The bailout standoff between Greece and its creditors has reached an unprecedented escalation with the default clock ticking. Two weeks before the key €1.5-billion payment to the IMF on June 30th that threatens Athens with a “credit event”, the two sides do not seem able to reach an agreement that could supply the debt-ridden country with fresh money so that it can meets its obligations to creditors. However there is absolute “radio silence” between the two sides, with no exchange of papers, with no any direct communication, apart from the signals transmitted via the international and national media.
In one voice international creditors EU, ECB and IMF and pro-austerity opposition parties Nea Dimokratia, To Potami and PASOK urge Prime Minister Alexis Tsipras to reach an agreement as soon as possible.
But the Greek Prime Minister is also under immense pressure from his own party left-wing SYRIZA, urging him to stick to the “red lines” and some like the Left Platform to even call on him to rift away from creditors demands.
Despite the meanwhile famous “some progress” in the negotiations process, creditors insist on the same strict austerity ignoring the needs of a economically drained society after five years of fiscal adjustment program. Each and every Reforms Plan submitted by Greece, creditors reject it claiming “not sufficient.” According to the latest negotiations stand over the weekend, the difference between Athens and its creditors was “austerity of additional 2 billion euro on annual basis ” till the end of the days.
But the problem is not just that. There is also disagreement among the creditors, with the IMF wanting a debt restructuring and Germany opposing it. Of course. Because if Greece would get a second debt restructuring, can you imagine the demands of the other bailout countries in the eurozone?
The Labyrinth of negotiations create a new Greek flag
by Antonio Jorge Goncalves (Portugal) posted on daily “Publico” via “Le Monde“
After the negotiations collapse on Sunday evening, talks remain “frozen” as of Tuesday noon. Greek media report that PM Tsipras launching a new initiative to seek a political solution on the problem. According to latest information, Tsipras plans a teleconference with German Chancellor Angela Merkel and French President Francois Hollande later on Tuesday, but also to hold talks with other high-ranking EU officials. At the same time, he holds talks with Greek political party leaders.
The creditors are on hold awaiting from Athens to submit an updated reforms list, “a solid reform package,” as a conservative lawmaker from Merkel’s party told Reuters. However, Finance Minister Yanis Varoufakis told German tabloid BILD – which is close to CDU/CSU – that “Greece has no plans to submit any additional reform list” at the Eurogroup meeting scheduled for June 18th. For a simple and logical reason:
“The Eurogroup is not the right place to present proposals which haven’t been discussed and negotiated on a lower level before,” Varoufakis told BILD and called on the European Commission, European Central Bank and the International Monetary Fund to come back to the negotiation table “with a clear, robust mandate.”
Greece has repeatedly said that it will not accept cuts in pensions and poverty benefits. It also opposes labor market reforms however it offers a long reforms list of proposals aiming to bring revenues via combating tax evasion and a series of other measures.
In the economic warfare against Greece, the country’s EU-partners have pulled out their most lethal weapons, including this of a Greek exit from the eurozone, even if it is not legally possible. The creditors’ arsenal includes also “capital controls”, “parallel currency”, “contingency plan”, “state of emergency”, “Plan B”, “default within the eurozone”, “Grexit is automatic EU-exit” or even some absurd claims of “halting of EU funds and subsidies in case of Grexit.” Scenarios in all possible and impossible combinations.
“Germany’s Suddeutsche Zeitung reported that the creditors are drawing an ultimatum, threatening to cut off Greek access to the European payments system and forcing capital controls on the country as soon as this weekend. The plan would lead to the temporary closure of the banks, followed by a rationing of cash withdrawals.
Syriza sources have told The Daily Telegraph that Greece may seek an injunction from the European Court of Justice to stop the creditors and the EU institutions acting in a way that breaches its treaty rights. This would be an unprecedented move, greatly complicating the picture.” (Daily Telegraph)
As the bombshells fall daily on Greeks’ heads, members of the local middle-class who have still money at the banks some seek their way to the banks and reportedly withdraw their deposits to hide them under the mattress. Economic media report of amounts between €10,000 and €30,000 leaving the banks’ counters. Logically, those with big amounts have most likely sent their money abroad – and thus: long ago.
After two days of bombing, the Athens Stock Exchange has plunged down to historical 708 basic points. Stand June 16/2015 at 14:07 pm 708 units and -4.07%.
There are currently media reports of an emergency EU Leaders Summit on Greece on upcoming Sunday, but much will depend of the outcome of Thursday’s Eurogroup.
At the moment Greece and creditors seem to pull the edges to the extreme. Is it a bluffing? Is it serious? Is it part of the game? Is it Now or Never? Or Now or Until June 30th? Point is that both creditors and Greece know that they can go on with negotiations until the end of the month.
PS All I can advice you is: keep calm and go swimming
It is quite clear that the ex-Troika sociopaths are starting to freak out. But Syriza and the Greek people have to hold the line and default if need be.
Just one question (if it is not too personal of course)… do you live in Greece?
I am just asking in order to know if you will also “bear fruits” of this default (that you propose) with the rest of us?
Let’s face it: Greece joined a monetary union (with now 19 members). 18 agree on a solution. If Greece wants to stay, it needs to conform, otherwise Greece will slowly default step by step. Every other country would be treated in the same way, whether it might be Portugal, Slovenia, Austria or Lithuania. The countries, which joined the Eurozone, did it for exactly that reason: to gain access to a stable, trustworthy currency, where strict rules are to be enforced.
The overall situation hasn’t changed since February. So if the Eurozone now backed down on Greek demands, they would stultify themselves and they would carry the responsibility of delaying a solution. So I’m pretty sure the Eurozone’s offer is a final one. If Greece prefers to default, that’s okay then. Nobody will blame the consequences for the remaining Eurozone on Greece. So should the consequences for Greece not be blamed on the Eurozone.
No, you are 100% wrong. The 18 have no solution, because they are completely deluded (for example, in claiming that Grexit is a small issue, when the markets are now reacting very strongly just in anticipation). The 18 are determined to oppose any solution that is (a) not neoliberal and rejects mass privatisations and things such as removal of minimum pensions’ and (b) would actually allow Greece to engage in economic recovery, e.g. by debt restructuring. They want to keep the left government of Greece in an unstable and dangerous situation in order for it either to lose power or concede defeat.
This has nothing to do with economics, and everything to do with politics and how the EU is controlled (mismanaged). The key player os Germany, and the pathetic right wing government across the EU fall into line behind neoliberal dogma.
It doesn’t really matter what you or I think is (no) solution. Currently there are two German voting rights out of 25 in the ECB’s Governing Council, so there is no way Germany can impose its opinion on others (see https://www.ecb.europa.eu/ecb/orga/decisions/govc/html/votingrights.en.html). For denying ELA a two-thirds majority is needed. If that should ever happen, it would be insane to blame it just on Germany.
It’s time to accept that democratically elected governments across the Eurozone have a different position than the Greek government. In most countries their governments represent the opinion of the vast majority of the population. Thus you would have to blame the people all over the Eurozone, people like me. As Greece is a tourist destination, I think this is an unhealthy point of view.
Greeks should gently talk to tourists and discuss this issue – I think that would be beneficial for mutual understanding.
Maybe the markets are more concerned about a debt relief than about a default.
I don’t see how the Eurozone became more “neoliberal” than from the start. Greece should have known what to expect.
What are your blathering about? Are you really so naive that you think it is about the ECB? It is about the naked political power of Germany in the intergovernmental arena of the Eurogroup — where the miserable old cripple in the wheelchair issues instructions to others, who perceive power and follow.
And there is no lack of understanding. I dispute this view, which many Germans and northern europeans are insisting on. The situation is very clear: the German government, along with most Germans, has no intention of negotiating with a debtor country. They have taken an irrational non-economic decision based on their “morality” that people who owe money and don’t pay are “bad” people and have to be punished. With the new German power in Europe, after 1990, that is what Germans intend to do.
Now, explain to us how this is somehow different from what the Nazis intended. Even without the genetic propaganda mentioned elsewhere, this is redolent of the 1930s.
Why should they follow Schäuble’s “instructions”? Just theoretically: How could he threaten them? Germany cannot exercise any power, if the other European countries don’t want it to. They (except for NL) just use Germany as a figleaf.
You are right that debt (Schulden) is related to Schuld (guilt) – you owe something to somebody.
I get your point, but the Eurozone was designed from the start as an area, in which a default is impossible thanks to strict rules (which were broken by Germany), thus leading to low risk premiums on interest rates. I understand this was a cultural shock to Southern European countries which were still used to higher inflation and growing wages.
The banding together of northern creditor countries with recently elected southern debtor countries is something astonishing, I agree. Historians have yet to analyze quite how Europe has fucked up this time; what is clear, is that Germany (as always) is at the centre of the trouble.
The eurozone was originally designed by experts as a currency zone with strict entry rules, since its operation was largely based on the stability of the DM. French and German politicians decided to bring all and sundry into it, in order to maximise their export markets and try to make a new European empire. Their greed was matched only by their stupidity — and now you try to blame the people of Greece, Italy, Spain, Portugal and Ireland for the serious faults of Germany and France. Just completely irresponsible and immoral conduct from Germans.
Your “democracy” is only the result of permanent counter revolution to let it cause best effect it’s national organised but the huge majority of the world population are the suffering proletarian classes, parts of which get slaughtered to corrupt your brave voters, f.i. another 6 million extinguished for Coltan for play stations, cell phones and other capitalist garbage that these dumbfucks need every six months fresh anew. Democracy? These voters are imperialists, in compliance with the rich.
What? Who forced M Samaras to resign and play foul with a wrong candidate with too heavy demands that aimed on destroying the GREEK tourism to create sell-out for TUI-bastards?
And so the story goes Euro membership was only a service for lazy Herrentouristen and the propaganda ministries are already at the same point as the weeks before the elections in June 2012 to scare also the tourists away, but wait something is wrong: no elections!
I am not a troll. Also I am no very fond of the EU politics, or the IMF.
Still it puzzles me how misinformed Greek voters are by their own media.
There was never any negotiation. Never did anyone signal that there could be a debt cut at any point. Still Greek politicians got elected for promising to negotiate this.
Nobody has any interest in controlling Greece. It is simply not controllable and not valuable enough to make an effort. Yet Greece media convinced the public of an underhand invasion.
All that the Greece government has done in the last decades was wasting your money and pointing fingers and you still believe them and the Greek state media.
Is it so hard to look in the mirror?
indeed, there was never any negotiation. Quite right. Schaeuble made it clear from the moment that the Syriza government was elected that there would be no negotiation, and when Varoufakis attempted to discuss economics and policy choices Schaeuble campaigned to have him removed as finance minister.
When the German people will wake up to the reality of the monster that have put in charge of the eurozone, I do not know. If past behaviour is any judge, they will never wake up — and claim innocence after another holocaust.
this could be my words
The Greek “state media” started just a few days ago after a forced break of 2 years and also just by chance the government was not the same the last 10 years, most Greek media are telling the same populist lies you believe in and that formed your “opinion” while telling you are uninformed.
And your kind opinion goes: “Greeks are brainwashed voters”
My opinion is: Opinions are like arseholes, everbody seems to have one
So it does not bother you that even Chinese and African press considers the Greek argumentation as irrational?
You are right, everyone has an opinion, but if you stand alone with your opinion, you might want to doubt your own arguments.
bravo francisco – it is the only sane path at this point…
“Grexit is automatic EU-exit”
It should read the other way around: “EU-exit is automatic Grexit”. Nobody wants it (at least, at the moment). However, there is a clear legal path. For example, U.K. will hold a referendum on staying or not in the EU. Once a country leaves the EU, it is out of the Eurozone as well. It can still use the euro as currency (similarly to Kosovo and Montenegro), but that is different from being a Eurozone member.
Exiting the Eurozone and staying in the EU is indeed out of a legal twilight zone. Of course, to paraphrase A. Merkel “if there is a will there is a way”; the lawyers might be able to come up with some steps to do that.
Your brilliant “EU-Exit” just sounds like real ugly gentrification as Greece is a member state since 1981, all these new tenants – that, oh what a surprise also refuse to take any refugees – should have joined 1981 too.
Deputy Minister Theano Fotiou:
500.000 Athenians living in cars and similar homes
here (close to bottom)
I’m curious about something. If the TTIP is ratified by all parties, what incentive do the more financially stable EU members have for remaining in the EU? If a trade treaty allows the same lack of tariffs an duties plus it allows a free flow of HIRED labor, without the free movement of people shopping for the best benefits package, why would Germany or UK remain in the EU? They would no longer need to fund the ECB. They could deport all the nationals holding visas from countries (Greece, Italy, Spain) who find it easier to document illegal entrants and send them on their way to UK or Germany then to deal with the expense and hassle of policing their borders.
And what happens to Greek unemployment numbers if all the expat Greeks (and Africans holding Greek visas) are sent back home?
The EU is much more than just a trade union. While England might leave, Germany will probably be the last to leave. Germany needs the balance of the European level, otherwise it would brek apart. If Germany left Europe for these reasons, it would be equally reasonable for Bavaria to leave Germany.
It’s a union, so we have to deal with immigration together. Just because Greece, Italy and Spain are situated in the Mediterranean doesn’t mean it’s not our common responsibilty.
Nobody wants to send Greeks etc. back home, they are important for the economy and culture not just as employees, but also as entrepreneurs.
What document? One for 30 days? In Greece 95% of the refugees get arrested when trying to leave the country. The front will be Germany together with Italy and Greece against England and all these new “Europeans” that refuse to take refugees although they all benefit from sinking gas prices as beheading and gas price work together; Iraq’s drilling was such successful the last time in 1985.
You forgot the 300 mill Americans that have to get home when Amerikkka gets free from the white men after 400 years.
Homeland Security – Fighting Terrorism since 1492
you are not Need to pay this Money( 1,5 Billion) now , the rules are that you can delay this another 6 months.
So you can use this for pay pensions and servants, at least they will be happy in June.