Greeks vote to reject incumbants, austerity

[Puppycow]

High-stakes talks in Brussels break up without decision on Greece’s future

Yet at risk now was the fate not only of Greece, but of European unity more generally — with a handful of hard-line creditor nations including Germany and, even more so, Finland, blocking any rush toward a deal.

The resistance set up a dramatic political struggle between those nations anxious to aid Greece and others that appeared to want to make an example of it. Those still reluctant to back a quick deal spoke of a profound lack of trust in the far-left government of Greek Prime Minister Alexis Tsipras, who only a week ago campaigned against a cash-for-cuts deal with Europe.

Now, Tsipras is pledging to make billions of euros worth of cuts and reforms to secure one, despite a resounding rejection of more austerity in the national referendum he called last week.

“We are not ready to accept calculations that are not believable,” German Finance Minister Wolfgang Schäuble, told reporters in Brussels. “We cannot only rely on promises. Trust has been destroyed over the past months in an incredible manner.”

One Greek official with direct knowledge of the talks said that Finland was emerging as the single toughest holdout against a deal. With the Greek issue having become a major political land mine for the government in Helsinki, its representative appeared so set against an agreement that securing one might require the invocation of emergency procedures to override its possible veto.

Other resistant European ministers also sought evidence that Greece was committed to enacting the roughly 13 billion euros in spending cuts and tax increases that it proposed in a bailout request last Thursday. Some wanted Athens to pass legislation by Wednesday that set in stone the cuts and reforms, according to a member of the Greek delegation in Brussels who spoke on the condition of anonymity to discuss the negotiations.

Hard-liners, the official said, were also calling for strong oversight of Athens by Greece’s so-called troika of creditors — the European Union, the International Monetary Fund and the European Central Bank.

 

[ceptimus]

BBC news - EU summit cancelled as talks continue http://www.bbc.co.uk/news/world-europe-33497353

When is a deadline not a deadline? Whenever politicians are involved.

 

[GlennB]

BBC news - EU summit cancelled as talks continue http://www.bbc.co.uk/news/world-europe-33497353

When is a deadline not a deadline? Whenever politicians are involved.

Douglas Adams — 'I love deadlines. I love the whooshing noise they make as they go by.'

And it seems that any agreement (which could be scuppered by EZ parliaments anyway) is likely to depend on Greece passing legislation to confirm the reforms they've proposed. 'By Wednesday' or something. Uh, right. That's plenty of time to draft and pass laws.

I wish somebody would just put an end to this charade. Germany wants Greece out - end of story.

 

[aleCcowaN]

Grexit was and continue to be a reality. The fact is not yet formalized and organized but that doesn't make it less real.

They are offering a golden paved road out for Greece. Not noticing it and acting accordingly is foolish.

If the ECB keeps the ELA at this level indefinitely and accepts a collateral from the Greek government to avoid any bank intervention, it's a sweet deal. Nobody would consider a Greek default on Troika's funding a deal breaker. It's fresh money what's out of the question, for a good reason and for sake and best interest of Greece. The new Prussian-Hungarian Empire, or whatever it may be called, is right about it, no matter Schäube looks like a gargoyle and is no Metternich.

The lack of effectiveness of the Greek political system as a whole is dispiriting. Shame on them. They deserve the popular rage that is coming from the full range of political stances.

 

[Amazer]

Douglas Adams — 'I love deadlines. I love the whooshing noise they make as they go by.'

And it seems that any agreement (which could be scuppered by EZ parliaments anyway) is likely to depend on Greece passing legislation to confirm the reforms they've proposed. 'By Wednesday' or something. Uh, right. That's plenty of time to draft and pass laws.

I wish somebody would just put an end to this charade. Germany wants Greece out - end of story.

I really don't think that Germany is all that eager to kick Greece out of the Euro, if only Greece was seen to be serious about improving matters. To me it seems that thus far Greece done very little except talking about what needs to be done. Now it's time they actually do something or face the consequences.

 

[aleCcowaN]

This is time to re-read Prospect Theory (my personal story I told earlier in this thread, living in anguish and yet having hard currency in hand). Besides, as far as I remember, during this century no government taking measures to forbid withdrawals from bank accounts lasted much (Argentina 2001, Iceland 2008). Lack of trust from the Eurozone is nothing compared to lack of trust from the Greek people. And I'm not meaning ballots but wallets, if somebody asks.

 

[NWO Sentryman]

So Greece are on a countdown

 

[caveman1917]

if only Greece was seen to be serious about improving matters.

The previous governments' improvements with the EU's austerity class war programs summed up:

What more improvements do you suggest? There's still 40% room on youth unemployment, and pensions and wages can go down at least another 50%. Child poverty hasn't even reached half yet, still a lot of room for improvement there. And, this is incredible, the top 10% only reached 56% of the wealth?! Such massive room for improvement there, who could ever understand why the Greeks wouldn't want to go along with that? Clearly they don't understand basic economics, if they don't "prostitute" themselves better to attract "investors", then the money will go to a place where the "investors" don't have such problems getting their austerity class war programs accepted, everybody knows that.

 

[caveman1917]

So Greece are on a countdown

A countdown to a coup, how nice. But what the article says is true, the Greek population was warned about not voting no on that referendum.


Killing the European Project

Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.

Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.

 

[LondonJohn]

The previous governments' improvements with the EU's austerity class war programs summed up:
[qimg]http://www.internationalskeptics.com/forums/picture.php?albumid=1268&pictureid=9971[/qimg]

What more improvements do you suggest? There's still 40% room on youth unemployment, and pensions and wages can go down at least another 50%. Child poverty hasn't even reached half yet, still a lot of room for improvement there. And, this is incredible, the top 10% only reached 56% of the wealth?! Such massive room for improvement there, who could ever understand why the Greeks wouldn't want to go along with that? Clearly they don't understand basic economics, if they don't "prostitute" themselves better to attract "investors", then the money will go to a place where the "investors" don't have such problems getting their austerity class war programs accepted, everybody knows that.

There's a massive elephant in the room here. No matter how hard the Eurozone leaders scrabble around trying to make it look like this is not a serious (and maybe terminal) blow to the whole Euro project, and no matter how surreal and absurd the spectacle is of Tsipras suddenly affecting to offer the acceptance of draconian austerity measures (despite being elected explicitly on the opposite ticket, and despite having urged - and received - a "no" vote in last Sunday's referendum....).

The elephant in the room is this: even if some sort of half-baked "emergency relief" package is agreed and implemented, alongside super-tough austerity measures, Greece is beyond all doubt doomed if it remains within the Euro. Of that there is no doubt. And the price of any further bailout at this advanced point - swingeing austerity that will plunge Greece into even deeper industrial and social decline - will increase the futility of the exercise.

There is only one rational, reasonable way forward. Only one. Greece must exit the Euro, in an orderly and decisive fashion. And it must announce within the next week that this is going to happen, and implement it by September. In the process, Greece will take a very large devaluation hit. That will hit Greece's imports very hard, but it's unavoidable. And the upside is that it will immediately boost Greece's export and tourism industries. Furthermore, it will force the circulation of cash, since people will have to exchange their Euros (hoarded or not) for the new Greek currency if they want to spend their money within Greece.

Once Greece announces an exit from the Euro, I would expect the ECB to approve emergency contingency funding through the transition, on humanitarian and anti-contagion grounds. I would expect the ECB and the IMF to write down a huge proportion of their loan book to Greece. And I'd see this as the only possible feasible way for Greece to rebuild its economy and welfare state. Frankly, anything else will just prolong Greece's slow suicide and make it all the more painful for all concerned.

 

[LondonJohn]

A countdown to a coup, how nice. But what the article says is true, the Greek population was warned about not voting no on that referendum.


Killing the European Project

While Krugman's analysis is accurate and correct (the austerity measured being proposed then and now make it a virtual certainty that Greece will suffer a long slow economic death), I think it's far too narrow in its scope and context.

Basically, there are sound reasons why the austerity demands by the Eurozone group are so severe (mainly linked to fear of contagion, internal political pressures, a fundamental desire not to let countries rack up crazy debts then "get away with it", and personal animosity towards Syriza's hostile and aggressive "negotiating" stance). So even though the demands are unreasonable and unworkable, they are inevitable.

And secondly, Krugman brings up "a grotesque betrayal of everything the European project was supposed to stand for", but he apparently fails to add that in fact the betrayal of the principles of the European project actually happened many years ago. It happened when the Euro project was forced ahead in spite of the inability to persuade national populations or governments to accept the concept of an overarching Euro Federal Government (a necessary and mandatory concept if there was to be a properly-functioning single currency). And it happened again when the ECB effectively signed up to act as the bank of last resort behind all Euro member countries that were borrowing in Euros - every commercial banker leaped at the chance to lend to voracious borrowers such as Greece, Spain, Portugal and Italy, safe in the knowledge that they were virtually guaranteed their money back (plus interest), even if/when those profligate countries got into economic trouble.

 

[caveman1917]

The elephant in the room is this: even if some sort of half-baked "emergency relief" package is agreed and implemented, alongside super-tough austerity measures, Greece is beyond all doubt doomed if it remains within the Euro. Of that there is no doubt. And the price of any further bailout at this advanced point - swingeing austerity that will plunge Greece into even deeper industrial and social decline - will increase the futility of the exercise.

I see your elephant and raise you a mammoth - the austerity programs implemented in the rest of the EU and its effects on other countries that are not much better off than Greece, such as Spain, Portugal, Italy and increasingly pretty much the rest of them as well.

There is only one rational, reasonable way forward.

It is irrational to posit that.

Only one.

I can think of several already, EU-wide general strikes come to mind, for instance.

Greece must exit the Euro

The flee response? It could also stay and fight. Besides, District 12 may not be pretty, but that doesn't mean it should be thrown out of Panem either

And I'd see this as the only possible feasible way for Greece to rebuild its economy and welfare state.

While the rest keep dismantling their welfare states and trashing their economies?

 

[caveman1917]

It happened when the Euro project was forced ahead in spite of the inability to persuade national populations or governments to accept the concept of an overarching Euro Federal Government (a necessary and mandatory concept if there was to be a properly-functioning single currency). And it happened again when the ECB effectively signed up to act as the bank of last resort behind all Euro member countries that were borrowing in Euros - every commercial banker leaped at the chance to lend to voracious borrowers such as Greece, Spain, Portugal and Italy, safe in the knowledge that they were virtually guaranteed their money back (plus interest), even if/when those profligate countries got into economic trouble.

Could you show the numbers behind these claims? Specifically where exactly the debt comes from, what exactly it has been used for, etc? As far as I know, it mostly went like this: some corporations in some EU countries got into financial trouble, but rather than the governments in those countries just giving those corporations (banks mostly) a pile of money of their taxpayers, they gave the money to the Greek government who thereby indebted their taxpayers to the taxpayers in those countries, and the Greek government then giving the money to those corporations.

 

[BobTheCoward]

You do know this is totally false? Greek government spending was average for Europe. The bailout didn't go to Greece, almost all of it went straight back to German and French banks. Greece was never bailed out, what was bailed out was German and French banks through Greece.

Then why would the Greek people vote in a government that would accept that deal?

 

[GlennB]

“Valuable Greek assets of [EUR 50 bn] shall be transferred to an existing external and independent fund like the Institution for Growth in Luxembourg, to be privatized and decrease debt.”

Chairman of the Board of Supervisory Directors of that organisation? Dr. Wolfgang Schaeuble.

You couldn't make this up.

 

[NWO Sentryman]

The past week alone has seen decades worth of eu credibility thrown in the fire.

 

[McHrozni]

“Valuable Greek assets of [EUR 50 bn] shall be transferred to an existing external and independent fund like the Institution for Growth in Luxembourg, to be privatized and decrease debt.”

Chairman of the Board of Supervisory Directors of that organisation? Dr. Wolfgang Schaeuble.

You couldn't make this up.

That's what you get if you vote in a hardline leftard government who loves to play chicken. It has lost all credibility, so now mere promises of reforms won't do any more. Last I heard there was a deadline - the day after tomorrow - to pass the relevant laws in exchange for assistance. The debt write off is off the table as well.

Not that deadlines are all that set in stone, but every day Greek banks remain closed the recession grows deeper, and it'll be even harder to come out for Greece.

McHrozni

 

[GlennB]

That's what you get if you vote in a hardline leftard government who loves to play chicken.

€50B of your assets are controlled by an organisation led by the FinMin of the very country that is prime mover in what has become purely a campaign of vindictive destruction?

The terms are much stiffer than those imposed by the creditors over the past five years. This, said the senior official, was payback for the emphatic no to the creditors’ terms delivered by the snap referendum that Tsipras staged a week ago.

“He was warned a yes vote would get better terms, that a no vote would be much harder,” said the senior official.


The EZ is in the business of "payback"? I won't bother about their proposals to have a say in all future Greek parliamentary business, while reserving the right to amend previous legislation of which they disapprove.

The only glimmer of hope is that the Greek parliament will reject this and accept a German-forced Grexit. However, opposition parties might be cynical enough to vote yes to the proposals for their own political benefit.

 

[Oystein]

The golden rule for negotiations is still: "Talk softly and carry a big stick" (plus "be resolved to use that stick if necessary").

Syriza, and with them the voting public of Greece, did the opposite.

This is why they will now get to feel the stick.
Kinda inevitable, even if irrational.

 

[McHrozni]

€50B of your assets are controlled by an organisation led by the FinMin of the very country that is prime mover in what has become purely a campaign of vindictive destruction?

I'm reasonably certain that if Germany was out to destroy Greece, you wouldn't be commenting on this forum right now. Internet needs electricity, you see.

The only glimmer of hope is that the Greek parliament will reject this and accept a German-forced Grexit. However, opposition parties might be cynical enough to vote yes to the proposals for their own political benefit.

They could do that three months ago, and it would be far less painful than it'll be now. From what I heard Greece is woefully unprepared for reintroduction of Drachma.

McHrozni