After the stalemate and the ice-cold atmosphere amid Greece summer, the government reportedly prepares some counter-proposals for its creditors. At the same time, Prime Minister Alexis Tsipras sends a small delegation to Brussels to meet with creditors’ representative on Saturday, state broadcaster ERT reported at its 6 o; clock news on Friday .
Most probably it will be Alternate Foreign Minister Euclid Tsakalotos and Minister of State Nikos Pappas to head for Brussels, the same official who met with EC Commissioner Piere Moscovici beginning of the week.
By not sending officials from the Finance Ministry, the Greek government wants to stress the “political aspect” of the negotiations.
According to Government sources, the differences between Greece and its creditors are not big and Athens is willing to submit counter-proposals in an effort to bridge the gaps.
The Greek side estimates that it is close to an agreement with the creditors and that on the Primary Surplus front, the difference between them is some 0.25%.
The government reportedly believes that with this initiative, what is needed is political will and mutual understanding.
Much to my understanding the Primary Surplus difference of 0.25% remains the same two days ago. Moreover, the Greek government source makes not one comment of the IMF’s demands on further key issues like pensions (cuts and retirement age), the labor issues and the fiscal gaps.
Before we come to conclusions, we’ll have to see the counter-proposals, which were allegedly agreed by Tsipras, Merkel and Holland on Wednesday night.
For those in a hurry…
“According to Government sources, the differences between Greece and its creditors are not big and Athens is willing to submit counter-proposals in an effort to bridge the gaps.”
Like you kind of say in the following paragraphs this is wishful thinking.
«There is not going to be a proposal from the lenders that does not entail a high political cost for Syriza and its leadership, because the party endangers the status quo in Europe. The lenders want to demonstrate that Syriza has been defeated.»
https://www.jacobinmag.com/2015/06/syriza-troika-lapavitsas-austerity-tsipras/
Costas Lapavitsas, again, hits the nail in the head! This is the corner stone that sums up all of the “Institutions/European partners” decision making process. For them its politically unacceptable to achieve a “honorable agreement” with Greece. They would rather have a Grexit and face all the included risks, than empowering Syriza and the idea that there are alternatives to austerity.
The only thing that might change this calculus form the EU elites is if the US forces them to act otherwise. That can happen, but it is quite unpredictable. So if I was the Greek Government I would´t be counting on the “7th cavalry” rushing into the rescue at the last minute…
It is really surprising that suddenly all the issues (with pension funds, labor laws, VAT etc) vanished, and only remaining point is surplus percentage. Maybe at the end there is in play first option from this article, where all those difficult things are kicked down the road.
“Greece and its creditors play for time with an interim deal after Tsipras makes some face-saving concessions but the two sides leave the most difficult issues such as debt relief, comprehensive reforms and a third bailout programme for later discussion.”
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_12/06/2015_550989
If you rely on the right wing propaganda sheet called English Kathimerini for your info, you are in big trouble.
The big and most difficult issue is the Greek debt. Everything else is ideological baggage, albeit issues with some budgetary implications for Greek governments.
One of the things that syriza is insisting on is a minimum pension such that people do not starve, regardless of their pension contributions. This provision has existed in Germany, France, Netherlands, the UK, etc since the 1960s — but not in Greece. Essentially, the Troika is telling the Greek people that the social protection common to the developed world is not an option for Greece, and it needs to look to Bangladesh as a model for its social economy. Oh, and wages should also go down to those levels.
And the budget surplus (which presumably you mean) is considered by mainstream economists to be outrageous. The time NOT to run a budget surplus is when your economy is in depression, and needs a fiscal boost. Everything that the Troika is imposing is right wing accountants’ mentality which damages economic prosperity and destroys people’s lives.
I am guessing that at least one of these thorny issues will need to be agreed upon by the Greek government in order to give creditors cover to extent the second bailout for a few months. Pensions is the most substantive issue, but is probably the most difficult to agree upon.
I have no idea what you mean by “bailout” and I suppose you do not either.
To call it “blockades” would work finer: IMF last tranche March 2014, EU August 2014.
But I guess that would be an Orwellian Kafka joke: Extension until March 2016 would mean the IMF didn’t pay for 2 years; or in other words 5% plus for German “radical” left, hahaha
What do you think how surprising it was how again the EU shell gamers tried to trickster Tsipras and just hours later play their ugly game again? Like: “We only saw 3 pages!” Why? They couldn’t find the other 4 on the backsides!
Hopefully the next time he brings his walk-man to tape the shit or even better let Greece listen live on ERT to this bunch of buddy-lackeys of greedy Manchester capitalists how they try to play on Greece the tricks they think that are “typical Greek”.
And then he might ask Angie: Do you want Tinos? We’ll have a referendum there if they want you as their Queen Märklin or so.
Greece needs to look at Iceland.
Iceland said fuck the bankers and defaulted, now they have one of the best economies in the world.
40 years of sufferage and pain is a long time for Greece to pay back this debt, if ever.
Just default. Greece will survive and be a stronger nation for it.
Yep, exactly right. And don’t forget that the UK tried to threaten and control Iceland in exactly the way the Germans do with Greece, because UK banks were compromised. The difference is that Iceland had politicians with balls, and Greece had… Papandreou, the gormless wonder, followed by Papademos, the stooge for Germany.
Now that there is a Syriza government with a real backbone, the Germans are fighting dirty. But this fight should have occurred 5 years ago, when Germany was at its most vulnerable.
In Iceland bankers went to jail. Tsipras keeps talking about “prior Greek governments” borrowing what they knew could not be repaid. Greek government kept issuing bonds that could not be supported, Greek bankers kept buying those bonds. Who of Greek politicians and bankers is going to jail?
No, my little dumbass. The bankers that belong in gaol are the German, French and British. Although the Greek banks did purchase goverment bonds, this did not cause the eurozone crisis. The eurozone crisis is caused by the incompetence of germany and france in the seriously faulty construction of the eurozone itself — warned by many economists starting in 1999.
So, if any one should go to gaol it should be german and french bankers and german and french politicians. We could add a few greeks, I suppose. Interesting idea. But I don’t see it happening. Can you see why?
Ii dont understand the logic behind this argument, please enlighten me. The Icelandic situation is different in that it was their banks that crashed and aftereward the icelandic people rightly said this is not our burden to bear.
But in greece the government borrowed and the greek people benefited(via higher pension/more government jobs and the secondary effect of that money being washed into the greek economy). Now I am certainly no friend of the banksters but how is the formation of those huge debts(not the failed handling of the crisis since, but its origins) the fault of french and germans banks and politicians?
Amen
Why doesn’t your “analysis” include anything that happened after 2009? lol let me guess!
Its not an analysis so much as it is a question. And because the original formation of the debt prior to 2009 and who is responsible for that is different from the question of who has done what since the crisis broke out and has it helped or hurt.
First o0f all, if you knew anything about the Icelandic banking crisis you would know that the Icelandic banks set up their major operations outside the country — in Luxembourg and London — and were out of control. The UK and Luxembourg demanded that the Icelandic government pay to rescue the banks, and threatened in a very nasty way. This is symptomatic of everything that has happened with the banking crisis that started in the USA.
Secondly, the banks that recklessly loaned money to greek governments are just as responsible for those loans as the people who borrowed. Ordinarily, this matter would have been dealt with by a new greek government insisting on a haircut for its private sector creditors, and possibly borrowing money from the IMF. No other European governments should have been able to interfere, except by making threats (as happened with Iceland). As part of that deal, the currency would have been devalued to attempt to deal with the serious balance of trade deficit. None of these things was possible because Greece was in the eurozone.
Thirdly, the banks that loaned massive amounts of money to Greek politicians (not the Greek people) were primarily German and French. The German politicians decided that Greece (the country) was far less important than German banks, and forced the issue such that the debts were transferred from private banks to the ECB, IMF and Greek state institutions. With this arrangement (the two Memoranda) Greece was forced into economic collapse in order to extract the money loaned to it — despite the fact that this money can (realistically) never be repaid. This technique was in fact what northern Europe tried to impose on Iceland — and was told to bugger off. In the case of Greece, as a member of the eurozone Greece had ceded complete control of monetary policy and partial control of fiscal policy to the eurozone itself. Without leaving the eurozone (actually impossible, legally) Greece had no effective sovereignty to address the problem.
Thus, we can conclude (as every economist has) that the Greek problem is essentially that it joined the eurozone. In its history, Greece always ran up debts and managed to renegotiate and survive the problems. This time, it came across the problem of Germany and France and German/French financial interests, and was plunged into economic and political crisis by those countries (supported by others). Those who deny that this is the problem are denying the historical and empirical facts — that this situation has never occurred before, least of all to Greece, and is the result of incompetent and greedy lending policy by German and French banks, and corrupt and self-interested abuse of the eurozone by Germany and France (among others). Loss of national sovereignty is a direct result of joining the eurozone — and it is this which has damaged Greece. Everything else is replicated across history and across countries as relatively normal — being unable to pay debts, poor economic performance, political clientelism and corruption, etc. What is abnormal — unique — is how Germany and France set up a faulty monetary union and then abused it to protect themselves from financial loss.
Last point’s easy: Mitterand became his Euro for his o.k. to the reunification of Germoney and taken a blind eye on the contracts that tricked out the reparations
” if you knew anything about the Icelandic banking crisis you would know that the Icelandic banks set up their major operations outside the country — in Luxembourg and London — and were out of control. ”
Well I do know a bit about it though admittedly not much which is why i wrote this: ” The Icelandic situation is different in that it was their banks that crashed and aftereward the icelandic people rightly said this is not our burden to bear.”
“Secondly, the banks that recklessly loaned money to greek governments are just as responsible for those loans as the people who borrowed. ”
Aha so right away you see the difference between greece and iceland in that in iceland its completly on the banks whereas in greece the people who borrowed(aka the government) are even in your opinion just as culpable. Yet in your posts before you useek the the responsibilty mainly at the other side:
“So, if any one should go to gaol it should be german and french bankers and german and french politicians. We could add a few greeks, I suppose. Interesting idea.”
Going so far as saying even the idea that some people in greece might be responsible is somewhat new to you.
All in all I would argue that the obligation to repay debts as well as the analysis on whether you will be able to repay them is primarily(but not solely) with the debtor. I mean its not like the banks forced their money onto the government.
The rest of your text(point 3 and after) I will gladly agree to, but this part is on the reaction to the crisis and not the origin of the debt, so its a somewhat different subject.
“his technique was in fact what northern Europe tried to impose on Iceland — and was told to bugger off. ” But I dont think the Icelandic government ran such huge deficits, did it?
The difference is that in 2009 you rpoliticiasn wouldnt havae had the option to just tell them to bugger off without inflicting even more damage to the economy, it is only now when there is a primary surplus that your government is able to act freely on this.
“Thus, we can conclude (as every economist has) that the Greek problem is essentially that it joined the eurozone. In its history, Greece always ran up debts and managed to renegotiate and survive the problems” Especially this i can agree to, but your conclusion at least can use an additional point. There is a difference in culture, and I dont think it is inherently bad or even a sign that ger is trying to dominate the rest of europe, if the germans (and scandinavian and austria and the netherland ….) fight for a hard currency.
Greece, as you say historically ran up huge debts and then either defaulted or lowered them through printing money/inflation.
But this is exactly what the german didnt want and were repeatedly insured wouldnt happen, they wanted a hard currency that would hold its value, and frankyl most other countries wanted that too. Because while now inflation might sound nice in compariso to the last 5 years and you always hear how it might make exports and touzrism more competitive smehow many people forget that whether your prices double or your wages and pensions go down by 50% really doesnt matter.
My point here is that even without any evil intentions this eurozone projext was bound to be doomed for the souther countries unless they would be willing to adjust their monetary culture/spending habits to that of the northern countries.
Last but not least back to my original question(which you never truly adressed), why is it that the banks who gave the loans are just as responsible(or more?) then the politicians that took those loans and the electorate that kept them in power?
if you don’t know why banks are responsible for the quality of their loans and their recipients, then you don’t understand how capitalism works. Or used to work. The idea that citizens’ taxes should be used to prop up greedy and incompetent private banks is something introduced by Germany and France — following the incompetent conduct of the USA. Until that point, private businesses were responsible for their actions and could not expect taxpayers’ money to bail them out.
And as far as Greece is concerned, the time to fuck the Germans was in 2010 when the German banks were vulnerable. The moron Papandreou was tricked into betraying the Greek people’s interests, and was also rapidly replaced by a paid stooge called Papademos, actually on the payroll of the ECB (read: Germans). If at that point Greece had simply declared non-payment of its debts, it would now be in a far better situation. By conforming to what Germany and France demanded over the last 5 years, the Greek people have been seriously damaged in every possible way.
So what is (in theory) the difference between a devaluation of the currency by 50% (as a result of a Greek default 5 years ago) and a cut in all wages and pensions by 50% (as intended by austerity) leaving aside the level of debt (would be lower in case of a default, but at much higher interest rates)?
I agree it didn’t work well in practise, by the way. Still, that doesn’t mean it was a bad idea.
It was a terrible and stupid idea, in theory. A currency devaluation leaves the domestic sector initially unchanged (that is, household income and domestic production) and increases the cost of imports (discouraging them) while making exports more competitive (thereby encouraging them). There are knock-on effects, such as the higher cost of essential imports such as fuel and raw materials for production, but these can be ameliorated with government policy and subsidies. So, the result of a normal X-rate devaluation is that people spend less on imports and the production sector has more chances to export. This is exactly what Greece needed.
The moronic “internal devaluation” merely cut people’s wages and household income, making no rebalancing between domestic and external sectors, and plunged the economy thereby in depression.
These theoretical predictions are exactly what happened. The Troika has no excuse for its incompetence and economic illiteracy. And they continue with these stupidities, denying reality — while Varoufakis has been trying to explain to them how wrong they are. They couldn’t give a fuck, because this is about political power and nothing to do with economics.
So when are Papandreu and Papademos going to jail?
Most brainwashed people might think that interest is the profit of the banks but it’s the insurance for the risk.
Who are the “Greeks that benefited”?
As always certainly not the proletarians who pay it all back since years and certainly not the wage slaves in the fields and certainly not the unemployed who depend for a year on a welfare state that really never existed.
Year on year hundreds if not thousands workers get murdered by greedy bosses and their “security measures” in so called “accidents” and then people protest against it they’ll get attacked by fascists
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_13/06/2015_551021
Directly? Everyone that received government money or did not pay higher taxes because of the money that was taken on.
Indirectly? Everyone, because there are secondary effects by the money being inserted into the economy.
Trivial garbage. The highly unequal distribution of that additional income makes your comment irrelevant: it was the political class of Greece that benefited, the same people who failed to get Greece out of the mess after 2010.
I beg to differ.
So you mean to tell me that all the extra money that came in through additional deficits went only to the political class, if thats the case you should be able to fix ALL deficit problems from 2009 on simply by ending that corruption, no cuts in other areas needed.
Also do you and Giaourti really deny that there are secondary effects?
Isnt this the whole problem right now, that cuts lead to less demand to a slower economy. Similarily even the part of the money that sunk into corrupt channels will have some positive effects.
But the main point stands, unless you mean to tell me the additional loans you your government took on because of the lower rates it could get created enough corruption to eat all of this, the additional money wouldve come through either higher taxes or lower spending and that wouldve effected almost anyone.
The moneys acquired by corrupt Greeks are in German, British and Swiss banks now — propping up the corrupt regimes of those countries. So yes, if you would like to confiscate the accounts in Deutsche Bank, with appropriate legal processes to justify it, perhaps we could pay the debt with that.
NOT GOING TO HAPPEN, IDIOT.
Im not talking about getting money back. The way you describe it the whole deficit was only there because all the extra money taken by the corrupt poiliticians. If that were true you wouldnt need the money back, you would just need to stop giving all that money to the corrupt politicians and voila, your problem is solved.
Im not an idiot just because you are unable to differentiate between pre 2009 and after 2009. During the late 90es and especially the early 200x, Inflation in greece went down, massively, which is an advantage for everyone.
Also the interest rates on government bonds and also private loans went down. From a spread of about 11% down to almost nothing. This also means cheaper money available.
In 2009 the spread widened again and we get the horrific failure that are the “rescue packages”.
Yet the origin of all that huge debt (i think its about 300billion) is not in just in 2009 and after, it is also because in the year before there were already large deficits.
You stated that the responsiblity for the debt is with french and german oliticians and bankers and while i very much accept that for the after 2009 part I dont see why anyone but your government(and by extension to a certain degree the electorate that kept them in power) is responsible for taking on those loans in the first place.
What “lower rates”? The disaster slowly started to get a tsunami when ND in early 2009 took much too high rates to save it’s arse after the December revolt and to get the money in they had gifted to the bosses by putting down taxes for big biz from 42% to 20% and had hidden it perfectly so that for the next government it took more than half a year to get real numbers and the crisis was born.
http://www.bankofgreece.gr/BogEkdoseis/Paper2011124.pdf
First link I found when looking for data. Ill cite from page 7:
“In the case of Greece, interest-rate spreads between 10-year Greek
and German government bonds came down sharply in the years running up to, and the yearsfollowing, entry into the euro area” …”
As shown in the figure, spreads fell steadily,from over 1,100 basis points in early 1998, to about 100 basis points one year prior to
euro area entry.”
Or just go down to table 2. In The years PRIOR to 2009(one last time Im talking about how the debts came to be not about what happened since) your government ran deficits of about 5-6%, in times of economic upwards movement. That money mustve gone somewhere or otherwise it would have had to come from somewhere, simple equation total spending-total government revenue=deficit.
Also inflation rates went down significantly and yes that matters because inflation mostly hits wage earners and pensioners with fixed rates of income.
Btw. neither one of you two has adressed my original question, which is how are the banksters and polticians in france and ger responsible for this(not necessarily saying they arent, but I dont see any major arguments for it so please enligthen me)?
@che: you are an idiot. I have no idea what you are talking about, because it does not make sense. When an economy is deflating (a terrible thing, unknown in Europe since the 1930s) it is stupid to talk about inflation. It is like talking about making profits when your business is making massive losses: gobbledygook. Indeed, that is the economics of the Troika — double speak, goobledygook, economic illiteracy and a general lack of competence. You merely repeat their pitiful attempts at propaganda.
In your sick thinking even unborn benefited or the ten thousand that were forced in suicide and the five thousand that got murdered by Troika cuz it cut the medicine and decided that 2.500 Greek doctors have to save the more worthy life in Germoney and not in Greece anymore.
Isn’t that cuts enough or do you need some ten thousand more to commit suicide and then discuss if they have to do that public, collective on Syndagma or in front of the German Scheisstag?
I really have to ask you now, are you blind? Or do you make a habit of just creating some image of people in your head and thenstick to it no matter the reality?
I have said 3 times in this thread alone, that the formation of the debts and the handling of the crisis are to seperate(though somewhat connected) points. I have further here and in other threads that I disagree with most of what has happened since 2009. And just a few day ago I called chris out for being trollish because of his disgusting comments to the suicide article.
I dare you to find me a single sentence in any of my comments that is offensive or racists.
In return you and Xenos call me stupid, nazi/member of hitleryouth, an asshole conformist and other stuff.
If this is how regulary react to people trying to have a discsussion then you are even more of troll the chris.
But it’s the same “party”, “the Greeks” blabla as it’s always and meanwhile the bosses figured “ai, these resisting assholes are still in the Euro” and “oh, these lazy Greeks don’t work for nothing”, “ah, that’s because they still are real families and uh the pensions must be too high, so let’s lynch some more pensioners and they will all work cheap as in south Asia.
You are the one bringing out the insults, I never talked about lazy greeks, please stop laying words into my mouth.
Just because I disagree with you sometimes and ppl like Chris disagree with you doesnt mean I agree with them.
May be I’ve told you “Angela Merkel Jugend” I don’t think so but it’s a good song.
And in all these years unemployed never benefited. They receive(d) support max one year, max 360 Euro until more than 1.2 mill benefited nuthing at all, zero Euro and there happened to be the crazy situation that only some 100.000 still got money plus more than 3 mill without healthcare. So at a certain point there’s not only a “rescue package” (CREDITS) that stopped leaking money for a year (from IMF more than a year) but also no unemployed gets any public assistance anymore; Kafka would have loved that shit. Just imagine how the situation would look like if Greek unemployed would get paid like “Europeans”
and if you’re good in research you will find out about the extremely expensive deal that Karamanlis made in spring 2009
I have not followed closely the events over the past five years, but I thought Greece already extracted some haircut from the commercial lenders (i.e., defaulted at the time), and the institutions financed the balance. Whether that haircut was sufficient is a separate question.
However, defaulting alone is not enough. Iceland has its own currency, which it readily devalued by more than 2/3. That made their exports much more competitive. This is not an option for Greece without exiting the EZ. Iceland also had to institute capital controls. These are not easy steps for the economy. The majority of Greeks does not want to give up on the euro and have their incomes cut very significantly.
Iceland is also a much smaller country than Greece (population less than 330.000) with significant natural resources (fisheries, geothermal and hydro energy). Before 2007 they were one of the most productive in the world per capita ($54.858). Basically, it was a perfectly good economy, which was hit by bad bets of its bankers (who loaded on debt six times the country’s GDP and then made poor investments). In that sense, they are more similar to Cyprus and Ireland (although the latter’s growth there was somewhat fueled by a property bubble, which is not sustainable in the long run). Correct me if I am wrong, but I do not think Greece has the same level of competitiveness of its economy (maybe, with the exception of its shipping industry, which does not contribute its fair share of taxes anyway, and tourism).
Last but not least, Iceland has free labor market, flat income tax system, low corporate taxes, and low subsidies by European standards. Clearly, such economic system would not be popular in Greece.
That was a so called “haircut” (except for the little savers) from “commercial lenders” like hedge-funds that sold their shares cheap to ECB but ECB wants it 100% paid by Greece and makes a lot of money with it (so far 6 billion)
Any way the hugest losts took the Greek banks and social security, alone pension funds lost 7 billion
No one in Greece is responsible in a slightest? Someone signed those bad deals with bad Germans. Someone approved them. Someone used the money (e.g. wasted money on Olympic frivolities). Someone should go to jail, no?
Then, maybe politicians responsible for Greece joining EMU in the first place should go to jail?
Or just do Iceland and be done with it.
There’s a parliamentary inquiry since some weeks taking place but when you search the internet you will find only people who try to make it ridiculous, just the same people that block in the Commission inquiries regarding German corruption in Greece.
Obviously the same people that laugh about inquiries as not necessary block’em when they get dangerous.
Hey, do you know of news resources (blogs, newspapers, etc…) in English from Greece?
Putting people against people, germans against greeks, greeks against germans, portugueses (the supposedly well behaved) against greeks, North europeans against South, South against North, all this is a mental trap. In the mouth or pen of the political Right, is the modus operandi to hidden the real culprits of the social crisis. Otherwise, signals a misunderstanding of the mind manipulation mechanisms developed by mass media.
For those who understand French:
La Commission d’audit a en sa possession un document qui prouve que le FMI savait depuis mars 2010 que le mémorandum appliqué en Grèce, augmenterait la dette grecque.
Source
money for nothing and chicks are free
EC, IMF stances on Greece negotiations do not coincide
…The IMF representatives expressed disagreement with the decision in preparation over the past days, which envisages for Athens not to decrease pensions if it manages to cut its military expenses by EUR 400 million.
This option was proposed by Jean-Claude Juncker, President of the EC, to Greek Prime Minister Alexis Tsipras.
The IMF representatives did not wish to back that deal
Frankfurter Allgemeine Zeitung
@Che
That means you’re one of the bosses as I put words to bosses’ mouths
Im my own boss and noone elses, just like it should be.
According to my information.
Greece only received 3% of the loans monies the rest went to bail out international banks.
I must be STUPID because this is the arguement,
“WE DID NOT GET ALL THE MONEY MATE”
“here is our 3% plus interest”
“go get the rest from who so ever you gave it to”
I would go to court so as to establish liability.