Greece Considering Confiscation Of Private Assets

Greece Considering Confiscation Of Private Assets (ZeroHedge, Oct 6, 2013):

The last time we opined on the possibility of a Cyprus-style “bail-in” in Greece, which is essentially a legally-mandated confiscation of private sector assets held hostage by the local financial system, until such time as the balance sheet of said financial system is viable, we were joking. Well, not really joking.

But not even we thought that a banking sector “bail in”, in which unsecured bank liabilities, which include bonds and of course deposits, are used as a matched source of extinguishment of non-performing bad debt “assets” could spread to the broader economy, and specifically to unencumbered private sector assets. Alas, this is precisely what Greece, which is desperately to delay the inevitable and announce it needs not only a third but fourth bailout, appears keen on doing.

As Kathimerini reports, the Greek Labor and Social Insurance Ministry is “seriously considering drastic measures in order to obtain the social security contributions owed by enterprises and to avoid having to slash pensions and benefits.” What drastic measures? “The ministry is planning to force companies to pay up or face having their assets seized, so that the 14 billion euros of contributions due can be recouped.

After all, it’s only “fair.”

Kathimerini is kind enough to layout the clear-cut problems with this plan which will further crush any potential rebound in the Greek economy:

While this amount – equal to 8 percent of the country’s gross domestic product – may be easy to calculate on paper, it is virtually impossible to collect even if the state attempts to confiscate all the real estate properties of debtors and the debts of third parties to them.

The ministry has been forced to consider asset repossessions as a result of the very poor state of social security funds. The fiscal gap expected at the end of the year from social security will at best be equal to 1.06 billion euros. This also constitutes a bad start for next year, too, when the budget will also provide for a reduction in state subsidies to social security funds by 1.8 billion euros.

Aside from the obvious, namely that this “plan” will be merely the latest disaster to hit the long-suffering Greek economy, now caught in the worst depression in history, and where greedy and corrupt politicians will promptly “confiscate” whatever benefits there are to have been made from this confiscation plan (however instead of accusing corruption all blame will be once again fall on (f)austerity), the greater problem is that any entrepreneurial confidence that Greece just may be a sound place to do business, has just gone out of the window as nobody will know if they are safe from arbitrary persecution, and subject to a wholesale asset confiscation at any moment in time.

However, none of the above gives us more confidence that things in Greece are about to go from horrifying to nightmarish, than the following FT story: “John Paulson and a clutch of bullish US hedge funds are leading a charge into Greek banks, confident that Greece, long seen as the weakest economy of the eurozone periphery, is on the turn.

Right. A 360-degree turn.

The good news: at least the Greek government will have a lot of “greater fool” assets to pick and choose from when the confiscation hammer hits.

1 thought on “Greece Considering Confiscation Of Private Assets

  1. Since 1650 or so, western civilization has been in a growth pattern. For the first time, enough food was being raised to feed all the people, nations were beginning to grow and expand. The New World offered endless possibilities to those brave enough to seek it out. England had beheaded a despot, and the people seemed to have a voice. The Age of Enlightenment was emerging. In the next hundred plus years, revolutions putting the people in charge of their destiny were happening. The American Revolution (actually a secession from England) was followed by the French Revolution. The idea man could rule himself, and grow his wealth became a belief.
    Now, all of that is disappearing. History has proven man cannot rule himself. In America, he was given the chance, and instead went to sleep, letting the government run itself. Now awakening, they face a nightmare Orwellian situation impossible to escape.
    We are moving backwards, far more rapidly than we advanced. Fukushima not only threatens our future survival, but it broke our food chain, and millions will be affected by not having access to safe food to eat. We have a president in the white house with far more power than any in history. He is pushing through trade laws that empower the corporations, overriding the food, labor and safety laws of this country. I don’t understand why so many people see him as a friend of the people, he has done more to ruin our rights than any other man in recent history.
    The US has lost it’s place as the #1 leader. With the fools in power, we are seen as the current Sick Man of the Americas, incompetent and foolish. The only power we have left is military, and that isn’t enough without trust, truth or faith to back it up.
    Even worse, the world banking system is near collapse. None of us have ever lived through an era where banks could not be trusted. I have read of it. My father told me much about the Great Depression, and I knew people who buried their money in glass jars in their back yards rather than trust a bank. When a people can no longer access a bank they can trust, they will stop using the banks, and the banks will collapse. Banks operate on trust. Without it, they cannot work.
    We have never experienced such a situation, yet we are moving into one now. The entire system is going back to the Dark Ages, where people lived in walled enclaves serving the warlord of their choice. Highway men roamed the wild, people who ventured out, did so at their own risk. Those who had to travel, did so in large numbers, but didn’t always return home……..
    We are on the skids, yet nobody seems to know or care. If this happens in Greece, it can happen anywhere. When Lawlessness takes over, all safety, all security is gone.
    Why is nobody talking about this? Why was nothing done about MF Global, Cyprus, Spain, and now Greece?
    What has already happened in Cypress will now happen in Greece….only worse. It happened in the US with MF Global……what will stop it happening again?
    Without trust, without stable laws, we become like animals, and have no way to go but down.
    It is ironic in this Age of Information how little truth reaches the people. Freedom of the press (except in the UK) is gone. There are too many people on the planet to control…..over seven billion………so many will die.
    They say the Pacific Ocean will be totally toxic by 2016 thanks to the ongoing disaster at Fukushima. What effect on the world this will have is unknown, because nothing like this has ever happened before.
    We face total uncertainty.

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