World View: Greece’s Government Will Confiscate Cash Reserves from All Public Institutions

The Associated Press

This morning’s key headlines from

  • Greece’s government will confiscate cash reserves from all public institutions
  • Greece’s people face the future with anxiety and dread
  • China speeds up its military takeover of the South China Sea
  • Vietnam and the Philippines establish a strategic military partnership to counter China

Greece’s government will confiscate cash reserves from all public institutions

The Hellenic Parliament building, where a decree was adopted to confiscate cash reserves of Greece's public institutions
The Hellenic Parliament building, where a decree was adopted to confiscate cash reserves of Greece’s public institutions

After a bitter debate, Greece’s parliament on Friday adopted a decree ordering all public institutions to hand over their cash reserves to the central bank.

This means that everything from municipalities and provinces to state universities will have to give up all the spare cash in their bank accounts. 1,400 public institutions will be handing over their reserves.

The money will be used to cover “the state’s urgent needs, which amount to three billion euros over the next 15 days.” The government estimates the decree will raise some 1.5 billion euros, but local media have put the figure at around 400 million euros.

Mayors, labor unions and college directors have been complaining bitterly about the decree. According to one public sector labor union leader, “It is unjust and unacceptable for the state to manage municipalities’ funds.” Kathimerini and AFP and Reuters

Greece’s people face the future with anxiety and dread

Some individual people can face the future realistically, even when it is obvious that the future is going to be bad.

But when you talk about entire populations of people or generations of people, self-delusion is the rule. The British ignored the Nazis’ military buildup. America ignored the real estate bubble in the mid-2000s decade, and they are ignoring China’s military buildup today. Actually, “ignored” is the wrong word. In each case, they deluded themselves into believing what was obviously true was not.

Ever since the Greek financial crisis began in the 2010, I have been writing that no solution exists, and that one day Greece will be forced into financial bankruptcy. Honestly, I thought it would have happened before now, but I underestimated the depth and extent of the self-delusion that not only the Greek people but also the European politicians would inflict on themselves and each other. In the course of writing about the Greek crisis over the past five years, some of the unbelievably ridiculous things that I have quoted from European officials have been truly astounding.

But at some point, reality overcomes self-delusion. And it seems to be the case that that point is being reached right now.

Friday’s Eurogroup meeting of the eurozone’s finance ministers was behind closed doors but was a verbal slugfest, descending into acrimony and name-calling, according to reports. Greece’s finance minister, Yanis Varoufakis, who is an expert on game theory, was accused of being a time-waster, a gambler and an amateur. German Chancellor Angela Merkel had to call for calm.

After the meeting, Eurogroup chairman Jeroen Dijsselbloem said flatly that there will be no money given to Greece unless and until Varoufakis produces a list of committed reforms that he promised in February. The list would need to address various economic issues, including Greece’s bloated public sector, curbing tax evasion and corruption, privatizing public businesses, and adjusting generous pension and minimum wage policies. Varoufakis has repeatedly promised that the list would be provided in a few days, and now the other finance ministers have apparently concluded that he’s a charlatan.

The Greek people are watching all this with a mixture of dread, shock and foreboding. Polls indicate that over 70% of them want Greece to remain in the eurozone, but they see it all slipping away. Self-delusion is giving way to reality.

It is not just the name-calling at the Eurogroup. The Greek people have seen news stories that the government will be running out of money in a couple of weeks, and will be paying salaries and pensions in IOUs. And now they hear that the government will be confiscating any available cash held by local governments and state organizations.

They fear their savings will be next. Anyone who can move their money out of a Greek bank into a foreign bank is doing so. Undoubtedly, a lot of people’s mattresses are also being filled up with their life savings.

According to one communist MP:

Even if there is a temporary solution it will not solve our problems. Our country produces nothing. Its manufacturing base has been destroyed, it is de-industrialised and agriculturally deserted. What lies ahead is great, great hardship.

When even the communists give up their delusions, you know that reality is really taking hold.

A word of warning. When a population turns from self-delusion to reality, they find someone to blame, and sometimes they do dangerous things, like turn fascist or start a war. We have seen nothing like that in Greece so far, but if things get extremely desperate, then the climate could change quickly. Guardian (London) and Bloomberg and Kathimerini

China speeds up its military takeover of the South China Sea

High-resolution satellite images reveal that in the space of ten weeks, China has built an artificial island on top of Subi Reef in the Spratly Islands group, with the apparent intention of building a runway that could support virtually all types of combat and supply aircraft in China’s navy and air force.

This is only one of three massive land reclamation projects that China is pursuing to establish military bases in the South China Sea.

China continues to occupy regions in the South China Sea that have historically belonged to other countries, and continues a massive military operation to enforce its seizures. China has claimed the entire South China Sea, including regions historically belonging to Vietnam, Brunei, Malaysia, Indonesia, Taiwan and the Philippines. China’s claims are rejected by almost everyone outside of China, and China refuses to submit them to the United Nations court deciding such matters, apparently knowing that they would lose.

Lacking legal authority, what we are seeing is a frenzied military buildup in the South China Sea with a speed, scale and intensity that have few or no parallels in history outside of wartime. Diplomat

Vietnam and the Philippines establish a strategic military partnership to counter China

The Philippines and Vietnam have had minimal strategic military ties. But the two countries are responding to China’s military buildup and belligerence in the South China Sea by establishing a “Strategic Partnership between the Republic of the Philippines and the Socialist Republic of Vietnam,” with the agreement to be signed in May or June. Under the agreement, the two countries will conduct joint naval drills and scientific studies in the South China Sea, defying China’s claims. They committed to resolve differences in a “constructive manner without resorting to the threat or use of force.” Philippine Star and Council on Foreign Relations

KEYS: Generational Dynamics, Greece, Jeroen Dijsselbloem, Eurogroup, Yanis Varoufakis, Angela Merkel, China, South China Sea, Philippines, Vietnam
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