034% yield for 6-month bills from Germany, and -0.006% yield for24-week bills from France. Meanwhile, 10-year bond yields for Italyand Spain have been surging. The yield was 6.1% for Italy, which isconsidered unsustainable, while it was 7.1% for Spain, considered amajor crisis level. Reuters

No relief in sight for Greece at Monday’s Eurogroup meeting

A meeting of the Eurogroup in Brussels is showing no sympathy forGreece’s hope to get an agreement to delay new austerity measures.Because Greece is so far behind on its previous commitments,a Greek government spokesman said that they would not be seekingan immediate renogtiation of the bailout terms:

“At the moment, we are way off our targets. We cannotnegotiate because to do so you need to give and take. The clearimpression we got at the recent EU leaders’ summit was that thereare some who are looking for an excuse to push us out of theeuro. But most people are telling us that if we prove we aremoving in the right direction, there will be room tonegotiate.”

Luxembourg’s finance minister agreed:

“We have to see how realistic the things are that wewant from Greece. I think we can accommodate Greece, but Greecemust also know that it’s not a one-way street. Greece has to enacta series of reforms that we have demanded; we will need to hearthe Greek minister about this.”

Kathimerini