Greek Prime Minister Tsipras Commits “Blackmail” by Promising Too Much Over Greek Referendum Vote

assholeThe euro is under pressure in early trading on Monday in Asia following the outcome of Greece’s referendum vote on Sunday that raised the prospect of a Greek exit from the 19 member euro area after Greeks voted overwhelmingly in favor of rejecting the current debt bailout proposal that is on the table from Greece’s creditors that contains unpopular austerity measures.

After falling over 1 percent to 1.0995 on Monday, the euro bounced off its daily lows and is currently trading at 1.1042 amid rising concerns over Greece’s perilous debt woes following Greeks overwhelming vote in favor of rejecting the current bailout package from Greece’s creditors that contains pension cuts and tax increases.

Yields on the U.S. 10 year Treasury and 10 yr. German Bund have dropped nearly 5 percent as investors flee to safety.

The yield on the 10 year U.S. Treasury dropped 4.33 percent to 2.28 and the German bund fell 5.70 percent to .80 percent in early trading on Monday.

Greece already defaulted on their €1.6 billion loan that was due on June 30th to the International Monetary Fund (IMF), the same day their 2nd debt bailout extension expired.

Now in arrears, with billions more due this month to the ECB and other creditors who are increasingly growing frustrated with the hard ball and risky antics of Greece’s leftist political leaders that are expected to use Greece’s latest referendum results as a mandate to demand a new bailout package containing less austerity, debt relief, and greater negotiating power.

After Greece’s leaders encouraged Greeks to vote “no” in Sunday’s plebiscite referendum vote by over promising that a “no” vote means greater negotiating power with Greece’s creditors, Greek Prime Minister Alexis Tsipras committed the greatest “blackmail” of all in the Greek debt deal, a term that he kept accusing Greece’s creditors of committing, after he deceptively failed to warn Greeks that a “no” vote could result in an exit from the 19 member currency union.

Greece’s radical leftist leaders have lost credibility across Europe which come as borrowing costs have skyrocketed for Athens and capital controls have been imposed on Greece’s fragile banking system by the ECB.

Greece stands to lose a lot by playing chicken with Greece’s creditors due to their political leaders’ defiance and refusal to take a conciliatory approach over their massive debt pile and necessary fiscal reforms.

Even though Greek citizens were celebrating on the streets following the referendum vote, the cash strapped country could be preparing to face a bad hang over that will  impact the wallets of most Greek citizens.

Eurogroup President Jeroen Dijsselbloem tweeted on Sunday following the outcome of Sunday’s referendum vote:

“I take note of the outcome of the Greek referendum. This result is very regrettable for the future of Greece. For recovery of the Greek economy, difficult measures and reforms are inevitable. We will now wait for the initiatives of the Greek authorities. The Eurogroup will discuss the state of play on Tuesday 7 July.”

Last week Eurogroup President Jeroen Dijsselbloem rejected assertions from Greek Finance Minister Varoufakisand Greek Prime Minister Tsipras last week that Greece is not far from reaching a deal with their creditors and warned that a “No” vote in the referendum would set Greece on the course of an exit from the euro area.

The ECB’s governing council will convene on Monday and decide about the level of liquidity for Greece’s fragile banks that are already on life support with capital control imposed.

European Council President Donald Tusk will confirm on Monday whether a Eurogroup meeting will occur on Tuesday as France’s Prime Minister Francois Hollande and Germany’s Chancellor Angela Merkel have requested.

-Johnathan Schweitzer

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