domingo, 5 de julio de 2015

Pensando en mañana después del "OXI"

¿OXI-rrinco financiero planetario a la vista? ¿Quién puede saberlo? Lo concreto es que el "OXI" griego aprueba tácitamente el default de 340.000.000.000 (trescientos cuarenta mil millones) de euros a la banca europea. Para ir pensando en mañana después del OXI (acuérdense que las bolsas abren en Shangai, que cerraron el viernes casi 6% abajo) veamos algunos análisis y especulaciones sobre el día después. 

Pero primero recordemos una vez más lo que realmente estaba en juego el día de hoy. Hace tres días alguien muy conocido por nosotros, Paul Craig Roberts, escribía en su sitio web (

Título: Sunday’s Vote Will Determine Liberty Or Serfdom

Texto: According to history books, democracy originated in Greece. Of course, historians could be mistaken, but this is the prevailing view among Western populations with enough awareness to be interested to know.

What we are witnessing today, July 2, 2015, is that after 2,500 years in the Western World only the current Greek government is interested in democracy. The Greek government, to the surprise and consternation of every other European government, has called a referendum for the Greek people to decide the fate of Greece. For resorting to democracy, the Greek government has been universally denounced in the Western World.

So much for Western democracy.

The greatest and most successful propaganda scam in history is the one that convinces the world that they are nobody if they are not part of The West, the indispensable peoples, the exceptional peoples. If you are not part of The West you are nobody, nonexistent, a nothing.

This prevailing propaganda might prevail in Greece on Sunday, in which case a fearful and intimidated Greek population might vote against the only government that, instead of accepting a payoff from Greece’s enemies, fought for the welfare of the Greek people.

If the Greeks vote for their oppressors and against their own government, democracy in the EU will cease to exist.

2,500 years ago Greeks saved their independence from the Persian Empire. Sunday’s vote will tell us whether Greeks have again served liberty or whether they have succumbed to Washington’s Empire.

The fate of all Europeans and of Americans themselves will be settled on Sunday.

Las patas en la fuente

Ahora vayamos a esa joyita del pensamiento reaccionario neoliberal, el "chief opinator" de la sección Finanzas del Telegraph de Londres, Ambrose Evans-Pritchard (y recuerden: lo que pase mañana en la plaza financiera de Londres será clave para lo que ocurra después):

Título: EU warns of Armageddon if Greek voters reject terms

Epígrafe: "Without new money, salaries won't be paid, the health system will stop functioning, the power network and public transport will break down," warns President of European Parliament

Texto: Greece risks a collapse of the medical system, power black-outs, and an import blockade, if the Greek people reject creditor demands in a make-or-break referendum tomorrow, the EU's highest elected official has warned.

Martin Schulz, the president of the European Parliament, said the EU authorities may have to prepare emergency loans to keep basic public services functioning and to prevent the debt-stricken country spinning out of control next week.

"Without new money, salaries won't be paid, the health system will stop functioning, the power network and public transport will break down, and they won't be able to import vital goods because nobody can pay," he said.

What happens if Greece defaults to the IMF?

Mr Schulz earlier called for the elected Syriza government to be replaced by "technocrat" rule until stability is restored.

The alarmist warnings are part of an escalating pressure campaign by European leaders as Greeks decide their destiny in what has become – despite attempts by Syriza to present it otherwise - an in-out vote on euro membership after five years of economic depression and mass unemployment.

Yanis Varoufakis, the Greek finance minister, said his country is on "war-footing" and accused the eurozone of trying to terrify Greek voters into submission.

"What they're doing with Greece has a name: terrorism. Why have they forced us to close the banks? To frighten people. It's about spreading terror," he told El Mundo.

The complete break-down in trust between Syriza and the EU-IMF inspectors comes as polls show the "No" side neck and neck, each driven by powerful emotions in the bitterly divided country.

An estimate 40,000 people gathered for a rally for "No" side on Friday in front of the Greek parliament, drawn by a star-casting of Greek singers and defiant appearance by premier Alexis Tsipras.

Some 18,000 thronged a nearby stadium for the "Yes" campaign, blowing whistles and waving Greek and EU flags, many afraid that Greece would be blown out of the EU altogether after 34 years, and cast into oblivion.

The crisis has reached a point where the Greece's manufacturing system is grinding to a halt. Crucial imports and raw materials have been stuck in ports since imposition of capital controls and the shut-down of the banking system a week ago.

Industrialists cannot pay suppliers outside the country unless they are deemed a top priority by an emergency payments committee at the Greek treasury. Hundreds factories and mills may be forced to close down as soon as next week.

Mr Varoufakis angrily dismissed "malicious rumours" that Greece's banks are drawing up plans to seize a share of all deposits above €8,000 in a so-called "bail-in". This is far below the EMU-wide deposit guarantee of €100,000.

The claims have been widely aired by Greek television and the conservative press, though no sources have been identified.

Louka Katseli, the head of the Greek banking association, said the reports were fiction.
The situation is clearly desperate, however. Mr Varoufakis told the Telegraph earlier that Greece's banks will run out of cash over the next two days. "We can last through to the weekend and probably to Monday," he said. Greeks were still able to withdraw €60 a day - in reality down to €50 – with local cards from ATM machines earlier today. Foreign cards have no limit but it is far from clear whether that can continue.

Mr Varoufakis appears ready to sit out a long siege if necessary. "We have six months stocks of oil and four months stocks of pharmaceuticals," he said.

The finance ministry is allocating much of the country's scarce liquidity for imports of food to avert a disaster as the tourist seasons reaches a crescendo. He said there is no risk of food shortages.

Romano Prodi, former chief of the European Commission and Italy's ex-premier, said it is the EU's own survival that is now a stake as the botched handling of the Greek crisis escalates into a catastrophe. "If the EU cannot resolve a small problem the size of Greece, what is the point of Europe?"

"I would like to know how Merkel, Juncker, or Lagarde can possibly take it upon themselves to throw Greece out of the euro. It is true that irrational behaviour always recurs in history. The First World War broke out over a minor incident. Let us hope this is not our Sarajevo," he said.

It has emerged that European members on the board of the International Monetary Fund tried to suppress the publication of a report by the IMF showing that Greece's debt is "unsustainable" and that the country is in grave need of debt relief.

This validates the claim by Syriza that a deal without debt restructuring fails to go to the root of the problem, and merely ensures another crisis later. Angry staff members at the IMF leaked parts of the paper to the German press, forcing full publication.

The EMU creditors have so far refused to offer any debt relief. The danger is that this hard line will backfire, forcing Greece to default on an estimated €340bn of liabilities to the eurozone system. This would entail vastly greater losses for the creditors.

Ahora vayamos a un par de títulos del Zero Hedge:

Título: A "No" Victory Appears Probable: What Happens Next According To Deutsche Bank

Texto: With early forecasts all telegraphing a modest victory for the "Oxis", barring some last minute miracle, the Varoufakis gambit - with some last minute assistance by the IMF - may succeed. What happens next? Here is Deutsche Bank's "map for the post referendum" which presents the four possible outcomes

In this document DB, which is one of the banks that may stand to lose the most from any major stresses to Europe's precarious status quo as a result of its tens of trillions of notional derivatives, lays out the possible post-referendum scenarios.

Here is how the German megabank sees the possible outcomes of what is shaping up to be a "No" vote:

N1 – Soft deal: The most unlikely scenario is that the euro-area partners offer a much softer programme to Greece.

N2 – Default-and-stay: Moderately less unlikely is a scenario where Greece defaults but stays in the euro thanks to a direct recapitalisation of Greek banks by the euro-area partners, with the Greek government using only domestic resources for the country’s fiscal needs.

N3 – New deal: The third scenario is one in which the rising economic and political cost of a closed banking system results in the Syriza government being replaced by a new government of national unity and a new deal with creditors being reached.

N4 – Grexit: In our view, Grexit and Scenario N3 are the most likely – with about equal probabilities. That said, we see the probability of Grexit increasing the larger is the margin of victory of the NO vote. Even with a NO vote, the cumulative probability of the first three scenarios still exceeds that of Grexit.

Un día peronista

And the details:

NO, Scenario #N1. Soft deal

This, in our view, is by far the least likely outcome, as it would generate significant moral hazard issues, which in the longer term could be as damaging as an exit. If Europe were to offer significant concessions to Greece following a no vote, it would de facto incentivize other borrowing countries to call domestic referenda to improve the terms of their rescue packages. This would be unsustainable in the long-run as (a) it would create obvious political issues in creditor countries, (b) it would not deal with the structural adjustments and political integration which are necessary for the longer term viability of the euro area.

NO, Scenario #N2. Default-and-stay

A direct recapitalization of the Greek banks is more likely, we think, than a very soft programme, but would be a challenge for Greece and, above all, euro-area partners to accept.

From the European perspective, it could be the start of a new round of financial commitments, all the more so unless there is a strong, credible agreement on structural reform to boost growth and protect Europe’s capital investment. After a default, getting the necessary consensus for such a bank-based deal will be difficult. Indeed, a public default would likely lead to a cascade of private defaults — starting with corporates.

The most serious flaw with this scenario is the moral hazard it creates. If Europe facilitates this default-and-stay option in Greece, it opens the door across the periphery to similar demands. If it is easy to renege on debts but have Europe preserve your banking system and access to the single currency, others will want the same. It will promote instability.

It is not only a question of ex-post moral hazard either. There are general elections in Spain at the end of the year and in Ireland by April 2016. How could the governments of these countries explain to their electorates that they should help to shoulder the direct recap of Greek banks after their own public debt ballooned because of the recap of domestic banks?

From Greece’s perspective, the cost of direct recapitalization in terms of deposit bail-in and general economic conditionality (see Box 1) means this scenario is not a shoe-in either.

It is also a scenario that needs time, measured in months, to come to technical fruition. In the meantime, the economic and political cost of a closed banking system will be mounting. There is a considerable probability if Greece and Europe go down this route that it merges into Scenario N3.

An additional consideration is that the HFSF is a guarantor to the EFSF. In the event of a Greek default, the EFSF may have a direct claim on the HFSF shares in the Greek banks. If Europe becomes the beneficial owner of the Greek banking system, the argument for direct recapitalization could grow. This does not diminish the technical and political complexity of direct recapitalization.

NO Scenario, #N3. New deal

Whether the ECB withdraws ELA — and when — is almost beside the point. The liquidity in the Greece economy is seriously impaired and as each week passes the economic, social and ultimately political cost of the crisis will rise exponentially. The tourist season may be compromised. We cannot judge Greece’s capacity for this. There may be new negotiations after a NO vote, but the chances of a soft programme (Scenario 1) or direct bank recapitalization (Scenario 2) are, in our view, very low. In the meantime the domestic political cost of a closed banking system will rise.

At some point, the rising economic and political cost of a closed banking system could cause the Syriza government to fall. A national unity government could emerge and new negotiations could take place around a deal with the international creditors.

How quickly such a scenario plays out depends on the economic and political cost. By that time, after the economic shock of failing talks and default, the scale of debt relief required to return Greece to sustainability will be even larger. If the EU wants to retain Greece in the single currency, more debt relief might be the price to pay.

Such an agreement would have to be based on a more balanced programme, probably along the lines outlined by the IMF in their latest debt sustainability report. There would need to be much more emphasis on structural reforms in exchange for a less growth-unfriendly fiscal consolidation and a commitment on a gradual debt relief based on implementation milestones . There needs to be a sequence that creates the incentives to improve the ability of the Greek economy to pass and implement the structural reforms that would allow the country to stands on its own leg within the monetary union.

A risk under this scenario is political deadlock could result if the Syriza government resigns but parliament is incapable of forming a new, stable government capable of striking a deal with the international creditors. The parliamentary arithmetic says that about 45 Syriza MPs – about one third of the parliamentary party – would have to join forces with the MPs of New Democracy, PASOK and River to gain a majority in parliament. Syriza retains strong support in opinion polls. Combining forces with the opposition could erode support and push voters further into the political extremes.

If a government cannot be found, the next step would be early elections. Note that there would be legal and financial challenges to new elections. According to the Greek constitution, the incumbent government cannot call elections within 12 months of the previous election. The government would first have to resign, followed by renewed attempts by the President of the Republic at forming a government. The constitution calls for three rounds of at most 3-day negotiations with the next three largest parties in parliament before an early election can be called.

NO Scenario, #N4. Grexit

A resounding NO would embolden PM Tsipras to ask for a complete overhaul of the programme. Actually, from his perspective it would make a much softer deal for Greece a necessity. But as we wrote in Scenario N1, an excessive compromise might be as damaging to medium-term euro area stability as Grexit, if not more damaging.

There is no formal mechanism in the EU Treaty that allows a member state to be expelled. That does not mean exit is impossible. First, Greece can take a unilateral decision to change its national currency back to the Drachma. Greece has this right under international public law (“Lex Monetae”). Second, exit could be agreed by mutual agreement. There is a view that Article 352 of the Lisbon Treaty might provide a basis for such an approach. It requires the unanimous agreement of the European Council, i.e. all EU countries in the EU including Greece.

Even though there is no legal mechanism that allows a member state to be expelled, there is a practical mechanism to trigger exit, namely the withdrawal of ELA. Withdrawing ELA would force the Bank of Greece to call in the emergency lending. The banking system does not have the capital for allow this and the government guarantee for ELA triggers a general default. The Greek banks would not regain access to ECB funding until they have been resolved and recapitalized, a lengthy and costly process.

The Syriza government claims it has no intention of leaving the euro area and that it would fight attempts to force it out through the European courts. This leaves economic circumstance to determine the point at which Greece feels it has no choice but to leave the euro area.

What differentiates the Scenario N4 (Grexit) from Scenario N3 (new deal) is that the Syriza government survives and takes the decision to exit. After a NO vote, these are the two most likely scenarios, in our opinion. They have a broadly similar probability, but we see the probability of Scenario 4 (Grexit) rising the larger the margin of victory for the NO campaign.

It is important to note that leaving the euro area and leaving the EU are two separate questions. If Grexit occurs, Greece would leave the euro area but not the EU. There is no argument being made for Greece to leave the EU. Staying within the EU limits the geopolitical ramifications of the Greek crisis.

Sequencing of events after a NO vote

Given the limited contagion in other peripheral markets and the rising domestic pressures in Greece, it is probably in Europe’s interest to wait. The exposure to Greece is no longer growing now that the ELA is capped. Contagion has been contained and the ECB has the ability to intervene more forcefully if necessary. Therefore, there is little cost in waiting for now.

On the other hand, precipitating an exit by e.g. suspending ELA, would lead to a crystallization of the losses on the existing official sector exposure to Greece, the introduction of potentially more challenging contagion risks and initiating a process that will be difficult to reverse. Conversely, given the trust lost over the last six months, Europe is unlikely to find it attractive to loosen its terms without a more credible commitment from the Greek side (or a change in government), as discussed in Scenario N1.

Given the above, it would be rational for Europe to wait for the political process in Greece to play out, even in the case of a NO vote. It would neither trigger a formal exit, nor offer more lenient terms until one of the following three outcomes realizes.

First, in the most optimistic scenario, there is a credible change in position from the Greek government. This would then enable Europe to restart more constructive negotiations along the “new deal” scenario.

Second, Greece itself gets closer to considering an exit. At that point, Europe may consider other alternatives such as a managed default within the eurozone, which will require Europe to recapitalize and control the Greek banking system which could lead to either “exit” or “default-and-stay” scenarios.

Third, there is an event that makes it institutionally very difficult for Europe to avoid exit. For instance, if the ECB decides that it is unable to maintain ELA following a default on the Greek bonds it owns, and Europe is not willing to recapitalize Greek banks, which would lead to the “exit” Scenario.

Note that it is not necessarily the case that ELA is suspended as soon as Greece fails to pay the ECB on 20 July – indeed, the ECB left the ELA volumes unchanged on 1 July despite the ‘default’ on the IMF. The rules of ELA are not published. It might also be the case that there is a 30-day grace period on the ECB held bonds. If so, the ECB could avail of the grace period before taking action on collateral (or suspending ELA). The counterargument will be that by permitting ongoing ELA the ECB will probably be in breach of the monetary financing prohibition in the EU Treaty.

Título: Eurogroup In Shock: Finance Ministers "Would Not Know What To Discuss" After Greferendum Stunner

Texto: There are no plans for an emergency meeting of euro zone finance ministers on Greece on Monday after Greeks voted overwhelmingly to reject the terms of a bailout deal with international creditors, a euro zone official said on Sunday.

Asked whether a meeting of the Eurogroup was planned for Monday, the official, speaking on condition of anonymity, told Reuters: "No way. (The ministers) would not know what to discuss."
May we suggest containing the fallout, whether in capital markets or in the resurgent mood in the other PIIGS, as a primary topic?

And meanwhile, while we symptahize with the Greeks officially telling the Troika to "fuck off", they may have other liquidity problems of their own.

Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place, a deputy finance minister told Greek television on Sunday.

Greece's government shut banks and imposed capital controls a week ago to prevent the country's banks from collapsing under the weight of mass withdrawals.

Deputy Finance Minister Nadia Valavani told Alpha TV that, as part of those measures, the government and banks had agreed at the time that people would also not be allowed to withdraw cash from safe deposit boxes.
Surely the Greeks bought enough gold and/or bittcoin ahead of this outcome. Surely

Título: Greek PM Calls Emergency Meeting For Bank Liquidity: MNI

Texto: Congratulations Greece: for the first time you had the chance to tell the Troika, the unelected eurocrats, and the entire status quo establishment, not to mention all the banks, how you really felt and based on the most recent results, some 61% of you told it to go fuck itself.

Now comes the hard part.

Because at this point, with Greek banks all of them effectively insolvent, it is all up to the ECB: should Mario Draghi now announce an increase in the ELA haircut or pull it altogether as the ECB did with Greece, then a Greek deposit haircut bloodbath ensues. And judging by the latest news out of Market News, this is precisely what Tsipras is focusing on.

According to MNI, Greece's Prime Minister, Alexis Tsipras has called an emergency meeting for Sunday evening, after the referendum vote result will be announced, to assess the situation in the banking sector and the liquidity shortage, a senior Greek official told MNI Sunday.

The source said that so far Tsipras has not had any communication with other EU leaders "but that could change in the coming hours." Finance Minister Yiannis Varoufakis is currently meeting with the representatives of the Greek banking union to mull whether the banking holiday ,which expires Monday evening, should be prolonged and until when.

Greece's government spokesman, Gavriel Sakellarides told Antenna TV that the Central Bank of Greece will submit Sunday evening a request to the European Central Bank for further Emergency Liquidity Assistance saying "there is no reason why we cannot get ELA" adding that "negotiations should start as soon as today with reasonable demands."

The Greek source who spoke with MNI said that, according to his estimations, the No vote would be even higher than what the preliminary polls showed earlier.

The source also said that the EuroWorking Group, the aides of the Eurozone Finance Ministers, are expected to convene Monday and that the Eurogroup might also convene via teleconference to assess the situation.

A Banking source has told MNI that even when banks reopen capital controls are expected to be readjusted and imposed for a long period of time, until trust is restored and a deal with the creditors is being reached.

Sesenta - cuarenta

ACTUALIZACIÓN: Escrutado un 30% de los votos en el plebiscito griego, gana el NO (OXI) por 60 % a 40 % aproximadamente. El mundo se argentiniza, chicos. Mañana, todo puede suceder.

Grecia, ahora

Grecia, cuna de la democracia, podría estar dando otra lección al mundo, y en particular a esos traidores químicamente puros, los neoliberales europeos. Es temprano todavía para festejar, pero están llegando algunos indicios. Leemos en el diario español El País: 

Título: Directo | Cuatro sondeos telefónicos dan una ligera ventaja al ‘no’

Texto: Los 19.000 centros electorales ya han cerrado en Grecia, después de doce horas abiertos. El país vive este domingo una jornada histórica que marcará su futuro dentro del euro y su relación con el resto de países de la UE. La mayoría de los sondeos pronostican un resultado muy reñido en el referéndum entre los partidarios del sí y del no a las condiciones que han puesto los acreedores del país heleno. Cuatro sondeos realizados por sendos institutos para televisiones privadas dan una ligera ventaja al no. No obstante, los primeros resultados parciales, correspondientes al 10% de los votos escrutados, se conocerán a las nueve de la noche (una hora menos en la España peninsular).

sábado, 4 de julio de 2015

Grecia y el dominó que está en juego

Mientras esperamos el resultado del plebiscito propuesto al pueblo griego por su gobierno (aceptar las condiciones impuestas por la troika para la refinanciación de su deuda, sí o no), reproducimos esta nota aparecida hoy en Zero Hedge. Los dominós, como venimos sosteniendo desde hace un tiempo. Acá va:

Título: The Greek Bluff In All Its Glory: Presenting The Grexit "Falling Dominoes"

Texto: Earlier today, Yanis Varoufakis reiterated his core thesis driving the entire Greek approach from day 1 of its negotiations with the Eurogroup: "Europe [stands] to lose as much as Athens if the country is forced from the euro after a referendum on Sunday on bailout terms."

This is merely a recap of what we said 4 years ago when in July of 2011 we explained "How Euro Bailout #2 Could Cost Up To 56% Of German GDP", recall:

the bottom line is that for an enlarged EFSF (which is what its blank check expansion today provided) to be effective, it will need to cover Italy and Belgium. As AB says, "its firepower would have to rise to €1.45trn backed by a total of €1.7trn guarantees." And here is where the whole premise breaks down, if not from a financial standpoint, then certainly from a political one: "As the guarantees of the periphery including Italy are worthless, the Guarantee Germany would have to provide rises to €790bn or 32% of GDP." That's right: by not monetizing European debt on its books, the ECB has effectively left Germany holding the bag to the entire European bailout via the blank check SPV. The cost if things go wrong: a third of the country economic output, and the worst case scenario: a depression the likes of which Germany has not seen since the 1920-30s. Oh, and if France gets downgraded, Germany's pro rata share of funding the EFSF jumps to a mindboggling €1.385 trillion, or 56% of German GDP!

Several years later, in anticipation of precisely the predicament Europe finds itself today, the ECB did begin to monetize European debt, which has since become the biggest European risk-shock absorber of all, and the one which the ECB is literally betting the bank on: just count the number of times the ECB has sworn it has the tools and can offset any Greek risk contagion simply by buying bonds.

Unfortunately, it is not that simple.

The reason is precisely in the contagion threat inherent in Europe's alphabet soup of bailout mechanism as we explained four years ago in the post above, and as Carl Weinberg of High-Frequency Economics did hours ago in today's edition of Barrons. Here is how the Greek contagion would spread, laid out in all its simplicity, should there be a Grexit, an outcome which the ECB could catalyze as soon as Monday in case of a "No" vote by raising ELA collateral haircuts:

The [Greek] government appears ready to renege on its debt obligations. So Greece’s creditors are going to lose money—a lot of money. Since these creditors are public entities, the losses will be borne, initially, by the public.

This crisis is about managing the resolution of bad Greek assets in a way that inconveniences creditor governments the least, forcing the least net new public borrowing, and minimizing financial system risks. The best way to do that is to avert a hard default, even if it means kicking the can down the road.

That, once again, is the Varoufakis all-in gamble, a gamble which assumes the ECB will be rational enough (in a game theory context) to appreciate the fallout of a Grexit on Europe's creditors. Here is a qualitative determination:

Consider the ESM, Greece’s biggest creditor. Under its previous name, the European Financial Stability Facility, it loaned Greece €145 billion. If Greece defaults, the ESM, a Luxembourg corporation owned by the 19 European Monetary Union governments, will have to declare loans to Greece as nonperforming within 120 days. Accounting rules and regulators insist that financial institutions write off nonperforming assets in full, charging losses against reserves and hitting capital.

Here’s the rub: The ESM has no loan-loss contingency reserves. Its only assets—other than loans to Greece—are loans to Ireland and Portugal. Its liabilities are triple A-rated bonds sold to the public. How do you get a triple-A rating on a bond backed entirely by loans to junk-rated sovereign borrowers? Well, the governments guarantee the bonds, and because they are unfunded off-balance-sheet liabilities, they aren’t counted in their debt burdens—unless borrowers default.

If Greece defaults hard, governments will be on the hook for €145 billion in guarantees on those loans to the ESM. We expect credit-rating agencies to insist that these unfunded guarantees be funded. After all, unfunded guarantees are worthless guarantees.

And the punchline:

The strength of these guarantees is untested. Would the German Bundestag vote tomorrow to raise €35 billion by selling Bunds, the government debt, to cover Germany’s share of ESM losses on Greek bonds? That seems improbable. Bund sales of that scale, if they did occur, would flood the market, raising yields and depressing prices. If, instead, the Bundestag refused to cover its guarantees, then we would see a legal dust-up on a grand scale. With the presumption of valid guarantees, credit raters would have no choice but to downgrade ESM paper. Then losses would be borne by bondholders, and the ESM—the euro zone’s safety net and backstop—couldn’t raise money in the capital markets.

In other words, Grexit would usher in a pandemonium of unheard proportions because when the ESM, EFSF and countless other bailout mechanism were postulated, none even for a minute evaluated the scenario that is being flouted with ease, and, paradoxically, by the ECB itself most of all: an ECB which stands to lose the most...

A hard default would produce other losses to be covered. The ECB would have to be recapitalized after it writes off the €89 billion it has loaned the Greek banks to keep them liquid. The ECB would need to call for a capital contribution from its shareholders—the governments.

... not to mention any last shred of confidence it may have had.

But wait, there's more:

And don’t forget that Greek banks owe the Target2 bank clearinghouse, a key link in the interbank payment system, an estimated €100 billion. The governments are on the hook to make good that shortfall, too. The cash required to cover these contingencies would have to be funded with new bond sales.

The conclusion is incidentally, identical to what Zero Hedge said back in the summer of 2011: "the ultimate loser in a Greek default would be the euro-zone sovereign-bond market, which is already vulnerable. " The only difference is that this time, yields are near all-time lows, and durations are high. Ironically, even the smallest fluctuations in yield mean a volatile response in prices, and an immediate crippling of the bond market. Perhaps most ironic is that Europe's bond market is far less prepared to deal with Greek contagion now than when Italian bonds were blowing out and trading at 7%, just because everyone has double down and gone all-in that the ECB can contain the contagion. If it can't, it's very much game over.

This is what Varoufakis' likewise all-in gamble on the future of Greece boils down to.

And just so we have numbers to work with, here courtesy of Bawerk's fantastic summary, is a way to quantify what a Grexit and the resultant falling dominoes would look like for Europe:

Simplistic representation of falling dominos not enough? Then here is the full breakdown of implicit exposure every Euro Area country has toward a Greek exit, because it is not just the EFSF dominoes, it is also SMP, MRO, ELA, Target2, and oh my...

And tying it all together, here is some more from "Eugen von Böhm-Bawerk":

The Germans, French and IMF alike reluctantly admit so much, but they cannot give the Greeks any debt relief because as soon as Greece starts to default on their obligations on the off-balance sheet guarantees extended by the euro countries the whole system could fall like dominoes.

The problem, however, is that the IMF already did admit that Greece does need at least a 30% haircut, implying that at least one member of the grand status quo, under pressure form the US, already got the tap on the shoulder and has been told to prepare for more falling dominoes. Which leads to even more questions:

What would happen if Italy suddenly got an extra funding requirement of more than €60bn? Every euro apologist point to Italy’s primary surplus, but what good does that do when your debt is over 130 per cent of GDP and rising? The interest payment on that gargantuan debt load means Italy must cough up more than €75bn a year just to service liabilities already incurred. A primary surplus is a useless concept in a situation like the one Italy finds itself in. Adding another €60bn to Italy’s balance sheet could very well be the straw that breaks the Italian camel.

The French would be on the hook for around €70bn just when they have agreed with the European Commission to “slash” spending to get within the Maastricht goal of 3 per cent, in 2017!

Imagine the German peoples wrath when they learn that Merkel defied their sacrosanct constitution; a constitution that clearly state that the German people, through its Bundestag, is the sole arbiter of any act that have fiscal implications regarding the German people. The Bundestag did not approve the €42bn of ECB programs that have funded the Greek states excessive consumption.

All this is purely theoretical. For the practical implications of the above "falling domino" chain, we go back to Carl Weinberg:

What if a downgrade of ESM paper causes a hedge fund to fail, which triggers the demise of the bank that handles its trades? The costs of fixing failed institutions will also, of course, fall on governments. The ultimate cost of Greece’s default is yet to be seen, but it is surely larger than it seems.

Contained? We think not. And neither does Varoufakis, which is why he is willing to bet the fate of the Greek people on that most critical of assumptions. The only outstanding question is what does Mario Draghi, and thus Goldman Sachs, believe, and even more importantly, whether the Greek people have enough faith in Varoufakis to pull it off...

Los enanos y la destrucción de la democracia europea

Reproducimos a continuación una nota de Héctor Illueca Ballester aparecida hoy en uno de los diarios más decentes de Europa: el español Diario Público. Corta, clara y apuntando al corazón del problema: el pensamiento único neoliberal y la banda de enanos (el 90% de los políticos europeos) que le hace de claque. Acá va: 

Título: La destrucción de la democracia en Europa

Texto: El 27 de junio de 2015 pasará a la historia por los insólitos acontecimientos que se produjeron en la reunión del Eurogrupo, convocada para decidir sobre la prórroga del rescate griego, que expiraba el 30 de junio. Conocemos los detalles a través de Yanis Varoufakis, que ha filtrado a la prensa el desarrollo del cónclave. Según ha trascendido, el Ministro de Finanzas de Grecia expuso a sus colegas las fundadas razones que avalan la convocatoria de un referéndum para que los griegos se pronuncien sobre la propuesta de la troika, que supedita la continuidad de la ayuda financiera a la adopción de nuevos recortes, especialmente en materia de pensiones, y no ofrece solución al acuciante problema de la deuda. La iniciativa griega fue recibida con una mezcla de desdén e indignación, y acabó provocando la expulsión de Grecia del Eurogrupo, un hecho de una gravedad extrema. En plena discusión, alguien espetó a Varoufakis una pregunta directa: “¿Cómo puede usted esperar que la gente común entienda asuntos de tal complejidad?” Pocas veces se ha expresado tan claramente la pulsión autoritaria y demofóbica que late en el interior de la Europa neoliberal.

Para comprender el alcance de esta pregunta, aparentemente tan sencilla, hay que detenerse, aunque sea someramente, en la concepción política que inspira y sustenta el proceso de construcción europea: el llamado neoliberalismo. En efecto, el neoliberalismo no es sólo un conjunto de medidas de corte neoclásico ancladas en la prehistoria del pensamiento económico, sino también una teoría política tendencialmente autoritaria que cuestiona abiertamente la participación democrática de la ciudadanía. O, por expresar la idea con mayor precisión, el neoliberalismo asigna al Estado un papel tan limitado en la vida económica y social, que termina invariablemente cuestionando la democracia política y contemplando el desenlace autoritario como un horizonte no sólo posible, sino incluso necesario. No es casual que Friedrich Hayek y Milton Friedman, por mencionar los dos casos más emblemáticos, apoyaran públicamente la dictadura de Pinochet y se confesaran admiradores del modelo económico impuesto a sangre y fuego en el país andino.

En el fondo, la pregunta dirigida a Varoufakis apela a un principio fundamental de la teoría política neoliberal: la separación radical entre política y economía, con el fin de erradicar cualquier interferencia popular en el normal desenvolvimiento del mercado. Lo decisivo, como bien sabía Hayek, es aislar al sistema económico de las presiones electorales ejercidas por los ciudadanos a favor de la justicia distributiva o en contra de los recortes sociales. Por supuesto, la Unión Europea es plenamente consciente de que un nuevo ajuste estructural sólo podría imponerse traicionando y sometiendo al pueblo griego, que sufriría las consecuencias en términos de paro, recesión y penuria generalizada. El poder europeo percibe la democracia como una amenaza permanente y no vacila a la hora de justificar el despotismo político como medio de neutralizar cualquier respuesta social susceptible de poner en riesgo el orden neoliberal. Al menos hay que agradecer al desconocido interlocutor de Varoufakis (¿sería De Guindos? ¿Schäuble, tal vez?) la valentía de expresar abiertamente sus reservas hacia los procedimientos democráticos, mostrando sin ambages el lado más oscuro del liberalismo.

En cualquier caso, no es la primera vez que la Unión Europea tropieza con un referéndum y resuelve el trámite imponiendo toda clase de limitaciones a la participación política. En 2005, Francia y Holanda rechazaron mediante referéndum el proyecto de Constitución Europea, impidiendo de este modo la entrada en vigor de la misma, que exigía el voto unánime de todos los Estados miembros. Pues bien, dos años después se convocó una conferencia intergubernamental en Lisboa para aprobar dicho texto y someterlo a ratificación parlamentaria en los distintos países, eludiendo la voluntad democráticamente expresada en las consultas populares. Pero aún hay más. Obligada por su propia Constitución, Irlanda sometió a referéndum el Tratado de Lisboa el 12 de junio de 2008, registrando un voto negativo a la ratificación del mismo. Sin embargo, atrapado por la crisis económica y presionado por la Unión Europea, el gobierno irlandés convocó una nueva consulta el 2 de octubre del año siguiente, obteniendo finalmente la anuencia de su pueblo al controvertido texto. Anotemos que, durante la campaña, los partidarios del sí dijeron a los irlandeses que el Tratado de Lisboa permitiría al país salir de la crisis e incluso llegaron a amenazarlos con excluirlos de Eurovisión si no resultaba aprobado.

Como un inconsciente reprimido, la pulsión autoritaria de las instituciones comunitarias ha reaparecido con fuerza tras la victoria de Syriza en las elecciones griegas del 25 de enero. Desde ese día, la Unión Europea ha aprovechado las dificultades financieras de Grecia para intentar doblegar al gobierno heleno, exigiéndole que renunciara a los principales compromisos programáticos contraídos en la noche electoral. Naturalmente, el objetivo no era reconstruir la economía griega, ni tampoco proteger los intereses de los acreedores, sino infligir una derrota política a Alexis Tsipras. Entre tanto, Bruselas conspiraba sin descanso con los líderes de Nueva Democracia para organizar un cambio político y restablecer el statu quo, alimentando peligrosas ilusiones de políticos fracasados y corruptos que habían sido rechazados por su pueblo. Los casos todavía recientes de Berlusconi y Papandreu, vergonzosamente destituidos por maniobras palaciegas urdidas desde Bruselas, sobrevuelan desde hace tiempo el teatro político del país heleno.

Como hemos dicho al principio, el último desafuero se ha producido en la reunión del Eurogrupo que se celebró el pasado 27 de junio en Bruselas. Irritada por el referéndum, la Unión Europea expulsó arbitrariamente a Varoufakis y rechazó la propuesta griega de extender el programa de rescate hasta después de las votaciones. Al proceder de este modo, las instituciones comunitarias precipitaron el cierre de los bancos y el establecimiento de controles de capital, lo que sólo puede interpretarse como una coerción antidemocrática hacia el pueblo griego. Cualquier demócrata habría aceptado la prolongación de la asistencia financiera durante unos días para que los ciudadanos pudieran emitir su veredicto en condiciones de plena normalidad democrática. Al negarse a ello, la Unión Europea ha mostrado al mundo su rapacidad y su autoritarismo, enviando un mensaje elocuente a todos los Estados miembros, y muy especialmente a los países del sur de Europa, sobre lo que les espera si osan oponerse al neoliberalismo.

Estos hechos son fundamentales para comprender e interpretar correctamente la actual crisis europea, caracterizada por un rechazo radical a los principios de la democracia con el fin de eliminar cualquier interferencia política en los mercados. No es posible entender los problemas a los que se enfrenta la Unión Europea sin considerar la ideología autoritaria y antidemocrática que ha orientado la trayectoria del poder europeo desde la década de los ochenta y, sobre todo, desde el final de la Guerra Fría. La teoría política neoliberal influyó decisivamente en la construcción de un marco institucional cada vez más alejado de la democracia, radicalmente contrario al principio de soberanía y temeroso de unos electores demasiado propensos a impulsar la justicia distributiva en los procesos electorales. Ya no es posible ocultar que la unión económica y monetaria es incompatible con la democracia. Lo que se dirime en el referéndum griego no es sólo la aceptación o el rechazo de una propuesta humillante e insensata, sino también, y fundamentalmente, la destrucción de la democracia en Europa.

viernes, 3 de julio de 2015

Gas para el eje ruso-alemán

Los reveses del Imperio no salen en los diarios; es por eso que a veces cuesta distinguir qué es lo que realmente está pasando. Acá transcribimos una nota de Mike Whitney para Counterpunch en donde se comenta sobre el tema del gas en Europa. Veremos.

Título: Putin Gobsmacks Uncle Sam … Again

Subtítulo: Way to Go Vladimir

Texto: Here’s the scoop: Two days before the swaggering Sec-Def touched down in Germany, Gazprom announced that it was putting the finishing touches on a massive deal that would double the amount of Russian gas flowing to Germany via a second Nord Stream pipeline. The shocking announcement made it look like the clueless Carter had no idea what was going on and that his efforts to isolate Russia were a complete flop. And, make no mistake; the deal is huge, big enough to change the geopolitical calculus of the entire region. Robert Morley explains what’s going on in a recent article at The Trumpet:

“Once this pipeline is finished, almost all of Eastern Europe can be completely cut out of the gas picture. There will be no need for any gas to transit through Ukraine, Poland, Romania, Belarus, Hungary or Slovakia.” (Gazprom’s Dangerous New Nord Stream Gas Pipeline to Germany, The Trumpet)

Yep, Ukraine is out and Germany’s in, which means that Washington’s plan to extend US hegemony by driving a wedge between Russia and Europe is down the plughole.
Judo expert Putin has done it again; he waited until the eleventh hour to pull the rug out from under the blustery Carter, and now he’s sitting back enjoying the show. Is it any wonder why Carter’s been running around Europe with his hair on fire? Here’s more from the same article:

“Think of the huge leverage this will give Russia…..Germany may not have much in the way of natural resources of its own, but with Russia’s help, it is becoming an energy hub of Europe! Increasing quantities of Russian gas are flowing through Germany before being distributed to countries like the Netherlands, Belgium, France and Britain. In this way Germany leverages the power of Russia. Western Europe also is becoming dependent on Germany for gas supplies too…

Don’t let the current conflict in Ukraine cloud what is happening. Germany and Russia have a history of secret cooperation—even when headline conflict appears to indicate otherwise. That Germany and Russia would push through such a deal when the West is supposedly sanctioning Russia for its actions in Ukraine speaks volumes.” (“Gazprom’s Dangerous New Nord Stream Gas Pipeline to Germany”, The Trumpet)

Talk about sour grapes! The author would like you believe that US motives in Europe are pure as the driven snow, but are they? Is Washington really afraid of Russian aggression or are they trying desperately to keep the unipolar model intact by separating Germany and Russia? Isn’t that what the sanctions are all about? STRATFOR CEO George Friedman summed up it up perfectly in a recent speech he gave at The Chicago Council on Foreign Affairs. He said:

“The primordial interest of the United States, over which for centuries we have fought wars–the First, the Second and Cold Wars–has been the relationship between Germany and Russia, because united there, they’re the only force that could threaten us. And to make sure that that doesn’t happen.”

Bingo. This is Washington’s strategy in a nutshell, preventing German industry from linking up with Russia’s vast natural resources. That’s the lethal combo that will lead to an integrated Eurasian free trade zone that will dwarf US GDP and put an end to the empire. So don’t believe the baloney about “Russian aggression”. What Washington really cares about is an economic rival that could leave it in the dust. And that’s exactly what’s going to happen when Germany becomes Moscow’s biggest gas station.

Naturally, the Gazprom news left Carter in a bit of a crabby mood, which may explain why he’s been dragging himself from one Capital to the next issuing terse warnings to Putin while promising NATO more weapons, more troops, more joint-maneuvers, and more missiles. And for what? To stop the Cossacks from sweeping across the Steppe and into Baltics? Be serious. Putin’s not going to invade Europe. He wants their business, that’s all. Like we’ve been saying from the beginning; Putin just wants to makes some dough. He wants to pull his economy out of recession, and, yes, beef up Gazprom’s profits. Is there a problem with that?

Nope. In fact, that’s the way the US used to do things, y’know, before they decided it was easier to just blow up stuff and steal whatever they could.

But all this whining about Putin is ridiculous, don’t you think? So he sells gas to Europe. So what? Get over it. No one likes a whiner.

The US did everything in its power to sabotage South Stream, and they succeeded too. Score one for Team USA. But did they really think it would end there? Did they really think that that Putin would just fold his tent and go home for a good cry? Did they really think he was going to walk away from his biggest trading partner and move on to China?

Of course not. Any fool could have seen this coming, so why was the Pentagon caught flatfooted? Don’t they have anyone on the payroll who can figure out stuff like this or are they too busy with their damn wargames? And why is Carter talking about tanks and missiles systems when US trade reps should be looking for ways to cut a deal? Isn’t that the way capitalism is supposed to work or has the US degenerated to the point where it has to incinerate anyone it can’t compete with? It’s pathetic! Here’s a clip from Carter in Europe:

“One of [Putin's] stated views is a longing for the past and that’s where we have a different perspective on the world and even on Russia’s future, Carter said. “We’d like to see us all moving forward, Europe moving forward, and that does not seem to be his stated perspective.”

C’mon, Carter. Can’t you just man-up and admit the US can’t compete anymore so you’ve decided to start a war instead. Is that so hard to say?

Of course Carter has made every effort to sweep the Gazprom story under the rug and pretend that nothing has happened, but anyone who follows these things can figure it out. The fact is, he got his clock-cleaned by Putin, and not just once either. There was another bombshell on Wednesday that just added a little icing to the cake. Check this out from Oil

“Russia’s state-run gas company Gazprom says it has taken a step toward building the Turkish Stream pipeline by securing permission from Ankara to begin surveying waters of the Black Sea for the offshore leg of the project…..Alexander Novak, Russia’s energy minister, says he expects Ankara and Moscow will sign an agreement to build Turkish Stream by the end of June.” (Controversial Gazprom Pipeline Clears Hurdle, Oil Price)
That’s what you call the double whammy! Now Putin’s going to be pumping gas into Europe from both directions leaving Uncle Sam out in the cold. Can you feel those Russian pincers starting to tighten around Europe? Now you can understand why Carter’s been running around Europe with his knickers in a twist; it’s because his glorious divide and conquer strategy just exploded in his face. His only option now is to scrap Plan A altogether and go back to drawing board. What a freaking disaster.

There’s another story that broke during Carter’s euro-junket that’s also worth mentioning. This is from Bloomberg:

“Ukraine will miss a bond coupon payment in July, setting off a default on about $19 billion of debt, as a standoff with creditors shows no sign of abating, according to Goldman Sachs Group Inc…

Ukraine is giving creditors a few weeks to accept a proposal that includes a 40 percent writedown to principal before it imposes a debt moratorium, a person familiar with the talks said on June 19.

“Ukraine will not make the July 24 coupon payment and, as a result, will enter into default at that point,” Matheny said of his base-case scenario in the report. “We do not expect the ad hoc committee to accept Ukraine’s latest restructuring proposal.” (Goldman Sees Ukraine Default in July as Debt Standoff Holds, Bloomberg)
Ukraine is busted, are you kidding me? The country that was so critical to US plans for luring Putin into a Vietnam-type quagmire, is headed for bankruptcy? So all that work was for nothing–toppling the government, arming the Nazis, fomenting a civil war, incinerating buildings full of civilians in Odessa, shooting down commercial airliners, and plunging the state into Somalia-like chaotic abyss? It was all just a big miscalculation, a boo-boo; is that it?

Can you see why the United States can’t be trusted as “the guarantor of global security”? Washington destroys everything it touches with its wrecking ball foreign policy; Afghanistan, Iraq, Libya, Syria. Now it’s destroyed Ukraine. Who’ll be next?
Putin has done us all a favor by throwing a wrench in Washington’s plans and helping to bring the era of imperial overreach to a swift and merciful end. We all owe him a debt of gratitude.

Way to go, Vladimir.

Detrás del Dniéper

Sabíamos que no todas son rosas para Petro Poroshenko y su pandilla, actuales gobernantes de esa entidad todavía denominada "Ucrania". Por un lado, los chicos de Nueva Rusia (los pueblos libres del Donbass: Donetsk y Lugansk) les vienen dando parejo en todos los frentes. Por el otro, las últimas levas militares resultaron un fracaso: no solo no va nadie a las filas, sino que la población deserta de las fuerzas armadas "ucranianas" a una tasa exponencial. Finalmente, la crisis económica entró en una fase que podría calificarse de terminal. El descontento popular es ya inocultable, habiendo comenzado las refriegas en las plazas de Kiev. De todos modos, el título que leíamos ayer es impactante: “La única chance de la Junta es retroceder hasta detrás del Dniéper”. Quien dijo esto es el analista ruso Rostislav Ishchenko, en un reportaje que le hiciera el portal informativo Ruspravda. Acá va toda la entrevista:

Título: The junta’s only chance is to retreat behind the Dnieper

Epígrafe: Rostislav Ishchenko, political scientist and president of the Center for System Analysis and Forecasting, was interviewed by Tatiana Dobrodeeva about the outlook for the counteroffensive by Novorossia’s army.


How far and how fast can the Donetsk People’s Republic army continue its counteroffensive?

– Today the counterattack is for the most part over. Taking into account the territories already occupied by the militia, the most they can do is to control these areas and gradually advance by means of groups that carry out reconnaissance and small-scale attacks.

They have a complicated task: they need to control their communications, leave garrisons in the occupied towns, continue trapping the junta’s troops and destroying those already trapped, and at the same time keep up their offensive. But they don’t have the resources to achieve all these objectives. According to the most optimistic estimates published by the militia, they have 25,000 to 33,000 troops – enough to be victorious on the frontlines, but not enough to be able to control the territory.

Therefore, taking into account the depth of the offensive, it has done about as much as it can. The most the militia can do is to secure victory in the south by taking Mariupol, which is already surrounded, and to continue a partial offensive in the north to push the front line away from Donetsk and Lugansk.

Thus the potential of this offensive is limited to the Donetsk and Lugansk regions. Even so, they need time to regroup and reorganize, even taking into account the recently signed cease-fire. Theoretically, the offensive can continue uninterrupted, but only if protests against the Kiev government break out in Kharkov, Odessa, Zaporozhye, Dnepropetrovsk, Kherson, and Nikolayev.

If such protests are serious enough and sufficiently well supported, the militia will only have to lend them a hand. Then they will be able to mobilize more troops and move as far as the Dnieper.

But if they rely solely on the resources of the Donetsk and Lugansk regions, then the militia will need a two- or three-week break to regroup and reorganize. The last time the militia needed to build up its forces, it took two or three weeks. And now, taking into account the captured equipment and the fact that the Kiev army has actually been defeated, they will need this break to increase their numbers and continue their advance.

Then, of course, after Kharkov, Odessa, and Zaporozhye are taken, the militia will have new resources they can mobilize, and then Kiev won’t stand a chance. Frankly they don’t have a chance even now. But then they would not even theoretically have a chance, and the militia could easily advance right up to Lvov. But, as of today, we must expect that the militia will take time to regroup, so that they can increase their strength and then launch the next offensive between the end of September and mid-October.

During this break, can the junta resume its offensive against the Donetsk People’s Republic and the Lugansk People’s Republic?

– They won’t be able to resume their offensive because they’ve already lost a significant portion of their truly motivated people. Their mobilization efforts have failed because no one wants to fight the war anymore. Everybody wants to win, but nobody wants to fight. Moreover, in terms of technical strength, the sides are now roughly equal. Before, the junta had significant superiority in terms of tanks, aircraft, and artillery, but now the ratio for artillery is 1:1 and for tanks it’s 1:2. Military aircraft are no longer flying because they just get shot down.

Now the sides are equal but the militia are much more motivated. Therefore, if the militia had had enough resources to control the occupied territories, they could have advanced all the way to Lvov and they would have been unstoppable. The junta is in no position to launch a new offensive; they just don’t have the strength.

At best, they could try to consolidate all their units to create a serious front line along the Dnieper and Desna, and try to defend themselves. That’s the most they can do: to try to spill as much of the militia’s blood as possible and then come to some arrangement about the territories.

But in terms of domestic politics, taking into account the fact that the junta is channeling all its resources into “the fight for the Ukraine’s territorial integrity,” anyone who negotiates an agreement recognizing that at least two regions will not be part of the Ukraine is a political corpse.

So the junta has no option but to fight to a victorious finish – except that the victorious finish will belong not to the junta but to the militia.

What is the likelihood that the junta will survive in its current form, given the mass protests against it in Kiev?

– There’s no chance because, to preserve the junta, it will have to be propped up. But no one will do that. The United States and all other sponsors want the junta to disappear. The only thing they are concerned about is how to pull their tails out of there without getting them stepped on. So the question now is not whether to preserve the regime in Kiev, but how to surrender it in such a way that the sponsors get out on a break-even basis.

What do you think is the likelihood of a third Maidan? And if there is one, who will be its sponsors?

– A third Maidan would be altogether different. The first Maidan was a real mass movement, with tens of thousands of people taking part. The second Maidan saw a total of only about 10,000 people, of whom half were Nazi militants and the other half were marginal. Any third Maidan will just consist of armed men who will kill Poroshenko and install a real Hitler in his place, because Poroshenko isn’t a real Hitler, and the Nazis need the real thing. It won’t be a Maidan; it will be the next coup d’état.

Has the geopolitical situation around the Ukraine changed?

– The situation hasn’t changed. Whatever anyone says, in reality the Ukrainian crisis is part of a global crisis – the global confrontation between the United States and Russia. Russia has already become the second superpower, and the United States is trying to go back to a time when it was the sole superpower – hence Afghanistan, Georgia, Syria, and now the Ukraine. So what is happening in the Ukraine is a confrontation between the United States and Russia. All the others are only minor conflicts.