Was "Mubarak's Poodle" Pushed Out?

If you have been reading this blog, you would know that Field Marshall Mohammed Hussein Tantawi was known as Mubarak's poodle during his master's reign. I made it a point to repeat it as many times as I possibly could without appearing petulant or childish.

My purpose has been to highlight the fact that Tantawi was (and is) Washington's man as much as Mubarak was. As you can see in the above links, my view is that the Egyptian Spring was not really a popular revolution, it should more accurately be called a palace coup. Sure there were people chanting in Tahrir Square but they managed to stay there and to make themselves heard because of Tantawi's decision not to force them out. In fact, he did not lift a finger to keep Mubarak in power. Quite the contrary, his army stopped Mubarak's thugs and protected the citizens of the Square.

Everybody knew that the Brotherhood was going to take over and the one major player whose opinions counts seemed quite fine with that prospect. If you have been reading this blog, you'd know that the army and the Brotherhood began collaborating very early on and have been working together every step of the way.

So you can imagine my surprise when most media outlets announced that the newly elected Muslim Brotherhood President Mursi forced Tantawi (Defense Minister for three decades) and the Chief of Staff of the Armed Forces Sami Anan to early retirement.

Syria: Is A Palace Coup Unfolding?

A few days ago, I suggested that a palace coup in Syria is the most desirable outcome for the main players in this drama. I enumerated the reasons and ventured that because of that it is also the most likely outcome. I speculated that the upcoming Aleppo massacre might provide the necessary trigger for significant defections.

Two days after I posted this, several high ranking military officers began crossing the Syrian border to join previous defectors in Turkey. Among them was the Deputy Chief of Security Forces of Latakia region, a Brigadier General and the first Syrian astronaut, General Muhammed Ahmed Faris. Yesterday another Brigadier General defected to Turkey accompanied by five high ranking officers.

This brings the total number of generals who passed to the other side to 31.

Today's announcement that the Syrian Prime Minister has joined the rebel forces is making me think that a palace coup is actually underway.

Moreover, BBC reports that:

Unconfirmed reports suggested that two other cabinet ministers had also deserted and there were claims that a third, Finance Minister Mohammad Jalilati, had been arrested while trying to flee.

As if on cue, the leader of the main Syrian opposition group Abdelbasset Seida made an unexpected announcement, just yesterday:

The leader of Syria's main political opposition group has said he is ready to negotiate with government officials whose hands are not "stained with blood" once the president, Bashar al-Assad, and his associates leave power.

The funny thing is that a short few weeks ago, they denied this very possibility.

This is beginning to look like a palace coup is taking place.

Stay tuned.

Greece and Eurozone One More Time

My tiny but distinguished readership knows that I was one of the first people on the Internet to recommend a Greek default and a speedy exit.

Of course I am a total nobody. But, at least there were more authoritative voices like Krugman and Stergios Skaperdas who suggested the same approach. These contrarians knew that, with German and French banks' huge exposure to GIIPS sovereign debt (close to a trillion dollars at the time) a Greek default threat would have resulted in a much more flexible response. (Incidentally, since then the acronym GIIPS was dropped and PIIGS became more popular along with GIPSI -pronounced Gypsy- talk about adding insult to injury)

Papandreu tried this with his referendum idea but, whatever leverage they had on him, he buckled under pressure and renounced that notion within one weekend.

More than a year has passed and German and French banks had ample time to dump their sovereign debt holdings. So now you hear European officials and central bankers lightly suggesting that a Greek default is not only not feared but it is seen as a reasonable option. Every week someone else is quoted as saying that no one wants Greece to leave but they are not worried if it does. A couple of months ago BBC's Robert Peston summed it up like this:

I am mildly bemused that central bank governors seem to be talking with some equanimity about Greece leaving the euro: the Belgian central bank governor describes an "amicable divorce" as "possible"; his Irish counterpart says a Greek exit is "not necessarily fatal" though plainly not attractive.

Just last week this is what Reuters reported:

Some European politicians and central bankers clearly see jettisoning a delinquent member as a salutory lesson to others not to abuse club privileges. Like the English in Voltaire's philosophical novel Candide, they believe "it's a good thing to execute an admiral from time to time, to encourage the others".

I think this is rubbish talk designed to hide a colossal game of chicken. And contrary to what you read in the papers, despite the reduction in direct exposure, European governments are scared witless of a Greek exit.

If they are not they should be.

Let me try to explain why.