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PM Tsipras accuses IMF of “criminal responsibility,” ECB of “financial asphyxiation’ and the EU of using “austerity a la carte”

Greek Prime Minister Alexis Tsipras sharply criticized the country’s creditors on insisting to impose a “failed program” and accused the International Monetary Fund of “criminal responsibility for what has happened in the last 5 years.”

Speaking to his own lawmakers in SYRIZA’s parliamentary group on Tuesday, Alexis Tsipras also accused the European Central Bank of using tactics that create “financial asphyxiation.” The European Union did not escape Tsipras’ arrows, who said

“The EU cannot use the IMF’s program a la carte, that is accept IMF’s austerity but reject IMF’s debt restructuring.”

Both Greece and the IMF favor debt restructuring and when the Greek Prime Minister speaks of “thorough solution” he includes the debt relief as well.

Tsipras said that he rejected demands from creditors to impose additional austerity measures worth 1.8 billion euros and added that the latest cuts demanded by lenders  concerned the pensioners pensioners, who have already been “brought to their knees.”

“It’s up to the government to decide who will pay taxes in this country. Not pensioners and employees, but the oligarchs,” Tsipras said and the MPs applauded.

“We are being asked to accept a deal that not only doesn’t solve the problem but which sweeps away a recovering economy into recession.”

He described the problems arising during the negotiations as “a show of strength aimed at killing any effort to counter austerity … It’s an issue that does not only concern Greece but all the peoples of Europe,” he said.

“Time has come for our partners to speak clearly–do they want to solve the problem of Greece, or do they want this to perpetuate. It’s time for the IMF’s proposals to be judged, and to be judged publicly.”

“The situation in which we find ourselves today is that IMF positions prevail when it comes to the strictness of austerity measures asked, while at the same time EU positions prevail when it comes to the denial for any discussion about Greek debt sustainability.” Tsipras summarized the difficulties during the negotiations.

“We will continue to work with the same sobriety and determination to the end to find a solution. The easiest thing for us to do would be what our predecessors did–which was to sign an agreement.’

“Our mandate is clear,” he said, “to end the policy of austerity after 5 years that have increased social inequalities.”

“The negotiation has just started now, we want a viable agreement with mutual benefit,” Tsipras added leaving analysts wondering whether an agreement still had a chance.

 

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64 comments

  1. …the MPs applauded
    And so do I!
    Have civilization a chance against barbarism?

  2. Tsipras could have shown some good will and implement some measures that he already agrees with the troika on, not wait for an “agreement”. That would show that he is serious about getting out of the financial hole and would build some trust with creditors. Right now their thinking must be that all he wants is debt forgiveness and do nothing about spending, tax collection and corruption. Then Greece starts borrowing again, increase debt, circle continues. For as much as Syriza is complaining about pension cuts, compared to EU countries with similar cost of living, Greek pensioners are rich, not that much behind Germany. That level of pension benefits is not sustainable.

    • exactly. don’t forget many voters of SYRIZA are the ‘rich greek’ ex public sector pensioners.

    • Giaourti Giaourtaki

      That Greek pensioners are rich is a typical “German Lie” – in their “statistics” they must have included Christmas bonus – resulting in that most German public believes that the pension is 980 but it is 665 average. Who else will feed the family as there is no welfare system?
      Source in Greek and German:
      http://www.griechenland-blog.gr/2015/06/wahrheit-ueber-die-renten-in-griechenland/2135266/
      Regarding the measures: Also this blog translated an interview with Mr. Varoufakis there he’s explaining that the “creditors” see any new measures or laws as end of negotiations, the measures you are referring to are ready in a package to be voted but these screwed up capitalists’ lackeys block it because they were pissed off by the reform named “measures against humanitarian crisis”

    • @Zarjad…you are an absolute idiot..rich you say you fool..10,000 have committed suicide because they can’t afford live..go back under your rock you stupid troll..

    • Any impementation or enactment before agreement is forbidden by Troika

      • Anybody asked troika if they would be upset if Greece started implementing budget cuts and tax reforms immediately?

  3. “Greek pensioners are rich.”

    Right. In a parallel universe, maybe.

  4. “It’s up to the government to decide who will pay taxes in this country. Not pensioners and employees, but the oligarchs,”

    I see two issues with this:

    1) There have been very few past due taxes collected from the oligarchs since Syriza came to power several months ago. I remember one such case in the news. If I am not mistaken, the oligarch just paid what was due (no fines). He also did it “on his own” and was not prosecuted. Under such rules, no oligarch will volunteer and pay the taxes when they are actually due.

    2) To compensate for higher pensions (say, euro 1B / year) in perpetuity the Greek government will need to collect much the same amount of taxes from the oligarchs in perpetuity. Simply collecting from them the taxes due for past years is not sufficient; it is a “one time event”.

    • Giaourti Giaourtaki

      You know, the creditors are as ugly as the American Army, the Indian Bureau and the White House were on “treaties” to rob the Indian Land and in this case they just told the Greek government to halt all laws and measures and if not it would be a reason to cancel negotiations as this would be against the February 20 deal

      • Not true, see http://www.consilium.europa.eu/en/press/press-releases/2015/02/150220-eurogroup-statement-greece/
        “The Greek authorities have expressed their strong commitment to a broader and deeper structural reform process aimed at durably improving growth and employment prospects, ensuring stability and resilience of the financial sector and enhancing social fairness. The authorities commit to implementing long overdue reforms to tackle corruption and tax evasion, and improving the efficiency of the public sector. In this context, the Greek authorities undertake to make best use of the continued provision of technical assistance.”

  5. pensions in Greece are nearly twice UK pension and it’s cheaper to live in Greece

    • Another one that lives in a parallel universe. Northern countries social welfare is way way more generous than the Greek, Spanish or Portuguese systems. Only ignorand half racists say otherwise.
      Truth is enough is enough, time to default and leave the IMF/ECB and other vultures cry all they want. The Greek people can build a better economy free of the debt shackles than living forever on the misery rations handed over by the sociopath ex-troika.

    • The average Greek pension spending per beneficiary was around €869 / month (€700 pension and €169 supplementary) in 2012. This put Greece in the middle of EU countries — right behind Germany and ahead of Malta, Portugal and Slovenia. Apart from these countries, the Eurozone members Slovakia, Estonia, Latvia, and Lithuania (who have to contribute to the Greek bailout) also had pensions lower that those in Greece:

      http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Total_pension_expenditure_per_beneficiary_for_old-age_pensions,_EU-28,_2012_(in_Euro_and_PPS).png

      I should add that the Greek pension system is the most underfunded (least sustainable) among the EU countries at the moment.

      • keeptalkinggreece

        the pensions system in Gr is much more complicated to be simplified like this. not everyone gets supplementary pension, majority of private sector older generations gets 600-700 gross, many 460 and farmers 300 (or 360). To this add the absence of social welfare system in GR.
        And this 2012 data has no worth anyway as 1. pensions were cut 2. it probably referred to data 2 years earlier.

        BT: Greece cannot do much for the pensioners of ex Communist countries in the sense that their pension funds are very new.

        • Giaourti Giaourtaki

          No East German would buy this argument too as Eastern German pensioners would run amok if the Eastern European pensions would rise like shit, 25 years on since the reunification they are still under Western German level!

          • keeptalkinggreece

            of course. their pension funds are just 25 years old

          • Giaourti Giaourtaki

            But the GDR working times count also, no idea if that’s the same in other ex-“communists” countries … but I guess.
            Who knows may be some East European will join this divide and conquer but I doubt

          • @KTG Basically, your argument is “the pension funds in the ex-Communist states are just 25 years old, so they do not deserve higher pensions”. I think this is an arrogant argument to make.

            First, there _were_ “pension funds” there before the fall of the Berlin Wall. They were called “communist states”. Essentially, the communist state not just through the taxes it collected, but with all of its economy (mind you, no private property allowed) was a guarantor of a decent life in retirement for all its citizens. Unfortunately for these retirees, the “pension fund” went bust with the fall of communism. As it turned out, the GDP was inflated and not sustainable. The investments made by the “pension fund” (in factories, plants and farms) either went bankrupt or were largely privatized with the proceeds going to pay down the state debts. This is why the retirement expectations had to be completely reset.

            Sounds familiar? It’s somewhat similar to what happened to the Greek pension funds. First, they made bad investments (mostly, in treasury bills of the Greek state). As with all other creditors, they had to take a “haircut” on those investments a few years ago when it turned out the state could not pay in full. For that and other reasons, the money in the Greek pension funds are no longer sufficient to pay the current retirees as originally promised. Hence, either the Greek state needs to collect more taxes and subsidize the retirees (not possible at the moment), or the Greek state needs to borrow money from other creditors (which is also not possible to the degree needed to sustain the current pension level), or the pensions need to be reduced.

            Second, I thought the Greeks’ argument against pension cuts was not about the existence and solvency of Greek pension funds. Instead, it was about providing the Greek retirees with “decent life”. Why would you want to deny the retirees in the ex-Communist countries “decent life” just because separate pension funds were created in those countries more recently? Why do you expect their empathy (and money to support the Greek retirees) if you do not show empathy towards their retirees?

          • Giaourti Giaourtaki

            This Eastern European-Greece thang is totally bullshit, invented by all these idiots that believed for quiet a long time that Greece was part of the communist states; this came up as the propaganda was always about “socialism in Greece”
            Also the Greek pension funds were forced to buy Greek bonds

          • @Giaourti I respectfully disagree that comparing Greece with ex-Communist states is BS. The Greek Parliament, Supreme Court, Government, and even some ordinary Greeks argue that Greece should default on its loans because the conditions “contradict human rights” and are “causing a humanitarian catastrophe”. However, the same people lightly dismiss a comparison of Greek economic plight with the poorer EU nations as if the latter are second-class EU members. Moreover, several of these nations are members of the EZ that are expected to pay for Greeks’ “human rights” to “dignified retirement”. You can understand how such attitude hurts the credibility of the Greek position and creates an impressions that Greeks have a strong sense of entitlement, are “full of it”.

            Regarding your last statement: Greek pension funds were required to buy Greek bonds by a decision of the Greek authorities (back during the monarchy). Such decisions can be reconsidered over time by a sovereign nation. In a democratic society nobody can “force” the pension funds to make wrong investments but the lawmakers elected by the people.

            Similarly, ever since it was created the U.S. Social Security program is required by law to invest its surplus (when it exists) into U.S. treasury bills. There have been a number of politicians and economists who argued that investing in equities would provide better returns and would stimulate better economic growth.in the country However, the argument that T-bills are “safer investment” has won so far.

        • If you are 40 and lose you job, do you have and welfare assistance until you fund a new job?

          • keeptalkinggreece

            jobless allowance is 360 euro/month for the period of maximum 1 year only and depends on the previous years of work.

          • I understand that from the status quo perspective pensions serve as a safety net, for example, for someone in her fifties who cannot find a job due to the bad job market conditions at the moment. Also, pensioners are often supporting younger members of their households. However, this is a poor excuse to reject pension system reform (including requirements to reduce or prevent early retirement and/or reduce the size of some pensions). It is better to introduce pension reform and use some of the savings to extend (maybe, temporarily) the duration and/or size of the unemployment assistance.

            First, it will help the right people to the right extent. Imagine, for example, not only grieving because of the death of your parents, but also losing the pensions you have came to depend on. You also cannot change the size of a pension depending on the number of unemployed adult children a given beneficiary has.

            Second, any sustainable solution to the Greek crisis has to have “the numbers add up” in the long term. Retirement of a person could be fairly long (for someone retiring in her fifties it could last 40 or more years). You can imagine how the size of a pension extended over dozens of years can have much greater impact on the liabilities of the state than an unemployment insurance that is limited to 1, 2 or even 3 years (even if the job market in Greece justifies such extension temporarily).

          • Look, Germany and France have extensive welfare states that protect people on low incomes. Greece does not, and Syriza is not prepared to give up on the only bit of the welfare state that can protect (to a minimal extent) people from absolute poverty. Basically, Germany is saying this: “The people of Greece are not entitled to food, shelter and a basic quality of life. It is more important for the budget to balance than for people to live.”

            The only possible answer for any decent human being, is to remind the Germans of the last time they tried to impose such ideas on the rest of Europe. And then tell them to go fuck themselves.

        • Actually, the graph reflects the 2012 statistics. However, the specific numbers for the Greek pensions originally came from an analysis by MacroPolis and seem to be very recent (March 2015?):

          http://www.macropolis.gr/?i=portal.en.economy.2464#sthash.Vr9pnWvd.dpuf

          It was quoted by an article in The Guardian:

          http://www.theguardian.com/business/2015/jun/15/unsustainable-futures-greece-pensions-dilemma-explained-financial-crisis-default-eurozone

          I understand the calculation is not straightforward.

          The number approximately cross-checks with the Greek blog in German referenced by Giaourti (although the figure of €665 is probably just for the basic pension rather than the supplementary). Giaourti?

          • Giaourti Giaourtaki

            Just search for “griechische renten lüge” and you’ll find a lot of material, as this smear-campaign started already in 2010
            That “Greek blog” will know more…

    • Nonsense.

      OAP is 630 euros / month.
      Twice as high as 300 euros / month.

    • Pensions in UK are accompanied by housing, medical, holiday, heating etc. allowances. Greek pensions are accompanied by — er–well, they used to have holiday.

  6. Ted from London, you might find the chart on this page a useful corrective to your prejudice: http://conversation.which.co.uk/money/uk-state-pension-comparison-serps/

    • Haha! Bigots like him are not interested in facts. They just shout their ignorant mouths off all the time.


  7. When Greece imploded in late 2009 the dollar was the main currency under threat of abandonment. The Chinese were openly rebuking the US Government for letting its own deficits and debt explode at a rate well over $1 trillion a year. The response of the US Treasury Financial Warfare Division, the Federal Reserve and of Wall Street and the rating agencies was to launch a counter attack on the euro to “save” the dollar. It worked and few of the naïve Berlin politicians, certainly not Schäuble, nor Merkel, had a clue how sophisticated the Washington currency war machinery had become. They began to find out.
    The USA credit rating agencies, led by Standard & Poors and Moody’s, took the unprecedented step of downgrading Greek government debt three notches in one day in April 2010 just as EU Governments had agreed a Greek rescue plan.

    Frederick William Engdahl

    • Your citation is from New Eastern Outlook (http://journal-neo.org/about/), a Russian online journal. Of course, the text was prepared by KGB and “signed” by an obscure author with English name (Frederick William Engdahl) to look better. Antonio, are you living at Moscow as well?

      • Perhaps this is a propaganda piece but the US has always dumped their financial shit on the rest of the world. Why should the rest of the world finance their trouble. Blow up this petrodollar once and for all.

        • Giaourti Giaourtaki

          You know this imperialists are just too lazy to get on their bikes, they enjoy it to gas the whole planet

      • Hold on your horses, my young friend: you are running too fast. Does a quote from “The Wall Street Journal” makes me a banker of the financial district of New York?
        William Engdahl is a German-American economic journalist. Current troubles of Greece, according to Engdahl, are better framed in the context of currencies war (US$ against €). This is quite a different perspective. German people in general and even German non-financial corporations are in the same boat as Greek people. Would Merkel have the same courage as Tsipras, all this mess would already be stoped long time ago.

  8. “In 2012, Greece spent more relative to GDP on pensions than any other EU nation. The 17.5 percent of GDP it spent compared with the EU average of 13.2 percent, according to the most recent Eurostat figures.” – Bloomberg
    “15% of older Greeks were at risk of poverty in 2013, above the eurozone average of 13%” – WSJ (some Eurozone countries are worse off than Greece).
    Sorry to disappoint WilliamW, but numbers he’s showing for Greece are wrong. May want to pull current understanding of Greek social spending from OECD website. When you do that, Greece’ spending is much closer to Germany. And let’s not forget lower cost of living in Greece.
    Finally, there are many more rich German then Greek pensioners, bigger country. There are many poor German pensioners and they are not taking expensive holidays. You only see rich ones but assume all Germans are like that.

    • The fact that the Greek para-state and state pension payments in total are quite high as a proportion of GDP does NOT mean that the pensions are high. It means that (a) Greece has a very high elderly population; (b) the GDP is low therefore the pensions are rather low; (c) as the economy collapsed with German interference in it, the ratio of pensions to economic activity would automatically increase. This last point is no longer true, because pensions were cut by 40% or more. The 2012 figures are no longer accurate for 2015.

      As for the lower cost of living in Greece compared with Germany, this is not always correct. Some of the German regions have very low living costs. You cannot make claims like this except as very crude averages, which then cannot be used to make government policy. The fact remains that Greek pensions are very low, and German pensions are better — especially for the very elderly living on high pensions before german pension changes.

      As for poor German pensioners, yes I am sure there are many. The fact is that the people making government policy in Germany are not part of the poor population: they are the rich and the very rich. Germany over the last decade has changed, like the UK under Thatcher, from being a very egalitarian country to one with highly unequal income and pension distribution. This did not happen by accident: those currently in power chose to do so. These are the same people who inflict their neoliberal lies and propaganda on Greece and the rest of the eurozone — designed to punish the poorer sectors of society and benefit the already-rich. Syriza is trying to protect the poorest from poverty and starvation; while Germans couldn’t give a fuck.

  9. This debate about pension system just does not make sense. Greece is Balkans. Pension system shoud be just a litte over Balkans, becasue economy without 5 -10 billions EUR per year form EU and creditors (Greece is still receiving huge money), will be soon on Balkan level. It is as simle as that.

    • More garbage? The Greek pension schemes date back to the 1930s and were a direct copy of the German system. By the 1990s they had unfortunately increased to about 400, with small schemes designed to get preferential treatment for small groups of people with political connections. This has now finished. Overall, the situation of Greek pensions is very similar to that with Italian pensions — with a high proportion of the population being elderly and with poor employment histories.

      As for German pensions, I can tell you that the only reason the budgets balance is because of the massive immigration (mainly Turks) who pay into the system, while it pays out mostly to Germans. Germans have tried to live off the backs of Turks for decades, and only recently were forced into allowing Turks to take their pension rights back to Turkey when they leave Germany. (This was the result of legal action in 1998 against Austria, in the ECHR.)

        • Giaourti Giaourtaki

          It’s not Greece’ fault that your Balkans had no balls to join the EU in 1981

        • The point is that Greece has been a part of the EU since 1981 (before Spain and Portugal), and its German-style pension system dates back to the early 1930s. That is not Balkan: it’s west European.

          • keeptalkinggreece

            for some people everything below Frankfurt is “Balkan”

          • And now what? If Zimbabwe will adopt German system, they should get also German pensions? – this is how I understand your argumentation.

            Unless there is a pension system based on real investing/savings of individuals, and as far as I am concerned, this is not the case of Greece, the system depends on furute economic strength and on demographics. Econmics (future) when we exclude the bubble created by EU donations is cca Balkans, and demographics is not too oprimistic either.

          • Are you an idiot? I told you that Greece has run the system SINCE THE 1930s… not recently. Just to enlighten you, the 1930s is before the Germans invaded Greece and imposed Nazi austerity on it.

            The fact that a European country within the eurozone is in the sort of mess that Latin America was in during the 1970s (and not entirely unrelated either, since much of the LA debt was caused by reckless and excessive western bank lending after the 1973 oil price increased bank liquidity), is a disaster for the EU as well as Greece. Comparing this mess with Balkan former communist countries is foolish.

            Moreover, the pension systems of the entire EU are in a mess. As I pointed out to you above, Germany lives off the social insurance payments of Turkish workers (as well as massive cuts in recent pension entitlements).

          • and now what? what does it change in terms of sustainability if Zimbabwe (Bulgaria) used such system since 1930?

            this is pure technical question, so pls. make it clear and do not mix x thing together
            1. is the system based on individual investing (is there a portfolio of assets politicial bastards can not touch because it is purely for pensionerss)? – i do not thik so, because as you correctly described its German system and whole Europe system is mess

            2. if not then it just depends on current state money and it is ABSOLUTELLY irrelevant how long it worked before it started to be unsustainable.

            3. if your point was that it worked before EU support – OK but everybody knows Greeks were not rich and the system did not pay such a huge money as today

            4. it is always good to compare yourself to region. this is basic benchmark. whether you like it or not, your region is Balkans and you belong there.

          • Giaourti Giaourtaki

            This is like a cartoon: A Car driving Egnatia motorway complaining about all this on Greece “wasted money”, the fresh tarnac they’re rolling on they are too blind to see, took 6 billion Euro Greek and European taxpayers money. Just like all these others in their rent cars in south of Europe, for them this is just standard not pleasure, just normal like the greedy bastard who bought this streets cheap and now takes money for it.

  10. Good point. Yes, Greece is in Balkans and its minimum wage and pensions should be compared with its neighbors, not with Germany and Germany’s neighbors. Once Greece will leave EU, I bet that in a couple of years, its pensions will be at the level of Albania, Serbia, and Bulgaria.

    • Few years back, my Greek friends were telling me how unsustainable government’ spending is. They were telling me that young people dream of working for government and retiring at 55, very unproductive dream. Obviously, that dream is now dead. Spending will be cut. Greeks need to worry about not ending up like Venezuela (or worse), under leadership of the Greek Communist Party (aka Syriza).

      • keeptalkinggreece

        we have to make a thing clear here: Greece has one Communist Party (KKE) with +/-6% in elections and this rejects all EU and NATO and everyting.

    • So now we have geographical racism? Poland is next door to Germany, so by your “logic” does that mean its wages and pensions should be the same as Germany’s?
      This is just ridiculous nonsense. The levels of national wages and pensions across the EU are determined by complex issues of structure and history, usually with a poor relationship with the cost of living. The wages in the UK are far too low relative to housing and transport costs; the pensions are mostly too high relative to current wage levels (but not to past wages). Does that mean that UK pensions should be cut? Apparently not, since the right wing government is actually raising the state pension level (without the means to finance it) — presumably to collect the elderly right wing votes.

      • Giaourti Giaourtaki

        In their logic German wages and pensions must be cut down to Polish level

        • keeptalkinggreece

          or to Balkan level or even EU average

          • Haha! Of course, the German right wing politicians have succeeded in cutting pensions for many — other than themselves, bankers and big business. That is why the ordinary Germans are whining all the time — but blaming Greece instead of their corrupt politicians.

      • I agree. Still, in retrospective most Germans wouldn’t want to bear the costs of reunification (about 3 trillion €). Trying to raise Eastern Germany to the Western part under the doctrine of “equivalent living conditions” and “flourishing landscapes” resulted in too high wages, closure of industry, mass unemployment, political radicalisation and mass emigration. While East Germans were unemployed, Czech and Polish worked hard to rebuild their countries. CDU/CSU won the election with the highly questionable slogan “Sozial ist, was Arbeit schafft” (being social means creating jobs)
        Regarding UK: Maybe there is a housing bubble? Maybe productivity lacks behind comparable countries? I think the UK once was one of the richest economies of the world, now it is below the EU average.