It is difficult to overstate how deeply Europe's leaders betrayed the ideals of European integration in their handing of the Greek crisis. The first and most fundamental goal of European integration was to blur the lines of national feeling and interest through commerce and interdependence, in order to prevent the fractures along ethnonational lines that made a charnel house of the continent, twice. That is the first thing, the main rule, that anyone who claims to represent the European project must abide: We solve problems as Europeans together, not as nations in conflict. Note that in the tale as told so far, there really was no meaningful national dimension. Regulatory mistakes and agency issues within banks encouraged poor credit decisions. Spanish banks lent into overpriced real estate, and German banks lent to a state they knew to be weak. Current account imbalances within the Eurozone -- persistent and unlikely to reverse without policy attention -- implied as a matter of arithmetic that there would be loan flows on a scale that might encourage a certain indifference to credit quality. These were European problems, not national problems. But they were European problems that festered while the continent's leaders gloated and took credit for a phantom prosperity. When the levee broke, instead of acknowledging errors and working to address them as a community, Europe's elites -- its politicians and civil servants, its bankers and financiers -- deflected the blame in the worst possible way. They turned a systemic problem of financial architecture into a dispute between European nations. They brought back the very ghosts their predecessors spent half a century trying to dispell. Shame. Shame. Shame. Shame.

Until the financial crisis, people like, well, me, were of two minds about the EU's famous "democracy deficit". On the one hand, I believe that good governance requires accountability to and participation of the broad public. On the other hand, before the crisis, I was willing to cut the Euro-elite a lot of slack. I'm an American born in 1970, but my life is largely framed and circumscribed by events in Europe during the Second World War. I grew up on a diet of "never again". I am writing these words from my grandfather's villa on the Romanian Black Sea, which my mother worked doggedly to recover in an act of sheer vengeance for what this continent's history did to her father. I was inclined to support Europe's democratic fudges when they were about diminishing and diffusing the still palpable possibility here of reversion to ethnonational conflict. To see European institutions deployed precisely and with great force in the service polarization across national borders has radicalized and made a populist of me (as have analogous betrayals among the political leadership of my own country). If I were Greek, I would surely be a nationalist now.

...

I think the explanation is quite simple, though. Having recast a crisis caused by a combustible mix of regulatory failure and elite venality into a morality play about profligate Greeks who must be punished, Eurocrats are now engaged in what might be described as "loan-shark theater". They are putting on a show for the electorates they inflamed in order to preserve their own prestige. The show must go on.

But then I always was a hopeless romantic.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

Our correspondent Helena Smith has learned that sources close to the EU commission in Brussels are estimating that the NO vote could be ahead by 8 -10 points.

Bundesbank president Jens Weidmann has warned that the German finance minister Wolfgang Schäuble faces a big hole, of several billion euros, in his budget planning if Greece leaves the euro. He issued the stark warning to the German government in a cabinet session last Wednesday, German newspaper Handelsblatt reports, citing a government source.

The Bundesbank has made provisions of €14.4bn to deal with the fallout of the eurozone crisis, but this would probably not be be enough in a case of a Grexit, the paper said.

Weidmann warned that the costs of a Grexit would hit Bundesbank profits, which flow into the German budget. Schäuble has factored in a Bundesbank profit of €2.5bn a year.

Stop lying to the Greeks -- life without the euro is great - MarketWatch

Will the euro-fanatics please stop lying to the people of Greece?

And while they're at it, will they please stop lying to the rest of us as well?

Can they stop pretending that life outside the euro -- for the Greeks or any other European country -- would be a fate worse than death?

Can they stop claiming that if the Greeks go back to the drachma, they will be condemned to a miserable existence on the dark backwaters of European life, a small, forgotten and isolated country with no factories, no inward investment and no hope?

Those dishonest threats are being leveled this week at the people of Greece, as they gear up for the weekend's big referendum on more austerity. The bully boys of Brussels, Frankfurt and elsewhere are warning the Greek people that if they don't do as they're told, and submit to yet more economic leeches, they may end up outside the euro ... at which point, of course, life would stop.

Bah.

How Europe Played Greece

Do these things, they said, for all our sakes and you will return to prosperity with our help. They lied.

"They have decided to strangle us, whether we say yes or no", said a Greek woman to me yesterday. "The only choice we have is to make it quick or slow. I will vote "oxi" (no). We are economically dead anyway. I might as well have my conscience clear and my pride intact." 

Her view is not atypical among friends and relations I have canvassed in the last few days. Trust has evaporated. Faith in European Institutions is thin on the ground. Lines have been crossed. At times of financial strain, a country's currency issuer, its central bank, should act as lender of last resort and prime technocratic negotiator. In Greece's case, the European Central Bank, sits on the same side as the creditors; acts as their enforcer. This is unprecedented. 

The ECB has acted to asphyxiate the Greek economy - the ultimate blackmail to force subordination. The money is there, in our accounts, but we cannot have access to it, because the overseers of our own banking system, the very people who some months ago issued guarantees of liquidity, have decided to deny liquidity. We have phantom money, but no real money. There is a terrifying poetry to that, since the entire crisis was caused by too much phantom money in the first place.

I like Byline.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

Comfortable No victory on the way: Latest voting update puts the No side on 60.6 per cent and the Yes camp on 39.3 per cent.

Not a landslide for the No side but a comfortable 60/40 split now appears almost inevitable, provided the demographics of votes counted so far are not skewed in some way.

One official has told Reuters:

"No way. (The ministers) would not know what to discuss."

German Chancellor Angela Merkel will travel to Paris on Monday afternoon to discuss the result of the Greek referendum with French President Francois Hollande, a German government spokesman said on Sunday.

"The talks with the French president from 630 p.m. (1630 GMT), and over dinner will be about a common assessment of the situation after the Greek referendum and the continuation of the close German-French cooperation on this subject," said Merkel spokesman Steffen Seibert in a statement.

I had no plans to drink tonight but Ouzo must now flow!


Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

Things are going to slide, slide in all directions
Won't be nothing, nothing you can measure anymore
L. Cohen

Overnight, in another perhaps even more relevant to the current quagmire in Greece leak, Wikileaks has released another intercepted NSA communication between German Chancellor Angela Merkel and her personal assistant reveals that not only Merkel, but Schauble, were well aware that even with a debt haircut (which took place in 2012 but only for private creditors and whose impact was promptly countered with the debt from the second bailout) Greek debt would be unsustainable. Technically, she did not use that word: she said that "Athens would be unable to overcome its problems even with an additional haircut, since it would not be able to handle the remaining debt."

She was right. And yet here she is, telling Tsipras and the Greek people that all Greece needs is to comply with the existing program when she knows well by her own admission that Greece is insolvent in its current state - precisely what Syriza is arguing and demanding be part of any deal.

Because why bother making a deal if Greece will once again be in default a few months down the line, just as Varoufakis said earlier today.

But where it gets really humorous is where the cable notes that even "Finance Minister Wolfgang Schaeuble alone continued to strongly back another haircut, despite Merkel's efforts to rein him in... with IMF Managing Director Christine Lagarde described as undecided on the issue."

Fast forward to today and now Lagarde is decided, and the IMF admits a 30% Greek haircut is necessary. So, one wonders, why is Syriza getting hell for pushing what both Germany in 2011 and the IMF now admit has to happen in order to have a viable Greek nation. Unless, of course, they don't want a viable Greek nation, and instead want a vassal state that is constantly on the brink of collapse and thus creating enough systemic risk to constantly push the EUR lower.

Because, just in case anyone has forgotten, the real issue here is not the fate of Greece or even the rest of the PIIGS, but how can Germany continue enjoying a currency that is substantially weaker than what a far stronger, and export-crushing Deutsche Mark would be at this very moment.

This is one time when i wish i had more time to comment, celebrate, and even pundificate. I only hope, this brings a fresh wind to ET, because this night is truly a signal that we're not dead yet.

I really believe this opening will allow previously silenced voices to reappear on the political landscape. the powers of Yurp have earned this defeat, and the media which does their bidding has some crow to eat. How they work to make sure they don't eat any will be a treasure to watch.

C'mon ET. Third Wind rulez.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

Greece has stockpiled enough reserves of fuel and pharmaceutical supplies to withstand a long siege, and has set aside emergency funding to cover all the country's vitally-needed food imports.

Yanis Varoufakis, the Greek finance minister, said the left-Wing Syriza government is still working on the assumption that Europe's creditor powers will return to the negotiating table if the Greek people don't agree to their austerity demands in a referendum on Sunday, but it stands ready to fight unless it secures major debt relief.

* Time for Europe to face reality: Greece needs mass debt relief now

"Luckily we have six months stocks of oil and four months stocks of pharmaceuticals," he told The Telegraph.

Mr Varoufakis said a special five-man committee from the Greek treasury, the Bank of Greece, the trade unions and the private banks is working feverishly in a "war room" near his office allocating precious reserves for top priorities.

Food has been exempted from an import freeze since capital controls were introduced last weekend. Grains, meats, dairy products, and other foodstuffs should be able to enter the country freely, averting a potential disaster as the full tourist season kicks off.

The cash reserves of the banks are dwindling fast as citizens pull the maximum €60 a day allowed under the emergency directive - already €50 at many banks. "We can last through to the weekend and probably to Monday," Mr Varoufakis said.

For now, Syriza and EMU creditors remain poles apart. Mr Tsipras is sticking to his campaign line that a "no" vote would simply be a stage in the negotiating process, while the European side is stepping up warnings that would mean Grexit and an economic cataclysm.

Jean-Claude Juncker, the European Commission's chief, said the negotiations have expired and that Greece is on its own. "The Greek position will be dramatically weakened by a No vote," he said.

Mr Varoufakis dismissed this as pre-vote bluster. Behind the scenes, there are signs that Europe's leaders are preparing a fall-back position if Greece votes no. "Unofficially, we are getting very interesting proposals, through by-ways and back-alleys," he said.

If there is a "no", Syriza will agree to reforms - never really in dispute - and to austerity provided that there is a big enough debt restructuring to restore the economy to long-term viability. "It will have to be a legal contract," he said, adding that the Greeks have already been burned once by pledges of debt relief in late 2012 that came to nothing.

What's next?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

Calm, confident, competent and articulate! I think he's got this...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

Pointed threats, they bluff with scorn
Suicide remarks are torn
From the fool's gold mouthpiece the hollow horn
Plays wasted words proves to warn
That he not busy being born is busy dying

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin