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Eurogroup draft demands from Greece’s govt what toppled Greece’s previous govt

“Greece needs to do more to start third bailout talks” is the Eurogroup finance ministers conclusion on Sunday and it was the same on Saturday. Already yesterday a draft was on the making but the strong disagreement among the 18 EZ FinMins and it has been supposedly to be finishing by now with some modifications.

According to the draft obtained by Reuters, the 18 eurozone finance ministers demand among others measures that

a. measures that go beyond the Greek government’s “red lines” like pension cuts,

and

b. measures that practically toppled the previous conservative government, the Samaras-PASOK coalition, as it could not proceed with so called “reforms” like mass lay-offs in the public sector, non-prescription medicines in supermarkets,  Sunday trade, labor market

Eurogroup draft via Reuters

– fully comply with the medium-term primary surplus target of 3.5 percent of GDP by 2018, according to a yearly schedule to be agreed with the institutions;

– carry out ambitious pension reforms and specific policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause;

– adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit I recommendations, including Sunday trade, sales periods, over-the-counter pharmaceutical products, pharmacy ownership, milk, bakeries. On the follow-up of the OECD toolkit II, manufacturing needs to be included in the prior action;

– on energy markets, the privatization of the electricity transmission network operator (ADMIE) must proceed, unless replacement measures can be found that have equivalent effect, as agreed by the institutions;

– on labor markets, undertake rigorous reviews of collective bargaining, industrial action and collective dismissals in line with the timetable and the approach suggested by the institutions. Any changes should be based on international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth;

– fully implement the relevant provisions of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, in particular to make the Fiscal Council fully operational;

– adopt the necessary steps to strengthen the financial sector, including decisive action on non-performing loans, transposition of BRRD and measures to strengthen governance of the HFSF and the banks;

– develop a significantly scaled up privatization program with improved governance. A working group with the institutions shall provide proposals for better implementation mechanisms;

– amend or compensate for legislation adopted during 2015 which have not been agreed with the institutions and run counter to the program commitments;

– implement the key remaining elements from the December 2014 state of play of the fifth review of the second economic adjustment program.”

From what I see the draft is a general framework,  in detail the agreement between Greece and its creditors will have %s and +s and -s and hikes and cuts.

If creditors insist to keep bringing up again and the again the same austerity measures they will be changing governments in Greece again and again in all possible and impossible combinations. Nothing will change if they do not accept also real structural reforms.

Dead end in a vicious circle.

PS I thought the previous program was over… lol

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27 comments

  1. This is all well & good
    The questions that needs to be asked however are these
    * WHERE IS ALL THE MONEY COMING FROM …/?
    * WHERE IS ALL THE MONEY THAT THE EU WILL USE TO BAIL-OUT GREECE COMIMG FROM …/?
    * IS THE MONEY REAL MONEY = PRINTED UP CURRENCY
    The kind that you need to deliver in a truck
    * OR IS IT CYBER MONEY = THEY JUST PUT IT UP ON A COMPUTER SCREEN – THEN PRESSED THE ENTER KEY & SENT IT.
    The kind that is – “let’s pretend” money that is actually worthless.
    BECAUSE THE EU POWER BROKERS KNOW THAT THE EU MEMBER NATIONS ARE STUPID & CANNOT TELL THE DIFFERENCE.

    Jean-Claude Junker admitted to this very tactic being in play in the interview with The Telegraph July 2014.

  2. Giaourti Giaourtaki

    Cut all pensions to zero or implement real trade reforms like closing all European embassies, banning all European products and closing the harbours for their consumers trash

    • I totally agree. Close all LIdL shops. Ban all European goods from shops. Lets create employment by making those goods here in Greece.

  3. I guess trust is the central problem at the moment.

  4. There are several items in this draft that I do not understand enough to be able to comment. However, I do not understand why the other items are objectionable to the Greek population. Can the Greek participants explain?

    For example, what is wrong with having stores open on Sunday? Interestingly, Germany had some similar restrictions until recently, but even they have made the store working hours more flexible.

    It is also clear that the flexibility of the labor force did help the Baltic states get out of the crisis and reduce the unemployment much faster. Yes, the economy got worse faster, but they have been growing already for five years. I know Syriza ideologically supports collective bargaining, but is it better to have extremely high unemployment among the young rather than give them an opportunity with a starter job that pays less? Those are meaningful structural reforms, IMHO

    • Another example of a structural reform that should help the vast majority of the Greeks: allowing over-the-counter medicines to be sold in supermarkets. Everybody agrees that would increase competition and reduce cost of these pharmaceuticals. Clearly, this would not be to the liking of pharmacy owners, since it will reduce some of their profits. It might even eat all of the profits of some pharmacies if they do not change. However, the Greek nation needs to move forward. It cannot rely on arcane rules and regulations to maintain the status quo and the good old ways of special interests.

      • Giaourti Giaourtaki

        The next structural reform to come will be that all workers that didn’t get paid will ask for their money in a more class-war way, also the bosses who forced their “wage-slaves” to vote YES will get their pay.
        Cheap medicine is so long cheap until all pharmacies are killed and then it will get really expensive.
        Reforms that make corporations frat and frater are no reforms at all, only reforms that hurt bosses are reforms and the only special interest is the will of the people to kill big business; next step will follow in South of Italy when the people send Lidl back home: It will start in Calabria or in Sicilia, but I guess it will be Calabria because of its Greek roots

        • “Cheap medicine is so long cheap until all pharmacies are killed and then it will get really expensive”

          There is certainly role for the state: to ensure fair competition. Most monopolies are bad — whether it’s a big corporation, or the government , or a professional cartel. There are exceptional cases in which monopolies are needed (e.g., the army), but pharmacies are not that case.

          • Giaourti Giaourtaki

            After this Deutsch-Mark-fascist onslaught your naivety is funny fair competition, the revenge of the EU-4th Reich for the resistance against the 3rd Reich and it’s “heck” to remind of never paid war reparations that made Germoney’s miracle possible; beside aryanizations and pillaged infrastructure all over Europe.
            Ah, yeah the army, it would be nice to call your embassies back home to not provoke the army.
            It’s really funny 5 years for posters with 5 years but I guess the German soldiers are too much traumatized from their murders in Afghanistan to have any chance against a real army; thanks to the constitution in Greece there is no civil service only draft

    • keeptalkinggreece

      having shops open on sundays kills the small shops who cannot afford to hire more personnel, +kills workers who could be hired to very low wages/work hours
      get over your biased approach: neither conserv ND nor P{asok allowed changes in collective bargain as the lenders demanded. these are not meaningful struct reforms but dumping wages. Meaningful structural reforms are: combat bureaucracy and corruption and tax evasion, make easy starting and closing businesses and give incentives to local + foreign investment. you cannot tax from the very first euro and have no tax returns. and these are only a few.

      • Your examples of structural reforms are very valid. At the same time, the flexibility of the labor force will help directly “starting and closing businesses and giving incentives to local + foreign investment”. I agree lowering taxes will help. (Whether the first euro of profit is taxed or not is another question). However, that also means lower government spending (which Tsipras strongly insists on keeping).

        The Germans had similar objections against allowing the stores to be open late during weekdays and on weekends: small stores will go out of business. However, essentially subsidizing less efficient retailers the government makes life more expensive and difficult for the buyers (who are also pensioners, unemployed, workers). The fact that ND and PASOK thought it will be more politically expedient to avoid such reforms in the short term does not make it right for the Greek people more than five years into the crisis.

        • Giaourti Giaourtaki

          How lowering taxes works perfect one could see the last days, as the government wanting to introduce higher taxes for profits over 500.000 made the “Europeans” starting the Grexit by closing the banks. I guess every German mini-jobber is forced to be ready for work in a 24-7 schedule and not even getting any extra for late work or Sundays will understand this just like she knows that the shitty job will get eaten any way by some delivery-hero-uberscum

  5. Nothing is over , I am afraid. Greece is helpless now – it has the position in negotiations much worse than during Samaras or Papandreou.
    Reasons :
    1. irritated creditors – many things were not diplomatic ;
    2. no serious contagion – now everybody knows Eurozone will survive Grexit ;
    3. closed banks ;
    4. blocked possibility of organized Grexit (because of closed banks and no money cushion, because drachmas are not printed and the government with closed banks has no time to print).
    Sorry, I promised to do no fear-mongering 🙁 – but it looks like truth.

    • Giaourti Giaourtaki

      Printing trillions of Euros is very easy.
      Aha, stealing Greek money by freezing 25% of the economy on the Balkans is no contagion? Just like letting thousands of refugees starve on Lesbos and Kos is no

  6. Professor Pelotard

    @KTG,

    Once again I ask, why are the Greeks so keen on hanging on to the Euro? If they can negotiate a proper program to help with the changeover, including a gradual chage of the debts from euros to the new currency (a debt relief), would that still be unpalatable, and in that case why?

    • keeptalkinggreece

      it is too late for this. it could have happened in 2010 when people were economically better.

      • Professor Pelotard

        An interesting reply indicating that you believe that being a “ward” (a colony) of the EU (ie Germany and France) is a better solution.

    • Do you seriously think that a proper programme is going to come from these buffoons running the eurozone? They would prefer Greece to fail and then watch the euro disintegrate. Their whole mentality is the Protestant work ethic and how the greeks are lazy people who deserve nothing.

      The expression one might use for much of Europe now (although mainly the germans) is that they will cut off their nose to spite their face.

    • Giaourti Giaourtaki

      Just like their proper “humanitarian aid” they are lying about. Where is it? Refugees need help on Lesbos, hospitals will shut down the next days. It’s only used as blackmail and to show their public Xaos, starving refugees cause more effect than closed banks. You want aid? Sell the Akropolis!

  7. Cause & Effect: A sure sign of madness is doing or saying exactly the same thing and expecting a different outcome………

  8. Greece is losing his sovereignty.
    New referendum in the make?
    Or they EU want to get rid of Tsipras and his party?

  9. Greece don’t have to pay anything back
    German

    • Giaourti Giaourtaki

      But they’ve paid until now 40 billion to the IMF and the 6 billion to the ECB was only profit from interest, Germoney took of this 2.4 billion and I have no idea how much Greece already paid back but it was much more than nothing, the recapitalization of the banks after the “haircut” Greece had to finance with 40-50 billion, 27 billion lost the social security funds.

  10. Wow,from a country whose citizens are most closely matched to the Roma in honesty, I am shocked they think they can lie about all the reforms they promised in the last two handouts and then cry and threaten and abuse the same for more money… Grow up, get to work, throw people whom do not pay their tax in jail and seize all their assets and sell them at public auction.. Those 700 people from the Island of The Blind should be jailed and all their assess seized… Fraud is Fraud any where else in the world … NOT GREECE, you accept and think it is normal and OK.. North American and most First World Countries have laws and penalties…otherwise they become Third World Countries with no pensions, hospitals, public universities..nor any services for free…. This is where Greece always was and should and will be again…. Laws and public attitudes are everything.

    Serves you right… FAIL

    • keeptalkinggreece

      Greece’s fans appear in the sky with their playmobils

    • That’s exactly what SIRIZA AND ANEL WANT AND WILL DO! PUNISH THOSE THAT TOOK THE MONEY DIDN’T PAY TAXES, ETC.. BUT THE MAJORITY OF THE GREEK PEOPLE IN GREECE AND ALL OVER THE WORLD ARE VERY HARD WORKING PEOPLE AND PROUD..

      THE ONLY REASON THAT SIRIZA DOESN’T WANT TO ACCEPT IS NOT WANTING TO GIVE UP GREECE AS A COLLATERAL..IT’S IMMORAL AND NOT RIGHT AT ALL!!
      FOR THE GERMAN’S TO ASK FOR THAT AS A COLLATERAL. THERE SHOULD BE TRUST IN THE NEW GREECE’S GOV’T. THEY ARE NOT THE SAME AS ND-PASOK!!1

    • Giaourti Giaourtaki

      The illegal states of North America belong to the American Indians so don’t miss your tea-party and swim back home to Europe.
      I guess First World Countries have laws but not when 6 million get slaughtered in Congo for Coltan to keep your cell-phones running.
      Stealing whole continents and call Roma not honest, haha
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