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Ex deputy PM admits Tsipras gov’t was unable to borrow “from third countries”

High-ranking SYRIZA official and one of the party’s top economist, former deputy Prime Minister Yannis Dragasakis, admitted that the SYRIZA-led coalition government was unable to borrow money from third countries and that therefore it was obliged to sign the July 13th agreement. At the same time, he revealed that before the capital controls, Greece was very close to have to proceed to ‘deposits haircut’  because “the plan was to follow the Cyprus example.”

Speaking to economic news portal euro2day.gr,  Dragasakis said that “the threats of capital controls started already on February 15th as part of the war that took place.”

The former deputy PM revealed that the Tsipras government had sought  alternative ways to raise capital and avoid signing the 3. Memorandum of Understanding and the 3. bailout. Greece has contacted China, Russia, India and Venezuela, but without result. And borrowing was inevitable.

“We did a global effort to see if we can raise capital from third countries so that we can meet our then obligations (…) There were no such possibilities,” Dragasakis said “they didn’t give us”.

He indicated that the effects the recession will be short-lived and that recovery is expected as of 2016. The crucial factor is, however, is the triptych of recapitalization, lifting capital controls and debt restructure.

He admitted that there were errors and omission during the negotiations and that these influenced but they did not determine the end result. the end result was in the context of the correlations that exist in Europe.

Dragasakis said that he believes that the disclosure of Schaeuble’s draft [temporary Grexit] mobilized some countries to stand by Greece.

He spoke of a “peculiar war” during the negotiations of the last months.

Yannis Dragasakis warned that the country suffers under “accumulated reserves of unreliability”, something that the whole political system has to deal with.

PS I wonder what were the terms & conditions tabled by the third countries that forces SYRIZA to hard landing.

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15 comments

  1. Supposedly….supposedly…..Greece was only of use to Russia and China as long as it stayed in the eurozone. Supposedly.

  2. Of particular concern is the almost offhanded confirmation that the Cyprus Model was to be used in Greece. “Deposits haircut” is shorthand for ‘steal from the middle and give to the rich.’ (The poor seem to get hammered no matter what ‘model’ is used.)
    The declaration that “..the recession will be short-lived and that recovery is expected as of 2016..” would be laughable in it’s manifest propaganda nature if this wasn’t coming from people supposedly responsible for public policy.
    The Greek Debacle is nowhere near over yet.

    • “Deposits haircut” is shorthand for ‘steal from the middle and give to the rich.’ (The poor seem to get hammered no matter what ‘model’ is used.)”

      Right, because the poor have more then 100k in their bank deposits….
      Never ceases to amaze me how things get convoluted. I dare say people with that much money in the bank can give a part, especially when the rest is financed by taxpayers who on average have a lot less then 100k in the banks. Also since this is all imposed from the evil outsiders how about we do nothing, just let those banks be on their own, how much money do you think they wouldve payed out to their depositors?

      • well, suppose you had a good paid job, but now unemployed for a couple of years and no chance for a job due to age. and hardly a chance for a pension. Would you give your money to save the banks?

        • ktg the question in this case is who else is going to safe me?
          because the banks are bankrupt and they already(no longer) have my money. So this <50% haircut on deposits bigger then 100k is already after 10bn were given by taxpayers
          This is exactly the problem i have with so many commentators here, its always not this and not that but noone ever talks where the money is supposed to come from. Are you really telling me that people with 100k AND MORE in the bank are the ones we need to protect? Would it be better that the taxpayers, either european or cypriotic, pay for this? I dare say those taxes would hurt a lot more poor people then the deposit haricut.
          Btw. there might be a few cases like you describe, but the majority of that money is from russians and other europeans using cyprus as a tax haven(awesome business model for a country, helping the rich people of other countries get away with not paying taxes).

          • btw. Id love xenos’ view on this depositors vs taxpayers…

          • this afternoon we were talking with friends about cases where the banks ‘wrote off’ debts to some in fact private businesses. This 100million euro write off for “friends of the system” should burden ordinary people’s shoulders? No, thanks.

          • Giaourti Giaourtaki

            German bullshit propaganda, these “Russians” are Greek families that survived the Turkish holocaust against Pontian and Asia Minor Greeks and other Greeks that lived in the Soviet-union.

            • Then please tell me both of you who pays?
              Where would you make the cut/who will take the burden?

              If noone pays deposits are more or less gone, no matter the nationality or identity of the depositors.

              I think we all here somehow agree at least on the idea that the rich/wealthy/the one who could shoulder the most should be the ones to take a heavier burden of those costs. So if not at 100k then where? 200k? 1 mil? Im flexible on rates.
              Im not saying the way it happened in cyprus is the best way to go, maybe there should be an expcetion for people on a pension plan or businesses who otherwise get in danger of closing down. But to say like ambrit did that to go after those with a 100k and more(thats about 1-2 the average wealth in greece or ger), which since it is open to the top by definition taxes the rich, is targeting the poor is ridiculous.

              The way I see I it all european states should have written of part of their debts(preferably in 2010 but it would still be doable) and put the rest into one big lump of commonly backed eurobonds.
              But writing of that much debt means that certain banks/pension funds get into trouble. SO we let the banks go bankrupt and the first to pay are the shareholders, but if thats not enough deposits aka the people who loaned their money to the banks are next. At that point i think governments should step in to guarantee small scale deposits of ordinary citizens.
              Instead the overwhelming part was shifted to taxpayers or cuts in essential social services.

              But to say I want neither taxpayers nor employess and beneficiaries of the governments nor depositors nor anyone else to pay is not an option.

              • how about ‘make the rich pay’?

                • and who is that? the rich? thats what im asking, at what amount of money in your acc(or whatever other criteria you want) are you rich?
                  Id say someone with 1-2times the average wealth in one account youre fast approaching it(and remember thats only where the haircut starts, its not all pensioners with just exactly 100k it is also the corrupt busniessman with 50 million in the bank).
                  you keep being non specific, how do you get to the money?
                  Higher income taxes for incomes exceeding xxx?
                  Higher property/wealth taxes?
                  Or just let the system go bankrupt in one fell swoop and rebuild after?
                  It is easy to say no, but its a cheap way of argumentating if at no point you say yes/offer a solution of your own. It is what people do when they want to lament their woes/ win the arguments, instead of being interested in solutions. Like gigi telling me its impossible for him to travel because he cant put his stuff anywhere, if I find a place for hist stuff, his grandma will be sick or hell have allergies or any number of other reasons and at the end hell gleefully tell me he was right all along its impossible to travel for young greeks.

                  Your examples up above dont really work either, because you search for the one exception to take down the whole idea, but I can always find those exceptions. Lets say we only tax billionaires. Now suppose there is poor african child getting supported by the gates foundation
                  well no more because since we tax bill gates that money is gone so as we can see taxing billionaries can mean taking from the poor as well.

                  You say you dont want to burden house and property owners in general, because for some of them thats their only little piece of wealth they still own/they couldnt afford to rent anyway.
                  You dont want burden businesses, because some of those might go bankrupt.
                  You dont want to burden the guys with huge amounts of money in the bank(most of which will have multiple accounts plus property and/or businesses), because for some of them that their life pensions.
                  SO were back to the questions, who are the rich/where can we take the billions we need to get away from this crisis?

              • Giaourti Giaourtaki

                Pension funds trouble in Greece: 27 billion due to so called haircut plus another 27 billion Greek bonds that the ECB bought cheap under 30% to rescue hedge-funds and gets repaid from Greece 100%.

            • I simply dont care about ethnicity gigi. I differentiated between russians and other europeans because of the different economic zones in which the money that came to cyprus originated.

        • Giaourti Giaourtaki

          This is exactly the point, with a million freelancers around and no social security but Mr. Guevara will not understand this as in his German tunnel reality he has no clear eyes for Greece, may be one should write people need the 100.000 for medicine and envelopes for the doctors or to travel round the world?