Wall Streeters, big banks, and their proxies in political office are all reaching for the Xanax tonight. The Greek left, led by Alexis Tsipras, is saying that there's no obligation to pay back the rotten deal handed down to the Greek people. ( Image: Oneiros )
After accepting a mandate to create a multiparty administration following inconclusive elections, Alexis Tsipras sent shockwaves through financial markets by announcing the pledges Athens had made to secure rescue funds from the EU and IMF were null and void.
"The popular verdict clearly renders the bailout deal null," said the politician, whose stridently anti-austerity coalition of the radical left, known as Syriza, sprung the surprise of the weekend's poll, coming in second with 16.8% of the vote. "This is an historic moment for the left and the popular movement and a great responsibility for me." Guardian, May 8, 2012
And what does this mean?
"Alarm in EU capitals is growing, with Germany in particular emphasizing that Greece must stick with the terms of the agreements it has signed with lenders who have committed themselves to give a total of --240bn to the crisis-hit country.
The prospect of protracted political instability has stoked fears that Greece is not just teetering on a political precipice but also laying the ground, however unwittingly, for its own euro exit." Guardian, May 8, 2012
The Greek left saying that the people are not obligated to pay the debt created by their leaders and Goldman in back rooms in Greece and elsewhere.
As in the American subprime crisis and the implosion of the American International Group , financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.