At the last Eurogroup meeting in Brussels, a seemingly indifferent – for Greek interests – theme had a “evolution”. The Irish head of the Eurogroup has made a statement on the adoption of a ‘road link’ for the notorious unification of European capital markets. According to his statement, the launch of a procedure for the wider mobilisation of funds through the securitisation market and the gradual elimination of obstacles to capital movements within the Eurozone was adopted. A common regulatory framework is essential. The truth is, with everything going on in the world and in the Eurozone, this statement, not unfairly, did not get much media attention. But looks are cheating. If this statement is accompanied by comparable planned acts, it may be the most important of what we have heard lately. In order to make a little impression, we will say at this point – not unfairly – that this statement concerns Greece more than anything else decided in the last Eurogroup. In particular, this decision is based on a kind of general application of the “Heraklis” system that was applied experimentally but successfully in Greece. But let’s take things in turn and explain what it’s about. As has been repeatedly mentioned in Eco-clastics in the coming years, the Eurozone is entering a period of shrinking capital availability. Specifically, the most powerful funding tool that has been activated since the pandemic, NGEU, which we know in the form of the Recovery Fund of around EUR 750 billion, is completed and closed in 2027. At the same time, i.e. from 2024 onwards, the ECB’s balance sheet has been reduced, i.e. the withdrawal of trillions allocated to the system through the APP, PEPP and TLTROS. In both cases, both the EU’s financial and monetary funding tool launches the “removal” from the European capital markets of huge volumes of liquidity, but in the meantime they have been “busted” dozens of times through the markets and the financial system. The “losses” that should normally be caused by this “out-investment” do not have their precedent in the life of the Euro. The conversion of water… into wine The “idea” is therefore to become in Europe what was experimentally “played” in Greece with “Heraklis”, i.e. the conversion of damage to negotiable assets, to a “new” capital market which, however, in order to be able to exist, needs to gain extent and depth. It was to achieve European dimensions through the unification of European capital markets and financial markets. The tool for converting water (in debt) into …wine, i.e. negotiable financial products, assetts, is their pricing. Pricing of loans of all kinds , securitisation of all types of liabilities that can be moved as negotiable items and financial instruments in a single market. That is to say, the ‘red’ and ‘yellow’ loans in Greece, which were generally the ‘worst’ in every respect ‘prime’ for securitisation. But which nevertheless proved to be a process which only through the “Herak” was able to “run”, replacing in the position of “losses” in the bank balance sheets negotiable assets, which settled… the balance sheets of a banking system, which was impossible to operate until then as such. In other words, the Eurozone plans to transform the “copro of Augea” that will result from the huge “demerge” capital that has already begun, but will take other dimensions after 2027, into a “source” of capital during the Greek “experiment”… So the idea of Heraklis is what Mr Donahue described indifferently about us yesterday at the Eurogroup. Of course, it is one thing to launch an experiment in conditions of “work” as was done with Greece and with Soyble holding the “browdula” over your head. And other conditions for applying it to a single internal European market, but with enormous obstacles between national capital markets… That’s the idea. And in how we hear, some who carry this “experience” on them and have been working on it for a few decades are already involved in the whole debate and process…
The Greek experiment of “Heraklis”, with Npls’ securitisations, acquires surprisingly ambitious European dimensions
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