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Creditors want permanent austerity – till the end of Greeks’ days

Did the Euro Working Group give ultimatum No 2,456,979,579 to Greece to comply with creditors’ additional austerity demands? It is not clear. Some European Commission “unnamed sources” told Reuters “it did”, others say “it did not.” Greek media reported that “Greece had 6 working days to present convincing measures that the Brussels Group will approve by April 21-22, so that the Eurogroup will make its decision two days later.

The Euro Working Group meeting on Wednesday allegedly saw “a little progress” and insists that Athens keeps on working on the “reforms” – call me: additional austerity in terms of further cuts in public spending, cuts in pensions, Value Added Tax hikes, mass lay-offs and whatever else the creditors think they could squeeze out of the country and the citizens.

From the Greek side there was a strong statement that liquidity is getting really bad and there was an appeal to release some type of liquidity support before the euro zone finance ministers’ meeting on April 24,” a euro zone aide said.

“But no one knows how this could be done – there is no willingness to provide support before there is some progress in terms of the reform programme,” the official said.

There was a slight improvement in technical cooperation between Greece and the lenders, but little progress on the content of the reforms.

“We are still lacking detail on specific measures, especially in terms of their fiscal implication and time is getting very short — decisions should be made on April 24 which is the next meeting of the Eurogroup in Riga,” he said. (Reuters)

It seems that the lenders want permanent austerity measures and therefore do not fancy Greece’s proposals like revenues from tax evasion and tax avoidance, which they consider one-off measures.

But the coalition government has strict red lines. Speaking to Bloomberg, Finance Minister Yanis Varoufakis said among others:

“We wouldn’t be fit for the purpose if we were not prepared to take the political costs which are necessary to stabilize Greece and lead it to growth, but let me be very precise on this, we are prepared to make all sorts of compromises, we are not prepared to be compromised.”

The Greek side has reportedly raised the reforms target from €6.1 billion to €8.5 billion but claims have it that the Greek team has to present additional measures by next Tuesday with the total reform package reaching €10 billion.

Apparently the lenders have calculated that in order to reach a primary surplus Greece has to have permanent austerity with Greek citizens to keep pouting money till the end of their days, whether they have it or not.

Much to my knowledge “primary surplus” is been achieved through “growth”. But a bunch of creditors believe I am wrong.

austerity monster

I heard austerity monsters looks like this…


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  1. “From the Greek side there was a strong statement that liquidity is getting really bad and there was an appeal to release some type of liquidity support before the euro zone finance ministers’ meeting on April 24,” a euro zone aide said”.

    How quickly things can change. It is only a little over 2 months since the FinMin told the NYT that “we don’t want the 7 BEUR”.

  2. I have said this time and time again. The economic “model” the EU elite is pursuing is a vulture economy, meaning, it needs sacrificial lambs to be offered on a regular, continuous basis in order to feed the moloch at the centre. In other words, the ultimate aim is to reduce the “lenders” to just one “lender”, with everybody else becoming a debtor. And becoming increasingly more indebted, otherwise the system collapses. And of course, the necessary consequence of this is that debtors get poorer while the “lender” gets richer. At any cost, including impoverishing whole nations by forcing the wealth transfer to the lender by all means possible.
    It is high time that the Greek government sees this for what it is, a game of pinhead dancing. Instead of dancing along, call it a day and do what needs to be done for Greece and its people. Time for Tsipras and Varoufakis to produce the real two-fingers video and start concentrating on those who really matter….

  3. Maybe I can help you out here:

    A primary surplus is achieved by less government spending than generating in tax revenues.

    This is what your creditors request. No new debt, if you are unable to pay off old one.

    This has nothing to do with austerity. – As long as the generation of the required tax revenue is not wishful thinking.

    The Greek government does not believe in this projected tax revenues in the first place. – Else they would not keep on coming for fresh money.

    You can only grow with the inflow of capital into your economy. – But what foreign investor would shovel money into an economy that is on a tight leash of radical marxists? – They risk / reward ratio is inferior in your country and this is effectively fending off fresh investment capital – the prerequisite for growth.

    What investor that is right in his mind would become “just another creditor” of a country where the government is constantly threatening not to pay back debt?

    In addition to that: the ECB’s ELA is in essence capital flight from your economy and this is constantly pulling the noose tighter during the quarters to come.

    A simple fact: Greece is meanwhile entirely depending on the goodwill of the institutions (who you are continuously humiliating and playing foul on) and their public money from creditor nation’s taxpayers.

    Greece wants to grow out of debt? How? With what capital? With civil servants, pensioners and Soviet style centrally planned economy? – Never, ever.

    • Spot on.

      • eermm , not quite. Greece and Germany have the same currency and the same ECB. The interest rates are not the same. Even the IMF is making billions of euros on loans to Greece. At the current rates it will take Greece over 300 years of austerity to repay. Varoufakis is correct in asking for a rescheduling of the debts aligned to the Greek economy. It is in the interest of all parties that this is done, a correction on rates is simple , because if the creditors agree terms , the risk of default goes away and the rates will tumble. The EU then needs to put investment capital into the country for the economy to grow.
        Varoufakis will make sure the corruption and tax evasion is drastically reduced. QED

  4. Chris: “Greece is meanwhile entirely depending on the goodwill of the institutions”.

    If you are numbered among the 26% unemployed, a figure that is more than double what the lenders forecast, and the lenders demand further unemployment be forced upon the people, it’s kind of difficult to see their actions as “goodwill”.

    When your small business has gone bankrupt due to a 25% contraction in the economy, some four times that forecast by the lenders, it is hard to see “goodwill” in their actions.

    If the lenders were to simply step up and admit that the level of austerity that they have demanded caused far more damage than they forecast, that might approach the notion of “goodwill”.

    Greece turned to the lenders and said, “We screwed up. What can be done to fix it?” The lenders imposed a prescription that was forecast to do far, far less damage to GDP and unemployment than actually came to pass. “Goodwill” on the part of the lenders would be to say, “We screwed up. What can we do to repair some of that damage?” To date, nothing even hinting at such an admission has been made. How can you expect a people to continue to accept a brutal austerity program when the authors of that program refuse to admit to the slightest bit of brutality? It’s not about accounting principles, but human suffering.

    • Do you really think there is an alternative to balance the budget?

      You belíeve that drowning Greece in money would get up to your feet again?

      How much per year do you expect from other nation’s taxpayers? – € 25 billion, or better € 50 billion or € 100 billion? – Just to pay your civil servants, pensioners or minimum wage laborers 4 times as much as the Baltics, the Polish or the Romanian? – Who are supposed to pay for you? And to avoid to tax your Oligarchs and small or mid caps?

      Your economy will not grow out of debt, because your structural deficits were never fixed and there are no plans foreseeable to do so.

      In a common market, 25% unemployment is clear sign of underqualification of the labour force and / or tax fraud.

      • In a common market, 25% unemployment is clear sign of underqualification of the labour force and / or tax fraud.

        And where do you get this piece of wisdom from?

        As for your minimum wage red herring, here’s a little bit of education for you.
        The minimum wage is Greece is 684€ per month. The minimum wage in Romania 217€ per month, in the Baltics it is Lithuania 300€, Latvia 360€, Estonia 390€. Poland runs at 410€. Pray tell us where you statement of

        Just to pay your civil servants, pensioners or minimum wage laborers 4 times as much as the Baltics, the Polish or the Romanian?

        comes anywhere near reality?

        In 22 memberstates the minimum wage is below 500€. In 5 member states the minimum wage is between 500€ and 1000€ per month. While in 7 memberstates the minimum wage is well over 1000€ per month (UK 1390€, France 1458€, Ireland 1462€, Germany 1473€ , Belgium and The Netherland 1502€ and Luxembourg 1973€. So, while we are in “Chris in Wonderland” mode, why not go the whole hog and instead of insisting that people already below sustenance level get paid even less, lets drop the wages of those over 1000€ down and use the money saved to bring thaose below 500€ up to at least 500€. How would that suit you. Everybdoy kind of equal, including yourself. 684€ a month, surely you can get by on that, you dont need the other 900€, sure you don’t….

        • Yes, cherry pick from Chris statement and blame someone else.

          Chris core point which you greatly avoid to touch is:
          If no one is lending money to Greece, who will pay for the budget deficit? Who?

          • It is very obvious to all who want to read that the only purpose of Chris’ “statements” is to deliberately spread rumours, to stereotype and to disperse outrightt wrong information. I’ve been reading these for a while now, and have yet to find one statement that is factually correct, even in the simplest things as calculating how much 4 times the Romanian minimum wage is.
            The deliberate nature of these untruths show the true nature of the agenda “Chris” is working on, to discredit the Greek government and the Greek people by all and any means possible, including fabricated “facts”.
            If Chris wants to make apoint, and be taken serious, s/he would do well to leave the policitally motivated rethoric where it belongs and stick to real facts. Then the statements may be taken seriously, until then, all they do is show a very sad person displaying an unhealthy superiority complex through a very sad, narrow minded and closed minded attitude.

          • I’ve noticed that the primary loci of anti-Greek (and coincidentally, pro-German) propaganda are the English language newspapers and blogs devoted to Greece. It looks highly organised to me, with some of the participants effectively spamming with quite sophisticated psychological propaganda techniques. It is also clear that they know very little about Greece. So the question would be, why would any normal person spend so much time on the net posting lies and propaganda about a country they have no relation with?

            I can come up with only two answers: either nutters with too much time on their hands, or professional propagandists paid by the impact they make on the global discussion on Greece, in English.

          • This individual “Chris” is German. Certain turns of phrase, although in English, and slip-ups like spelling Pireaus the German way, Piräus, are a dead give-away. Doesn’t make it less pathetic though…

          • Yet another wrong conspiracy theory from you.

          • Let me correct this a little. German speaking…. Austrian, the real uber-mensch?

            Instead of constantly spouting BS, you might just want to try now and again to get your facts right. But hey, why let facts get in the way of some good fiction? You should really think about a career change. There’s good money to be made in creating fiction, good fiction that is, not the kind you engage in. A little work is needed there. Κάλο Πάσχα!
            As for your constant pointing to a “majority” as proof of your fiction actually being fact, we have had many “majorities” proving to be extremely wrong, not in the least in rather recent European History involving the majority of those of your mother tongue…

          • The usual dark foreign forces that are out to get you…

            Conspiracies all over the place.

          • Now you got me.

            I’m a paid poster hired by SYRIZA in a false flag operation.

            My mission is to ensure that you continue to swallow their interpretation of the events when the facts do not match your perceived reality by providing you a cheap target for all your paranoia.

            As long as you keep on swallowing the SYRIZA stories without using your brain, you don’t challenge them all too inappropriately.

            Germany is in an economic war with you, 18 Eurozone countries, the IMF,the ECB, the EU commission, the USA, Turkey, Macedonia, Capitalism in general and Neoliberalism in particular.

            Thank god at least Putin proves to be a reliable ally. At least as long as it does not cost him money.

          • Your unhygienic garbage impresses nobody. Your reasons for posting remain one of the two I posited: either you are a looney or a paid troll (and a German one at that).

  5. How many European economies has historically and currently, run on a primary surplus? The paradox for many non-economists i.e. ordinary people is that it appears you have to impoverish the 99% in order to feed the bankers and lending institutions. The appetite of the bankers & Co. are voracious and never, ever satisfied – ordinary people will and do suffer.

    Not everyone equates and reduces the wealth of a nation merely by how much money is left in the pot after state expenses or commitments are paid. The function of any government regardless of where they are is to look after the interests of its electorate, its people. If your primary focus on how societies evolve is the acquistion of money, your world view neglects by definition stuff like state social provision and health & welfare issues. I prefer people, women, children, pensioners, ordinary people over banks, theoretical economic models and their unspoken objective of enslaving entire sovereign nations using nebulous financial instruments via corrupt political and economic systems.

    • If your primary focus on how societies evolve is the acquistion of money, your world view neglects by definition stuff like state social provision and health & welfare issues.

      neo-liberal thinking in a nutshell, it does indeed not care one iota about people, women, children, pensioners etc.

      Sadly, you will always find gombeen men, and none of them realise that one day it will be their turn to be at the receiving end of what they do to others.

    • correct !

      What just for the fun of it , is the size of the UK deficit in pounds sterling compared to the Greek ? Uk owes £1.4 TRILLION
      If they had to pay the same interest rates as Greece they would be broke in months !

      • There’s another 500 billion in deferred payments to the private sector, which in Greece would be counted as debt but in the UK is called some stupid name that I forget, but is not debt!

        Basically, right wing European governments (and the USA) have played games with money and statistics, which is why our economies are f***ed. Then they start bleating about how bad the new Tsipras government is, for pointing out the reality of our economies.

  6. I have a question.
    WHo is responsible for the imbalance in the austerirty measures. As written in the feature article the overwhelmign part of the burden went to the lower income part of society. Is that because the institutions insisted on implementation a,b and c, the previous government did that and this is the consequence?
    Or did the instituions just say this is the deficit target, this is what we propose you do to get there but ultematly it is up to you HOW u get to the target?

    • The Troika left it to the Greek government how to balance the budget.

      Only problem: the government came up with fanatsy figures regarding growth rates and tax revenues – in the hope that the deficit would be covered by the Troika – as usual. In addition to that the Lagarde list vanished in the buraucracy void…

      Then the IMF forced the Greek government to reduce expenses to the level of comparable economies, which required cuts in the welfare state.

      Remeber: the IMF consists of 188 member states and it is hard to sell to Ethiopia and Maynmar or Iran why they should finance Greek civil servants in order to avoid what they perceive as a “humanitarian crisis”.

      • Remeber: the IMF consists of 188 member states and it is hard to sell to Ethiopia and Maynmar or Iran why they should finance Greek civil servants

        The IMF would not ever face the fictitious problems you raise, because it does not deal with Iran (it has consultations, ie talk shops but no contracts), it does not deal with Ethiopia and it does not deal with Mayanmar…
        the Troika did not leave it up to the Greek government to balance the budget. Very specific demands were made, including lowering of wages, cutting of pensions, cancelling of health care and other social safety nets, removal of labour laws etc. All of which were aimed at the working people in Greece…

  7. It was an explicit demand from the Troika to reduce pensions, wages, minimum wage etc. In other words, the “reforms” dictated by the Troika were, and still are, aimed at the weakest in society. Surely, you wouldn’t expect them to gov after Friends and realtions and put the pain were it belongs…

  8. so go Draghme, as it happend before.
    read this.

    it is in German but I think you can translate the text by Google or other means.