ECB and EU along with many politically interventionist central bank efforts have created a drawn out, conflicted and confusing environment. On one hand financing is readily available for an utterly defaulted nation that never quite made it into the EURO (Ukraine) - yet Greece is being an especially tortured soul. How can this ECB's/EU's conflicted strategy be explained?
It is clear that every day lately, a barrage of the most ominous and negative press grabbing sound bytes are projected by IMF, ECB, EU, etc. Occasionally with rhetoric from Greece and the obligatory 1 out of 10 positive test bubbles. What are the goals of this kind of unending, torturous behavior? Certainly, concern for Greek citizens can not be being improved with this gamesmanship. What kind of negotiation is this?
A POLITICAL BATTLE IN A LEVERAGE WAR
The reality of conditions is that ECB and most central banks have pushed the envelope to the extreme. They are in danger of losing control. It is likely that they have already lost control based on the impacts of their grossly irresponsible gambling and policy activity. A Greek exit for ECB is NOT an option. Yet hyperbole from Eurocrats seeks to project that it's just another day of doing business - nothing to worry about here. However, nothing could be further from the truth. The real fear that ECB and EU has is the potential that it appear qualitatively viable for any nation to pursue a similar negotiation as Greece. Behind the veneer, who knows what kind of deals ECB/EU is making or may need to be made. However, publicly ECB/EU and central banks need to project an image of balance and control.
They have a lot of power and do have the potential for a lot of control. This was on full display in the UK recently when just about any EU dissenter was served a knockout blow in the election process. Scarcely ONE of them got reelected. How convenient for the ECB and EU just as the UK was gaining momentum in its independence movement. If there ever were a clearer message to a politician - it could not be much louder than the one sent to the UK by ECB and EU with their successful and dramatic meddling in the UK political process.
Greece is a vastly different story,. What they have in common though is "leverage": both in the UK and Greece leverage is much too high, and both can not possibly pay their debts. So, what is all this grandstanding for between ECB/EU and Greece? Political intervention. With the central banks losing control of the debt situation and more importantly the ever growing public awareness of what interminable debt servitude looks like, the EU and ECB should an "A" for demonstrating a new and innovative forms of control, manipulation and subterfuge.
The root of the problem at this time is the large amount of insolvency in the system. It is no question, that every politician in Europe and even some in the US are watching with great interest for when they can clamor onto the stage and beg for their own refinancing, bailout or funding.
The labored, conflicted, and irrational hyperbole from ECB and EU makes sense in that it is conveying a very clear message. "When negotiations are complete in Greece, there will be career ending, political and physical risks for politicians." If there is one area that any politician wishes NOT to occur, its reelection, financial, legal, impeachment or physical risk to themselves. Additionally, politicians generally would like fruits for their labor to be rewarded and spendable - both real and political capital.
Danger, potentially criminal or life-threatening, from constituents, is not fodder for a long political career, reelection or spending of real and political credits. So, what we are seeing here are the desperate attempts of the ECB and EU to both agree to anything required to get the Greek situation to disappear behind the curtain. While ending the political careers (not to mention other significant risks) of anyone stupid enough to cause trouble for their debt expansion agenda and marketing campaign.
From this vantage point, this strategy is showing some progress and is quite imaginative. The key to a signal of an end to Greek negotiations is the implosion of political careers of the "deviant operatives" in power and at the negotiating table in Greece currently. One could not send a better message than the ECB and EU events in UK and Greece can be conveying to Italy, France, Hungary, Spain, Slovakia, Romania, Slovenia, Latvia, Ireland, Czech Republic, Estonia, Belgium, Croatia, Austria or Bulgaria politicians. While there is not even a shred of practical or sensible in this process - political it clearly is.
Will this kind of tactic be able to supersede or merely suppress temporarily the dramatic consequences of a destructive credit expansion while these eurocrats and central bankers search for the ever elusive "PLAN B"?