Moon of Alabama Brecht quote
July 07, 2015

Countdown To Grexit

The Greek referendum seemed to have given some push towards a compromise. But the powers that rule the Euro did not agree. The European Central Bank continues to starve the Greek banks. In a few days they will be toast and a Greek exit from the Euro will be inevitable. That seems to be what the hardliners in Berlin around the psychopathic Finance Minister Schaeuble want to achieve.

The Greek Prime Minister Tzirpas managed to get the backing of the people and most other political parties for a compromise offer. But the promises he made before the referendum already fall apart. The banks did not reopen, a deal is not in sight and given the fast deterioration of the real economy the situation will soon be immensely more difficult.

He will have to answer questions. Why can't he present a written proposal in Brussels today as he promised to do? Why hasn't he anticipated the assault on the banks by the ECB and the powers behind it? Why hasn't he prepared for an exit from the Euro? Why was there no scenario planning anticipating the current situation?

The German media and politicians have villainized the Greek so much, based on crude propaganda a denial of the on facts, that a Grexit seems to be the now favored public opinion in Germany. The public opinion in other northern and eastern European countries is very much the same. People do not want to "give more money to the Greek" even though hardly any money was given to them so far. What was given in taxpayer guarantees was given to German and French banks. The consequences of a Grexit seem to be beyond the realm of discussions.

Supporting some partial debt jubilee now, hardly noticeable when stretched over decades, and giving the Greek economy the ability to grow out of debt would be much cheaper for European taxpayers than a complete Greek default which will trigger the payment of hundreds of billions of guarantees. With an exit from the Euro such a default is very likely. Greece would then have no debt at all. It could again borrow from maybe Russia and other sources who would be happy to make some money lending to a then nearly debt free country.

On top of the catastrophic results of a five years austerity program the carnage in Greece from a hasty, unplanned bankruptcy and exit from the Euro would be huge. But the example of other cases of state bankruptcy show that the recovery is usually quite fast and the long term possibilities much more favorable than the slow death a continued austerity program would guarantee.

(I am still under an unusual workload but the end is in sight.)

Posted by b on July 7, 2015 at 16:19 UTC | Permalink

« previous page

psychohistorian @79: "The world financial systems rely on a whole lot of [misplaced] faith to operate." Greek exit is a withdrawal which the capitalist religion cannot honor.

Posted by: Comrade X | Jul 8 2015 12:41 utc | 101


Just as USAryan and Ukrainian citizens took it up the troika with the illegal junta coup in Kiev, the same fat Mil.Gov pigs in Athens are snorking it up tonight; they got their cake, and US / EU pension funds and Greek pensioners will take the haircut.
After the 2012 restructuring, those banks and asset funds still holding this radioactive garbage are seeking to quell concerns among their investors, that the EU and ECB would 'never allow a second restructuring' of privately-held bond debt. Oh, no, no.

When you wish, upon a star
Makes no difference who you are
Anything your heart desires will

When you wish, upon a dream
There is nothing too obscene
Anything your broker sells, hold and...go...long.

Posted by: Chipnik | Jul 8 2015 12:45 utc | 102

Posted by: Comrade X | Jul 8, 2015 8:36:30 AM | 99

It is hopeless - no draft, no unemployed young generation, grandfathers who remember the bombing nights when they were kids ...

Posted by: somebody | Jul 8 2015 12:47 utc | 103

Generally speaking, let's hold off celebrating the brilliance of Syriza's leaders until _after_ they get Greece out of the Euro. If this potentially great victory against austerity ends up being basically the EU leadership accepting that Syriza June 23 plan for deeper, more brutal austerity, a lot of Varoufakis and Tsipras lovers are going to feel deeply embarrassed.

Let's just wait a little bit here.

Posted by: fairleft | Jul 8 2015 12:53 utc | 104

…"creation" of financial capital, TIAnA. It can be primitively acquired, ie. stolen…

…can't steal something that doesn't exist, undermines your own argument. Look up the Arrow of Time. It may help eliminate some of your confusion.

… It can be privately fabricated, i.e. through the manipulation of "asset" values…

Realization of gains requires monetization…and the money we already have can never lead to more money…it can only be redistributed.

Posted by: paulmeli | Jul 8 2015 13:03 utc | 105

To okie farmer @91: Draghi the mole just got GS some commissions? Or something more nefarious?

Posted by: Comrade X | Jul 8 2015 13:11 utc | 106

It seems Greece needs out of the Euro to be able to devalue it's currency, give it a monetary boost that it can't get under the Euro. The Euro may need two currencies, or some kind of relegation plan, that economies can be moved into. Otherwise, one currency over many fiscal policies is going to create problems

Posted by: Scott Conner | Jul 8 2015 13:30 utc | 107

Posted by: meofio | Jul 7, 2015 10:20:30 PM | 67

Thanks for the link

Posted by: jo6pac | Jul 8 2015 13:36 utc | 108

The financial attack on Greece: where do we go from here?

The remedy is to replace these central banks with what preceded them: national Treasuries, whose proper function is to monetize government spending into the economy. The basic principle at work should be that any economy’s monetary and credit needs should be met by public spending and monetization, not by commercial banks creating interest-bearing credit to finance the transfer of assets (e.g., real estate mortgages, corporate buyouts and raids, arbitrage and casino-capitalist gambles).

After duly diligent analysis, Michael Hudson argues for Greece's - and all nations' - restoration of Seigniorage.

Posted by: jfl | Jul 8 2015 14:05 utc | 109

67;Anglo Saxon elite?Nah,its all Zionist inspired thievery.The anglo saxons have given up the ghost,the schmucks.

Posted by: dahoit | Jul 8 2015 14:22 utc | 110


The MMT Moneyacks are back trying to sell their Magic Coins/Beans again. It's probably wise to hang onto your cow as a productive asset and leave the Magic Coins for the fabulists.

Posted by: Wayoutwest | Jul 8 2015 14:46 utc | 111


"Tsipras has said that he is going to the European High Court, which is his chosen way to challenge an expulsion of Greece by bureaucratic fiat. And If the German government really is committed to Grexit now; then there has to be a negotiation that signifies some kind of legal structure, if that is to happen. Tsipras has neither disrespected Varoufakis, nor does he disrespect the mandate, the "OXI". He has simply brought someone, the new FinMin, Euclid T. in whom he trusts to close the deal. The new man is the right person for the next phase in this struggle. . ."

Thanks, Copeland - this makes perfect sense in line with the latest proffer Tsipras has made. The letter he's written has no specifics but in very general terms speaks to the legal foundation of the eurozone. Junker and co. are making threats of a non-legal nature, and the implications are that it is they that are out of order, not Tsipras, which will be for a court to decide. And since the Troika are dragging their heels on immediate aid to Greece in the interim, it is they who are on shaky grounds.

Posted by: juliania | Jul 8 2015 15:20 utc | 112


Capitalism is the myth cover for the religion of inheritance and accumulating ownership of private property.

Posted by: psychohistorian | Jul 8 2015 15:36 utc | 113

................wonder if this will go thru? geez louis.. .

Posted by: james | Jul 8 2015 15:53 utc | 114

Copeland@77, juliania@111

So how would this play out?

Like this???

Friday: Greece submits final-final-proposal

Saturday: Europe rejects it

Sunday: European Leaders meet for GRexit

Monday morning: ECB cuts off ELA

Monday afternoon: Greece files action with European High Court on emergency basis

Tuesday?: European High Court issues temporary injunction, forcing ECB to make ELA available
Weeks later: EHC rules on the matter

if favorable: Greece gets court-ordered bailout
if unfavorable: GRexit

Posted by: Jackrabbit | Jul 8 2015 15:56 utc | 115


"The MMT Moneyacks are back trying to sell their Magic Coins/Beans again."

These kinds of schemes are not part of the MMT framework. But then the MMT community is used to dealing with ignorance.

The only reason 'MMT Moneyacks' come up with these kinds of schemes is because the public is woefully uninformed about how monetary systems work, which is bewildering since there is nothing particularly complicated about them, requiring nothing more than addition and subtraction.

So they counter fabricated nonsense with accounting-consistent nonsense.

Any monetary system is at it's root a simple accounting system interleaved with a legal framework that can easily be manipulated by TPTB at will (and has been countless times over history).

The People thus have the right to propose accounting-based (and mathematically sound) 'solutions' in response to the ridiculous dogma surrounding our money promoted by TPTB.

If we are going to live by the myth that sovereign governments somehow 'go into debt' as they create their own currency then we can also live by the reality that that mythical debt can be cancelled by a simple accounting entry. All it does is move the 'debt' from bondholders savings accounts at the Fed to their checking accounts at the Fed. It's still 'debt' it just doesn't earn interest. Debt the sovereign will always be able to service in either case.

Of course they would cry like babies if we did that because the rentiers are accustomed to having a tollgate at the currency-creators door…they're 'entitled' to earn interest off the People's money…charge us for the use of our own capital.

It is here that Prof. Hudson maintains his focus…that the rentiers are the parasites that are killing the rest of us. Any weapon in the arsenal to combat these monsters is OK by me.

Posted by: paulmeli | Jul 8 2015 16:13 utc | 116

psychohistorian @112: How about, "Capitalism is the myth cover for the religion of inheritance and [appropriation] of private property. Referring to 100, I meant that capitalist crusaders will continue to attack an apostate Greece.

Posted by: Comrade X | Jul 8 2015 16:21 utc | 117

176 victimes of the bombings in the last 24 hours in Yemen
what Yemen?

Posted by: Mina | Jul 7, 2015 4:01:49 PM | 23

Clearly they must not be using those terrible barrel bombs or I'm sure we'd be hearing all about it... The Saudis must be using those "My Little Pony" bombs that don't so much "kill" as they send people straight to heaven with cuteness and kisses. No need to discuss such altruism then, it would only make the Saudi's blush.

Posted by: guest77 | Jul 8 2015 16:31 utc | 118

Maybe a temporary injunction by the EHC would be enough to make the Troika more reasonable? The ECB would be facing billions of potential losses via an acceleration of the bank run (if there is ultimately a GRexit).

Wouldn't Greece have a good case at EHC because it should have a right to ESM and ECB liquidity? Can anyone here comment on how strong their case is?

Posted by: Jackrabbit | Jul 8 2015 16:40 utc | 119

New York Stock Exchange has suspended trading. Technical computer issue, they say. Hacking?

Posted by: lysias | Jul 8 2015 16:54 utc | 120

pm @116: The money rent of the private banks is a means of regulating extraction in the economy. To say you are bewildered why the public is "woefully informed" is to neglect the campaign to keep them misinformed. You yourself, thus seem uninformed.

It's like you said, you're looking for a clever myth to overthrow the banker's myths.

By the way, would it be safe to say that the government is now more central to the extraction process?

Posted by: Comrade X | Jul 8 2015 17:08 utc | 121

Jackrabbit @ 118

"Can anyone here comment on how strong their case is?"

I can't but yesterday or the day before Prof Bill Mitchell, who is well informed wrt the legal framework, says that the ECB's sole mandate is to provide that liquidity, and would be breaking the rules in refusing to do so.

But then again, this is a political problem mainly and the Euro technocrats have no problem breaking the rules if it suits their purposes. Germany and France have done so many times in the past.

IOCIYAG (It only counts if you are Greek…or Irish, or a Cypriot or…)

Posted by: paulmeli | Jul 8 2015 17:11 utc | 122

Draghi the mole just got GS some commissions? Or something more nefarious?

More nefarious Comrade, yes the commissions, but insider knowledge of how it worked, plus full commitment to destroying Unions, pensions, etc, i.e. a war against the working class.

Posted by: okie farmer | Jul 8 2015 17:14 utc | 123


I tried to follow the MMT discussions for a few months and found them a wonderful sleep-aide. It seemed to me to be little more than a scheme to continue to prop-up the dead end consume and grow paradigm that is destroying us but without the guilt of debt.

Posted by: Wayoutwest | Jul 8 2015 17:30 utc | 124

Is the possibility of Greece's taking their case to the European High Court (EHC) the reason that they have not introduced alternative currencies like IOU's and/or taken other measures (as suggested by Yanis) to prepare for GRexit? They need to have 'clean hands' if they are to get the best possible hearing from the court.

Looking forward to any comments regarding Greece and EHC.

Posted by: Jackrabbit | Jul 8 2015 17:39 utc | 125

Comrade X @ 120

"The money rent of the private banks is a means of regulating extraction in the economy."

Not sure what you're meaning here…but if I understand correctly it would be more accurate to say that underwriting by banks rather than the interest regulates extraction. Interest redistributes wealth from the debtor to the creditor.

I'm well aware of the campaign to keep them uninformed and I alluded to it in my comments.

My bewilderment is with the fact that money systems are simple constructs that are as easy to understand as balancing a checkbook. The basics of monetary systems have been known for thousands of years and haven't changed much, other than being encapsulated within opaque legal frameworks.

When the conventional wisdom was that the Earth was flat, many if not most people knew that to be a myth…why are the myths about money so hard to penetrate?

A clever myth (actually an accounting artifact rather than a myth) to overcome bankers myths is a reasonable option…how can you fight nonsense with a serious proposal when the nonsense is internalized within the average person's belief system? They wouldn't know a serious proposal if they saw one…they have to rely on 'experts'…appeal to authority (one of the most serious logical fallacies).

There is little hope in overcoming misinformation with facts and logic while 99% of the so-called 'experts' are telling us that the myths are in fact true. We get this crap even from fake Nobel luminaries like Krugman.

Yes, I do believe the government is in on the con…so-called 'governments' have been co-opted by the very forces we've been talking about. That's the problem. Misinformation is their strongest weapon.

We are all marks in the biggest con in history.

I'm not sure we disagree that much on most of these issues…just talking past each other. I have not been defending capitalism, only the Laws of Arithmetic.

Posted by: paulmeli | Jul 8 2015 17:51 utc | 126

The legal name of the "European High Court" is actually the European Court of Justice, and it: the highest court in the European Union in matters of European Union law . . . it is tasked with interpreting EU law and ensuring its equal application across all EU member states. The Court was established in 1952 and is based in Luxembourg. It is composed of one judge per member state – currently 28 – although it normally hears cases in panels of three, five or thirteen judges. The court has been led by president Vassilios Skouris since 2003.

The President of the Court is Greek!

Posted by: Jackrabbit | Jul 8 2015 17:57 utc | 127

"I tried to follow the MMT discussions for a few months and found them a wonderful sleep-aide."

More proof that you're about as bright as a lump of coal sitting at the bottom of a deep dark mine shaft.

Posted by: guest77 | Jul 8 2015 18:04 utc | 128

@fairleft - "a lot of Varoufakis and Tsipras lovers are going to feel deeply embarrassed."

I'm really not sure why so many people have to turn this into a game of "love" for individuals. It's really ridiculous. I haven't met anyone interested in the situation in Greece and wishing Syriza well who isn't doing it because they want to see the Greek people escape depression and austerity - inside or outside of the Eurozone.

Posted by: guest77 | Jul 8 2015 18:07 utc | 129

BRICS countries will definitely start using their local currencies for mutual settlements quite soon, the head of Russia’s VTB bank Andrey Kostin told RT Wednesday at the BRICS summit in Ufa.

READ MORE: BRICS/SCO summits in Russian city of Ufa LIVE UPDATES

“We definitely see a growing interest from the countries to make settlements in local currencies,” the CEO of Russia’s second biggest bank said. 40-50 percent of all the mutual settlements among the BRICS countries can be performed in domestic currencies, Kostin estimated, RIA reported.

The Chinese yuan as the leading currency can be used in settlements among BRICS member states, Kostin said, adding that the Russian ruble can be used for that as well.

He says there will be a growing interest from leading Russian exporters to the process of switching to national currencies.

Posted by: guest77 | Jul 8 2015 18:11 utc | 130


MMT is nothing more than a description of how monetary systems are arranged within an accounting paradigm. To reject MMT is to reject arithmetic.

The Sectoral Balances identity…

(G-T) + (I-S) + (X-M) =0

is to the flow of funds as F=ma is to Newtonian physics. Since monetary economies are defined by the flow of funds (GDP), it behooves us to understand what is and what isn't possible within this framework.

Most of modern macroeconomics ignores this framework and therefore ends up erring on the wrong side of virtually every economic issue important to the majority of citizens.

The simple view is that economic growth requires growth in spending, which is a direct function of the growth in the money supply (that of the non-government). This can be considered axiomatic. We can blow up bubbles, but true growth isn't zero-sum.

I can't imagine what it is about the complex, opaque nonsense we call neoclassical economics that makes it more interesting than a description of how the the system actually works, but I suppose billions of people can't be wrong.

As far as the guilt of debt is concerned, subject to the realities of double-entry accounting, money is debt regardless of whether it earns interest or not, the non-government's asset (money) is the governments liability (debt), thus it is debt by definition, but all debt is not the same. Let's call it DINO.

We will have to come to terms with that boogeyman if we are to continue with Capitalism in any form. Private debt is what always ends up killing us…Greece has a 'private debt' problem, inasmuch as it has to borrow to spend just like any other private citizen in the true sense of the word.

Joining the Eurozone was like checking in to the Hotel California.

Posted by: paulmeli | Jul 8 2015 18:33 utc | 131

@ psychohistorian @ 34

Exactly! She's a true believer . Its amazing to me, a layman, that the "professionals" and "experts" all ignore the glaring fact that once upon a time in America, all of those structural features of the economy WERE regulated and heavily, and it lead to general and widespread prosperity. Once up a time in America monopolies (capitalist over-accumulation) were seen as a bad thing by the ruling class (go figure), and they were remedied with strong anti-trust laws and progressive taxation (90% seemed reasonable in the "golden age")..It is the ascendancy of finance capital which has turned everything on its head. The rule and supremacy of finance capital over the rest of society ,according to some Marxist theories (and only Marxists ever studied such things),is the very definition of fascism. I'm finding that hard to argue with these days - and MS Smith comes entirely from the finance sector.

Posted by: psakiwacky | Jul 8 2015 19:08 utc | 132

To pm @126:

An example of Hudson's deficient propagandizing:

The reality is that central bank money creation has just financed the greatest inflation of modern history – asset price inflation of the real estate market by junk mortgages, inflation of stock prices by junk bond issues, and central bank Quantitative Easing to create the fastest and largest bond market rally in history. The post-1980 experience with central banks has removed any moral or economic logic in their behavior as lobbyists for commercial banks, defenders of their special privileges, deregulator of financial crime, and extremist right-wing blockers of a public option in banking to bring basic services in line with actual costs. In short, if commercial banking systems in nearly every country have become de-industrialized and perverse, their enablers have been the central banks.<\BLOCKQUOTE>
This is neither accidental nor due to central bank inflation. Here's one main dispute between us: an analysis of this transformation must explain the situation, including the enemies' tactics and motivation. Their choice to subvert and defraud, to invest in sociopaths and compradors, flows not just from a technical opportunity; it comes out of crisis. Do the technocratic do-gooders fail to highlight the resource exhaustion/pollution, the elites' loathing, the fraud of consumer society because it's impolitic? Their propagandizing of technocratic fixes is hollow, unconvincing, and does not at all engender trust.

They cannot say the prole truth, thus they caught in the web of myth creation.

Posted by: Comrade X | Jul 8 2015 19:38 utc | 133

Posted by: Jackrabbit | Jul 8, 2015 1:39:07 PM | 125

The reason why they extend their threats to the last last last offer, now really really last last ultimatum is that it is going to be very, very, very, very messy.

The European courts are the least of their worries. Greece is not the backward third world country German tabloids are trying to make it but an international trading place from the times Germany was Europe by Celts.

Greece's main trade used to be shipping and the connected banking serving expatriate communities is something you would not wish to mess with legally or professionally, very international with a long tradition/experience. Eg here Greek national bank, it is not the only one.

he National Bank of Greece (NBG; Greek: Εθνική Τράπεζα της Ελλάδος) is a global banking and financial services company with its headquarters in Athens, Greece. From the operations in Greece come 50% of its pretax preprovision profits, complemented by 35% from Turkey and 15% from Southeastern Europe.[2] The group offers financial products and services for corporate and institutional clients along with private and business customers. Services include banking services, brokerage, insurance, asset management, shipping finance, leasing and factoring markets. The group is the largest Greek bank by total assets and the largest by market capitalisation of 4 Billion Euro as at 25 June 2015. It is however not the largest by assets and liabilities in Greece, trailing Piraeus Bank. The Swiss banker Jean-Gabriel Eynard and Georgios Stavros founded NBG in 1841 as a commercial bank. Stavros was also elected as the first director of the Bank until his death in 1869.[3] From NBG's inception until the establishment of the Bank of Greece in 1928, NBG enjoyed the right to issue banknotes. When the Athens Stock Exchange was founded in 1880, NBG immediately listed on the exchange, a listing it has retained to the present. NBG is listed on both the Athens (ATHEX) and New York stock exchanges (NYSE).


The bank has over 500 branches in Greece and some in Australia, Egypt and United Kingdom. It owns bank subsidiaries in Albania, Bulgaria, Cyprus, Macedonia, Malta, Romania, Serbia, South Africa and Turkey.

And there is interesting stuff like Black Sea Trade and Development Bank with member states Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, Ukraine.

The attempt to cause a bank run by silly remarks was criminal enough. To leave fingerprints would mean real trouble.

Posted by: somebody | Jul 8 2015 19:50 utc | 134

New York Stock Exchange reopened a little less than an hour ago.

Posted by: lysias | Jul 8 2015 20:02 utc | 135

Noirette @88

Hilarious! Thanks.

Posted by: Jackrabbit | Jul 8 2015 21:26 utc | 136

Comrade X @ 133:

"Here's one main dispute between us: an analysis of this transformation must explain the situation, including the enemies' tactics and motivation."

(I'm assuming this is part of your comment… the formatting has gone horribly wrong.)

Seems like you want any analysis of a (this?) problem to include 'the secrets of the human nature'. They aren't really secret are they?

What motivates the darkest of human instincts to exploit his fellow man with extreme cruelty is way beyond my pay grade. It is well-known though that greed knows no bounds. This part of the equation doesn't really need a lot of analysis. We must find the people that have and use these traits against the citizens of the World and eliminate them, one way or another. And, we must continue doing it because nature spits out monsters as fast as it spits out saints.

The real problem is this…as some famous robber baron of the past once said "I can always hire half the population to kill the other half".

We have met the enemy and he is us. Ignorance is a weapon.

Posted by: paulmeli | Jul 8 2015 21:32 utc | 137

jackrabbit@125, before and after:

I can't answer you on the court issue but found this from Michael Hudson:

". . .What is needed to put this basic principle into practice is creation of a new international forum to adjudicate how much debt can reasonably be paid – and how much should be annulled. In 1929 the Young Plan (which replaced the Dawes Plan to deal more rationally with German reparations) called for creation of such an institution – what became the Bank for International Settlements (BIS) in 1931 to stop the economic destruction of Germany by bringing its reparations back within the ability to pay. . ."

I hadn't read this article when I made my original post about the International Court, have been following the link in his article to a long forum of speakers in the second note to this article:

His explanation of how the German debt was handled is the clearest I've seen so far. I only got halfway through the video linked in the footnote - very clear that Greece is not an isolated case.

Posted by: juliania | Jul 8 2015 23:41 utc | 138

Woops, should have said European High Court there, sorry.

Posted by: juliania | Jul 8 2015 23:48 utc | 139

@paulmeli, 131, 137:

“Joining the Eurozone was like checking in to the Hotel California.”

Brilliant! Much sharper on than my own comparison of a few years ago:

The Eurozone

“You unlock this door with the key of imagination. Beyond it is another financial dimension, beyond that which is known to working people—a dimension not only of crimes unseen and unheard of, but of unsound mind. It is a dimension as vast as debt and as merciless as compound interest. You’re moving into a land between rights and robbery, between fascism and free trade. That’s the signpost up ahead—your next stop, the Eurozone!”

ps—It was Jay Gould who, asked if he worried about a revolution in the US answered in the negative: “I can hire one half of the working class to kill the other half.”

Lenin’s effective reply: “The capitalist will sell us the rope that we will hang him with.”

Strange how the subjective factor of the planetary class war and possibly our very survival can be rendered in terms of a game of chicken, seeing who can out-corrupt the other…

Posted by: Vintage Red | Jul 9 2015 0:55 utc | 140

guest77 at 129: My main point is that celebrations of victory over austerity are premature, and the current excessive optimism -- which based on the latest news seems counterfactual -- can lead to deep despair when/if it is disappointed.

The referendum was great, but all it did was give Syriza the opportunity to win or lose. And this _is_ the party that had offered only a couple weeks ago to impose even deeper austerity on Greece. If it makes the same offer again, perhaps the EU masters will come their senses and accept. I hate to say it, but that sounds like a very likely outcome to this crisis.

For a depressing example, look at this new headline: "Greece offers to implement pension and tax reforms for 3-year bailout." The article of course doesn't specify what these 'reforms' are, but of course they are CUTS not 'reforms'. Here is what Syriza offered two weeks ago:

€2.5 billion alone is to be cut from pensions. To achieve this, the Greek government will put restrictions on early retirement, increase premiums, and cut top-up pensions.

Up to €1.8 billion is to be obtained by increasing the sales tax on goods which are basic necessities. It is still unclear if the tax on foodstuffs in general will rise to 23 percent, or if there will be exceptions taxed at just 13 percent. ...

All of these measures will mainly affect poor layers of the population.

Their latest actions indicate that Syriza continues to be obsessed with staying in the Euro, at almost any price. EU intransigence and brutality have finally made the people ready to leave, especially since the alternative seems to be a worsening of an already insane austerity. Sadly, though, it seems to me fairly obvious that Syriza's leadership is marching in the wrong direction.

I think people's excessive optimism and hope is making them ignore what is happening and what Syriza is proposing ... and the probable result. Well, probable unless irrational and vindictive intransigence wins the day at EU banker headquarters.

Posted by: fairleft | Jul 9 2015 0:58 utc | 141


I'm not too interested in what's seen to be probable or not. None of us are anything but bystanders, with zero input into the reality of Greece - not counting our bloviating on blogs of course. I am interested in the outcome, but having no input reduces me to waiting and seeing what it is. I do hope for the best for Greece. My choice of favorites among the players seems not to have much bearing on the outcome.

I hope that Michael Hudson's and others' advice is taken on Creating New Money, which is what the Greeks are going to need. I do think his analysis of the situation there has been accurate. I hope his - and not only his - advice is taken not only by the Greeks but by all of us worldwide, whipping our governments into line. I do cheer for small 'd' democracy and exhort us all to work for its implementation.

Posted by: jfl | Jul 9 2015 2:15 utc | 142

@juliania 112, @jackrabbit 125

The referendum mandate gives some confidence to the Greek negotiators; also their leverage is improved in court, should the financial institutions or the servile governments in the EU try to expel Greece in any extralegal way.

Greece is on firm legal footing, I would think, to adopt emergency financial measures, in order to respond to issues of public safety and security issues, and for the fundamental right of sovereignty.

Before he stepped down as FinMin, Varoufakis pretty much threw down the gauntlet concerning the issuance of IOUs. It is not an accident that this idea was put out publicly, even though the government is seemingly dissociated from that option by the minister's resignation.

What is not mentioned is the roll out of the drachma; but that is pretty much the other shoe that could drop. I think the readiness of the Greek government to put drachma in circulation is seriously implied.

Recently, in Zero Hedge, there was a little anecdote about a restaurant in Athens that had put up a menu in their window, with the various prices set in drachma. Could just be whimsy or wishful thinking, in the spirit of amusement. Take it with a grain of salt; but maybe some hint of a supply of banknotes is already being mentioned discretely.

Posted by: Copeland | Jul 9 2015 2:30 utc | 143

Fairleft @141

offered only a couple weeks ago to impose even deeper austerity on Greece

That's not a 'fair' reading of the proposal, Fairleft. You are taking this out of context. You are reguritating Troika-friendly MSM talking points.

Syriza has repeatedly sought debt restructuring that would put investors mind at ease and investment that would spur economic growth.

The Troika has refused to put promises to talk about these other measures in writing. While Syriza shows flexibility about structural reforms, the Troika remains intransigent with respect to making commitments that would end the crisis.

Posted by: Jackrabbit | Jul 9 2015 3:09 utc | 144

Jackrabbit: If anything I'm repeating a talking point found in WSWS, which cannot be found in the mainstream media. Anyway, Syriza conceding on an increase in austerity -- especially increased for the poor and old -- is a fact. Syriza offered a deal to the Troika that was horribly bad for Greeces bottom 80%. Whatever the hopes and dreams about future concessions that surrounded Syriza's offer.

Posted by: fairleft | Jul 9 2015 5:20 utc | 145

Posted by: Jackrabbit | Jul 8, 2015 11:09:37 PM | 144

Christine Lagarde has come out publicly now for debt restructuring plus reforms. And Angela Merkel's red line is a solution without the IMF.

A Grexit would not work for anybody in Greece depending on pensions or imports. It would also force even more people to find work in the Eurozone. As is, Greeks have huge purchasing power across their borders - Turkey, Bulgaria, Albania, Macedonia. With debt restructuring it might open the Greek market for investment - with the effective wages and the competition of Turkey, Bulgaria, Albania, Macedonia.

Posted by: somebody | Jul 9 2015 5:21 utc | 146

Fairleft @145

We see the same misleading talking points again and again. Mostly they are just attacks on Syriza/Greek leadership and/or the Greek people.

The "Syriza accepts austerity" argument is just another that tries to discredit Syriza/Tsipras by portraying them as betrayers. They could've done so in much easier and straightforward ways if that was their intention.

Syriza originally wanted a comprehensive negotiation that included talks on "structural reforms", debt restructuring, and new investment. The Troika FORCED Syriza to present a proposal on structural reforms BEFORE the other aspects of a solution to the crisis could be negotiated.

Syriza resisted this. They did NOT present a proposal before the April 30th deadline and when they DID present a proposal, it included debt restructuring (and I think investment also).

Syriza's resistance was described as "incompetence" by naysayers but it was only logical. Describing how they would service the debt would greatly disadvantage Syriza in later discussions about debt restructuring and investment. AND Syriza can be more flexible about 'structural reforms' if they are getting a significant package of debt restructuring and investment. But the Troika have REFUSED to put ANY promises regarding debt restructuring and investment in writing.

You need to question your sources. Think about what makes sense. The media has been used to pressure Syriza and to deter allies.

Posted by: Jackrabbit | Jul 9 2015 6:59 utc | 147

Somebody @146

There are no good choices.

The Troika is not being any more reasonable after the referendum. Greece seems to have some sympathy from the US and France, but these are largely due to each country's narrow interest. The US basically wants to ensure that Greece doesn't turn toward the BRICS/SCO and France is concerned about Marie LePen.

Greece may be able to take their case to the European High Court as a last resort. This is a wildcard. Doing so might cause the ECB to lose billions - costs that would be passed on to other nations, causing more anger toward Greece. And it may just delay the inevitable.

So crushing austerity in the EuroZone or GRexit? The good news is that a 'managed GRexit' would be much less of a disaster than the unmanaged GRexit that Greece was threatened with 5 months ago. The US+France (for their own reasons) may force the EU to recognize and act upon their moral obligation to help Greece to make the transition.

Posted by: Jackrabbit | Jul 9 2015 7:28 utc | 148

Posted by: Jackrabbit | Jul 9, 2015 3:28:38 AM | 148

US finance and military will not have their door to ex-Soviet South-east Europe and the Black Sea destroyed.

New leaks - French insider - How Europe strangled Greece

Short highlight: Schäuble asked "How much do you want to leave the Euro"

Djisselbloem in February: You sign the memorandum or your economy will melt. No? We will destroy your banks.

Syriza has become - and probably alway was - a multinational Greek national project.

The EU is folding fast - The irony of Tsipras listening to the EU parliament accusing him of serving the clientele system of his country - while for everybody to see - EU parliamentarians (and EU bureaucratic leadership) clearly did not represent any meritocracy of their country - being lavishly funded by the taxpayers of their countries ...

Quick, how much could we save by cutting down on the clearly use- and powerless EU parliament?

Posted by: somebody | Jul 9 2015 8:18 utc | 149

Another French view: Creditors thought to weaken Angela Merkel would risk Germany leaving the Euro and therefore prefered to get Greece out.

Posted by: somebody | Jul 9 2015 8:23 utc | 150

Yves Smith at is now "shutting down comment on most posts".


Posted by: Jackrabbit | Jul 9 2015 8:58 utc | 151

jackrabbit: My sources are reporting the facts. Syriza proposed a crushing increase in austerity. It was rejected because it wasn't crushing enough. And there is a good option, Grexit (something very similar worked very well for Argentina), and a bad one, staying in a Euro realistically controlled by international bankers and the neoliberal ideology. That means the ongoing desperate efforts by Syriza to bend over backwards to stay in the Euro are wrongheaded and if succesful will be brutally bad for Greece's bottom 80%. This is particularly true of pensioners, who've already been impoverished by previous cuts, and are targeted for much worse in the new Syriza proposals.

Posted by: fairleft | Jul 9 2015 9:21 utc | 152

Vintage red at 140. “Joining the Eurozone was like checking in to the Hotel California” (paulmeli) and your description. Yes…

On a more mundane level, what happens when almost literally overnight interest rates go from say 15% to 4%? Madness. Prudence (economising) and fear (of inflation, indebteness, etc.) ZAP.

Chart of Greek GDP

2001: 143 (about) -> joins Euro
2004: 200
2006: 247
2009: 354 (peak)
2015: 237

That is almost 2.5 x 2001-9! Public debt also rose about 2.5 x in 10 years…

Population rose negligibly 2000-2010 and started to decline 2011 (wiki)

Lets compare with Spain, horrid boom as well

2001: 1157
2009: 1634 (peak)
Following years: between 1499 and 1355 (trough, 2011)

The G-S difference is very interesting.

Posted by: Noirette | Jul 9 2015 9:46 utc | 153

jackrabbit @151:
I saw they are shutting down comments, too. She said her site has a significant following among "policymakers, journalists, staffers, and financial regulators." The logical conclusion is she wanted to show these "Very Serious People" that she'll brook no dissent from the rabble. It has turned into a very authoritarian website.

Posted by: madisolation | Jul 9 2015 11:28 utc | 154

strange effects of the "bank run"

Despite the closure of Greece’s banks, no less than 1 billion euros has flowed into the state coffers since June 29, when capital controls were imposed, allowing the government to cover some of its obligations.

The fear of a possible haircut on bank deposits has convinced thousands of enterprises and taxpayers to pay off their income tax – in lump sums, too – and value-added tax dues via e-banking in order to lighten their holdings.

Despite government assurances that there won’t be a bank bail-in, many citizens consider it inevitable and are trying to reduce their bank deposits, either by paying off taxes, paying salaries to employees, or even settling debts to suppliers and associates.

Bank data show that from June 29 up to July 8 a total of 700 million euros was forwarded electronically to the tax authorities, while another 300 million euros was paid in cash at the country’s tax offices.

Part of this 1 billion euros has been used for the payment of salaries at the start of July and some 300 million euros will be used for the half-month salaries of civil servants due on July 15.

Posted by: somebody | Jul 9 2015 11:36 utc | 155

New York Times against Merkel

This strategy promises something more than an economic breakthrough. It represents Germany’s last, best hope for avoiding a catastrophic re-entry as the unquestioned power on the Continent. Preventing the consolidation of such power in a single country (and in a single leader) was one aim of the European Union’s architects. Will Ms. Merkel have the courage and wisdom to defend their vision?

Posted by: somebody | Jul 9 2015 13:16 utc | 156


' Preventing the consolidation of such power in a single country (and in a single leader) was one aim of the European Union’s architects '

This was all an accident ? Who they hell do they think they're kiddin'.

Posted by: jfl | Jul 9 2015 13:47 utc | 157

Vintage Red @ 140
Noirette @ 153

The analogy of the Eurozone to the Twilight Zone is a good one, considering how surreal the situation is.

Jay Gould…yes, thanks, I was too lazy to look it up.

Here's a new report on where demand really comes from…

Government Expenditure Accounts for 48.1% of EU GDP

if anything this finding seriously understates the importance of public investment…government expenditures lead to more spending downstream.

Not much left for the 'invisible hand' to do…mop-up maybe.

Posted by: paulmeli | Jul 9 2015 14:24 utc | 158


The question really seems to be, for us onlookers, on whose side is time? More and more I am thinking that time is on the side of anti-austerity forces as time percolates knowledge down and out to those of us whose ignorance has been far-reaching, me included.

For instance, I and many like me, we are just now digesting the 1953 conference in London which gave Germany a 50% relief package so that it could recover from the savageries of war and become a viable nation once again. And we are also digesting the vagaries of the European Union, what its founding principles are, and how they affect the rest of the world, included nations and those outside.

It's as if as the Troika flay the Greeks, they lay bare the cancer-infested bones of their own institution. It's not good for them. And all of this new knowledge is having unintended consequences for Europe - unintended by the Troika, but very good for Europe as a healthy constituency. Other voices are speaking up - I recommend visiting the long video that is a footnote to Michael Hudson's yesterday article at The man from Ireland gave a rivetting short speech.

Posted by: juliania | Jul 9 2015 15:02 utc | 159

(recent discussion) In a way, Greece is a country sub-prime crisis. The curve (see my previous post) is very like house-sales/mortgages in the US, if I may apply such a metaphor.

The ugly part is that then the banks take the houses, which are subsequently sold at a discount to predatory mega-landlord-cos for rent.

While Greece is presented as ‘small’ - pop 10 million, with a ‘tiny’ GDP - 2% of Eurozone - and ‘Southern’ meaning sorta ‘poor’ ‘lackadaisical’ - it is actually far richer than one thinks. I may elaborate on that later. So there is that. There are reasons why the creditors will not budge, debt restructuring NO. They want their pound of flesh, and more, but not from retirees or mom-and-pop food stalls taxed by VAT, as that represents pennies and no profits!

somebody at 155. In the same vein, the Syriza Gvmt. has signed an accord with Switz. re. Greek resident’s bank accounts. Done by Panagiotis Nikoloudis (nominated by Tsipras.) The plan (expected to be voted by the G Parliament before 31 July) is for a fiscal amnesty, those who declare previouly hidden accounts in Switz. will be taxed 21% on the capital if they act promptly; if not (idk the time-span), 40%. They can keep their bank-accounts in Switz. Automatic exchange of information starts in 2018, following EU/Switz/other agreements, rules. -from Swiss press

This was the only sensible thing to do imho. For the moment, nobody knows how much money is involved.

Posted by: Noirette | Jul 9 2015 15:30 utc | 160

This article puts facts on the table I'm not competent to assess,(might have to wash my mouth out with soap after this) - but I do get that the reason for the Troika's refusal to act in Greece's favor is a toxic assets scenario that is even huger than the one we faced when our US banks got bailed out by our taxpayers, and the ramifications will be like dominoes tipping back because those toxic assets are still in the mix somewhere, all across the spectrum.

Posted by: juliania | Jul 9 2015 15:33 utc | 161

Here is the link to Tsipras' important speech and rebuttal to the European Parliament:

(I have made more comments over at in posts on Greece - I won't clutter here further.)

Posted by: juliania | Jul 9 2015 17:59 utc | 162

Posted by: Noirette | Jul 9, 2015 11:30:43 AM | 160

The ugly part is that then the banks take the houses, which are subsequently sold at a discount to predatory mega-landlord-cos for rent.

Actually, that would work very well for Greece. All they have to do is to return the U-Boats and Eurofighters they bought.

Posted by: juliania | Jul 9, 2015 11:02:13 AM | 159

For instance, I and many like me, we are just now digesting the 1953 conference in London which gave Germany a 50% relief package so that it could recover from the savageries of war and become a viable nation once again. And we are also digesting the vagaries of the European Union, what its founding principles are, and how they affect the rest of the world, included nations and those outside.

That was the cold war. Stalin and the US had divided Europe on a clear line. Both Germanies were made show cases for the respective systems. The whole of Europe was devastated but West Germany recovered fast - by US investment.

Greece in the Stalin/US drawing of a line was part of the Western Bloc - so their communist/left/republican partisans got no help from Stalin in the 1946-49 Greek civil war where the US and Britain fought against them whilst in 1956 Hungarians got no help from the West. The Greek military coup end of the 1960's was the continued Western attempt not to let Greek communists/leftists/republicans come to power.

Whilst the Soviet Bloc had quite a few countries with strong ultranational ie fascist collaborationist movements, the West (Britain/US) got Greece with a strong Communist/left/republican resistance movement and they fought it by using Nazi collaborators.

So yes, Germany had lost hot war, but won cold peace. And Greek collaboratiors continued to collaborate.

The sticking point now - reparations for Greece - is not so much the treaty of 1953 but the reunification treaty of 1990. The treaty of 1953 pushed the can of reparations down the road to a future peace treaty. The treaty of 1990 was very consciously not called peace treaty to avoid the issue of reparations to some 50 countries Germany had declared war to.

There is a rumour that the Euro was the price for reunification.

The German attempt to push Greece out of the Euro against British and US wishes is a case of historical amnesia.

Posted by: somebody | Jul 9 2015 18:26 utc | 163

Outcry Grows After EU Gives Green Light to TTIP

After the European Parliament approved the controversial Transatlantic Trade and Investment Partnership on Wednesday, civil society organizations and social movements have again expressed widespread concerns about public health, the environment, and other issues to be impacted by the deal.

The investor-state dispute settlement system in the TTIP expands allows foreign investors and corporations to sue countries for perceived infringement on their profits. Despite opposition, this feature of the deal remains in tact after the EU vote, a troubling move for social movements.

“In essence, foreign investors are still to receive substantial additional rights compared with domestic companies and a parallel justice system to domestic courts to enforce these rights.”

The 'secret treaties' will accomplish on worldwide scale what the EU is presently attempting in Greece: nullification of self-determination and the effecting the fungibility of all its national assets. The TNCs will literally own Greece and - with the 'secret treaties' - our world.

Posted by: jfl | Jul 9 2015 23:13 utc | 164


Thanks very much for the post-wwii history of Greece ... the Greek people have been being abused by DE/US/UK for way before there was an EU.

I've been reading Donny Gluckstein's account of the second World War, as well as William Blum's accounts of the abuse of Greece 1947 to early 1950's as well as 1964-1974.

There is, of course, Costa Gavras' brilliant, chilling account of the CIA backed coup, Z (1969), as well.

If anyone deserves an end to their non-stop abuse by the ruling class it is certainly the Greeks.

Posted by: jfl | Jul 10 2015 0:05 utc | 165


Greece: όχι Loses

As many including myself early on predicted, Syriza and Tsipras are trojan horse technocrats, who have sold out the Greek people for a new ECB bailout, this being the Through The Looking Glass inversion of Menem's rise to power in Argentina, where he shook his fist, exhorting the crowds, "I will not betray you!!"

It's interesting that b, or maybe it was B of the original MoA, who predicted on the election of Obama in 2008, that Ω was just a Manchurian Candidate in a TTLG inversion of Bush Jr. All the Hope and Changers howled in protest, just as they all squealed with glee when Syriza and Tsipras 'stuck it to the ECB'.

Sure they did.

They gave away everything, fooled the Greek people into a national referendum accepting through their 'No' bailout vote the original 'odious' debt and original austerity sanctions. And now Tsipras just published their hand-written double-austerity through national-privatization roadmap for accepting new EU bailouts~!

Nothing escapes the credit-debt trap of the Vampire Squid, or the pure cupidity and venality of the technocrat pop stars of Mil.Gov, any nation, anywhere.

"[Anything which] is a living and not a dying body... will have to be an incarnate will to power, it will strive to grow, spread, seize, become predominant - not from any morality or immorality but because it is living and because life simply is will to power... 'Exploitation'... belongs to the essence of what lives, as a basic organic function; it is a consequence of the will to power, which is after all the will to Life."

from Nietzsche's Beyond Good and Evil

And now Evil has come to Life.

Posted by: Chipnik | Jul 10 2015 9:17 utc | 166

Yeah, Chipnik, it's officially time now to gnash our teeth in despair over 'betrayal' by formerly St. Syriza ... Headline: Tsipras quells rebellion as Greeks set to pass tougher three-year rescue package ... Deal looks to be more severe than the proposal rejected by Sunday's referendum and - crucially - there is no mention of debt sustainability

Bill Mitchell of billyblog fame was also pessimistic about Syriza, in A Greek exit is not rocket science. His main point is that it's not that hard to explain and pretty damn obvious that an exit can be very beneficial to the Greek economy, if managed well (duh, like a Keynesian would), and, also obvious, continued austerity especially deeper austerity (Say It Ain't So!) won't be.

There's something really deep-seated about the spectacularly anti-Keynesian conventional wisdom. This diseased thinking has deeply infected even heroic 'leftist' leaders who ostensibly and very vocally are 'leading the fight against austerity'. How can that be? What do they feed these people, how do they bully the common sense out of them, at the world's elite colleges these days? We rightfully fear for our children and their impending AP Economics or Econ 100 courses.

Posted by: fairleft | Jul 10 2015 14:01 utc | 167

PM Tsipras says, " we came together or we'll all go. Or we continue together, or we'll all go".

Michael Hudson says, in a recent economics speech, that the present finance system is a destroyer of the market itself. The institutions, the Troika, exist only to prop up the banks, and not to monetize the societies. The whole finance apparatus, in this configuration, has become "a system of foreclosure on the public domain".

The EU political class, subservient to this system--as manifested by the Troika--will continue to move the goalposts and the Greek government will not be able to give them enough to satisfy this complete process of liquidation and foreclosure.

The Greek people have passed in recent years through the phase of protest, and have arrived now, at a state of resistance. Tsipras is not walking this thing back. And whatever he does, he will be judged in short order by the "OXI".

But the meaning of Tsipras statement, "we continue together or we'll all go." refers not merely to the act of solidarity in Syntagma Square, but to his stated willingness to take the issue to the European Court of Justice, and to challenge the EU on the basis of whether it is a community and a Union, or whether it is not--or whether instead, it serves a few of its member states, at the expense of others.

And there is more at stake here than Greece alone. Look at Spain. PM Rajoy's gag law is now in effect, essentially criminalizing dissent. Spanish people are living in a police state. That country is a casualty of a new kind of war, conquest by the financial sector--followed possibly by the dead quiet one only hears in a fascist state.

Is this to be the outcome in one European state after another?

Posted by: Copeland | Jul 10 2015 14:37 utc | 168

Mitchell wrote earlier today, before the austerity capitulation became clear:

... I am still trying to work out an impression of what is going on in Greece and Brussels. ... The sheer antagonism of the Baltic States towards Greece is a newly revealed element which is interesting. If their logic prevails then it really is a race to the bottom unless the nation is Germany. Representing the desired benchmark by massive mediocrity if not near disaster (as in Latvia, Lithuania etc) seems to be the new normal in EU debates. Spare the thought. The Baltics should be joining Greece in a solidarity pact to oppose austerity and seek fundamental changes to the EU Treaties instead of siding with the Troika’s death wish for Greece. But there is quite a bit of uncertainty in trying to guage the Greek position. One is led to the most obvious, simple and consistent interpretations of that position – that Syriza is a fractured coalition and those currently in positions of authority (Prime Minister etc) are surrender monkeys who have miscalculated dramatically. But that would tell us that they are acting with such venality towards their people as to be almost an unbelievable narrative. ...

[And yet ...]

Yes, once again, the so-called ‘progressives’ who think it is fine for Greece to remain in the Eurozone, fundamentally misread the Groupthink that binds the Troika together as a ‘Recession Cult’.

When the Greek government got a modest concession renaming the Troika – the “institutions” – apparently that was a success. It is a Recession Cult and should be thought of as such.

Anyway the big external spending boost is not about to happen – and really, it never was.

The Troika’s position has really only hardened from ridiculous to something beyond believable – if you sit outside the neo-liberal Groupthink that they are trapped within.

Posted by: fairleft | Jul 10 2015 14:44 utc | 169

Good overview of what Syriza is proposing at Naked Capitalism, with the inaccurate (because Greece is already destroyed, this will just deepen the crater) title “Tsipras Has Just Destroyed Greece”. The full text of the Syriza proposal is included at the bottom of the article. The proposal contains no debt relief, and protects the military from cuts for at least the first year. There's also this linked observation:

Close confidant of Yanis Varoufakis and Greek government advisor, Jamie Galbraith, confirmed that Tsipras never intended to win the referendum. He essentially confirms the report by Ambrose Evans-Pritchard that many readers rejected, that the referendum was a ploy to save Tsipras’ and Syriza’s face in admitting defeat and allowing a new coalition or a new government to cut a deal with the creditors.

Of course, there's always the small hope that the capitulation comes too late. But I don't think that will be the case.

Posted by: fairleft | Jul 10 2015 15:08 utc | 170

Defense spending cuts halved:

nationalist [sic] defence minister, and leader of the junior coalition party ANEL, is meeting with the PM.

ANEL have been unhappy about plans to abolish the tax exemptions for Greek islands, but in an an olive branch to the party, Mr Tsipras is not implementing the full €400m in defence spending cuts next year.

No debt relief:

a government "non-paper" sent to parliamentarians makes mention of a commitment to reprofile Greece's debt after 2022.

That is the year Greece is set to pay back deferred loans from Europe's rescue funds.

fairleft @162: "What do they feed these people, how do they bully the common sense out of them, at the world's elite colleges these days?" justified fear and elitism.

Posted by: Comrade X | Jul 10 2015 15:23 utc | 171

Well, this sucks ass and I feel terrible for the Greek people who probably had high hopes of escaping the EUsterity monster, getting control of their country back, and believing that voting for Syriza and oxi on the recent referendum would get them there and improve their prospects for the future despite short-term extreme hardship. I'm wondering how much this had to do with NATO and whether Greece would have been allowed to foster closer ties with Russia in event of a Grexit without a fight, as in immediate and vicious color revolution or possibly even straight up invasion. So to get this right- Syriza actually submitted a proposal dictating MORE austerity than was required by the Troika, with no debt relief or restructuring? And I'm assuming this is a done deal? Was this whole past few months pure theater? Curious to see what the reaction of the Greek people is going to be. Jesus H this is depressing to me, I have to think there's gonna be some really pissed off citizens for whom this matters much much more than to myself.

Excellent comment thread btw, thanks to ALMOST all of you for the very informative comments and lively but respectable debate, great links, etc. I'd really only been following this whole crisis (circus?) on the surface level.

Posted by: Colinjames | Jul 10 2015 16:26 utc | 172

fairleft @170

Galbraith's statement is somewhat less than 'confirming'. Yves finesses this with "essentially confirming".

And THAT is a good example of why Yves has had so much push-back on her Greek coverage.


Furthermore, Yves coverage was flawed in many ways.

1) Debt restructuring WAS an issue.
Yves rejected the notion that debt restructuring had any importance WHATSOEVER after the February Agreement was signed. But for the GREEKS, it was still an issue. The Greek program for ending the crisis required debt restructuring and investment as well as the structural reforms.

It is simple logic. The Troika's demand that Syriza describe how they would service the debt BEFORE talks about debt restructuring was extremely disadvantageous to the GREEKS. And the Troika refused to put ANY promises about future debt restructuring or investment in writing.

2) Syriza/Tsipras as a sell out.
Yves claimed that Syriza had accepted austerity. Yet that claim did not take account of Syriza's full program which (as noted above) included debt restructuring and investment to grow the economy.

A primary surplus in a growing economy is much different than a primary surplus in a contracting economy.


Yves has been very hard on Tsipras personally. But Tsipras had opportunities to capitulate that he didn't take. His actions have been too damaging to the Troika/Germany/EU-elite for him to just be a sell-out. The reality is more complicated than that.

For example, weeks before the referendum Yves had speculated that Tspiras could break with the Left Platform and ally with a centrist party. When Tspiras brought together other parties after the referendum, Yves saw this as exactly what she had foreseen. But it clearly wasn't.

Then there is the AEP article. Which could reasonably be seen as nothing more than gossip. IMO whatever truth there may be in that article simply did warrant posting out to the readership. That Yves closed down comments after posting this article is probably indicative of revulsion at her posting it.

3) There were many other issues that detracted from her coverage. Yves seemed to rely on sources that, if not pro-Troika, were unlikely to be pro-Syriza. She never took notice of what many saw as a media campaign to discredit Syriza (pressuring Syriza to 'make a deal', and detering allies). And she pushed Troika-friendly points like the polls that showed that the Greeks preferred the Euro (but the referendum showed that their preference had a limit).

She was, at times, unecessarily harsh on critics (see Wayoutwest's complaint above). And the certainty of her positions was off-putting AS WAS her apparent need to win points at the expense of her critics. All in all, it seemed that she had something 'in' for Syriza - and indeed she confirmed this, to some degree, by saying that Yanis had once lied/misled her(!!)

That Yves was right about much of the negotiating dynamic is cold comfort as it doesn't redeem the faults. Most of what she was 'right' about was obvious to all: that the Troika is a harsh negotiator that could destroy Greece; that there was no 'solution space'; that GRexit is not the preferred solution; that Syriza made mistakes due to their inexperience; etc.

Posted by: Jackrabbit | Jul 10 2015 16:31 utc | 173

This is the last item in the capitulation proposal:
Privatisations: assets including the electricity grid company, regional airports and ports including Pireaus and Thessaloniki will be sold off.

Posted by: okie farmer | Jul 10 2015 17:00 utc | 174

Here's the whole list:

Posted by: okie farmer | Jul 10 2015 17:02 utc | 175


"Most of what [Yves] was 'right' about was obvious to all: ... that GRexit is not the preferred solution ..."

Grexit is not only the preferred solution, it is the only solution for anyone with a real world understanding of who and what rules the Eurozone. The probable Grexit story isn't a mystery; the outcome would be hard for a matter of a few months, and then would turn positive, probably very positive relative to Greece's recent history:

We can be guided, in part, by what happened to the Argentinean peso in the years after the Argentinean government floated it during the 2001–02 crisis. Greece, for example, would endure some short-term drop in the new drachma once it was traded on foreign exchange markets.

It is true that the nations such as Greece do not have the large quantities of natural resources that Argentina enjoyed, but it is equally untrue to say they have no desirable assets that are exchange rate sensitive.

Of importance is that Argentina created new export capacity given the competitive boost it received from the depreciation. For example, Greece would likely experience a tourism boom, notwithstanding the fact that the crisis has run down its capacity somewhat.

The positive change in the direction of the current account would also put a floor into the downward spiral of the new currency as it did in Argentina’s case.

Further, in the same way that Argentina had to bear a major inflation impulse as its currency depreciated, which eroded real living standards, the reversal in standards was just as swift as the currency started to appreciate on the back of renewed growth. Greece would experience the same dynamic as Germans flooded into the sunny Greek islands to escape the Berlin winter and enjoy the dramatically cheaper vacations.

A similar dynamic occurred more recently when Iceland entered crisis and saw its currency drop. The Kroner is now higher against the Euro than at any time since the crisis began and the gain in competitiveness the nation has enjoyed as been to its advantage.

Posted by: fairleft | Jul 10 2015 17:19 utc | 176


... whatever truth there may be in that article simply did NOT warrant posting ...

... indicative of the revulsion ...


Also: If Tsipras really didn't want to win the referendum and is really just a pro-business sell-out (like Obama), then why is the Greek government pursuing investigations of the media oligarchs for their anti-government coverage of the referendum?


Another thing. Yves argues that Syriza's bungled negotiation has set back the left. That it would have been better that Syriza capitulated "on day one". This makes no sense to me. It strikes as more an excuse for her anti-Syriza stance than a real objection. Should the left EVER ask that a people not stand up for their interests? Not call out injustice? Nevertheless, it raises the question: what was gained?

I'd say much was gained by the both the Left AND the Greek people. First, austerity and the inequities inherent in the EU/EZ was challenged in a way that raised awareness across Europe. And I have to believe that the Greeks will ultimately get a better deal than if they had quietly succumbed to the Troika.

Yes, the new Greek proposal looks bad. But it still falls short in some ways from what the Troika wanted. For example I believe that it relies more on tax collection than cuts (especially with regard to pensions). And I think that there is much in the background that we are unaware of (due to support from US and France). For example, the promises of debt restructuring (probably not in the form of write-offs) and investment are less likely to be reneged upon. And, if GRexit does occur, the EU is much more likely to help Greece through that they were 5 months ago when their interest was only to make an example of Greece if Greece chose GRexit.

Posted by: Jackrabbit | Jul 10 2015 17:24 utc | 177

Grexit is not only the preferred solution, it is the only solution for anyone with a real world understanding of who and what rules the Eurozone.

I'm not arguing against GRexit. But as you point out, what makes GRexit an attractive option is the intransigence of the EU-elite/Troika - and what makes GRexit undesirable is the same intransigence. A sudden unplanned GRexit would be a disaster.

What the Greeks MAY have accomplished over the course of the last 5 months is a softening of the Troika's hardline such that:

1) debt restructuring (probably not in the form of write-downs, though) and investment are much more likely; and/or

2) Greece will get EU support (technical help, trade and humanitarian aid, etc.) if a GRexit occurs - instead of being made an example of.

But even if Greece believe that it was in their interest to GRexit, they would lose the benefits of #2 if they were to appear to choose option over #1.

Posted by: Jackrabbit | Jul 10 2015 17:59 utc | 178

Yanis Varoufakis writes in the Guardian: Germany won't Spare Greek Pain: It has an Interest in Breaking Us Debt restructuring was our aim: little did we know, when we embarked on negotiations, that Grexit might be a goal for eurozone leaders

Posted by: Jackrabbit | Jul 10 2015 19:09 utc | 179

Thanks jackrabbit, for link @179

Varoufakis explains the situation in a very cogent and clear way. The goal is a concentration of political and economic power for the better off nations in the EU (especially Germany). Greece has been whipped and chastised with a view toward kicking the country out of the EU. I would guess probably all the side bets, which have been made by the vampire speculators, have also been made on the side of Grexit for some time.

The misery of the Greek people is done with malice, for the purpose of stripping the nation of its assets, real estate. shipping, and everything that can be stolen, in what is essentially a financial act of war.

But the sociopaths and psychopaths, who are orchestrating this, would probably claim it's just business.

Varoufakis is probably right about there being an ulterior motive in the example being made of Greece, to discipline the other troubled economies in the Union, and strike fear into the hearts of their leaders, so they will tow the line.

Posted by: Copeland | Jul 10 2015 20:17 utc | 180


From a BBC live video I caught one day, interviewing a poor old Palestinian farmer whose 40 hectare 400-year old olive orchards had been bulldozed for New Israel gated condos, when a white Mercedes roared up, and an Israeli woman dressed in Chanel jumped out, screaming and waving the farmer away.

She pushed right up to him, shouting, 'We won, you lost! It's just business, get over it! NOW GET OFF MY LAND!!'


It's just bidnes, ... get over it.

Posted by: Chipnik | Jul 11 2015 6:11 utc | 181

Posted by: Copeland | Jul 10, 2015 4:17:23 PM | 180

Actually Tsipras has, successfully up to now, created a new type of politics. He integrated left and right, and from there took the center.

Ruling class politics have been to neutralize left and right by splitting them and setting them against each other, integrating the right, whilst claiming the center, so that Social Democrat strategy has been to try to claim the center, too.

This might now be over. And it explains why traditional European politicians are invested in seeing Syriza fail. It very obviously is also a generational thing.

If the austerity measures the Greek parliament voted through on promise of some type of debt restructuring and investment stand and the debt restructuring and investment is put off to nowhere, Syriza will fail. If not, they will have money to play with.

The assessment from January shows that this is not difficult. It was made difficult by politics.

Posted by: somebody | Jul 11 2015 9:22 utc | 182

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