Greece vs. Austria: Non-Friendly Acts

Two days ago we came across a headline at Reuters, informing us that Greece rages at neighbors as fears migrants could be halted”. Say what? What the hell is this supposed to mean? Is this even English? Possibly Reuters employs the same headline editor as Bloomberg….he or she is definitely equally bad.


Kotzias, enragedNikos Kotzias (νίκοσ κοτζιάσ), a former member of the Central Committee of the Greek Communist Party. Nowadays, oddly enough, he is Greece’s foreign minister. Here seen enraged.

Photo credit: Simela Pantzartzi


Anyway, we delved into the article to see what it was about. Here are a few pertinent excerpts:


“Greece raged at neighbors and began busing refugees and migrants back from its northern border on Tuesday, after new restrictions by countries on the main land route to Western Europe trapped hundreds behind a bottleneck at the frontier. Athens filed a rare diplomatic protest with fellow EU member Austria for excluding Greek officials from a high-level meeting on measures aimed at curbing Europe’s biggest inward migration since World War Two.


Austria is due to host west Balkan states on Wednesday to discuss efforts to manage and curb the flow, but did not invite Greece. In unusually heated language that shows how the migration crisis has raised passions across Europe, Greek Foreign Minister Nikos Kotzias described the snub as a “unilateral and non-friendly act”.

“The exclusion of our country at this meeting is seen as a non-friendly act since it gives the impression that some, in our absence, are expediting decisions which directly concern us.”


Austria, the last country on the overland route to Germany, said last week it had imposed a daily limit of 3,200 migrants passing through, and 80 asylum claims. Further down, Hungary has said it would shut three railway crossings with Croatia used by migrants, effective Feb. 22. Slovenia has erected a fence on its southern border with Croatia to ensure that migrants can enter only through official border crossings.

“The Balkan route was a humanitarian corridor. It could close after consultations and not by turning one country against the other,” Greek Migration Minister Yannis Mouzalas told Skai TV. “We are faced with an action that has elements of a coup.”

Vienna denied it had snubbed Athens by excluding it from Wednesday’s talks. The meeting of West Balkan nations was an established format which had first convened in Austria last year to discuss the issue of Islamist militants, a foreign ministry spokesman said. The meeting includes interior and foreign ministers from Albania, Bosnia, Bulgaria, Kosovo, Croatia, Macedonia, Montenegro, Serbia and Slovenia.”


(emphasis added)

Fair enough, we thought. After all, Greece is in quite an unfortunate situation. Not only is it bankrupt, it also happens to be Europe’s major entry point for refugees. If everything had been handled according to current EU legislation, the country would have been forced to accept more than 800,000 asylum seekers – a practical impossibility.


mouzalasThis man deserves a moment of sympathy: Greece’s minister of immigration, Ioannis Mouzalas. Who would want to be Greek migration minister at this juncture? It has to be one of the most thankless political appointments ever.

Photo via


Angry Greeks Strike Back

In the meantime, the situation has escalated further, with Greece recalling its ambassador from Vienna. Quite possibly, to his regret – after all, Vienna has just been ranked “the world’s nicest city”, with Reuters telling its readers that “Austria’s grand capital on the Danube river offers the highest quality of life of all cities in the world.” So let us commiserate with the Greek ambassador as well for a moment.

As the FT reports:


“Athens withdrew its ambassador to Austria on Thursday in a sign of the mounting acrimony between EU countries over the bloc’s failed refugee policies, a fight that increasingly risks destroying the continent’s passport-free travel zone.

In a statement announcing the decision, Greece’s foreign ministry accused the Austrian government of taking unilateral action outside of EU rules and recent agreements by capping the number of asylum seekers that it would accept across its southern border.

The move by Vienna has angered several member states, particularly Germany, which believe it was a direct violation of principles agreed by Werner Faymann, Austria’s chancellor, at recent EU summits.

While Vienna is capping the number of daily asylum applications it accepts at 80, it is freely allowing as many as 3,200 refugees a day to pass through Austria en route to Germany — even after agreeing not to do so at the most recent EU summit.

“It is clear that the major problems of the European Union cannot be confronted via thoughts, attitudes and extra-institutional initiatives that have their roots in the 19th century,” Nikos Kotzias, Greece’s foreign minister, said in the statement. “Nor can the decisions of the heads of state be supplanted by directives from police directors.”

Despite anger in Athens and Berlin, Vienna has hastily put together a group of EU and non-EU allies along the so-called “Western Balkans route”, most of whom met in Vienna on Wednesday to agree policies that could constrict tens of thousands of refugees in Greece indefinitely. Neither Germany nor Greece was invited to the Vienna meeting.

The recall of the Greek ambassador marked a torrid week of disagreement among EU member states, who are increasingly turning on each other as the number of arrivals show little sign of slowing.


(emphasis added)

We rename the European Disunion!

Mish and Zerohedge have some further details and opinions on the matter which readers might want to check out as well.


A Darkening Social Mood

Obviously, this represents yet more evidence of the rapid deterioration in social mood we have frequently discussed in these pages in recent months. We refer readers to an article we posted in mid November in this context, which looks at the fate of political incumbents over the past year (see “Incumbents Swept from Office Around the World”).

The hardening attitude toward refugees is typical of a worsening social mood backdrop as well. We are willing to bet that if those refugees had arrived anytime between 1995 and 1999, the EU would have arranged for their dispersal across its member countries in no time at all. When the public is in an optimistic, bullish frame of mind, harmony and togetherness are held in high regard and agreements of this sort are struck quickly. Ms. Merkel’s famous slogan “wir schaffen das!” (“we can swing it!”) wouldn’t have been widely seen as a sign that she was “out of touch”.

It is quite different when the public’s mood turns sour, worried and bearish. Harmony and inclusiveness are no longer considered worth striving for. Suddenly, it is every man for himself. The disadvantages of inviting in millions of people from a different culture become the focus of attention. People fleeing from war and/or miserable economic and political conditions, who would likely have been welcomed in better times, are seen as akin to an invading army.

As we always stress, this has major implications for financial markets and the economy as well. At the time we wrote about the troubles faced by political incumbents, the S&P 500 Index had just come off an interim high, trading close to 2,080 points. As we remarked on the occasion:


“When the performance of financial markets diverges from underlying social mood trends, it is usually time to be very careful. It very often means that a financial accident is not too far off.


Financial market participants have recently ignored political developments (not to mention economic developments), instead choosing to continue to put their faith into the power of the printing presses of central bankers. This could very easily turn out to be a costly mistake.”


SPX and JNKThe S&P 500 Index and junk bond ETF JNK, daily – two major “risk asset” gauges – click to enlarge.


Lest we be misunderstood, we should point out that what followed thereafter was not the “financial accident” we were referring to. We regard the January decline merely as another warning shot. In fact, we believe that the current market rebound could easily go further.

Not only are there a number of historical patterns which suggest that market weakness in January is usually followed by a multi-week recovery, but the current positioning and sentiment backdrop also indicates that stocks should manage to trade firmer for a while (we are referring to futures and options positioning as well as survey data in this context – more details on this in a market update soon).

In the short term, immediate crash risk has receded. This could change again, but for the time being what we have referred to as the “standard expectation” seems to be winning out (see also the conclusion to our recent article on the “crash risk” question). In the medium to long term, the risk of a major stock market decline remains as pronounced as ever.


A Message from the Empire

All of this is quite morbid and depressing. We don’t really like bear markets – they are difficult to trade. And although we enjoy the growing popular revolt against the dictates of the ruling elites in Brussels, Washington and elsewhere, we are well aware of the history of waxing and waning social mood trends. Let us just say, usually things tend to get a lot worse before they get better. So before we all get totally morose, pondering an uncertain and likely unpleasant future…let’s consider something completely different.


And now for something completely different!


We actually happen to know one or two people in Austria. So we asked one of our correspondents what he thought of the recent spat with Greece. He considers it a case of geographical confusion. The sentence to focus on, he insists, is the following: “The meeting of West Balkan nations was an established format which had first convened in Austria last year to discuss the issue of Islamist militants, a foreign ministry spokesman said. The meeting includes interior and foreign ministers from Albania, Bosnia, Bulgaria, Kosovo, Croatia, Macedonia, Montenegro, Serbia and Slovenia.”

He notes that the foreign minister of Greece has absolutely no reason to feel left out. Recommendation: just look at a pertinent map. Actually, we are beginning to suspect our informant may secretly be a monarchist. So here goes, in the spirit of an “extra-institutional initiative with its roots in the 19th century”. Mize-well!


Austrian EmpireThe Austrian Empire. Do you see Greece, or any Greeks on this map? No! – click to enlarge.


In case Mr. Kotzias reads this, any remaining questions about the situation should be addressed to the boss. Here’s the boss:


franz-3The boss.

Painting by Julius Victor Berger


In a pinch, his current right hand man/acting factotum might do as well. Beware the evil eye though!


Bundeskanzler Werner FaymannCurrent acting factotum

Photo credit: Lilli Strauss / AP


This one by the way was once known for singing welcoming songs, sotto voce, at nearly every opportunity. Proving that the social mood eventually engulfs everyone, his tune has changed significantly of late. In this video (in German language) he is heard lobbing verbal hand-grenades in Ms. Merkel’s general direction (paraphrasing: “Germany’s position is duly and respectfully noted. Germany should do likewise with Austria’s position….they want to give us advice. We can do without this kind of advice”, etc. etc…).

All joking aside, look at the above map again and ponder it for a moment. What is it, if not an early experiment to unite diverse European people under a single roof, administered by a central authority? And now ask yourself: why was it doomed to fail?



Maybe “we” should have left the Middle East alone…but there’s no use crying over spilled milk (although we note that the spilling continues, and it’s actually blood, not milk, that gets spilled). Of course, everything that is happening at present is following well-worn patterns, this is to say, historically well-established dynamics. As you can see above, we are not offering solutions or making judgments. Our own view of the refugee crisis is a bit more nuanced than a mere pro or con – but that is a discussion for another day. Here we merely want to point out that growing political disunity has to be closely watched, as it is symptomatic of an important underlying social and historical trend.

We would like to think that there is a difference between today’s allegedly more enlightened society and past social arrangements, but human nature doesn’t change all that much. To be sure, there are also grounds for optimism. As we often stress, statism is actually fighting a rear-guard battle. Superficially, it may often seem ascendant, but a major pillar supporting it is crumbling before our very eyes: the ubiquitous proverbial ministry of disinformation and propaganda is losing its mojo. As Etienne de la Boétie pointed out in the 16th century already (in The Politics of Obedience, Discourse on Voluntary Servitude):


“If we led our lives according to the ways intended by nature and the lessons taught by her, we should be intuitively obedient to our parents; later we should adopt reason as our guide and become slaves to nobody.”


“Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.”


Etienne_de_la_boetie_1French judge, political philosopher and early anarchist Etienne de la Boétie, 1530-1563

Engraving via


Chart by: StockCharts



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