“Note what’s happened here. The will of the people is now being characterized as a “false signal” to “financial institutions, investors, and markets.”
In other words, what voters want means nothing. This is about what “markets” and “financial instiutions” want. What the electorate wants is nothing more than a “false signal.”
This is precisely what we predicted would happen should the political situation in Portugal not unfold in a way that pleases Berlin and Brussels. Germany and, to a lesser extent, the IMF are now in complete control of the European political process. There’s no “democracy” left. It’s either get with the austerity program and stick with it, or face the consequences which, as we saw with Greece, could entail the closure of banks and the willful destruction of the economy. “
On Thursday evening, we took a close look at how the political landscape has changed in Portugal following inconclusive elections held earlier this month.
For those unaware, the worry in Brussels has always been that either Spain, Portugal or, in a less likely scenario, Italy, would go the way of Greece by electing politicians that would seek to roll back austerity, shun fiscal rectitude, and demand debt relief.
As we’ve noted on any number of occasions over the past nine months, that’s why Berlin adopted such a hardline approach to negotiations with Alexis Tsipras and Yanis Varoufakis. There was never any hope of setting Athens on a “sustainable path.” It was always about deterring more “meaningful” states from going the Syriza route.