Mish's Global Economic Trend Analysis

Greek Communist Party Calls For Annulment of Greek Loan Deal; Yet Another Unfortunate Atttempt to Broker a Deal
Mud Slinging Carries the Day in Greece; Again and Again Samaras Proves He's a Liar; New Elections Likely
Crushing Defeat for Merkel's CDU Party in German Elections as Voters Reject Austerity; Crown Prince Turns Into Frog
Good News From Greece: Greek Unity Talks Hit Impasse; Math Lesson For New Democracy; Syriza Up to 25.5% in Latest Polls

Greek Communist Party Calls For Annulment of Greek Loan Deal; Yet Another Unfortunate Atttempt to Broker a Deal

Posted: 13 May 2012 04:58 PM PDT

I was hoping for an election announcement today, but the pressure is on for "one" more day as Greek President to Meet Four Party Leaders Tomorrow in one more attempt to form a "Unity Coalition".

Greek President Karolos Papoulias will meet with political party leaders at 7:30 p.m. tomorrow as discussions on forming a national unity government continue, state-run NET TV said, without citing anyone.

New Democracy leader Antonis Samaras, Pasok leader Evangelos Venizelos and the head of the Democratic Left party Fotis Kouvelis will attend the meeting, NET reported. NET initially said that Syriza party head Alexis Tsipras was also expected to attend the meeting, but later reported he would not be taking part.

Greek Communist Head Calls For Annulment of Greek Loan Deal

The Wall Street Journal reports Greek Communist Head Calls For Annulment Of Greek Loan Deal

The head of Greece's Communist KKE party Sunday called for the annulment of the country's loan deal, ruling out her party's participation in a coalition government, even as Greece scrambles to resolve a weeklong political deadlock following inconclusive polls last week.

"We will introduce legislation in the Greek parliament, which is going to set out very specifically the elimination and annulment of the [loan agreement], Aleka Papariga said after a meeting with Greece's president Karolos Papoulias.

For the benefit of Greece and taxpayers in the Eurozone in general, let's hope this last attempt to form a coalition falls flat.

The sooner Greece leaves the euro, the sooner it will have a chance to recover.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mud Slinging Carries the Day in Greece; Again and Again Samaras Proves He's a Liar; New Elections Likely

Posted: 13 May 2012 12:06 PM PDT

Things are looking better for Greece as the latest report is Greek coalition talks break down in acrimony.

Greece appeared to be heading for fresh national elections after last-ditch coalition talks chaired by the country's president ended in mutual mud-slinging by the conservative, socialist and leftwing leaders.

Antonis Samaras, leader of the centre-right New Democracy party, said the radical left coalition Syriza had blocked efforts to break the deadlock, even after a letter from premier Lucas Papademos was circulated at the meeting outlining Greece's deteriorating fiscal position.

Tax collection slowed markedly during the election campaign, putting budget deficit targets at risk, according to a finance ministry official. Prolonged political instability would also delay the implantation of a €40bn recapitalisation scheme for Greek banks included in the country's second bailout by international lenders, the official said.

Mr Samaras criticised Syriza's 37-year-old leader for refusing to help form a coalition or support a government that would try to re-negotiate the terms of the bailout. "I don't know where (Alexis) Tsipras is heading," Mr Samaras said at the end of a 90-minute meeting described as "highly charged" by presidential aides.

Evangelos Venizelos, leader of the PanHellenic Socialist Movement (Pasok), accused the Syriza leader of "showing arrogance" by opposing a coalition deal.

Again and Again Samaras Proves He's a Liar

Samaras' idea that terms of the bailout can be renegotiated is a complete farce and he knows it. He is simply looking for any way to get into power.

Moreover, falling tax receipts means only one thing: harsher austerity terms and more demand from Germany not less. If there was any change of heart from Germany, it would be up to Germany to lead the way, not Greece. Samaras knows this as well.

I suppose one can accuse Syriza party leader Alexis Tsipras of lies as well, given he is running on a platform of staying in the Euro as well as defaulting on debts. However, anyone with an IQ above the level of a rock knows that is impossible.

Let's hope for another election on June 10th or 17th, one with a clear mandate to tell the Troika to go to hell. Such an outcome is in the clear best interest of all of Europe.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Crushing Defeat for Merkel's CDU Party in German Elections as Voters Reject Austerity; Crown Prince Turns Into Frog

Posted: 13 May 2012 11:32 AM PDT

The BBC reports New election blow for Germany's Merkel

Chancellor Angela Merkel's conservatives have suffered heavy losses in an election in Germany's most populous state, exit polls suggest.

Support for the Christian Democrats dropped from 35% to 26% in North Rhine-Westphalia, with the Social Democrats set to return to power with the Greens.

It is the Christian Democrats' worst result in the state.

Analysts say many voters rejected Mrs Merkel's tough line on fiscal discipline as a cure for state debt.

In another development, the exit polls suggested Germany's Pirate Party had won seats in North Rhine-Westphalia, making it their fourth state parliament.

The Pirate Party has grown in strength recently with its calls for transparency and internet freedom.

According to two exit polls, the Social Democrats (SPD) won around 38%, the Christian Democrats (CDU) 25.5%, the Greens 12%, the Free Democrats (FDP) 8.5%, the Pirates 7.5% and the Left, 2.5%.

The FDP, the CDU's national coalition partner, performed better than expected, increasing their vote by nearly two percentage points and thereby giving the lie to speculation that they might fail to win seats.

When the CDU and FDP recently lost elections in the northern state of Schleswig-Holstein, Mrs Merkel's party scored its lowest tally there for 50 years.

German Voters Reject Austerity

The Financial Times reports German Voters Reject Austerity

Angela Merkel's centre-right Christian Democratic Union suffered a bruising defeat on Sunday night in the election of a new parliament in North Rhine-Westphalia, Germany's most populous state, when the centre-left opposition of Social Democrats and Greens won a clear majority.

The vote for the CDU slumped to just 26 per cent, according to the first exit polls, by far its worst result in the state in the post-war period, and a serious setback for the German chancellor.

The outcome will be seen as a rejection by voters of the strict austerity policy promoted by Ms Merkel's party at both local and national level, and a boost for the opposition. It will encourage the SPD and Greens to campaign all out for a "red-green" coalition at national level when Ms Merkel stands for re-election in autumn 2013.

However the biggest casualty will be Norbert Röttgen, environment minister in Berlin and leader of the CDU in NRW, who immediately took responsibility for the disastrous defeat and announced his resignation from the local party leadership.

Mr Röttgen, who was regarded as a crown prince and potential successor to Ms Merkel, had sought to make the government's austerity policy in Berlin and in Europe the central theme of the NRW campaign. The outcome suggests that he made a mistake in doing so, and that the CDU espousal of austerity in NRW actually lost the party votes.

Crown Prince Turns Into Frog

It is probably amazing to most US citizens that a political party named "Pirates" running on a platform of internet freedom could win any seats. Such is the nature of European politics where parties get representation if they meet a small threshold, in Germany's case, a mere five percent.

The big news is not the Pirate Party but the trouncing CDU took at the hands of the Social Democrats.

Ex-crown prince, Mr. Röttgen, is now a toad because he played himself as a Merkel clone. He tried to take the blame for this debacle, but without a doubt Merkel will bear the brunt of the blame.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Good News From Greece: Greek Unity Talks Hit Impasse; Math Lesson For New Democracy; Syriza Up to 25.5% in Latest Polls

Posted: 13 May 2012 09:26 AM PDT

Under the category of good news from Greece, the Financial Times reports Greek Unity Talks Hit Impasse.

Talks between Greece's president and the leaders of the country's three largest political parties on forming a coalition government reached an impasse on Sunday, increasing the chances that the country will hold fresh national elections in June.

Antonis Samaras, the conservative leader, said the radical left coalition Syriza had blocked a last-ditch effort to break the deadlock.

"Syriza doesn't accept the formation of a viable government, or agree to support a government that would seek to renegotiate the terms of the bailout," Mr Samaras said after the 90-minute meeting chaired by Karolos Papoulias at the presidential mansion.

Alexis Tsipras, the Syriza leader, said after the meeting: "They wanted Syriza to collude in a crime … to ignore the voice of the people", referring to the fact that 70 per cent of Greeks voting last Sunday backed anti-austerity parties.

Math Lesson For New Democracy

Note the irony in New Democracy leader Samaras placing the blame on Alexis Tsipras.

Syriza got 16.2% of the vote. Precisely whose fault is it that Samaras cannot muster a simple majority without that 16%?

Perhaps the message that parties do not want to join a coalition that has raped and tortured Greek citizens to bailout German and French banks ought to sink into Samaras' thick head.

Snatching Defeat From Jaws of Victory

Until new elections are actually called, however, eurosceptics still fear the answer to this question: Will Greece Snatch Defeat From the Jaws of Victory?

Pressure from the Troika and fear-mongering by all the politicians in the bailout-bed will be immense. There will be another decade of pain and suffering for Greeks if they stick to the Troika plan.

However, there will be short but intense pain for Greeks if they tell the Troika to shove it. Which is worse? It seems Greeks have come to the correct conclusion.

Syriza Up to 25.5% in Latest Polls

Please consider Latest polls shows clear lead for far-left Syriza

Real News reports that the Coalition of the Radical Left (SYRIZA) has gained support at the expense of the other parties. It puts Syriza on 25.5 percent, New Democracy on 21 percent, PASOK on 14.6 percent and the Communists KKE on 5.3 percent.

Given that Greek law gives the winning party an extra 50 seats in parliament, a coalition between SYRIZA and one or two leftist parties is now in sight, yet another math lesson for Samaras as well as Troika-clown Evangelos Venizelos, leader of Pasok a Greek socialist party whose support in the polls is now down to 10%.

In general, I have little use for socialists and radical left parties of any kind. However, they are the only ones talking sense about what needs to happen to the bailout agreements.

The simple fact of the matter is Greece will not recover until it defaults on all external debt. Once that happens, and Greece takes a dive, hopefully new political forces can put Greece on the right path to needed reform.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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Sunday, May 13, 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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