I have a problem here: I try to understand why the Eurozone leaders do not support the new Greek government. Why don’t they make a step forward to meet with Greece in a compromise that will benefit both sides?
Greek coalition government has said that it accepts 70% of the reforms asked by the current Memorandum of Understanding: the bailout austerity program, signed in 2012 and scientifically proven that it does not work.
Furthermore the Greeks have said that their top priority is combat big scale tax evasion and corruption, the two eternal diseases spread in the country that have billions of euro disappear every year in dark corridors outside the tax offices and the country’s cashier machines.
The majority of Greeks – employees, pensioners and even jobless – have been drained by the over taxation of the last 5 years, one in four Greeks are without job, the cuts in health sector over proportionally burden the needy.
The majority of Greeks have been worn-out, are extremely tired of the austerity that leads to nowhere else except a further debt abyss and a continuous internal devaluation of the euro and their lives.
The Greek debt has sky rocketed despite two bailout programs and one PSI.
The model of so-called European aid to Greece has proven that it cannot work.
In January, Greeks voted in favor of a government that could end or at least ‘ease’ the inhumane austerity rules. Whether our European partners like it or not, this was a decision that arose from a democratic process.
Just a couple of hours ahead of the crucial (BTW “another crucial”, the X-crucial since 2010 ) meeting on Greece in the Eurogroup, EU politicians lash out against Greece. Not to mention the chorus of journalists-‘influencers’ and international mainstream media.
A cooperation that should be based on mutual trust and solidarity – call me: the much praised, and much misused “European Spirit” – has mutated into a broader, rigid and stubborn campaign against Greece.
Undoubtedly, Germany has the leading role in this anti-Greek campaign. Undoubtedly. Spain and Portugal cry their corrupted tears, claiming that had they not lend money to Greece, their own economical situation would have been much better.
As if the money poured to Greece in the form of bailouts was cash money taken right from the pockets of Spanish and Portuguese, as if this bailout money will return right in the pockets of their citizens, should Greece pay back its debt.
Bailout money was anyway ‘money on accountant spread sheets’ and the majority of it flew back to the lenders, mostly to French and German banks, that own the majority of Greek debt.
So what do EU and Eurozone leaders want? They threaten to throw Greece out of the euro, even if this is legally not possible. They threaten to pull the carpet underneath Greece’s feet. They display a naked antipathy, a challenging hostile behavior towards the new Greek government, .
So, what do EU and Eurozone leaders want? To continue their failed austerity policy? To have Greece leave the euro? To have an impoverished Greece in the euro zone? To create an example for future defiant governments that may arise through democratic elections by the austerity-hit and unemployment-ridden people of Europe? do they use Greece as a scapegoat for failed economic policies?
Are they up to a lose-lose end solution that will eventually lead into losing the money of their taxpayers, should Greece decide to follow a different path? Now really. I want to see, how the EU leaders will justify the loss of their taxpayers’ money, if they let Greece sink.
Would they still prefer a conservative and cooperative government in Greece, that they kept on criticizing while it was in power, lashing out at Samaras, Venizelos and Papandreou that they did not proceed with the “agreed structural reforms?”
What do the EU and eurozone leaders want, after all? A country to be governed directly by the EU Commission in Brussels or a non-elected but appointed ex-banker like Papadimas?
The Greek government has shown that it is willing to compromise. The situation can easily turn into a win-win. It’s all a matter of political will.
A Win-Lose situation is out of question. In the name of the well-known European Spirit, you know?
PS I am fed up. Honestly.
the reason is simple. As stated by Varoufakis himself
The Eurozone leader represent these very “vested interests”, and not their countries nor their people.
Bravo Eph, good to see you here. And the Varoufakis press conference is a masterpiece :))
Hi Tsig, thank you, good to be back… So, what now?
The tragedy is that the eurozone now acts mercilessly against the first Greek government since… well, ever, that may actually DO something again tax evasion and coruption.
(Seeing Greece only through the mirror of foreign media I don’t know whether this hope is justified; what I read in the media doesn’t sound like fighting tax evasion and cronyism is really Tsipras’ top priority. But but it’s still nice to dream about it.)
Compare that to Pasok or ND governments: save some PR stunts they never intended to change the system that they created and used to fatten themselves. Yet the Troika always gave them a green light when evaluating refrom work.
You’re right, we’re probably on the way to a lose-lose szenario. You thought times were tough? They can still get way tougher…
of course, what we read in the local & international media are selected excerpts. and this is the mandate Greek voters gave to Syriza: to fight against ‘vested interests’ blamed of large scale tax evasion, cronyism etc
I am confused too. On the one hand you reject the Spanish and Portuguese opinion that if they had not lent money to Greece that they would be in a better financial position, because you say that the money did not come from the pockets of these people – then you ask how EU leaders will justify the loss to their taxpayers if Greece sinks?
Why would the EU leaders have to justify any loss to their taxpayers if the loss did not come from them in the first place?
The old loans did not come from the EU taxpayers pockets, the new loans Schauble insists on lending p against the refusal of the past ND coalition and new SYRIZA coalition – will.
Oh come on, this is nothing a good old USA-EU lead military-Goldman Sachs led coup wouldn’t fix, to the satisfaction of everybody that counts. Get with the program! Syria and the Ukraine are working out well, join the ‘club’!!
Sad thing is, I wish I was being more sarcastic but I bet this is being talked about right now. Nothing that a few well paid snipers on roof tops couldn’t get started, just like in Ukraine.
The western world is sick and near death, lets hope the medicine that’s needed starts in Greece.
Excellent post. Thank you. My (old) country’s (Finland) Finance Minister said it is frustrating to sit down for hours for no good reason.
I feel so sorry for him that all he need to do is sit down while others’ are living in poverty, in hunger and without proper health care.
poor guy! just sitting around, getting paid, doing nothing
What can they do ? If they blink, Portugal, Spain, Ireland and others will want to renegotiate like Greece and Eurozone will become a chaos. Is it so difficult to understand ? Instead of 1 Varoufakis speaking about the danger of the end of euro if he does not get money, they will have 5-8 people like this. Euro would be probably dead anyway.
Yes, austerity was a failure, but now there is no good way from the mess.
so you just keep going, creating an ever bigger mess? Or do you accept the failure and start anew, from a different starting point?
I would say : the problem is that probably they do not know what the new starting point should be. The old plan is no more, one should negotiate a new one, but… when ? There is very little time for Greece – I mean necessity to pay the debt instalments and the problem with the banking system.
It is Greece that is risking most, not Germany and not the EU.
It looks like a real Gordian knot, but there is no Alexander.
Well, the new starting point is obviously today. There simply is no point in rehashing all the stale arguments and trying to turn back the clock.
What SYRIZA is demanding and fighting for is nothing other than what was the political norm in Europe in the 1980’s, when there was a real economy, based on economic activity and not on debt. When the powers that be at least put up a pretence of caring about their peoples. The neo-lib take-over put an end to that and created the main problem we all face today, being a debt fuelled economy. So, here’s your new starting point. Let those who inflicted this disasterous economic model on all of us take their own debt instead of allowing them to pass it on to everybody else, with interest.
PS. I am only trying to understand them how they can think. There is a mess – but they can think that there can be still one more Pandora box in the mess.
By the way, Greek history and myths give so many ideas to describe today’s Eurozone’s problems : we have a Gordian knot and a potential Pandora’s box. Maybe we even have a Sisyphus somewhere.
Remember this
(John Adams) and this
(Thomas Jefferson) Both of them were obviously talking about America, but pinpointed the very ills that are killing Europe today with deadly accuracy.
BTW: nice to see you here again!
Thanks, the abacus seems to be working again. Long may it last..
The problem is : what concretely can they propose to the rest of Europe ?
One idea is correct and I understand it : primary surplus. Greece should not be choked by the debt so much.
But the other ideas are promises – but from where to take money for their realization if we know that Greece is bankrupt (Varoufakis said it, so it is not my opinion) ? So the question is : who should pay ?
And also : Greece has no time now… Nobody has time for long negotiations. Banking system must be helped quickly, if Greece wants to stay in Eurozone. This is also a cost for the creditors (I know there are complications hete, because Greek National Bank is responsible for ELA, but still there is big probability that Europe will have to pay additionally, if the situation lasts longer).
I would firstly like, on behalf of the majority of Portuguese, (surveys have already been made) to ask sincerely apologize to the Greek people, unfortunately we still have rulers to be ashamed of in their positions, however our leaders no longer represent the people and will soon be expelled from their perches. The Greece should have the support of all Europe, and especially of all south countries, but the real tragedy is that our syrisas not yet come to power and we still have Germany collaborators in power. Continue to resist soon’ll join us in your struggle. Wait for us, we are all Greece!
I’m sorry, but I totally can’t understand your point of view. Being German I can tell you all those accusations against Germany haven’t passed unnoticed. As a result the share of people who don’t want the German government to renegotiate has risen significantly (see the rise of the AfD, PEGIDA etc. – fueled by the Russian administration by the way). On the other hand there is a vast majority of Germans who feel sorry for the Greek population and want to help (therefore also lots of Germans went to Greece for holiday).
The Greek (government) fails to see two important arguments, which are play a huge role in Germany (and possibly the rest in Europe as well:
1. Yes, the bailout did help German and French banks – but it also saved the deposits of the Greek people. Had the Greek banks gone bankrupt, it would have hurt the “normal people” much more than the rich ones, who already had sent their money abroad or invested into property. A Greek default would not only have been bad for the Eurozone, but also for Greece.
2. Greece has been in trouble, because the government spend much more than it collected. Thus, structural reforms have been absolutely essential. High wages for a few privileged (while the majority is unemployed) combined with high prices is not a solution. There are many political talkshows here discussing Greece (saying, for example, that food is much more expensive in Greece (Germany: yogurt at 0,12€/100g and oranges at 0,50€/kg) and many businesspeople retreated from Greece due to bureaucracy and corruption. The problem is not the amount of debt, but that the Greek government does not present a computable, realistic idea how the budget could be balanced in future. Once that is presented there won’t be any conflict any more, as Greek debt will be attractive on the market again, interest rates will fall and investment will flow into Greece and create new jobs (provided there is an efficient government – Varoufakis seems like an honourable politicians).
Of course, it wouldn’t hurt the German/Euro taxpayer at all to cut the Greek debt – but it is extremely hard to sell to those attracted by emerging right-wing populists. We really don’t want to end up like Austria.
I think Merkel and Schäuble are right when always thinking about the next steps: If Ukraine was supplied with weapons – what would happen? If Greece got a loan without preconditions – what would happen?
To the Greeks: What can we Germans/Europeans do in order to help you long-term? We are convinced of the idea that only innovation, efficiency, productivity, transparency, competition and education (combined with a welfare state which doesn’t let down anybody and encourages each of us to take some risk) increase our living standard.
As Eurozone in total we are still strong – imagine how well-off we’ll all be when the financial burden due to unemployment is halved!
I would love a more thorough answer but unfortunately I have no time. Just a few key words: this austerity program as such does not and cannot work. Another problem is that Germany does not feel the need come down from its “Hoch Ross” and do some self-criticism about its economic policies it enforces to EZ. German economic policies divide the people of Europe instead to unite them. “Help”? We normally help the needy, right?
Yes south countries spend to much (indeed they were financed to buy german cars), but 100 years from now the picture will be much clear: Germany had made war to the world (million innocent killed – after that the world helped Germany to rise again – Paying debts linked to GDP growth and of course the Marshall Plan.
Now germany thinks that other one’s problems are different (less important!) So they should suffer, they should have a currency that only serves german purposes they should have no healthcare, because they spend to much buying german cars and submarines, and beeing corrupted (look better for the german submarines sold to Portugal and conclued about who is corrupt). But ok we all agree we should all be more efficient running public funds (nevertheless how are south countries paying and suffering more than germany post war country(did we kill millions to deserve this (yes we should not buy so many german cars… I think german people think that south countries prefer to live like slaves then to live poor but happier without german influence. For us leaving the euro could represent a reborning, and you can be sure we will never again buy so many germa cars if that happens…
Well, most (Western) Germans would rather like to spend money for suffering Greek people than having had to pay 1-2 trillion Euro in total for the former GDR/Eastern Germany, with people there now demonstrating against foreigners (PEGIDA) and so-called “war crimes” by the British when bombing Dresden.
Think about that!
German, Dutch, Finland people, they all helped Greece. It is their money and they want it back. It is not money of governments but from people. More than 80% of the dutch people want their money back (€1000 per person) In the Netherlands we pay a lot of taxes. Much more than the Greek people do. We pay for health care, study, water, dirth disposal, food, etc. for everything we pay taxes. The Netherlands have less civil servants compared with Greece but we have more citizens. The dutch people save for pensions, houses, and every big spending they must/want to do. I will retire when I am 67. So comparing all this with Greece, there are lot of things to do. And how is suffering really. Do you know the story about the cricket and the ant from Jean de La Fontaine? Read the story and learn what Greece (hopefully) was.
it’s a Aesop fable. anyway, I here with express my full solidarity with the suffering Dutch people.
PS I heard that the Dutch made some profit by allowing Greek yachts (allegedly belonging to tax evaders) angered in their ports. Rumors also have it that the suffering people of Luxembourg have opened their country to facilitate multinational companies come along with paying minimal taxes. Not to mention the bankrupt German companies that poured billion of euros in Greece and other countries to secure state contract.
It always takes two #justsaying.
Not to mention the “Dutch Sandwich” tax evasion schemes allowing many multi nationals to avoid taxes …Dell Global BV paying 0.1% on 2 billion USD profits… Yahoo paying 1.28 million on 101 million profits channeled through the Netherlands.
In 2010 a total of 10.2 TRILLION EURO was channelled through 14.300 paper companies in the Netherlands, avoiding billions of taxes.
Meanwhile Dutch citizens pay taxes at what rate…? Any chance of looking for all that money back? After all, Dell and Friends CAN afford it, Greek Joe soap however, is not in such a position…
yes Rotterdam is one of the largst ports in Europe and yes we are business people. What does Greece produce? Only yachts for the rich Greeks? Oh, yes the dutch build also fantastic yachts, perhaps also for the rich Greeks? And the Greek church has the wealth in farms, land. From your church and your rich people is money to get instead of other European citzens. And to be clear: the countries which had to reform there finances hardest are the most strong opponents of the Greek plans. The Greek plans say: you won’t get you money back, give us more money so we can spend more money and no we make no deals about returning that money also. Win-win situation? You need something that you can offer when you want to bargain. So what has Greece to offer?
give me your account I’ll send you 1000euro
It’s simple in the end. If there is no growth there is no money. If there is no money, no debt can be repaid. Default hurts everybody.
I believe that the election of Syriza is a clear sign that the bail-out, or the memorandum as we call it here, has not worked. The policies approved by the Troika, and carried out by the previous government have been a mix of sensible, ideological, wasteful and vindictive. If they had been successful then the government would have been re-elected.
I am frustrated. I am frustrated because I fear the storm coming, a storm that will be released by an “accidental” exit from the Eurozone. I am frustrated because I feel the economy slipping back into recession. I fear the social and political strife caused by the polarization of political life here. And I fear that there is not enough time for the politics of opposition to be converted into the politics of statescraft. There are too many negatives in the air from both sides, the Greeks and the Eurogroup, including revenge, ignorance, resentment, despair, arrogance, and a complete lack of humility.
But a compromise is absolutely essential and only possible once someone, somewhere focuses on the future, and not the past, and bangs some heads together. The present is not working, enoita.
Reading through the comments section, I am very alarmed. Here we are, fellow Europeans skirmishing blame and accusations back and forth. The German and Dutch commenters are readily attacked by the other readers/posters.
When will you understand that this is NOT a national conflict? But rather a conflict between creditors and debtors across the continent.
Read this.
http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/