The head of Greece’s radical left party seems to think there is little chance of Europe cutting off funding to the country, and if it does, Greece will repudiate its debts. Really…
In an interview with the WSJ, Alexis Tsipras, the 37-year-old leader of the Coalition of the Radical Left, also known as Syriza, warns that a financial collapse in Greece would drag down the rest of the euro zone. Instead, he says, Europe must consider a more growth-oriented policy to stop Greece’s spiraling recession and address what he calls a growing “humanitarian crisis” facing the country.
“Our first option is to convince our European partners that it is in their own interest not to stop funding,” Tsipras said in an interview with The Wall Street Journal on Thursday. ‘If we can’t convince them, because we don’t intend to take unilateral action, but if they proceed with unilateral action on their part, in other words cut off our funding, then we will be forced to stop paying. our creditors, to go into receivership to our creditors.’
According to recent opinion polls, Tsipras’s party is poised to win the most votes in repeat elections next month, improving on its surprise second-place finish in an inconclusive May 6 vote that left no party or coalition with enough seats in parliament to form a government.
Tsipras says that if the time comes, Greece can fend for itself. By defaulting on its debts, the country will have enough cash to pay its workers and retirees. He also proposes cuts in defense spending, cracking down on waste and corruption, and tackling widespread tax evasion by the wealthy.
The madness in Greece does not end here. The government has been having trouble getting citizens to pay their property taxes, so it decided to bundle property taxes with electricity bills, as citizens were more inclined to pay those bills. The government expected to collect between 1.7 and 2 billion euros from the tax in the fourth quarter of last year. But a massive union-led civil disobedience movement against this “injustice” thwarted him, and a ruling that made it illegal to cut people off for non-payment pushed the collection rate even lower.
Now the power company doesn’t get revenue from electricity bills and has now had to be bailed out by the government to prevent a nationwide energy crisis. For these and many other reasons, we continue to short the euro using the leveraged EUO ETF.