Financial Crisis in Greece

[Amphipolis]

I don't think this is a good idea. They are trying to prevent panic and runs on banks but what happens if the referendum returns a vote to reject Europe's proposal, can you imagine the hysteria the following day when the market opens after being closed for so long? They are not giving the market a chance to deal with any of this and they will basically end up with 10 days worth of volatility in one day. I hope they know what they are doing because this has the potential to run away from any attempt to stabilize it.

That was unavoidable. Banks will not open after the referendum (they will have to make calculations first) and it will also depend on the result. It will take days to open after July 5, even with a YES.

Stock market cannot operate as transactions are performed through the banking system.

[Gocka]

That is true but come the 7th should there be a no vote basically all Greek banks will become insolvent and collapse overnight.

That was unavoidable. Banks will not open after the referendum (they will have to make calculations first) and it will also depend on the result. It will take days to open after July 5, even with a YES.

Stock market cannot operate as transactions are performed through the banking system.

[Amphipolis]

That is true but come the 7th should there be a no vote basically all Greek banks will become insolvent and collapse overnight.

Not exactly. A NO vote means there will be a very restricted liquidity (in Euros). Some suggest Greece will sooner or later have to use IOUs or return to the drachma, but this is too complicated.

The simple answer is political. Tsipras will return to negotiations considering he has the people's support.


==

[Philosopher]

Banks and stock market will be closed for the next 10 days (until Monday July 6th).

Is it your position that Greece should leave the EU and the Euro? Please do not repeat EU rules. I'm asking for your opinion.

Do you believe life was better before Greece joined the EU and with the drachma?

I read articles daily how Greeks do not want to leave the EU or the Euro.

What are your thoughts?

[Amphipolis]

Is it your position that Greece should leave the EU and the Euro? Please do not repeat EU rules. I'm asking for your opinion.

Do you believe life was better before Greece joined the EU and with the drachma?

I read articles daily how Greeks do not want to leave the EU or the Euro.

What are your thoughts?

I belong to a minority of about 6% that wants exit from EU and Euro. The rest 94% believes in both EU and Euro.

There are some small forces or important persons (in all parties) who want EU and drachma but haven't managed to get organized in a solid and successful party or move from euro-skepticism to drachma-determination.

I believe that right now Greek economy has marginally retreated to the exact size it was when we entered Euro-currency. Also the population may have reduced since then (I'm not sure).

PS: That means I will vote for NO.

==

[Philosopher]

I belong to a minority of about 6% that wants exit from EU and Euro. The rest 94% believes in both EU and Euro.

There are some small forces or important persons (in all parties) who want EU and drachma but haven't managed to get organized in a solid and successful party or move from euro-skepticism to drachma-determination.

I believe that right now Greek economy has marginally retreated to the exact size it was when we entered Euro-currency. Also the population may have reduced since then (I'm not sure).

PS: That means I will vote for NO.

==

I agree with your statements. It is for this reason that I am always befuddled why Macedonia wants to join the EU. This is a terrible desire, and one which Macedonians will pay with their lives.

Greece's future does not lie in the EU.

Greeks are not Western Europeans. Greeks are different than Western Europeans.

[Amphipolis]

In a weird decision the Communist Party of Greece decides to give invalid vote in the referendum instead of supporting NO. That is a probably a huge mistake, though it’s too early for forecasts.

Coalition of Radical Left, Independent Greeks and Golden Dawn vote for NO.
New Democracy, The River and the Socialists vote for YES.

This is very marginal, it seems like 51/49 for NO.


===

[George S.]

Its not just a vote of yes or no its more to it the greek president said they value greek sovereignity.Even if it means staying out of the Eurozone.
Most people are well and truly upset with the eu and blame them for the run on the banks.
What a bjoke they just don't get it you have to LIVE WITHIN YOUR MEANS.BIG BROTHER EU shouldn't pick up the debt for you.THey would prefer their own soveregnity to being with the eu.Greece can't pay that 1.6 billion interst.

[George S.]

Greek catastrophe shows EU’s promised trade-offs are hot air

Greek catastrophe shows EU’s promised trade-offs are hot air
Losing sovereignty was supposed to be a price worth paying but it has ended in humiliation
By Boris Johnson
9:01PM BST 21 Jun 2015

http://www.telegraph.co.uk/finance/economics/11690200/Greek-catastrophe-shows-EUs-promised-trade-offs-are-hot-air.html

I sometimes think we are missing the main point of this Greek crisis. We talk of deadlines and deadlocks and dénouements. We go on about the personalities and politics involved – and yet they are all irrelevant next to what has emerged as the one gigantic conclusion from which only a cretin would seriously dissent. It would make no difference to this conclusion, now, if the Greek government were a load of neo-Marxists in motorbike leathers or a junta of Frankfurt bankers.
It doesn’t matter – for the purposes of this argument – whether the whole thing collapses tomorrow, or next month, or next year. They can “kick the can” even further down the road, or just watch as that battered object is finally steamrollered by the logic of the markets. They can keep the Greeks locked for ever in the procrustean torture of the euro or they can allow them suddenly to print billions of new drachmas on the back of cereal packets.

Whatever happens, nothing can change the fundamental truth: the Greeks should never have joined the euro.

They were mad to abandon the safety valve of an independent monetary policy, and they are paying for that folly in a daily and escalating human tragedy: of falling life expectancy, of rising suicides and mass unemployment; of medicines they can no longer afford, of operations cancelled and hope extinguished

However it unfolds, the Greek catastrophe has exploded the central proposition of EU integration, the assertion that has been made time and again to the British people to secure their assent to new treaties – that the loss of national political control is always a price worth paying for overall economic gain.

That was the bargain, that was the trade-off – more or less explicit – when Britain signed up to the Common Market. We were told (though never very volubly) that there would be some loss of parliamentary “sovereignty”; and Mrs Thatcher again understood quite clearly that trade-off, when in 1986 she came to consider the advantages to Britain of the single market programme. She signed up, without much fanfare, to a very big increase in qualified majority voting. She gave up certain national prerogatives and independence, because like virtually every other UK prime minister, she persuaded herself that British citizens and businesses would benefit.

That is the Faustian pact of the EU. You surrender something precious in the form of national autonomy – and everyone is meant to be richer. Well, that has certainly not worked for Greece. That loss of monetary independence is now the main cause of their pain, humiliation and abject fiscal servitude. Loss of sovereignty has been a disaster for them.

Has it been much good for Britain – or indeed anyone else? How has the sovereignty-prosperity trade-off really worked out?

Let us look first at Britain, and the negative side of the ledger: the sacrifice of political independence. It is considerable. We have given up national determination over an amazing range of policy areas, from the hours worked by junior doctors to the right to strike international free trade deals; from levels of indirect tax to the composition of our sausages.

It has been recently estimated by the parliamentary authorities that about 65 per cent of all legislation passing through Westminster either originates in or is heavily influenced by Brussels.

I happen to think that this is not, in itself, especially healthy for democracy. The main reason why Ukip became so potent and so electorally dangerous was that when people wondered vaguely what their government could do about levels of EU immigration, they were amazed to discover that the answer was – nothing. That basic power, to decide who you were going to allow to settle in your country, had been given away.

Over decades, British politicians had given away powers that weren’t strictly theirs to give. They belonged to the people; and when the people asked for them back, they were told that the heirlooms were now locked in the silver cabinet in Brussels.

It was that sense of a loss of control that caused voters such fury – even people who were actually quite willing to be persuaded of the benefits of immigration. That is why Ukip got 14 per cent in the polls.

And yet I still think the British people would wear all this – all this loss of “sovereignty” – if the material gains were shown to be worthwhile. But can they? How has this experiment really worked out?

In the run-up to that 1992 single market, the EU published the Cecchini report, prophesying untold riches for the continent. By harmonising standards and blitzing national objections, the single market would unleash a frenzy of cross-border deal-making and dynamism. To a certain extent, that did indeed happen. But was it really attributable to Brussels?
And over the past 20 years, European growth has lagged way behind other regional economic groupings – Asean, Mercosur, Nafta – none of which has these elaborate sovereignty-sharing arrangements, with a peculiar parliament and court and a vast and ever-growing corpus of supranational law.

Indeed, you could surely argue that it is all this supranational regulation and legislation – so easily promulgated, so impossible to remove – that is now holding Europe back; one of the causes of endemic low growth and high unemployment virtually everywhere in the eurozone. The whole tendency of politics today is towards localism and devolution; and if we are going to give power to the nations and regions and cities of the UK, then surely it is time to give back powers to the countries of the EU.
Should Britain stay in or get out of the EU? Polling since 1977

Polling
Stay In
Get Out
October 1977
53
47
May 1978
47
53
March 1979
35
65
March 1980
29
71
March 1981
36
64
March 1983
40
60
June 1984
51
49
September 1987
55
45
1989
67
33
November 1990
68
32
June 1991
70
30
December 1991
67
33
5-6 June 1992
60
40
10-13 June 1992
62
38
21-25 October 1993
54
46
11-30 April 1994
59
41
23-26 May 1996
53
47
27-29 November 1996
52
48
15 April 1997
50
50
25-28 April 1997
52
48
2-3 October 1997
54
46
13-14 November 1997
58
42
25-30 June 1998
54
46
21-24 May 1999
53
47
10-11 June 1999
53
47
13-14 October 1999
55
45
27-29 October 1999
48
52
22-27 June 2000
62
38
29-30 September 2000
48
52
24-25 November 2000
53
47
15-21 March 2001
48
52
30 April -1 May 2001
53
47
22-May-01
51
49
20-22 June 2003
54
46
20-22 September 2007
56
44
22-24 October 2011
46
54
10-13 November 2012
48
52
10-12 May 2014
59
41
11-14 October 2014
61
39
June 2015
55
45

The Greek debacle has immeasurably strengthened David Cameron’s hand in the run-up to the referendum, as Jeremy Warner pointed out on last week. The euro crisis has shattered the myth of euro-irreversibility, and shown the hollowness of the assumption that “shared” sovereignty leads to greater prosperity.

It is becoming ever clearer that the opposite case can be made – that economic growth will, in fact, come with devolution of powers back to people and parliaments. The time is approaching when Britain will need to set out its case for reform – and the case for boldness is growing by the day.

[George S.]

Ah Greece what have you done to deserve this?

Ah Greece what have you done to deserve this?
July 8, 2010
Posted by Yilan in Yunanistan.

https://turkeymacedonia.wordpress.com/tag/risto-stefov/

While contemplating “bailing out” Greece from its current economic woes let us ponder the following;

According to a report published on December 15th, 2009 by Macedonia online

(http://macedoniaonline.eu/content/view/10962/2/) Greece paid journalists 130 million dollars to promote the “Greek-ness” of Macedonia.

From 1989 to 1993 the Greek Foreign Ministry, headed by Andonis Samaras, used a secret fund to pay Greek journalists 130 million US dollars to promote propaganda about the “Greek-ness” of Macedonia!

Although these funds were originally intended for external propaganda campaigns, according to the testimony given by former Prime Minister Constantinos Mitsotakis, they ended up in the pockets of Greek journalists.

“All of the funds were put in black plastic garbage bags filled with 5,000 bank notes of cash money to be used mainly for propaganda purposes against Macedonia’s name, but instead of being sent abroad, the propaganda was directed inwards towards our own country” said Mitsotakis in front of a commission.

The payments of huge lump sums coincided with the independence of Macedonia and the strengthening of internal propaganda.

The dilemma whether the Greek Government bribed journalists and publishers across the country to write material that would promote Athens´ agenda hangs in the air. Andonis Samaras, however, publicly acknowledged that a large amount of money was paid to publishers, journalists and local officials.

What more has Greece done to deserve this you say? Well, let us look at some “other things” that Greece has done over the years;

By the 1913 Treaty of Bucharest Greece annexed 51% of Macedonia along with a large Macedonian population which Greece immediately subjugated. For a century now Greece has continuously and systematically used extreme measures to eliminate all traces of the Macedonian identity.

Greece has taken many steps including eradication, expulsion, colonization, forced denationalization and assimilation in order to destroy the Macedonian consciousness and erase the Macedonian identity forever. For example;

In 1914 Professor R.A. Reiss reported to the Greek government that: “Those whom you would call Bulgarian speakers, I would simply call Macedonians. …. I repeat the mass of inhabitants there (in Macedonia) remain simply Macedonians.”

In 1919 a Greek Commission on Toponyms issued instructions for choosing Hellenic names to replace Macedonian place names.

In 1920 the Greek Ministry of Internal Affairs published an administrative booklet, “Advice on the Change of the Names of Municipalities and Villages.”

In 1920 approximately 70,000 Macedonians were forced to leave Macedonia and move to Bulgaria in exchange for approximately 25,000 so-called Greeks.

In 1923 approximately 565,000 Christian Turkish colonists from Asia Minor and approximately 55,000 colonists from Greece were settled in Macedonia.

In 1925 Greece denied the existence of Macedonians and referred to the Macedonians as “Slavophone Greeks” or as “Old Bulgarians”.

In 1926 Legislative Orders in Government Gazette #331 ordered the names of Macedonian towns, villages, mountains, lakes, rivers, etc. to be changed to Greek names.

In 1927 all Cyrillic (Macedonian) inscriptions in Macedonia were destroyed or overwritten. This included inscriptions found in Macedonian municipal buildings, churches, tombstones, and icons, prompting English journalist V. Hild to say “The Greeks do not only persecute living Slavs (meaning Macedonians)…., but they even persecute dead ones. They do not leave them in peace even in their graves. They erase the Slavonic inscriptions on the headstones, remove the bones and burn them.”

Church services in the Macedonian language were outlawed. Macedonians were forced by the Greek state to abandon their personal names and adopt Greek names assigned to them. Some of the Hellenized names still echoed their original forms. For example, Mr. Popov became Mr. Pappas whereas other Macedonian names were replaced with completely different Greek names. For example, Mr. Itskarov became Mr. Christidis, etc.

From 1926 to 1928, 1,497 Macedonian place names were converted to Greek ones. Decree 87 ordered accelerated denationalization of Macedonians. The Greek Ministry of Education sent “specially trained” instructors to accelerate conversion to the Greek language.

In 1938 Law 23666 was enacted which banned the use of the Macedonian language and strove to erase every trace of the Macedonian identity. Macedonians were fined, beaten, jailed and exiled to arid islands for simply being Macedonian by birth and/or for speaking Macedonian. Adults and children were further humiliated by being forced to drink castor oil when they were caught speaking the Macedonian language.

From 1929 to 1940, 39 more Macedonian place names were changed to Greek ones.
In 1945 Law 697 was enacted which brought into force more regulations for changing Macedonian toponyms to Greek.

In 1947 Law L-2 was enacted which arbitrarily and without due process stripped citizens of their citizenship.

In 1948 Law M was enacted which provided further means for confiscation of properties.

In 1948 approximately 28,000 Macedonian children were evacuated out of the Greek Civil War hot spots and sent to Eastern European countries. Their evacuation became permanent and the children remain exiled to this day.

In the 1950’s Greece continued to colonize Macedonian lands with colonists from Turkey, Egypt and parts of Greece.

In 1953 Greek authorities met in Solun to plan the expulsion of Macedonians and to bring Greeks from the south to colonize their lands. By decree 504 the Greek state continued to confiscate properties from Macedonians and give parcels of these lands, along with financial incentives, to Greek colonists.

In 1954 Law 2951 was enacted which called for confiscated land to be placed in the hands of Agricultural Institutions and Commissions for Expropriations which decided how to redistribute properties.

In 1959 Law 3958 was enacted which allowed for confiscation of the properties of those who left Greece and did not return within five years.

The populations of many Macedonian villages in the districts of Florina, Kastoria and Edessa were forced to swear language oaths never to speak Macedonian and to speak only Greek. The people were forced to gather at an appointed place in their respective villages and were made to take the following oath in front of Greek church, government and military officials:

“I promise before God and men and the official authorities of the state that from this day on I shall cease speaking the Slavic Idiom, which only gives grounds for misunderstanding to the enemies of our country, the Bulgarians, and that I will speak everywhere and always the official language of my fatherland, the Greek language, in which the Holy Gospel of Jesus Christ is written.”

In the 1960’s Greece continued to hand over the confiscated properties of exiled Macedonians to persons of “proven Greek patriotism”.

In 1962, Decree 4234 was enacted which reinforced past laws regarding confiscated properties of exiled Macedonians and denied them the right of return.

From 1940 to 1979 another 135 Macedonian place names were changed to Greek ones.

In 1982, the Greek internal security police urged intensive campaigns to wipe out any remaining Macedonian consciousness and use of the Macedonian language. Law 106841 allowed the right of return to political exiles provided they were ethnic Greeks by birth. Macedonian exiles continue to be denied the right of return.

In 1985, decree 1540 was enacted allowing the right to reclaim confiscated properties to political exiles provided they were ethnic Greeks by birth. Macedonian exiles were denied and are still denied this right.

In 1987, Greece established special “kindergartens” for two and three year old Macedonian children to ensure they learned the Greek language and prevented them from learning the Macedonian language at home.

In the 1990’s Greece continued to colonize Macedonian lands with persons from the Caucasus who say they were Greeks.

Fear of Greek Authorities and State Harassment Greece is probably the only member of the OSCE which has not granted any freedoms and human rights to the diverse minorities living on its soil.

Apart from the Muslim Turkish minority in Western Thrace, other ethnic minorities in Greece, including the Macedonians, are prohibited from organizing their own cultural associations, schools and religious institutions.

Greece is the only member of the OSCE which does not permit the return of political refugees and others whose citizenship has been arbitrarily revoked without due process.

The present population of the Macedonian districts in Northern Greece is approximately 2 million. Approximately 1 million are of direct Macedonian descent. After nearly a century of systematic effort to denationalize the Macedonians, many succumbed and developed a Greek consciousness and refer to themselves as Greeks or Greek Macedonians. The Greek state has always portrayed the Greek identity as being more cultured and superior. The Macedonian identity has always been portrayed as an uncivilized, barbaric and dirty presence within a pure Greek space. The psychological aim is to make people abandon use of the Macedonian language. It has gotten to the point where one is looked down upon for speaking Macedonian. The language is referred to as the “local idiom.”

It is interesting to note that the Macedonian language is recognized internationally, but it is forbidden in Greece. After many generations of policies of denationalization by the Greek state, the Macedonian consciousness among the population has been badly damaged to the point where those who retain their Macedonian consciousness fear to declare it openly. This fear is difficult to comprehend by those who grew up in free and open societies. You have to experience it to understand it. Among the older generation of Macedonians the fear is pervasive and ingrained. It is as if the person is always on guard for his or her actions and words for fear that he or she will be betrayed or heard by Greek authorities. When one Macedonian was pressed further on this issue he blurted out in exasperation, “It (fear) has gotten into the genes!”

In 1993 a delegation from Human Rights Watch/Helsinki visited the Greek province of Macedonia and reported that: “Harassment of the Macedonian minority has led to a widespread climate of fear. A large number of people interviewed by the mission stated specifically that they did not want their names used, for fear of losing their jobs or suffering from the kind of harassment experienced by human rights activists—being followed, threatened and harassed.”

Why has Greece done all these things you say?

First, let me say that this is only a mild and small fraction of the “evil acts” Greece has committed against the Macedonian people. I have not mentioned what they did during the various wars, the various dictatorships and in their prisons and concentration camps over the years.

Greece has done this for two reasons;

1. To build the so-called “Greek nation”. Since there are no “real Greeks” the kind of Greeks that are descended of the ancient Greeks, Greece had to create “Greeks” by assimilation from its indigenous ethnicities or from the colonists Greece imported from Albania, Asia Minor, the Caucasus and other places. To enforce this, the Greek state had to use harsh measures and strict laws.

2. The “newly fabricated Greek nation” had no history, country or lands of its own so it had to occupy and annex “other peoples´ lands” and hide this fact. The Greek state needed to eliminate all traces of the previous owners. So to make a long story short, Greece has made every effort to extinguish the presence and erase the past of everything Macedonian in order to expropriate Macedonian history and the Macedonian land it occupied and annexed in 1912, 1913.

In 1912 and 1913 when Macedonia was invaded, occupied and brutally partitioned by Greece, Serbia and Bulgaria, these countries and the Great Powers of Europe knew very well that Macedonia was populated with Macedonians. They very well knew that only a decade earlier the Macedonian people rose up and fought in a Macedonian National Uprising in an attempt to create their own free, democratic and independent Macedonian state. In spite of all that Greece, Serbia, and Bulgaria, along with the Great Powers of Europe, decided to ignore the Macedonians and partition their country anyway. And if that was not enough, they also took the extra step to permanently extinguish the Macedonian existence.

Guilty for what they have done, Greece, Bulgaria and the Great Powers of Europe now do not want to face the consequences of their actions and are still insisting that “Macedonians don´t exist”.

Greece, Bulgaria and some countries in Western Europe will continue to give Macedonia and the Macedonian people a hard time as long as the Macedonian people keep quiet about what has been done to them. But once the truth is out then there will be no reason for them to harass the Macedonians.

The truth is Greece and Bulgaria illegally annexed Macedonian lands that were forcibly taken away from the Macedonian people. Greece, Bulgaria and some Western European countries don´t want the world to know this! And that is the entire crux of the problem between Greece, Bulgaria and Europe on one side and the Macedonian people on the other.

It is time for the truth to be revealed!

[George S.]

Greek Referendum: Drachma or Euro

Greek Referendum: Drachma or Euro

Saturday, 27 June 2015

http://macedoniaonline.eu/content/view/27623/52/

Greek Prime Minister Alexis Tsipras said that a referendum on whether to accept an accord for a new bailout with its creditors will be held on July 5.

Greeks will be asked to give a simple "yes" or "no" vote on whether they will accept tax rises and pension cuts amounting to 8 billion Euros that the EU, ECB, and IMF have set as a condition for desperately needed bailouts to keep the debt-stricken country afloat.

"After five months of hard negotiations our partners, unfortunately, ended up making a proposal that was an ultimatum towards Greeks democracy and the Greek people," Tsipras said in a televised address to the nation. "We have been presented with an ultimatum, and it is the historic responsibility of our country and people to answer this ultimatum."

Earlier in the day, Tsipras held an urgent cabinet meeting.

In his televised address, he also said that an extraordinary session of Greece’s parliament is due to discuss holding of the bailout deal referendum on Saturday.

German Chancellor Angela Merkel, French President Francois Hollande as well as the ECB chief have already been informed of the plan, Tsipras added.

Greek Deputy Prime Minister Yannis Dragasakis and the country’s Deputy Foreign Minister Euclid Tsakalotos will hold a meeting with European Central Bank President Mario Draghi on Saturday, the prime minister’s press service said.

The meeting on Greece's debt settlement scheduled for Saturday, which is expected to finalize months-long intricate negotiations.

Athens is currently in talks with its major international creditors — the International Monetary Fund (IMF), the European Union and the European Central Bank (ECB) — seeking to unlock financial aid to avoid a default on its multibillion-dollar debt before the current bailout program expires on June 30.

In return for the financial aid, the creditors stipulated that Greece should fulfill certain demands, including austerity measures and cuts in social benefits, continuous monitoring of the Greek economy by the lenders and unpopular economic reforms.

[George S.]

Greek Debt Committee Just Declared All Debt To The Troika "Illegal, Illegitimate, And

Greek Debt Committee Just Declared All Debt To The Troika "Illegal, Illegitimate, And Odious"
Wednesday, 17 June 2015

http://macedoniaonline.eu/content/view/27570/46/

It was in April when we got a stark reminder of a post we first penned in April of 2011, describing Odious Debt, and why we thought sooner or later this legal term would become applicable for Greece, because two months ago Greek Zoi Konstantopoulou, speaker of the Greek parliament and a SYRIZA member, said she had established a new "Truth Committee on Public Debt" whose purposes was to "investigate how much of the debt is “illegal” with a view to writing it off."

Moments ago, this committee released its preliminary findings, and here is the conclusion from the full report presented below:
All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.


As we predicted over four years ago, Greece has effectively just declared that it will no longer have to default on its IMF (or any other debt - note that the dreaded "Troika" word finally makes an appearance after it was officially banned) simply because that debt was not legal to begin with, i.e. it was "odious."


If so, this has just thrown a very unique wrench in the spokes of not only the Greek debt negotiations, but all other peripheral European nations' Greek negotiations, who will promptly demand that their debt be, likewise, declared odious, and made null and void, thus washing their hands of servicing it again.


And another question: when Greece says the debt was illegal and it no longer has to make the June 30 payment, what will be the Troika's response: confiscate Greek assets a la Argentina, declare involutnary default, sue it in the Hague? Good luck.

[George S.]

Greece's latest attempt to reach deal with creditors collapses

Greece's latest attempt to reach deal with creditors collapses

Exit from eurozone a step closer as EU officials dismiss Alexis Tsipras’s reforms as incomplete, with talks halted after less than an hour

http://www.theguardian.com/business/2015/jun/14/greeces-latest-attempt-to-reach-deal-with-creditors-collapses

Last-ditch talks aimed at breaking the impasse between Athens and its international creditors have collapsed in acrimony with European Union officials dismissing Greece’s latest reform package as incomplete in a step that pushes the country closer to leaving the eurozone.

What had been billed as a last attempt to close the gap between Alexis Tsipras’s anti-austerity government and the bodies keeping debt-stricken Greece afloat was halted late on Sunday after less than an hour of negotiations in Brussels.

There is a significant gap between the plans of the Greek authorities and requirements of the commission, ECB and IMF

European commission statement

In a tersely worded statement, the European commission declared talks would resume when euro area finance ministers gather in Luxembourg on Thursday. The meeting could be decisive in determining the fate of a nation that is dependent on bailout funds from the EU and International Monetary Fund to avert default.

“While some progress was made, the talks did not succeed as there remains a significant gap between the plans of the Greek authorities and the joint requirements of the commission, European Central Bank and IMF,” the statement said. In fiscal terms, the differences amounted to €2bn (£1.45bn) a year in permanent budget savings

The gulf between the sides prompted a call from the IMF’s chief economist for both sides to compromise further. Olivier Blanchard said Brussels should be prepared to delay more of Greece’s debt repayments, accept only limited reforms and cut the interest applied to debt-relief loans, while Tsipras should offer further pension reforms and accept that some VAT exemptions must be dropped.

“On the one hand, the Greek government has to offer truly credible measures to reach the lower target budget surplus and it has to show its commitment to the more limited set of reforms,” Blanchard wrote in his economic blog. “On the other hand, the European creditors would have to agree to significant additional financing and to debt relief sufficient to maintain debt sustainability.”

The intervention by Blanchard late on Sunday will be widely seen as supportive of the Greek position, though with the sting for Athens in his call for pension reform, which Yanis Varoufakis, the Greek finance minister, repeated on Saturday was a dealbreaker.

With the future of Greece in the eurozone on the line as never before – and time now of the essence if Athens is to honour a €1.6bn debt repayment to the IMF on 30 June – the magnitude of the moment was not lost on Greek officials or the prime minister’s radical left Syriza party.

Yannis Dragasakis, the deputy prime minister who flew to Brussels to head talks, said Athens remained ready to conclude negotiations “with a mutually beneficial agreement”, suggesting there was still room for compromise.

Blaming foreign lenders for the breakdown in talks, he said the Greek government had submitted complementary proposals that “fully cover” the fiscal gap and the primary surplus – the two major sticking points between the two sides.

Creditors, he said, had insisted on pension cuts and increases in VAT both worth 1% of GDP – or €3.6bn – to close the projected gap, measures that Athens regards as untenable for a population already pauperised by five years of biting austerity. It was the second economic reform package to be proposed by the Greek government and rejected by creditors in June.

“Despite the presence of the Greek delegation in Brussels, there was no response on the part of the institutions [European commission, ECB and IMF] for discussions at the same [political] level or authorisations that would permit a solution to the issues that remain open,” Dragasakis said in a statement.

Euclid Tsakalotos, Greece’s chief negotiator, said it was clear “the opposite side did not have a mandate to negotiate”. He told the Guardian in a text message: “We made huge efforts to meet them halfway but they insisted on both pension cuts and the increase in VAT on restaurants and would not accept closing the gap even partially via administrative measures to reduce tax evasion, even though this was a central plank of our electoral programme. Moreover, they told us bluntly they had no mandate to discuss a compromise! So much for negotiating.”

With developments taking such a dramatic turn, opposition parties urged Prokopis Pavlopoulos, the head of state, to call an emergency meeting of political leaders. “The country has to remain intact within Europe and this has to be understood by everyone,” said the centrist party, To Potami. “We await a responsible reaction from the political leadership of the country.”

Negotiators, who included the young prime minister’s closest confidant Nikos Pappas, were due to return to Greece on Sunday night.

Failure to keep Greece in the euro, after years of arduous negotiations and two emergency bailouts totalling €240bn, would send it lurching into the unknown and mark a historic blow to the EU’s most ambitious project.

Greek officials flew to Brussels after Tsipras signalled he would soften his stance and accept painful compromises in return for promises to alleviate the country’s staggering debt.

Government sources had indicated that Athens was “very close” to sealing a deal that would release more than €7bn in bailout funds the country now desperately needs to avoid defaulting on loans to the IMF and ECB over the summer. Creditors have refused to disburse financial assistance since August as both sides have wrangled over reforms.

A gesture on the ever-contentious issue of Greek debt would also allow Tsipras to sell a deal to hardliners in Syriza, which was catapulted into power in January on a pledge to end five gruelling years of “self-defeating” austerity, and to Greeks at large.

At more than €320bn, the equivalent of 180% of the country’s entire economic output, Greece has the highest debt-to-GDP ratio in the EU with economists far and wide agreeing it is unsustainable. Following the breakdown in talks, leftwing militants implored the government not to concede on any measures that would entail “the extinction of the Greek people”.

Fears now abound that Greece could be heading for a Cyprus-style denouement with the ECB pulling the plug on the emergency liquidity assistance (ELA) it has been drip-feeding Greek banks. The Frankfurt-based institution has come under growing pressure to make such a move in recent weeks.

Indicative of the growing tensions between Athens and Berlin, the biggest contributor of Greece’s bailout programme to date, Sigmar Gabriel, Germany’s vice-chancellor and head of the country’s Social Democratic party – who has long been seen as a friend of Greece – deplored the Greek government’s negotiating tactics in an article for Monday’s daily Bild newspaper.

“The game theorists of the Greek government are in the process of gambling away the future of their country,” he wrote in an excoriating critique of Varoufakis, whose academic expertise includes game theory. “Europe and Germany will not let themselves be blackmailed. And we will not let the exaggerated electoral pledges of a partly communist government be paid for by German workers and their families.”

[George S.]

Greece is the first in the world and the only country to have defaulted the IMF.
At the moment the greek govt has tried to present various pros but no luck so far.

[Risto the Great]

At the moment the greek govt has tried to present various pros but no luck so far.

I hear the IMF like their pros. I'm surprised no Greek thought of this earlier.

http://www.independent.co.uk/news/world/europe/dominique-strausskahn-pimping-trial-former-head-of-the-imf-expected-to-take-the-stand-10035324.html