June 27, 2015
The Greek Tragedy: Curtain Closes On Most Absurd Act
Nothing was posted here so far on the Greece tragedy. I did not touch the issue as there was excellent coverage elsewhere and what the whole issue produced so far was more absurd theater than serious economic policy. But one act of the drama is now coming to a preliminary end and the tragedy may now unfold into something new with potential serious geopolitical consequences.
Greece took up a lot of debt when banks were giving away money without caring for the ability of the debtor to pay back. When that game ran out, some six years ago, Greece could not no longer take up new credit to pay back its old debts. That is the point where it should have defaulted.
But the Greece government was pressed on to pay back the debt to the commercial banks even when it had no money and not enough income to ever do so. Bank lobbyists pressed other EU governments to raid their taxpayers to indirectly cover the banks' losses. These other governments then pushed Greece to take on "emergency loans" from their states to pay the foreign commercial banks.
Nothing of that money ever reached the people in need in Greece. Here is a gif that explains what happened to all those foreign taxpayer loans treats "given to the Greek".
To get these new loans Greece had to agree to lunatic economic measures, an austerity program and neoliberal "reforms", to fix its balance of payments. But austerity has never worked, does not work and will never work. It crashes economies, lowers tax incomes and thereby further hinders a government to pay back it debts. It creates a vicious cycle that ends in an economic catastrophe.
After six years of austerity nonsense the Greece voted for a new party that promised to end the cycle and stop the austerity measures. But the new Syriza government misjudge the situation and the nastiness and criminal energy of the other governments and organizations it was negotiating with. It early on said it would not default and thereby took away its own best negotiation argument. The negotiations failed. The creditors still demand more and more austerity. Now it will have to default but under circumstances that will make it much more difficult for Greece to get back on its feet.
Yesterday the Syriza prime minister Tsirpas, in a speech to his people, called for an end of the blackmail and for a referendum to decide on the way forward:
Fellow Greeks, to the blackmailing of the ultimatum that asks us to accept a severe and degrading austerity without end and without any prospect for a social and economic recovery, I ask you to respond in a sovereign and proud way, as the history of the Greek people commands.
To authoritarianism and harsh austerity, we will respond with democracy, calmly and decisively.
Greece, the birthplace of democracy will send a resounding democratic response to Europe and the world.
Paul Maison of Channel 4 news sees this as a positive and likely successful step. The people will vote no to austerity and the IMF, European Central Bank and various country governments will still keep giving fresh money to Greece. Yves Smith at Naked Capitalism does not believe that this will happen. She calls the referendum a sham. Greece will default and the only thing the referendum will do is to keep Syriza in the political business. She blames Tsirpas for having misjudged the situation and for being unprepared of what is likely to come:
Greek defiance of its creditors will make it more, not less dependent on them in the next year. How badly things turn out for Greece will depend in significant degree on how much they do to ameliorate the impact of the implosion of the banking system, whether they take extreme measures to keep Greece in the Eurozone, and if Greece tumbles out, how much they provide in humanitarian aid and targeted trade financing (most important, for petroleum imports).
Greece should have defaulted six years ago. Tsirpas should have prepared for default immediately after he became premier. He should have used it as a threat during the negotiations. Greece will now have to default in the worst possible situation and with little thought given to the consequences of the default.
But the consequences will not be limited to Greece.There will be consequences for the EU, for NATO and for the political balance in the Mediterranean. Greece may now decide to leave the "western" realm and thereby set an example others could follow.
The German and other European governments promised their taxpayers that Greece will not default and that the austerity program pushed onto it will succeed. They will now rightfully lose some of their political and economic credibility. The Greece default will be a somewhat harsh and expensive lesson for the voters in those countries too. Let's hope that they will draw the right conclusions.
Posted by b on June 27, 2015 at 10:30 AM | Permalink
While there is nothing easy about the path forward I think finance minister Varoufakis has played things pretty well dragging it out letting the people get all those euros out of the banks to help contribute to rebuilding but most of all blocking the ability of the Banksters to "Cyprusize" Greece. The referendum obviously comes from the study of Iceland and anybody that studies Argentina can only come away thinking Syriza is doing the right thing.
Posted by: madrone | Jun 27, 2015 10:50:12 AM | 2
@2 There were missteps early. Syriza operated under the assumption the EU powers that be were reasonable and ethical people instead of political animals. Greece was never going to be rescued by a German coalition government. The moral character of Merkel, the Troika, and so forth is irrelevant. Coalitions are weak. If they werent weak, they wouldnt be coalitions.
Syriza is opting for a referendum because they don't have a plan for how to go forward despite it being the inevitable outcome. They need to make voters culpable for what is next. I don't think they ever grasped the political reality of the EU.
Posted by: NotTimothyGeithner | Jun 27, 2015 11:40:22 AM | 4
- "End the austerity" ??
Austerity only has just begun !!! A default WILL collapse the greek bond market and make things (e.g. austerity & corruption) MUCH, MUCH worse !!!
- "Greece leaving th western realm" ?? I am not that sure that that will happen. It will increase the odds for MORE corruption from e.g. the US government. Keep in mind that there's a US military on the Island of Crete. Excellent opportunity to bribe the greek government even more.
Posted by: Willy2 | Jun 27, 2015 12:18:21 PM | 5
Sryriza has done something unique in modern politics, they have followed the mandate that the Greek voters gave them, to attempt to seek relief from the Troika without a Gretex. Claiming that they should have immediately violated that trust and threatened default shows how some people think leaders should make decisions for their citizens instead of with their citizens, authoritarian leadership instead of democratic leadership.
The last few months of Sryriza's attempts to fulfill their mandate have been used to educate Greeks, what a good leadership should accomplish, and now seeking their voice again to make a new decision and mandate for a much more difficult and dangerous path that may lead to more suffering but regain control of their country.
Posted by: Wayoutwest | Jun 27, 2015 12:32:37 PM | 6
After so many taxpayers took baths after 2008 _and_ bailed out the banks, to think the banks cannot conceive of taking a loss is unconscionable.
Frankly I am starting to see a reason to behead bank executives and post their heads on pikes outside their respective banking districts.
Posted by: Bardi | Jun 27, 2015 12:32:59 PM | 7
The Monday-morning quarterbacking is interesting but not necessarily fair.
>> Schauble taunted Tsirpas in early May that Greece ... which is an eternity ago, and when a referendum did not conflict with the bailout end.
How many years has this event been in the making? How many years does it take for stark choices to crystallize not only in the minds of bloggers (who read for a living and can hold snap referendums in their heads any minute of the day) but also in enough of the public for the referendum to be a fair reading on what the public really wants?
Better "late" to hold a referendum than never. The referendum will mean more now than had it been held earlier, because there's one more data point for Greeks than was available earlier: The Eurocrats want to protect (a) the few rich Greeks and future carpetbaggers at the expense of (b) everyone else.
The foot-faulting sounds a little shrill.
Posted by: not a name | Jun 27, 2015 12:35:48 PM | 8
In the context of previous threads, what does this example tell about the future of Ukraine, another disfunctional economy. So-called aid is a pile of new debt and the funds go down the drain, in part for the war. While the levels of debts are probably much smaller that in the case of Greece, they can be pumped up to a similar ratio to the national product. Of course, Ukraine can always default and go back, with tears, to Mother Russia, but if I understand, the government, in the process of improving democratic institutions, outlawed political parties that could propose that and thoroughly intimidates and represses opposition that could form new parties.
American policy is to advocate that EU would shell cash to solve all problems around, plus to send some military trainers etc. Perhaps, military trainers should be send to Greece?
Posted by: Piotr Berman | Jun 27, 2015 12:36:43 PM | 9
thanks b.. excellent overview.
Posted by: james | Jun 27, 2015 12:52:04 PM | 10
The Delphi Declaration
Everyone's been trashing Syriza since before they were elected. The wsws.org was the most bitter I've seen. The armchair left hates anyone who actually attempts to act.
NYT Warns Greece to Accept Endless Depression–Because Default Might Be Painful. I hope for the best for the Greeks. I hope they take control of their own lives.
The banks have reaped rape's profits and left the governments - the European people - with the losses. Maybe some lights will finally go on when the reality of what the banksters have done sinks in. I hope that Russia can help.
Posted by: jfl | Jun 27, 2015 1:28:43 PM | 11
The democratic state institutions that evolved since the Magna Carta to protect the people have collapsed. The Mafia Robber Bankers’ coup triumphed. Ukraine and Greece are the writing on the wall that corporate media ignores: “Austerity or War”. What a choice!
Posted by: VietnamVet | Jun 27, 2015 2:08:53 PM | 13
The Greeks are on the horns of a dilemma: the public are fundamentally divided concerning which is worse, whether to reject the austerity and humiliation of the odious debt--that the Troika is using against the country-- or to otherwise withdraw from the Euro, and for Greece to leave its political association with the EU.
Which of these two choices is best for Greece, in the estimation of Greeks themselves? Clearly defining this fundamental issue for the people, has been the policy goal of Syriza. It is really no longer about the debt or default; and in the political context, it has become about whether democracy or political accountability matters in the EU, and whether the EU is willing to abide by its own rules, and whether the blackmail and subjugation of a member country in the Union is a more pressing concern than the settlement of the debt that the banks need to shuffle around between each other.
It looks like Tsipras is a real European leader, who makes many of the other EU chiefs look rather puny. And Europe will be less than it is, if the Greeks are driven to withdraw from the Union on account of financial measures, and coercion, that do bear a passing resemblance to acts of war. Tspiras says he prefers for Greece to remain in the EU; but he points out that if Europe has its priorities screwed up, and democracy and solidarity take second place to the tyranny of banking institutions, then the contagion of the abuse Greece is suffering can be passed on to other countries in the EU. And where does this end?
Posted by: Copeland | Jun 27, 2015 2:10:18 PM | 14
- In the US the banks were also bailed out by the US taxpayer. So, it should come as no surprise that the same has happened in Europe. In that regard I don't see why people are that outraged.
- Greece has massively benefited from being in the Eurozone. In 1990 Greece paid ~25% for a 10 year loan, whereas Germany paid in those days ~ 10%. In early 2008 Greece could borrow at a slightly higher rate than the Germany (then ~4.5%).
Posted by: Willy2 | Jun 27, 2015 3:15:33 PM | 15
This is not about a money, and never has been. This is neo-colonialism, Euro version of it. Another word would be this is fascism by the EU's Core states, plus Washington, vs. periphery.
All this is explained very well in this documentary: http://thoughtmaybe.com/fascism-inc/ well worth of time to watch it.
And I somewhat agree with Paul Craig Roberts:
“The agenda of the EU and the central bank is to terminate the fiscal independence of EU member states by turning tax and budget policy over to the EU itself.
In other words, the Greek “sovereign debt crisis” is being used to create a precedent that will apply to every EU member government. The member states will cease to exist as sovereign states. Sovereignty will rest in the EU. The measures that Germany and France are supporting will in the end terminate their own sovereignty, very little of which actually remains as they do not have their own currency and their foreign policy is subservient to Washington.”
The "tragedy" is not yet, if we have in mind what's has happened to some other states, for example Yugoslavia where Germany and USA had soaked the soil with blood and fill valleys and hills with graves of local population, or Iraq even worse. For better or worst, Greece is not multinational in its composition otherwise.... So the goal of "civilized" world is the same. I am curious why Greece have gotten such publicity?
“"Plunderers of the world, when nothing remains on the lands to which they have laid waste by wanton thievery, they search out across the seas. The wealth of another region excites their greed; and if it is weak, their lust for power as well. Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich. Robbery, rape, and slaughter they falsely call empire; and where they make a desert, they call it peace."
This above written two millennium ago is very much (un)official policy of the West. Hope the Greeks won't be voting for own executioner. Although, I wouldn't be surprised if they do just to stay in racist EU.
Posted by: neretva'43 | Jun 27, 2015 3:26:58 PM | 16
I just saw an article from PCR that is valid to all “people”.
Greek People Demand Their Own Destruction
Paul Craig Roberts
Some years ago Thomas Frank wrote a book, What’s the Matter with Kansas. The book is about how brainwashed Americans vote against their own economic and political interests.
The utter stupidity of populations makes them helpless at the hands of the rapacious. Today Thomas Frank could ask the same question about the brainwashed Greek population. On June 22, RT reported a huge rally of Greeks in Athens waiving the EU flag and demanding that their government sell them out to the troika. http://rt.com/news/268945-greece-rally-eurozone-summit/
The Greeks are so determined to be included in “Europe” that they are willing to be driven economically into the ground and to cease to exist as a sovereign state as the price of being in the EU. The idiots who participated in this “rally for Europe” have made it difficult, if not impossible, for the Greek government to soften the austerity that is being imposed by the One Percent on the Greek people.
Among Western people, the Greeks have experienced the heartlessness and greed of the One Percent more severely than any other Western people. Yet, the Greeks accept their mistreatment as the price of being European.
It is a wonder that Alexis Tsipras hasn’t resigned and damned the idiot population to hell.
I saw this with my own eyes couple decades ago. Voting and democracy is the biggest fraud by far in modern time.
Posted by: neretva'43 | Jun 27, 2015 3:46:34 PM | 17
Can someone please name for me all the banking reforms and banking independence inside of Greece that Syriza
have proposed or enacted since they were elected ?
If as Michael Hudson says, that finance is the new modern form of war, which I completely agree with and is painfully obvious, then how has the Greek government protected itself within its own banking system from financial weapons of war ?
Posted by: tom | Jun 27, 2015 4:03:03 PM | 18
From the Greek Parliament's Truth Committee on Public Debt:
"Several legal arguments permit a State to unilaterally repudiate its illegal, odious, and illegitimate debt. In the Greek case, such a unilateral act may be based on the following arguments: the bad faith of the creditors that pushed Greece to violate national law and international obligations related to human rights; preeminence of human rights over agreements such as those signed by previous governments with creditors or the Troika; coercion; unfair terms flagrantly violating Greek sovereignty and violating the Constitution; and finally, the right recognized in international law for a State to take countermeasures against illegal acts by its creditors , which purposefully damage its fiscal sovereignty, oblige it to assume odious, illegal and illegitimate debt, violate economic self-determination and fundamental human rights." [...]
"As far as unsustainable debt is concerned, every state is legally entitled to invoke necessity in exceptional situations in order to safeguard those essential interests threatened by a grave and imminent peril. In such a situation, the State may be dispensed from the fulfilment of those international obligations that augment the peril, as is the case with outstanding loan contracts. Finally, states have the right to declare themselves unilaterally insolvent where the servicing of their debt is unsustainable, in which case they commit no wrongful act and hence bear no liability." [...]
"People’s dignity is worth more than illegal, illegitimate, odious and unsustainable debt."
Posted by: Copeland | Jun 27, 2015 4:14:06 PM | 19
Paul Craig Roberts' comments shows that he hasn't got the faintest clue of what's going on. The problem in the Eurozone is that there's NO common fiscal policy for ALL eurozone countries.
In that regard PCR has lost a lot of his credibilty.
Posted by: Willy2 | Jun 27, 2015 4:18:11 PM | 20
And yet the policy of the Troika is validated by national leaders in the EU, which is financial rape of Greece, a member of the Union, which would strip Greeks of sovereignty, dignity, and virtually drink their life's blood, and rent out their heritage and real estate, absorbing their resources and their futures, in the way colonizers do.
Not very neighborly, I'd say.
Posted by: Copeland | Jun 27, 2015 4:37:09 PM | 21
Go ahead and tell him that.
and who cares for fiscal policy when everything is tailored for needs of one percent and “investors”. It is interesting in the documentary posted above how slave lab our was used in BMW's factories during WWII, now when there is no slaves anymore there is austerity or structural adjustment programs how to squeeze money.
There is Irving Fisher's famous observation: "The more the debtors pay, the more they owe"
Posted by: neretva'43 | Jun 27, 2015 4:41:41 PM | 22
Note that the U.S. controlled IMF has said it will support Ukraine even if it defaults. Geopolitics trumps economics.
Posted by: Andoheb | Jun 27, 2015 4:57:02 PM | 23
@6 Agree. Tsipras has has followed the mandate of the voters. It has been a frustratingly long, winding, one step forward two steps back path that has led to the conclusion most expected, Grexit. Perhaps a different procedure would have produced better, more streamlined results, but Syriza chose to use the messier yet more legit route of democracy. Europe's revoking of ELA as a response to Greece's referendum proves that Europe is anti democratic and that Europe knows Troika style austerity can only survive in a top down power structure.
Posted by: yellowsnapdragon | Jun 27, 2015 5:05:39 PM | 24
Paul Mason reports that Greece never walked out of negotiations. Instead, Dijsselbloem said that 18 would reconvene informally.
Posted by: yellowsnapdragon | Jun 27, 2015 5:14:54 PM | 25
Greece's future was sealed when greek consumers started to withdraw their money from the banks.
Posted by: Willy2 | Jun 27, 2015 5:24:35 PM | 26
In my view, the Greek problem started with its admission to the euro, on political rather than financial grounds.
The idea of Greece at the origins of Europe is only what it appears to be, an idea. I discovered from the work of a colleague a few years ago, that the majority of the population of central Greece is actually Albanian, but they were forced to change names and become "Greek".
A country based on a false idea is unlikely to succeed. But still I have sympathy for Syriza. It's a problem which will come to us all in Europe. Regulating the relationship between banksters and the consumer who has to have enough money to buy the products which are going to produce the profits, is a difficult one.
Posted by: Laguerre | Jun 27, 2015 5:30:04 PM | 27
@16 Europe is definitely trying to revoke the sovereignty of states in the union, but the purpose of control is to transfer money upward from citizens to the banking elites by codifying the cruelest form of capitalism. The Bretton Woods Institutions are used as tools for capturing nations by trapping them in unsustainable debt and "legally" enforcing debt remedies that steal national resources, public funds, and citizens' money and properties to give to the elites.
Posted by: yellowsnapdragon | Jun 27, 2015 5:39:00 PM | 28
I see that the a link to the Delphi Declaration was posted above but with no explanation of want it's about, http://www.counterpunch.org/2015/06/26/the-delphi-declaration/
You'll see its rhetoric mirrored by Tsipras's recent speech and his decision to hold the referendum. I believe most Greeks will vote for Greece and against the Banksters. I am certain lots of animated conversations are occurring. I expect most of the debt will be declared odious for the reasons already detailed by the Debt Commission. I also think we'll finally see the Domino Principle I action as the EU unravels due to its undemocratic nature, which will spell the death of the Atlanticist Project.
Posted by: karlof1 | Jun 27, 2015 5:41:50 PM | 29
@ b: "Greece may now decide to leave the "western" realm and thereby set an example others could follow."
Yep, time for someone, anyone, to push back against the economic warfare being employed by the Globalists. Maybe Spain will follow, we'll see.
Posted by: ben | Jun 27, 2015 7:27:59 PM | 30
@ 28: Said much better than I could. Yes.
Posted by: ben | Jun 27, 2015 7:30:25 PM | 31
PCR also says the Greeks May be averting wwIII. He's concerned about his credibility?
Who the hell knows. It's still way early in this deal. I'd imagine the average Greek is pretty pissed at the EU just now- just multiply resentment by what the avg citizen in Detroit or Camden NJ must feel.
It'd be nice if Greece can pull victory from the jaws of defeat. But they're not in an enviable position.
Posted by: Nana 2007 | Jun 27, 2015 7:36:31 PM | 32
I hope "I've had enough and I'm not going to take it anymore!' rolls back and extinguishes the 'secret' trade treaties as well. The step in the EU now is to remove national sovereignty from the states to the EU ... and the next step is to remove sovereignty from the EU/US/5-eyes/JP/... to the TNCs.
Via 'secret treaty'! The TNCs have made a referendum impossible by keeping secret the terms of our disenfranchisement.
You really could not have made this up prior to (a little before) the change of the millennium.
The enslavement of the world by the TNCs. Definitely hope the Grexit takes place and that thereafter everyone heads for the door on the 'secret' trade agreements, and the apotheosis of the corporate planet.
Posted by: jfl | Jun 27, 2015 8:07:25 PM | 33
You don't need to go eschatological- the apotheosis is here. Then again, the blame assigned to Greece could be big.
Posted by: Nana 2007 | Jun 27, 2015 9:24:46 PM | 34
This is as clear an act of choosing to dignity over slavery, no matter what the costs. Its the decision that we'd hope any of our leaders would make were the choice so stark. Unfortunately for the rest of us, we have political systems which carefully root out any politicians who might be so brave somewhere below the electoral level of "county dog catcher".
Tsipras is not just a real leader, he's the leader that all the countries of Europe could and would have if they could extract themselves from German economic domination and Washington political interference. Greece holds an strange position in the Euro-realm, in some ways that are to its advantage: its politics, a result of its civil war and subjection to Cold War fascist dictatorship, makes its politics too violent and therefore too independent to allow it so succumb to coercion. And that can be allowed, as it is simply too small to really worry about its demise wrecking the rest of the scheme. Italy, for instance, isn't so lucky (or is so lucky?) in that it has faced the ultimate in coercion in being forced to live with technocratic and neo-liberal government but also hasn't had to face as harsh of austerity because the German scheme simply couldn't survive an Italian default. Greece can, by this interesting position, be a beacon that will show all other brow beaten countries that have faced mass emigration and economic assault that another alternative is truly possible. Of course many of these countries are in Eastern Europe and many are being dazzled with the prospect and propaganda about a war with Russia.
NotTimGeithner makes the right point with what is IMHO the wrong tone: "They need to make voters culpable for what is next." Its not about making the voters "culpable" for Syriza's sake, but for taking the political steps necessary to ensure that the Greek people are ready for the difficult times ahead. This referendum absolutely must be undertaken on this specific issue, or else it is very easy for foreign powers to interfere with propaganda and throw the situation into even more turmoil.
jfl is right in the shameful behavior of those, especially on the "left", who've been attacking Syriza from almost day one. This is real action with real risks and real rewards, this isn't internet squawking and posturing.
I wish the Greek people all the luck in the world. They need to make clear to the anti-democractic rulers of Europe that being European means more than simply being lashed to Brussels - it means democracy, revolution, and advancement. Greece is part of Europe because it is part of Europe, just as Russia is. These elite dreams of a Europe without Russia or a Europe where countries "pay their way or are driven out" can never be. Because that will never be "Europe" that's only the bad old days of war and division. New "Iron Curtains" placed all over by those who claimed the ultimate moral superiority in opposition to the old one.
Posted by: guest77 | Jun 27, 2015 9:40:49 PM | 35
Russia is part of Europe. And is weathering the most virulent abuse the US and its European Unit can throw at it. Russia spoke with Italy a few weeks ago. I hope that this time ... unlike right after WWII ... the Greeks can assert themselves, that Italy can too. And that Russia can help/be helped by their enforced comaraderie. Certainly there's no 'Stalin pact' in force now, as the sun sets in the West and rises in the East. And the Russians have nothing more to lose. They've lost it all and survived. And are thriving.
Posted by: jfl | Jun 27, 2015 10:13:51 PM | 36
I have been relying, lately, on Jack Rasmus' analysis of the 'action' ...
Greek Debt at 11th Hour: The Troika’s ‘Carrot and Stick’
Schaubel is the architect of what is the Troika’s ‘Plan B’ to precipitate a default as a condition to get Greece to leave the eurozone. He has long believed the eurozone would be stronger without Greece and that the European Central Bank’s US$1.2 trillion quantitative easing money slush fund passed earlier this year would be sufficient to contain any euro-wide fallout from a Greek default and exit.
Others in the Troika are not so sure, however, about the economic contagion effects of default or “Grexit,” nor about the potential political consequences of a Greek default and exit. If Greece exited, and then recovered, it would certainly give impetus to other movements within the eurozone, and even the European Union itself, like Britain, to consider exit. It would certainly increase the appeal of rising parties on the left and right within Europe to run for office on programs to exit.
Posted by: jfl | Jun 27, 2015 11:09:06 PM | 37
Zerohedge is all over this. The referendum doesn't matter any more because the Troika is pulling the plug Monday
That populist stunt of his was the last straw. Now who bails out the banks who bet the wrong hedge?
Theiy are saying Deutsche Bank could pull a Lehman over it
Just print more fiat...
Posted by: Anunnaki | Jun 27, 2015 11:24:46 PM | 38
Laguerre, you mentioned several times that you are teaching. So how can you write that?
"The idea of Greece at the origins of Europe is only what it appears to be, an idea. I discovered from the work of a colleague a few years ago, that the majority of the population of central Greece is actually Albanian, but they were forced to change names and become "Greek"."
This is pure and simple 19th c. racism. You really think the ancient Greeks on their islands were not a mixture of all the Mediterranean and Middle Eastern people? It's their cosmopolitanism which gave them the 'genious', not what you seem to believe was running in their blood.
You should read that, frankly. A good debuking. Albanians... Slavics... what else next time? "mixed blood" ??
Posted by: Mina | Jun 28, 2015 12:01:26 AM | 39
When I look at a number of financial metrics then the US is actually worse off than Greece. On top of that the US is still running a LARGE Current Account Deficit. Greek austerity has paid off, it's no longer running a Current Account Deficit.
Just imagine what would happen when the US government would impose austerity here like the greeks did. One simpl has to look at Greece.
Posted by: Willy2 | Jun 28, 2015 1:49:58 AM | 40
Maybe the Greeks are simply what their ancient non-slavicly tinged forbears did in the past? Stand up to a huge metropolis and ultimately trigger it's downfall. Are we standing before the Thermopylas and seeing the huge force of the powers that be wasting themselves away with an upstart, nonobedient Greece? The Hellines are itching for a fight and if they do end up outside of the EU, I don't think many of them will care anymore. They are exhausted, plus perhaps sick & tired of this toxic relationship. Aren't Albanians, not Slavs? Are they not a mixture of Illyrians or Thracians?
Posted by: Fernando | Jun 28, 2015 2:15:45 AM | 41
Naked Capitalism had absurd coverage of TPP so don't rely on them for the final word on Greece.
Posted by: jeff | Jun 28, 2015 2:59:08 AM | 42
It is political theater. It is clear, Greece needs debt restructuring, but European politicians do not want to give the success to Syriza. 1920's class warfare at its best. The consequences are clear and maybe intended by the few gnomes of "the institutions".
Germans are lied to by their politicians and media. Germany can't run a trade surplus indefinitely without their debtors being unable to pay back their loans. Either politicians take the one economic zone seriously or they end the idea of European integration.
The idea that you either have to transfer the surplus or lower competitiveness bought by the impoverishment of low/median skilled workers would be quite a change in German politics.
The historical solution is warfare and that is already planned for, when you read "think tank" papers. Let's hope people are too informed for that, nowadays. Looking at Ex-Yougoslavia, Ukraine and Syria I am not that optimistic.
Posted by: somebody | Jun 28, 2015 3:10:57 AM | 43
Posted by: Fernando | Jun 28, 2015 2:15:45 AM | 41
There is no mechanism that I know of to expel anybody from the EU, there is no mechanism to expel anybody from the Euro. They would have to invent that. My guess, it would take a few years.
Syriza has got European politicians over the barrel. That is why negotiators - unprofessionally - try to provoke a Greek bank run (though the European Central Bank has to keep the money to Greek banks flowing), they try to get rid of Syriza in power. The longer the ECB has to keep the money flowing, the greater the "book" loss of Euros to the Eurozone. In a time of "quantitative easing".
When the ECB stops to supply liquidity to Greece with Syriza in power, that would probably topple the Greek government, but who will come to power after Syriza is anybody's guess. I don't think another Greek military dictatorship is an option.
Greece in all likelyhood will be another state that failed for geopolitical reasons. There ia much more at stake. The free Schengen travel zone - Greece is one of the entry countries for all those refugees fleeing from other geopolitical conflict areas. Europe just failed to agree on an common refugee policy.
Posted by: somebody | Jun 28, 2015 4:02:07 AM | 44
This is pure and simple 19th c. racism.
>Why? They were Albanians who spoke Albanian and had Albanian names. They were forced to change and speak Greek and have Greek names. The racism is in the Greeks who imposed a political ideology, in order to have a pure idea of "Greekness", which we in Europe have continued to subscribe to, for reasons of romantic attachment to a mythical past.
Posted by: Laguerre | Jun 28, 2015 4:51:07 AM | 45
"Albanians and Albanians names"
d'ya recall that the khediv of Egypt Muhammad Ali was an Albanian? that Greeks were all over the Egyptian delta, as were the Italians for centuries?
In the Ottoman empire, frontiers were quite fluid, so i can't buy your "speaking Albanian and having Albanian names". When exactly did the Greeks impose a political ideology?
Posted by: Mina | Jun 28, 2015 5:26:15 AM | 46
Hurrah! "somebody" is back!
Posted by: Mina | Jun 28, 2015 5:28:41 AM | 47
And here in the US we are already having the first taste of austerity. Did anyone see how US interest rates have gone up since the end of january ? Rising rates are the most potent weapon to impose austerity upon a country and I expect US rates to go much higher.
Posted by: Willy2 | Jun 28, 2015 5:47:25 AM | 48
For me Paul Mason has a far more credible position on events in Greece than Yves Smith and always has done. At the BBC, Mason was about the only free-thinking journalist left. Naked Capitalism is very good on some issues but highly inconsistent and Yves Smith is sometimes very short-tempered with those who dare to oppose her views.
Posted by: Lochearn | Jun 28, 2015 6:13:07 AM | 49
And the Brits must admit their theft, beg the Greeks' forgiveness, and return the Parthenon Marbles.
Posted by: jfl | Jun 28, 2015 6:41:59 AM | 51
There’s a secret fear gripping the powerful across Europe.
It has policy honchos lying awake at nights in Brussels. It has bankers in Berlin tossing feverishly on their silken sheets. It has eurocrats muttering into their claret.
The fear is that if Greece leaves the euro, the country will return to prosperity — and then other countries might follow suit.
Take a look at the chart, above. (the chart has pre-euro and post-euro spreads of GDP. okie)
As you can see, Greece with the bad old drachma had double the economic growth of Greece under the euro. Double. And it wasn’t alone.
Italy, Spain and Portugal tell similar stories. Their economic growth back in the 1980s and 1990s, when they were “struggling” with the lira, the peseta, and the escudo, makes a mockery of their performance under the German-dominated euro.
Apparently having control of your own national currency and your own monetary policy works well with having your own government and your own national sovereignty.
Posted by: okie farmer | Jun 28, 2015 6:56:42 AM | 52
Greek prime minister calls for referendum on EU austerity demands
By Robert Stevens and Alex Lantier
27 June 2015
“After five months of hard negotiations, our partners unfortunately ended up making a proposal that was an ultimatum towards Greek democracy and the Greek people,” Tsipras said. He said that the EU had subjected Greece to “humiliation and blackmail,” adding that its proposals “clearly violate European rules and the basic rights to work, equality and dignity.”
Nonetheless, he proposed that the Greek people vote on whether to accept these reactionary proposals, calling this a “democratic process.”
“I will respect the result, whatever it is,” he added.
Tsipras’s proposal is a reactionary fraud, designed to lend a veneer of democratic legitimacy to the looting of Greece by the banks at the expense of workers and broad sections of the middle class.
According to Tsipras’s proposal, people can vote either to accept the EU cuts, pushing them even deeper into penury, or vote "no" and face a cutoff of credit from the EU and the ECB, the bankruptcy of the Greek state, and the collapse of Greece’s banking system. Indeed, it appears that, even before the referendum, Greece's banks are beginning to collapse.
(Incidentally Tsipras have called for a "no" vote according Reuters)
Posted by: okie farmer | Jun 28, 2015 7:06:28 AM | 53
Greeks want to stay in eurozone, two polls show
Two opinion polls indicate most Greeks want to keep using the shared euro currency and would prefer a deal with Greece's European partners rather than a rupture.
The polls published Sunday were both conducted before Prime Minister Alexis Tsipras declared early Saturday that he was calling a referendum on financial proposals made by Greece's creditors in return for continuing to fund the country with bailout loans. Still, they provide an indication of public sentiment.
In the poll by Alco for the Proto Thema Sunday paper, 57 percent said they believed Greece should make a deal with its EU partners while 29 percent wanted a rupture. A separate poll by Kapa Research for the To Vima newspaper found 47.2 percent of respondents would vote in favor of a new, painful agreement with Greece's creditors, compared to 33 percent who would vote no and 18.4 percent undecided.
Both nationwide polls were conducted from June 24-26. The Alco poll had a margin of error of 3.1 percent while Kapa Research's was 3.09 percent. [AP]
Posted by: okie farmer | Jun 28, 2015 7:13:51 AM | 54
Posted by: okie farmer | Jun 28, 2015 6:56:42 AM | 52
Of course. Own currency means you can raise your competitiveness by inflation. The Euro sets an equal bar to the competitiveness of European economies.
I guess a functioning Europe will not just need refugee quotas but economic quotas, too.
And improved democracy. From Varoufakis' blog
Following my intervention (see above) the Eurogroup President rejected our request for an extension, with the support of the rest of the members, and announced that the Eurogroup would be issuing a statement placing the burden of this impasse on Greece and suggesting that the 18 ministers (that is the 19 Eurozone finance ministers except the Greek minister) reconvene later to discuss ways and means of protecting themselves from the fallout.
At that point I asked for legal advice, from the secretariat, on whether a Eurogroup statement can be issued without the conventional unanimity and whether the President of the Eurogroup can convene a meeting without inviting the finance minister of a Eurozone member-state. I received the following extraordinary answer: “The Eurogroup is an informal group. Thus it is not bound by Treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup President is not bound to explicit rules.” I let the reader comment on this remarkable statement.
Posted by: somebody | Jun 28, 2015 7:19:41 AM | 55
Greek Referendum Is More Con Than Democracy
28, 2015 4:02 AM EDT
By Marc Champion
The Greek parliament has approved a referendum to decide whether to accept the latest bailout terms offered by the country’s creditors. It will come too late and ask the wrong question.
This is a vote that Prime Minister Alexis Tsipras should have called at least a month ago -- if it were an honest effort to let the Greek people make a democratic choice on where their future lies, which it is not. As it is, the July 5 referendum will be so rushed as to be flawed in principle, and will come after the current bailout program expires. Indeed, it may come after Greece has already suffered a banking collapse.
The referendum is not, as Tsipras repeatedly claimed during his announcement, an expression of democracy in response to the “authoritarianism” of the creditors. His argument that the creditors must bend to the will of his election mandate has been preposterous from the start: In which debtor nation would voters not elect to have easier credit terms? And in what case has the International Monetary Fund or any creditor been answerable to the electorate of its client nation?
I’ve argued for Greece to hold a vote to clarify what its people want. It was necessary because Syriza lied during the campaign to get its representatives elected in January, by offering to end the bailout terms, keep the bailout and stay in the euro -- an option that, rightly or wrongly, was never available. Rather than produce a clearer mandate, though, this proposed referendum would continue Syriza’s subterfuge.
According to a draft cabinet proposal, the question on which Greeks would be asked to vote in just seven days’ time would be whether they want to accept the latest offer from the country’s creditors. This is a complex document that has yet to be translated into Greek and may well be void by Wednesday. It is clear from the language Tsipras used in describing that offer -- “blackmail,” “humiliation,” “ultimatum” -- which way he wants the vote to go.
Again, just as during the election campaign, Syriza officials are not mentioning what all this would mean for Greece’s place in the euro. They are maintaining the fiction that the question of accepting the bailout terms is quite separate from whether Greece defaults on its debt payments, sees its financial sector collapse and is forced to issue its own currency in one guise or another.
Not once in his address on the referendum did Tsipras mention the common currency. When the Associated Press asked Syriza cabinet minister Panagiotis Lafazanis whether the nirvana of reconstruction and progress he described as following from a “no” vote to the bailout would involve leaving the euro, he said: “It is you [the media] who pose this dilemma.”
This is populist dishonesty. It may be that by this point Greece would be better off defaulting and returning to the drachma (though I doubt it). And it may be that a majority of Greeks would make the choice to go it alone, rather than continue a dysfunctional relationship with the nation’s economic partners and creditors (although opinion polls suggest not). But the proposed referendum doesn’t ask those questions.
Tsipras and his party want this vote to legitimize their decision to default and exit the euro, most likely after that decision has already been made, without actually telling Greeks that this is the choice they are making. It gives further weight to my suspicion that Syriza’s erratic negotiating behavior for the last five months has been driven by a preference for default and exiting the euro they could not express, because the party had no mandate for it.
Greek voters should be told the honest truth about what they would be deciding on July 5, if the vote goes ahead at all after the likely chaos of the next week: a return to the bailout terms within the euro, or a default and a return to fiscal sovereignty outside it.
Posted by: okie farmer | Jun 28, 2015 7:25:14 AM | 56
Posted by: okie farmer | Jun 28, 2015 7:25:14 AM | 56
You realize this is an attempt at regime change by the international finance mafia and their media?
"Greek" banks are interesting to say the least.
“We are committed to returning Eurobank to profitabililty over the long-term.We firmly believe that Eurobank and its management team can exceed expectations and provide the first turnaround story in the Greek banking system post crisis”, said Prem Watsa, president of Fairfax Financial Holdings in an address to the bank’s top officials during his visit in Athens.
Fairfax is a major cornerstone investor in Eurobank following the recent capital increase, after investing €400 million in the bank. Presenting Prem Watsa to the 300 participants in the meeting, Eurobank CEO Christos Megalou noted that it is “a milestone and a springboard to the future” for both the bank and the Greek economy to be able to attract international investors of the caliber and the clout of Fairfax and Mr. Watsa, as well as the other cornerstone investors (Capital Research and Management Company, WL Ross, Mackenzie Financial Corporation, Fidelity Management and Research Company, Brookfield International Bank). “We look forward to having them consistently on our side and to drawing from their unique global experience. We shall do our best in order to deliver and to deliver on time”, Mr. Megalou said.
Mr. Watsa underscored the fact that Eurobank is the first Greek systemic bank to have a majority of private shareholders and thus well-positioned to fully take advantage of the opportunities created by Greece’s return to positive growth rates. “Our investments in Greece are long-term investments. Eurobank can be instrumental in the entire project of putting the Greek economy back on track on a sustainable basis, both as an example for the crucial banking sector and by providing a new pattern for financing the Greek businesses”, said Mr. Watsa, adding that with its intention to be represented in Eurobank’s Board of Directors, Fairfax shows that “we will be there for advice and support” to the management. “We believe that the markets have already begun to realize the considerable opportunities that exist in the Greek market and the positive prospects for the country, provided a stable course on the implementation of the reform programme”.
There is logic in the madness.
There are some fun business models around "Greek" banks, too.
We focus on deep value opportunities in a variety of asset classes from sizes ranging from €1m to €500m.
• Non-performing loan portfolios sourced mainly from international banks active in our region. Systemic Greek banks currently remain under-provisioned but this may change over time
• Corporate bankruptcies or accidents when the habitual can-kicking strategy of Greek banks reaches a dead-end. We step in to preserve the underlying value of the company and/or assets. These can be complex situations where we leverage all our legal, financial and transaction expertise and our local knowledge to discover value that is not always ap- parent and to structure a successful deal
• Real estate opportunities from auctions, bank sales, distressed sellers. Our dedicated experienced team scours the market for mispriced assets, performs background legal, planning checks and valuations. We look at income producing properties (office, industrial, logistics), hotel & leisure facilities and land banking
• Hard asset sourcing including ship and aircraft assets and related leases, capital raising for ship acquisitions, infrastructure assets
Posted by: somebody | Jun 28, 2015 7:57:38 AM | 57
Iceland defaulted. Nothing happened. Argentina defaulted (a second time). Nothing happened. This whole hamster wheel hand-wringing in the media (and dead air re Iceland:Argentina) is just psyop for the prols to keep their money in the banks and keep paying the rentier class.
Default! Take all your cash home and put it under your mattress! Run wild in the streets!
Otherwise, the Banksters nee Mil.Gov can, have, and have shown they will again, loot every penny you ever earned in your entire life, leaving you a destitute wreck at the mercy of MICPharma aka ObamaCare, and locked away until death in MICWarehouses aka 'Nursing Homes'.
90,000,000 jobless and homeless Americans failed to put their cash under their mattresses.
Posted by: Chipnik | Jun 28, 2015 8:01:23 AM | 58
"Austerity Measures" bleed the commons and fatten TNC - already here and ones to come for USA:
NAFTA, CAFTA and the secret TPP; Increased Retirement Age, Medicare Cuts, Private Health Insurance Expansion; Fire insurance premiums and deductibles increased, coverage decreased, claims denied; Pensions Disappeared - Looted, displaced by 401K also looted, Privatization of Social Security...
Posted by: fast freddy | Jun 28, 2015 8:27:58 AM | 59
ELA by European Central Bank continued
Posted by: okie farmer | Jun 28, 2015 7:25:14 AM | 56
The disinformation is obvious. According to above FAZ article sources told the BBC that "Greece is considering capital transfer controls and a bank holiday on Monday".Interesting enough, FAZ seems to try to distance itself from the disinformation campaign: they quote Varoufakis on twitter that the Greek government opposes capital transfer controls
Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept.
Posted by: somebody | Jun 28, 2015 8:41:42 AM | 60
Greece has massively benefited from being in the Eurozone.
Posted by: Willy2 | Jun 27, 2015 3:15:33 PM | 15
Couldn't be more wrong. Open the link @52
Posted by: okie farmer | Jun 28, 2015 10:09:06 AM | 62
somebody @59 I think madrones take @2, might be more accurate:
I think finance minister Varoufakis has played things pretty well dragging it out letting the people get all those euros out of the banks to help contribute to rebuilding...
Posted by: okie farmer | Jun 28, 2015 11:03:22 AM | 64
"Greek austerity has paid off..."
Yeah, classic "the economy is doing well! Wages are down!"
Paid off for whom?
Just like WSWS, there are so many people who are sitting far from the epicenter of Greek Depression who want to blab on in very abstract terms about the "Greek Economy" without seeing that for so many Greeks this crisis is not some abstract morality fairy tale along the lines of the ant and the grasshopper, it is a real event that means food on the table and a roof over their heads.
Who should we pray for, the Greek People? Or the Greek "Economy"?
Posted by: guest77 | Jun 28, 2015 11:18:04 AM | 65
Allein am Samstag ist mehr als eine Milliarde Euro aus den Geldautomaten geflossen.
On Saturday alone has flowed from ATMs over a billion euros.
It's not clear in the FAZ article if the banks will be closed because of a 'bank holiday' or because bank run, but it definitely said they'd run out of money. Making 'why' irrelevant.
Posted by: okie farmer | Jun 28, 2015 11:19:32 AM | 66
WSWS are complete finks: "Tsipras’s proposal is a reactionary fraud, designed to lend a veneer of democratic legitimacy to the looting of Greece by the banks at the expense of workers and broad sections of the middle class."
There should be a severing of internet flows from rich countries to poor ones, so at the very least those in crisis don't have to hear the inane blathering of the comfortable. It's like "Dreams of the Rarebit Fiend" applied to global economics... senseless. A full stomach can lead to some wild dreams!
Posted by: guest77 | Jun 28, 2015 11:24:55 AM | 67
nereva @ 16: Excellent link, could be titled Fascism A to Z. Highly relevant today.
Posted by: ben | Jun 28, 2015 11:40:38 AM | 68
WSSWS are worse than 'finks'. They think they're the only true leftists around. Not only that, they're arrogant, and have no support to ANY left bloc except themselves.
Posted by: okie farmer | Jun 28, 2015 11:43:25 AM | 69
"As you can see, Greece with the bad old drachma had double the economic growth of Greece under the euro. Double. And it wasn’t alone. Italy, Spain and Portugal tell similar stories. "
Of course, I mean, wasn't the whole point of constructing the Euro to end this practice which was so irritating to the Germans? To cut off at the knees those countries who "dared" to trade some national GDP for lower productivity?
The Germans have rigged the game. They've made it so that the only way to even play (forget about winning) is to play for their terms. What the Germans have done, in their crafting of the Eurozone, is not just anti-democratic, it's anti-human nature in exactly the same way that people refer to Communism at times trying to stifle even the smallest business impulses. They've made any lifestyle alternatives to "high value-added technical export production" impossible with the way they've rigged the avenues of economic advancement. Of course with "free trade" and the impossibility of protecting nascent industries, no one is likely to overtake the Germans entrenched, cartel position in these economic areas.
So it is as naked an example of structural imperialism as the world has ever seen. It is imperialism as imperial as the US "not-imperialism" it created among its "Good Neighbors/Alliance for Progress" phonyness in Latin America and the Caribbean by setting up certain practices which baked in disadvantages for the "not-colony" at every point in the system.
Posted by: guest77 | Jun 28, 2015 11:56:24 AM | 70
Posted by: okie farmer | Jun 28, 2015 11:19:32 AM | 65
You would have to deduce from that sum normal turn around of cash machines and withdrawal by tourists. It does not sound that excessive then.
You also have to deduce the cash Greek banks are receiving via normal transactions to judge liquidity.
I doubt the number even exists - it would have to be aggregated from various sources.
It is pure spin. Banks are run on trust. The aim is to make Greeks - and tourists - lose trust in Greek banks.
Posted by: somebody | Jun 28, 2015 12:03:57 PM | 71
"Rising rates are the most potent weapon to impose austerity upon a country and I expect US rates to go much higher."
Rates only matter if people/businesses are borrowing to begin with.
There has been virtually zero growth contribution from credit since 2008, only now reaching 2008 levels. If anything savers will have more income if rates go up.
Government spending (the growth rate of) is a measure of austerity, and has been the main component of growth in the U.S. since 2008. Investment has declined as a percentage of GDP and relative to G since the 1980's.
G is a direct component of GDP, (Y=G+I+C+NX). Credit is hidden in C and I, but as noted has not expanded beyond the high in 2008. Neither has G in relative terms, in the sense that historically G has grown at 7% per year but since 2008 has grown at only 3.5%…roughly half of what has been normal since WWII.
If anything, this where 'austerity' will come from.
It's unlikely that credit growth will resume anywhere near historical levels, as those that would use credit are currently maxed out and in a holding pattern. Only an idiot would take on debt in this environment.
Posted by: paulmeli | Jun 28, 2015 12:53:12 PM | 72
I thought for quite some time that a referendum would be likely.
It makes sense to me - the govt. needs a cover - and in any case, a default is a really big decision.
Fr a somewhat different view from b's - here is Michael Hudson http://www.counterpunch.org/2015/06/26/the-delphi-declaration/
Posted by: GoraDiva | Jun 28, 2015 2:10:49 PM | 74
Reasonable people see this Greek tragedy differently. There is a certain logic in both views. Are the Greeks playing a game or does the Troika want to destroy Syriza? Why can't both be true?
Naked Capitalism's Greece coverage has been rather controversial. Every Greece-related post contains much dissenting opinion. Many felt that the coverage was missing the forest for the trees.
Although Yves has said that there was a big gap between the two sides and has been critical from time to time of the Troika, her coverage has been drawn largely from MSM and Troika-friendly sources and resulted in posts that struck many as damning the Greeks for their resistance (which was labeled "incompetence")
NC Readers have been led to believe that:
- a Greek default/GRexit would have limited effect on Europe;
that may be true financially (initially), but the political effect is likely to be great
- Syriza is incompetent;
in some ways but there does seem to be a strategy that has played out
- the Greek side will/must capitulate;
- Tspiras/Yanis will betray the Greeks (like Obama) / HAS betrayed the Greeks
It is questionable whether Tspiras really DID cross his 'red-lines'. He attempted to finesse those 'red-lines' - in a way in which he probably knew would be unacceptable: Hence the economy minister's "Greece is saved!" statement meant to force the Troika's acceptance or culpability.
- Tspiras is a craven politician who has put forth the referendum only to save
his political skin - with a subtext that reads as follows: Syriza is using the Greek people as pawns and the backlash from Tsipras' failure could/will harm the left/progressives.
OTOH, The unwillingness to wait a few days for the Greek people to decide after years of crushing austerity-induced depression have made the Troika seem anti-democratic as well as heartless.
1) I was very critical of Syriza and Yanis after the February agreement with the "institutions". It seemed like a sell-out. But as Greek resistance/noncompliance became clear I re-thought their strategy and concluded that they were forced into a path that is similar to nonviolent resistance movements that aim to demonstrate to TPTB and the public at large the illogic and harmfulness of their policy.
IMO the two-step process that the Troika forced upon Greece is the main cause for the failure of these negotiations. Describing how they will pay the debt would greatly disadvantage Greece in later debt restructuring talks. NOTE: Greece had previously been promised restructuring/forgiveness (even the IMF recognized the need for this) but that never happened so Greece was understandable wary of this 2-step ploy.
2) I applaud the fact that Yves have covered Greece when few paid any attention. Her dedication and attention to detail have been fantastic. I simply think that Greek "incompetence" was too simple an explanation - the logic of Syriza's negotiation strategy was not given due consideration.
3) Although I have been a reader/commenter at NC for over 5 years, I have been put into moderation and find that I am no longer able to comment on Greek-related posts.
Posted by: Jackrabbit | Jun 28, 2015 2:18:36 PM | 75
We lift the veil a little...@b
b links Yves quoting the NYT of all people. Yves' condescension is similar to LaGarde's "send in the adults" statement. Sometimes psychopaths are easy to mis-read. It is not expected that so many people should suffer and die in order that the current power structure survives a little longer, that other countries should dispel themselves of any notion of challenge to that structure .
In May negotiations were continuing, but now the Greek people know what they are up against and what is at stake. Do they want to accept the "final offer" as presented? A Yes presents one set of problems and a NO a different set of problems, all consequential. But referenda and democracy are so "Quaint" in new financialized and corporatized EU.
Posted by: mrd | Jun 28, 2015 2:37:39 PM | 76
Tell me, b , what is the context in this link?--the background?-- and why does this prove Syriza is a scam? Are the opinions of the journalist in the link substantiated by anything? Syriza has had to lay out the reality of the situation to the Greek people using the protracted dance of this negotiation, because that is the only way that about 50% of the people who cling to some romantic notion about staying in the EU, can be educated about the merciless technocrats and the predatory institutions they are dealing with.
The behavior of the German government during these negotiations has been atrocious, and there is no other word to describe it. I can't believe you would have the pluck to accuse the Tsipras government of scamming, on such flimsy grounds. You're suggesting this nation of 11 million who are shackled with an odious and unsupportable debt of almost one-third of a trillion dollars, isn't being represented right now by a brilliant and courageous groups of leaders? Did you read the report that came out of the Greek Parliament that declared their principles?
I don't think anyone is privy to the inner council of the Greek government, except those concerned. No one knows what provisions it has made for default, which I believe is inevitable now. Do the Greek people accept the vultures' offer or do they reject it? I found nothing ambiguous in the concise language, the wording of the referendum.
Posted by: Copeland | Jun 28, 2015 2:42:16 PM | 77
Greek banks will be closed and capital controls will be imposed, Prime Minister Alexis Tsipras says.
Speaking after the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks, Mr Tsipras said Greek deposits were safe.
Greece is due to make a €1.6bn (£1.1bn) payment to the International Monetary Fund (IMF) on Tuesday - the same day that its current bailout expires.
Greece risks default and moving closer to a possible exit from the eurozone.
Greeks have been queuing to withdraw money from cash machines over the weekend.
Mr Tsipras did not give details of how long banks would stay closed, or exactly what controls on capital would be imposed.
Posted by: okie farmer | Jun 28, 2015 2:45:51 PM | 78
Here it comes - the comedy
US pushes for discussion on Greek debt relief
The US Government has been watching events in the eurozone with growing alarm.
And it has now revealed that Treasury secretary Jack Lew spoke with the IMF, Germany and France on Saturday, and urged a resolution to keep Greece in the euro area.
Lew also told them that the issue of Greek debt relief must be discussed (as the IMF also argues)
There are also reports tonight that President Obama has weighed in, telling Angela Merkel to avoid Greece crashing out of the single currency bloc.
Posted by: somebody | Jun 28, 2015 2:46:01 PM | 79
Correction to my comment @75. It should be:
Comments on every Greek-related post contain much dissenting opinion.
Posted by: Jackrabbit | Jun 28, 2015 2:54:15 PM | 80
As I noted @75, IMO it was the forced 2-step process (where the Troika demanded that the Greeks describe how they would pay the debt before talks on debt restructuring) that caused these negotiations to fail.
The focus on the Greeks "incompetence" in delivering a workable plan to service the debt and predictions that the Greeks would ultimately capitulate were meant to pressure the Greek side and deter potential supporters.
Posted by: Jackrabbit | Jun 28, 2015 3:02:09 PM | 81
Thank you, Copeland, at 77 for saying it so well.
Posted by: mrd | Jun 28, 2015 3:06:14 PM | 82
Apparently Varoufakis is an expert on game theory.
There never was any problem in guessing on his modus operandi.
Greece was left with an ongoing problem of insurmountable,
(that is no solution other than default or massive debt-writedowns) exponential debt growth from 2010 onwards.
He's just playing the game to its ultimate conclusion, and the downside for the rest of the EU and the rest of the world is a great deal (100 times more) for every body else than it is for Greece.
The Greeks have already endured a great deal of the pain so far, even though there is worse to come (for Greece). The fallout from the inevitable Greek exit hasn't even begun to dawn on the rest of the EU..... yet
(but i think that they are finally beginning to wake up to the reality )
"they" referring to the EU bureacracy/banking elites.
Mario Draghi said that there was no plan "b" ,and he's dead right on that.
they've already declared their hand, no plan "b" = no idea.
i've heard the saying (from certain Italians) that in italy drivers dont believe in insurance, because that would be just asking for trouble.
EU elites seem to be thinking that Varoufakis is calling their bluff---and that they're not bluffing
Varoufakis is most certainly not bluffing.
however if you want to know how to bluff your way out of a situation,
try looking at this man.....Tom (Durrrrrr) Dwan
https://www.youtube.com/watch?v=GtaAnS_uKVw and https://www.youtube.com/watch?v=ifKrTaTn3As
Posted by: chris m | Jun 28, 2015 3:07:04 PM | 83
Posted by: Jackrabbit | Jun 28, 2015 3:02:09 PM | 81
Sure, but the end result of this now is the worst potential outcome for the creditors who need the bailout, or lose all, whilst Syriza might get a popular mandate for default though they presumably won't survive a non working Greek banking system.
What will happen after this politically in Greece and elsewhere is anybody's guess. It could very well be the end of the Euro.
Posted by: somebody | Jun 28, 2015 3:22:15 PM | 84
"Here it comes - the comedy"
The U.S. administration is run by mental midgets, especially evident when it comes to understanding anything as abstract as monetary systems and finance.
Anything the Obama [any U.S.] administration does wrt Greece will only be in the interests of Wall Street.
So comedy will ensue, except that real live human beings will be suffering.
"Reality is something that, once you stop believing in it, still happens".
Posted by: paulmeli | Jun 28, 2015 3:34:10 PM | 85
The Eurozone Sarajevo moment
A fully fledged monetary union has the means to transfer resources from one region to another. This is what happens in the US or the UK, for example, with higher taxes in areas that are doing well being redistributed to areas with slower growth and higher unemployment.
The euro, however, was constructed along different lines. Countries were allowed to join even though it was clear they would struggle to compete with the better performing nations such as Germany. A stability and growth pact designed to ensure a common set of budget controls was a poor substitute for fiscal union. From the start, it was obvious that the only mechanism for a country that ran into severe difficulties would be harsh austerity. Greece is the result of what happens when politics is allowed to override economics.
If Greece leaves, the idea that the euro is irrevocable is broken. Any government that runs into difficulties in the future will have the Greek option of devaluation as an alternative to endless austerity. Just as importantly, the financial markets will know that, and will pile pressure on countries that look vulnerable. That’s why Greece represents an existential crisis for the eurozone.
It will be said in response that Greece is a small, insignificant country and that the single currency has much better defences than it had at the last moment of acute trouble in the summer of 2012. Diplomats in Europe’s capitals took very much the same view in late June 1914.
Posted by: somebody | Jun 28, 2015 3:46:26 PM | 86
Perhaps the Greeks were "bluffing" - about being sincere in the negotiations. Knew from the beginning that Grexit was inevitable. I remember over two years ago when Varoufakis was expressing the opinion that the Troika had to "drive" Greece out of the Euro. Thinking about that BBC article, I think Greece will default Tuesday and the banks will stay closed until Friday or so. Capital controls may last quite a while.
Posted by: okie farmer | Jun 28, 2015 3:52:47 PM | 87
I agree with B, Syriza is a scam.
Not only are they ideologically weak, and unprincipled, they have shown how pathetic they are they by not establishing banking independence and control which is crucial for Greeces economic development and protection from The financial war they are currently oppressed under.
This vote proposal just proves Syrizas political cowardice.
Want you actually want to declare independence from financial and political tyranny, that's when the hammer will fall economically/politically. there will be short term pain in that regard which Syriza does not want to deal with at all.
Posted by: tom | Jun 28, 2015 4:06:28 PM | 88
The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer to the institutions’ proposals – proposals crucial for Greece’s future in the Eurozone. The very idea that a government would consult its people on a problematic proposal put to it by the institutions was treated with incomprehension and often with disdain bordering on contempt. I was even asked: “How do you expect common people to understand such complex issues?”. Indeed, democracy did not have a good day in yesterday’s Eurogroup meeting! But nor did European institutions. After our request was rejected, the Eurogroup President broke with the convention of unanimity (issuing a statement without my consent) and even took the dubious decision to convene a follow up meeting without the Greek minister, ostensibly to discuss the “next steps”.
Can democracy and a monetary union coexist? Or must one give way? This is the pivotal question that the Eurogroup has decided to answer by placing democracy in the too-hard basket. So far, one hopes.
In our last meeting (25th June) the institutions tabled their final offer to the Greek authorities, in response to our proposal for a Staff Level Agreement (SLA) as tabled on 22nd June (and signed by Prime Minister Tsipras). After long, careful examination, our government decided that, unfortunately, the institutions’ proposal could not be accepted.
We rejected the institutions’ 25th June proposals because of a variety of powerful reasons. The first reason is the combination of austerity and social injustice they would impose upon a population devastated already by… austerity and social injustice. Even our own SLA proposal (22nd June) is austerian, in a bid to placate the institutions and thus come closer to an agreement.
What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.
Posted by: okie farmer | Jun 28, 2015 4:06:40 PM | 89
Posted by: okie farmer | Jun 28, 2015 3:52:47 PM | 87
I think they were very sincere. They explained to Merkel/Schäuble that the choice is transfer/debt restructure or Grexit/default. Politically Merkel would survive neither.
So they all gamble on the political non-survival of Syriza now.
Posted by: somebody | Jun 28, 2015 4:19:48 PM | 90
@89 - okie farmer.
Even though I think Syriza are political cowards re the referendum vote, The fascist arse wipes at the guardian didn't have that in mind when they wanted to conflate a democratic referendum with vote support from Greeces Golden dawns nazism.
"It was one of the the most momentous decisions in the ECB’s brief history and came after the Greek parliament upped the stakes when it voted 178 to 120 in favour of holding the referendum proposed by the prime minister, Alexis Tsipras, on Friday. Embarrassingly for his radical left-led coalition, the neo-Nazi Golden Dawn party joined it in endorsing the proposal, which has to be approved by Greece’s president, Prokopsis Pavlopoulos."
Posted by: tom | Jun 28, 2015 4:22:20 PM | 91
Heiner Flassbeck on Germany's wage dumping policy - in German
Brief translation: Germany made a decisive mistake: It started wage dumping in a monetary union. You can do that with your own currency as you can then simply upvalue your currency. But you cannot do so in a monetary union. You cannot talk about that in Germany, people are silent on this.
Posted by: somebody | Jun 28, 2015 4:42:27 PM | 92
@okie farmer, 87:
I don't think the Greeks were bluffing. They really DID want to convince the Troika of their good intentions and of the need for a comprehensive agreement.
At the same time, however (IMO), they were moving through a process that would show how undemocratic and heartless the Troika was (if there was no agreement). This would raise the stakes for the Toika and unite the Greek people.
Think of it as a virtual sit-in (occupy the euro!?!)
Note: Along those lines, I'm not sure that Tsipras' last proposal was really crossing 'red-lines'. He knows what the Troika wanted to see, and it was NOT tax increases (7.3b of the 7.9 billion in additional revenue was tax increases). Circumstantial evidence: the Greek economy minister's claim that "Greece is saved!" before the Troika had a chance to examine the proposal.
Note: the Obama administration was initially supportive of the Greek side - until it was clear that the Greeks were not 'playing ball'. Then they pressured the Greeks to come up with a plan.
Posted by: Jackrabbit | Jun 28, 2015 4:52:31 PM | 93
b's link is basically the opinion of someone who is aligned and supports KKE, the Greek communist party, which is opposed to SYRIZA 'social-democracy' and 'pro-EU' stance.
Not that I really disagree much with the opinions expressed there though. But from an European 'socialist' aka 'social-democracy' stand SYRIZA isn't performing such a horrible job. Just incompetent, contradictory and generally misguided. Just as most European 'social-democracy' who is sold to neoliberalism and 'European values'. The position of Italian and French government, which are slightly more moderated versions of SYRIZA at the end, is much much despictable.
Posted by: ThePaper | Jun 28, 2015 4:54:41 PM | 94
So they all gamble on the political non-survival of Syriza now.
Posted by: somebody | Jun 28, 2015 4:19:48 PM | 90
At the same time, however (IMO), they were moving through a process that would show how undemocratic and heartless the Troika was...
Posted by: Jackrabbit | Jun 28, 2015 4:52:31 PM | 93
In Varoufakis' speech to the Eurogroup was full of references to point out how vile, almost evil the Troika are.
Posted by: okie farmer | Jun 28, 2015 5:59:51 PM | 96
This talk about "Syriza's downfall" seem pretty preposterous assuming they win the referendum. The Greek people seem to have made up their mind about which way they want to head. For once in the West we have a government which actually represents the wishes of the people. The Greeks know what they are up against, the Greeks know a war when they're in one. Syriza will be leading Greece for the forseeable future because Greece has gone through the fire and Syriza is who emerged as the honest voice of the Greek people. To paraphrase Churchill, democracy usually makes the right decision - after exhausting all of the alternatives.
Posted by: guest77 | Jun 28, 2015 6:28:43 PM | 97
Her is Michael Hudson saying " what you need to do is much more than renegotiate the current loan, you need to put in place a treasury based productive financial system that will finance growth instead of asset stripping". He is talking directly to the Greek people and government
At the end of this video: https://www.youtube.com/watch?v=NNvKGkMunYY
Why hasn't the Syriza scam done that as soon as they were elected ? And if EU rules forbade it, thats went you leave the middle finger while running away from the EU financial terrorists. Well you'd do that anyway.
Posted by: tom | Jun 28, 2015 7:21:59 PM | 98
@karofi 1. The same president of country x that you've ever critisied. Can you name them and enlighten me ?
Posted by: tom | Jun 28, 2015 7:26:13 PM | 99
Ah this second guesing of Syriza is so bogus. There's been more "shoulda dones" in the few months they've had power than should be in the record books.
Syriza had to prove two things neither of which they could do "soon as they were elected": they had to show that they were willing to negotiate with Europe in good faith, and that they have the people's backing for whatever fallout comes from the failure of those good faith negotiations.
Those who think Syria should have just "given the middle finger" to the EU on day one - that was the first and surest road to disaster. The second surest would be to default based on months old election results.
Syriza is doing exactly right. Those trying to "out left" them are hopeless internet poseurs with no skin in the game anyway. Let the Greeks and those they elected do what they must to secure a dignified future for themselves and their country.
Posted by: guest77 | Jun 28, 2015 8:45:36 PM | 100