MidnightWatcher – Prophecy in Motion

By Joel Hills, Sky News – “Greece’s former finance minister has told Sky News that if Greece reneges on its bailout deal with the EU and the IMF it will ‘open the door to hell’.

Sky News last interviewed George Papaconstantinou two-and-a-half years ago.

In December 2009 he told how Greece could survive independently and Greece’s creditors had nothing to fear – they would get back every euro they were owed.

A lot has changed since then.

Greece is in the process of borrowing 240bn euros of emergency loans from the EU and the IMF (in return for pledges to raise taxes, cut spending and balance the books) and investors holding Greek debt have been forced write off up to 50% of their money.

Even now Greece remains heavily in debt, deep in recession (now in its fifth year) and without a functioning elected government.

Mr Papaconstantinou lost his position as finance minister last summer, shortly after the second bailout package was agreed.

In the general election, two weeks ago, he also lost his seat as an MP. He was not alone as support for his Pasok party collapsed.

The result of the election was inconclusive and, ultimately, no party was able to form a coalition government. In four weeks’ time Greece will vote again.

The opinion polls suggest that were an election to be held tomorrow the result would, once again be inconclusive, but the Syriza party, which is promising to ‘tear up’ the bailout agreement with the EU and the IMF, continues to attract support…

Interestingly, he admits there are elements of the bailout deal that he would seek to renegotiate but he says if Greece were to do what Syriza’s leader, Alexis Tsipras, is proposing and fail to honour the promises the country has made in return for emergency funding then the results would be disastrous.

‘The extremist parties are lying to the Greek people because they are not telling them that reneging on the agreement means that you have opened the door to hell,’ he said.” Read more.

EU banks fear a Greek exit could cause bank run across continent – “… the continent’s financial system remains vulnerable to the prospect that stampedes of customers could yank their deposits from institutions perceived as shaky. That threat was shoved into the spotlight last week when customers withdrew more than €700 million from Greek banks in a single day… If Greece leaves the eurozone, it will almost certainly restrict bank customers from moving their money out of the country. That could prompt depositors in struggling countries such as Spain and Portugal to … pre-emptively transfer their funds out of their countries to avoid having their savings converted into rapidly devalued Spanish pesetas and Portuguese escudos. ‘That’s what markets are starting to worry about,’ Bodereau said. ‘It takes you to a whole different level of liquidity crisis.'” Read more.