The Greek site ToVima reports that the European Commission has put forward a new proposal to try to force the release of funds to Greece. This proposal has not been approved by the IMF or ECB and requires use of an ECB facility, the ESFS. While the report is only a summary, it also appears to call for a limited set of reforms, and thus is consistent with the notion of having Greece adopt a partial list of reforms in return for getting a partial disbursement.
While this would seem to be a positive development, recall that an effort of the EC to intercede in the negotiations, the famed Moscovici memo of February, has been negotiated with Greece but was not taken up by the Troika as a basis for negotiations. The problem in general in that the EC does not have funding power and is thus trying to get other parties to commit to funding Greece. The report notes that it does not expect the IMF to participate. Indeed, the proposal says it is an effort to cut the Gordian knot among the parties. In practice, this memo seeks to cut out the IMF and to pressure the ECB into cooperating, as in providing funding. But it also requires Greece to cross some of its long-established red lines.
There are several issues that look to have the potential to be stumbling blocs. First is the requirement that an agreement be reached by June to unlock €5 billion euros. Part of the comes via requiring the ECB to “unlock” the €1.9 billion in the SMP program, which Greece has repeatedly asked the ECB to provide then and the ECB has refused to release. Second is that it requires Greece to agree to structural reforms similar to those proposed by the OECD. The memo specifically mentions labor market reforms, which is one of Greece’s red lines. If Greece were to accept this memo, it amounts to capitulation. But it appears to offer Greece a concession on the labor reforms issue, in that it says that Greece will:
You Reviewed the issue of collective bargaining agreements in the light of the report of the ILO on “best practices” in labor relations of the European Union, the need to increase the competitiveness of the Greek economy and addressing the enormous problem of unemployment.
I’ll update in light of English language reports on this issue, since this is very unclear in this version. Greece did pump for using ILO best practices. This section appears to try to find a middle ground, with Greece adopting some labor market “reforms” as in increased labor competitiveness (ie, labor crushing) measures, but giving Greece the ILO measure to make the other measures politically and practically more palatable.
The memo notes that it does not expect the IMF to participate. The IMF has in fact signaled that it is not willing to continue to funding Greece unless the Eurogroup creditors write down their existing debt. Moreover, the IMF’s involvement has been unpopular with some European leaders. The IMF was brought into the earlier fundings due to the need for another pocket to tap, and some European officials, particularly European Commission chief Jean-Claude Juncker, have made it clear they would prefer for European institutions to control Europe’s destiny and the IMF should no longer participate. In theory, that’s all well and good, but in reality, the EC does not have a checkbook of its own, so the question remains who will stump up to replace the IMF.
It also sets forth fiscal targets that are draconian:
-2015 Primary surplus of 0.75% of GDP
-2016 Primary surplus of 2% of GDP
-2017 Primary surplus of 3.5% of GDP
-2018 Primary surplus of 3.5% of GDP.
3.5% is an insane level and .75% looks unattainable for 2015 without Greece engaging in extreme austerity given the current state of the economy.
Here are the other main provisions from ToVima via Google Translate:
In the first list out the measures for meeting the budgetary gap and to achieve primary surpluses by the end of 2016. The measures are:
-the reform of the VAT to be applied after the summer (most likely by October 1) and provides for a uniform rate of 18% for cash transactions and 15% for card transactions and maintaining the low rate of 6.5%.
-Increase The extraordinary tax on annual incomes above 30,000 euros to pre-reduction levels
-Maintains The ENFIA as the most efficient (in terms of collectibility) tax
-There Will apply the zero deficit in the subsidiary clause, but will be reviewed as part of the dialogue to be launched in autumn for the sustainability of the pension system
-You Reviewed the issue of collective bargaining agreements in the light of the report of the ILO on “best practices” in labor relations of the European Union, the need to increase the competitiveness of the Greek economy and addressing the enormous problem of unemployment.
The general secretariat of public revenues -Anexartitopoieitai and institutional guaranteed the independent role
-Create The fiscal council, also as an independent authority.
-Lamvanontai Measures to address the humanitarian crisis – and in the context of the package Juncker – safety net created for the “underprivileged.”
Also in the text – in substance evaluation report and model of the new agreement – the European Commission notes that there is convergence of views on banks and red loans
Update: The link to the OECD report is here. I will attempt to embed it but I have been having difficulty from my current location. I had looked at this document briefly in February and back then set reader and expert in all matters construction-related bob on the building materials section. He gave a long list of reasons why it made no sense from an economic perspective and amounted to a prescription for looting the Greek industry. It is also not crisp on the issue of pensions. It does urge the lifting “third-party levies on materials or services, which are then used for parafiscal purposes, mainly to finance pension funds for special interest groups….It should be said that the quantification of consumer surplus, cost savings or increased expenditures/turnover obtained by the OECD study represents an estimate of the gross positive effects of removing the barriers to competition. In some cases, such as removing the fee on advertising, there will be a cost associated with implementing the recommendation, for instance a funding gap for the pension fund in question. However, in this particular case, owners of media houses and newspapers do not currently contribute
to the pensions of their employees. Some of the switching cost should therefore be borne by employers, rather than by the state.” Recall that Greece has an extremely fragmented pension system, with IIRC 133 separate pension funds. I’d welcome reader input, but from what I can tell on this quick pass, the OECD reform list appears to call for some form of pension reform, as in reduction, by require private employers to pick up more of the burden.
Second Update 2:10 PM. So much for relying on Greek sources, as readers have urged me to do more often (although ToVima is not friendly to the Greek government). This report comes from Reuters:
The European Commission denied on Monday a Greek newspaper report that its President Jean-Claude Juncker has made a new, compromise proposal to Greece in negotiations on more funding in exchange for reforms for the cash-strapped country.
Greek To Vima newspaper reported that the Commission, which together with the European Central Bank and the IMF is negotiating a deal with Athens on behalf of its creditors, offered to disburse new funds in exchange for fewer reforms and smaller primary surplus targets than demanded before.
“I can’t confirm media reports on @EU_Commission /Juncker proposal on GR. Not aware of such proposal. Working towards comprehensive deal,” Commission spokeswoman Annika Breidthardt said on Twitter.
This may mean the cat was let out of the bag early and has put the EC in an awkward position. The leak is too specific for To Vima to have fabricated it out of whole cloth. We’ll see if future updates shed light on what is afoot.
Third Update 2:20 PM: The Financial Times’ Peter Spiegel reports that the EC plan has not been well received by the actual proposed funders and reveals the existing fault lines:
The Commission’s spokeswoman responsible for economic issues, former Reuters correspondent Annika Briedthardt, has already distanced the Commission from the document, saying in a tweet that she’s not aware the proposal actually exists:
Can't confirm media reports on @EU_Commission /Juncker proposal on GR. Not aware of such proposal. Working towards comprehensive deal.
— Annika Breidthardt (@A_Breidthardt) May 18, 2015
Other commission officials are similarly playing down its importance. “We have many documents,” said one, only half-jokingly.
Although nobody is admitting the provenance of the document, what it appears to be is one in a series of proposals going back and forth between the Commission and Athens in an effort to find common ground, rather than a full-blown “Juncker Plan” to cut the Gordian Knot.
Still, even if it is not a fully-articulated Juncker proposal, what may be most interesting about the document is what it says about the current negotiation process. It is now no secret that the Commission views the IMF and Berlin as being unreasonably hard-line in the Greek talks and Commission officials, including Juncker himself, have been trying to bridge differences between Athens and hard-line elements for weeks.
It is also no secret that many others involved in the talks are none-too-pleased with the Commission’s freelancing. Jeroen Dijsselbloem, the Dutch finance minister who leads the negotiations on the part of his fellow eurozone ministers, has been quite open about his unhappiness that the Commission tried to intervene without his knowledge back in February, when everyone was desperately trying to convince Athens to seek an extension of the current €172bn bailout before it expired.
The new Juncker effort could touch off similar recriminations, because it appears that none of the other players knew what Juncker was up to. “We are thunderstruck,” said one official involved in the talks, who said the ECB and the IMF – who are theoretically on a co-equal standing with the Commission when it comes to talks with Greek authorities – were unaware such a proposal was being mooted.
Spiegel also describes how the EC tried to intercede in the Cyprus banking system collapse and lost to the IMF and Germans. He concludes: “The new Juncker document likely faces a similar fate.”
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Not sure which post to attach this to, but here we go:
Let’s stand back and look at the bigger picture for a moment. The trees so easily obscure the forest.
Isn’t it perfectly obvious that Greece will eventually leave the Euro and quite likely the EU, maybe even NATO? They shouldn’t have joined the Euro in the first place and still can’t begin to cope with its requirements. Ultimately, an essentially poor country has no business having a fixed exchange rate, let alone a currency they have no control over. Ultimately, you’re almost always better off as your own master.
On the fundamentals, the painfully dragged-out “negotiations” are everyone’s fit of denial – when they aren’t just a smokescreen for a reality no one wants to admit. Nor does it really matter that the Euro was supposed to be irreversible; that’s pure hubris. Sovereign states cannot be held to irreversible commitments short of conquest – that’s what “sovereign” means. There may be a high price to pay, but that doesn’t mean it’s irreversible. It’s like saying the US “can’t” withdraw from one of those trade agreements, just because the agreement says so: are you serious? Who’s going to stop them? And unless someone – the US? Germany? – is going to invade Greece, their commitments are no more irreversible.
The real question is Spain, Italy, and Ireland (Latvia and the other Eastern countries I know less about – a big-picture article on them would be welcome). The level of political unrest in all of them is increasing rapidly. When does something break? Or does the Eurozone somehow learn its lesson?
I read years ago that the Euro was a botch, with fundamentalist neo-liberal ideology built into the currency itself. I take it most of us would agree. The real question has to be: how long can that last? How will it break? And in an age of “globalization,” are there any refuges when the brown stuff hits the fan?
“The level of political unrest in all of them is increasing rapidly.” I’d love to see some evidence of this. Granted, news blackout, but there’s always the twitter and other alternate media sources.
I don’t see this as obvious. As Ambrose Evans-Pritchard has pointed out, the only country that has an incentive to leave the Eurozoone and also comes out ahead economically. If Greece were to leave, it does not shed its debt obligations. Even worse, most have been redone as English law bonds, so the Greek government cannot force them to be redenominated as drachma bonds. So on paper, if Greece exits the Eurozone, its debt problem gets even worse. In reality, if Greece defaults, its debts will have to be restructured. Leaving the Eurozone would not improve Greece’s negotiating position.
While it may seem all well and good to advocate national sovereignity and control of one’s destiny, I sincerely doubt that anyone urging more boldness on the part of Greece has ever lived through what the Greek public has endured. All experts agree that a Grexit would lead to another big ratchet down in economic performance in Greece. Can the country take that hit when it is already in acute distress? Moreover, Greek reader alex morfeis has argued in comments that while Greece can feed itself, it lacks the ability to manage itself as a country. The fact that Greece had a poorly functioning government, as the abject state of tax collection attests, that has no doubt been made much worse by years of austerity leading to budget-cutting.
Syriza does not want Greece to leave the Eurozone, or more accurately, the hard left wing, roughly 1/3 of the party does, but the 2/3 of representatives that are moderates do not. Most surverys show substantial oppositon by the Greek public.
Yes, I understand all that. But by the same token, the status quo is not sustainable. Something is going to break.
I wouldn’t presume to advocate anything to Syriza or Greece. I was trying to illuminate the structure of the situation.
And in response to Lambert’s implicit question: I may be guilty of wishful thinking. But we see the mass resistance to the new water bills in Ireland; Podemos rising in Spain; the 5-Star Movement and other resistance in Italy. Again: when does something break?
Ironically, the first thing to break will probably be the UK. Scotland is going to pull out, and Britain will very likely leave the EU.
Of course, I wonder the same thing here – but we’re in better shape than those three countries.
I’m aware of the efforts in Ireland, Spain, and Italy that you mention (and have intermittently linked to them), but though laudable, these efforts seem to me to fall very short of being able to bring to bear the sorts of pressure that would cause Greece’s tormentors to cease and desist.
Adding, cue cries that I’m not clapping hard enough… The door to Kos is over there….
Exporting cheap tea and cheaper tobacco for the British burguoisie + worthless cotton and lumber for Her Majesty’s mills wasn’t a good proposition for smart, hard working people in America.
So the American Revolution took place, remember ?
No room for that no more you say ?
“This time it’s different” ?
Really ????????????
I was thinking more in terms of the overall stability of the Eurozone. No, they don’t seem likely to do Greece much good – more that they’ll react to a Grexit; or whatever happens.
Spanish municipal and regional elections are happening next Sunday, and the atmosphere is of change, at least in big cities and urban regions, but let’s wait until ~Monday 5:00 UTC when there should be reasonable results to take a good snapshot of this unstability in Spain.
Well, let me add a smidgeon of value for readers by taking thirty seconds to research and provide some local sourcing. Spain Report:
Sounds interesting. Do we have any readers on the ground in Spain? What do you think, both of the source and the general situation?
Santi is in Spain.
Then it should be easy for him to provide supporting evidence for his claims, which he never does.
I have posted this link at least three times (from memory) in your site, to show evidence of this “rainbow” slow train derailing that is parliamentary politics in Spain.
This query is “Santi” in your site. I have sent a number of emails (I can count them but won’t bother now) with hints about Spanish or Greek politics and links.
Never is a strong word to be used ad hominem. I try to provide always evidence; we can discuss if the evidence is correct, wrong, anecdotal or precise.
I tend not to look to Wikipedia for current events, but whatever.
I’m sure it’s just what biologists and gemologists would call a mere “inclusion,” but from your link above there’s this (snarky?) paragraph:
GUINDOS TO GO: Economy Minister Luis De Guindos will not continue in his role should Mr. Rajoy win a second term later in the year. He has his heart set on becoming president of the Eurogroup: “It has been an honour and a privilege to be Economy Minister in the worst crisis Spain has seen. [But] after four years I’ve had enough”, said the former Lehman Brothers manager.
Another metastasizing little tumor cell… An “expert” one, no doubt.
The April regional elections had Podemos doing MUCH worse than expected. And it has also fallen in polls. From end of April:
Support for Podemos, led by pony-tailed former political science lecturer, Pablo Iglesias, has plateaued after a meteoric rise since being founded in January 2014.
The anti-austerity party has seen support fall from 23.4 percent in March to 17.9 percent in April.
http://www.thelocal.es/20150427/ciudadanos-gains-as-podemos-wanes
IIRC, it was as high as 28%.
As I said before, Syriza has been an unexpected present for the incumbents in Portugal and Spain. Not that the equivalent party in Portugal had any chance of a big win (I have never seen any good explanation for that, but it is a fact), but the challenging party, PS, celebrated the anti-austerity win in Greece but is keeping utterly mum on the subject these days and even issued an economical program pre-election that is barely leftist. No, things turned out to be the opposite of Syriza’s expectations in the Iberian Peninsula.
“April” elections were in March 22, and only in Andalusia.
I don’t think Podemos is “vanishing”. It is waiting for the neoliberal press fire to clear. See global polling again (I just posted up there) and wait till Sunday. Let’s see if, as it looks probable, coalitions with Podemos inside gain Madrid, Barcelona and some other big cities. Until Monday it is really difficult to be, but my bet is that the results will be better for Podemos than you expect. It is just a few days to know.
How did it manage itself as a country before the EU? Life was good then. I used to visit relatives in Greece when I was growing up. Of course it had problems but what country does not? The people were many times better off then. As for popular opinion, I believe it is influenced in Greece by the mainstream media, controlled by the economic elites who make Grexit sound like Armageddon.
Questioning a people’s ability to manage its own country? Wow, that is unexpected and shows how people from high income countries view others. Simply breathtaking
i’m back…got over my anger bit about something SYR did
I have a little blue card from the greek government that suggests I am a dual citizen…so I am not speaking from some far off land…actually, when I was living in athens with the law professor I was involved with, we lived in Kypseli, lower Kypseli but visited what might have become my mother in law who lived in upper kypseli, just 7 streets over from Harmony street where Prime Minister Tsipras lives…so, he and I might have stood in line together at the post office, or the agrotiki bank at the top end of Negri Fokionos…or maybe we both took a moment to watch our other haves go shopping at Hondoes or have a bite to eat there at the top floor restaurant…or maybe we fought over my parking my car too close to his motorcycle, since at times, i had to park six or seven blocks away to go visit the mother in law to be…its a sharp up hill walk up fokionos and her daughter was not often up to doing the climb from where we were starting near the goodys fast food place…
so maybe just maybe, it is not some far off distant person suggesting the human capital is not there…
personally at this point…I would just as soon, Syriza did a straight out take away, sign a piece of paper, slide it across the table to Dr. Strangeluvauble, and tell him to fill in whatever he wants…and then call in the morning…cross the red lines already and call their bluff…let them do as they will…then hurry up and make peace with turkey…develop a friendship with crown prince erdogan and come to whatever terms are needed to stop fighting over the natural gas in the Aegean and become energy independent.
This fight with Greece by France and Germany has in the end very little to do with Greece…it’s to keep Turkey out of the EU…Greece is a 400 billion euro economy stuck at less than 200 billion. It does not promote tourism much off season and has a woman in the Government Archaeology Department, Katerina (she changed her name from Delaportas to Peristeri) who thinks it is her job to make sure tourists go to london, paris and berlin to see greek historical artifacts. If you ask for a permit to take pictures of Greek monuments and use them for publications, and you are greek, forget it…but if you are one of her friends from the American School /ASCSA (or one of the other 17 FOREIGN institutes which smugly come over every summer to enjoy their little “digs”) then do as you please…since she is their to serve you…fights every attempt to create any marine archaeology training in Greece, by Greeks/for Greeks, but gives Woods Hole in MASS carte blanche to do as they please…whenever they please…
and as for tax collection…its not that the tax agents are corrupt or lazy…
that law professor I was involved with…well her dad was a mid level Tax collector in the 70’s…he tried to do his job…he wanted the tobacco industry to pay their fair share of taxes…they thought otherwise…first they tried to bribe him, then they tried to threaten him, then they tried to kidnap him…then they finally accidented him…
I don’t believe you have a clue as to the level of discooperationalism that exists in Hellas…
Example: why bother begging the russians for a pipeline and an advance when you have over 2000 islands uninhabited which can be cost effect and safe ports for LNG terminals…lets say 20 of the smaller islands were set up that way…might one be able to connect producers and CFO’s in europe who might want to source gas cheaper…it costs about 3.50 per unit to transport and deliver…if US price is 4 or 5 per unit…it is still a savings over current pricing…no need for expensive offshore man made platforms…could run the pipelines up the old wertheimers southern branch of the orient express that is sitting mostly fallow…
Greek reader alex morfeis has argued in comments that while Greece can feed itself, it lacks the ability to manage itself as a country.
Yves
Why do you automatically believe this when Alex says this?
It does not agree with what I am told by other educated Greeks. Look what Edna says. But it is certainly common among diaspora who parachute in to Greece and leave and
feel what they know is completely true across the board.
I can only agree with Kemal’s comment. A this is how it is seen by many Greeks. It is just a simple cop out that Greece can’t manage itself when it did so when it was out of the E.U and Eurozone for a longer period of time navigating just as serious and at times far more serious situations and came out fine. Good enough for someone like Edna to remember those times.
Luckily with the Bush/Clinton, neo-liberal neo-conservative dynasties we are getting good leadership/management/stewardship in the US. Bringing us such things as unrest in the Ukraine and TPP.
Bill Mitchell is similarly impressed with how well Australia is managed.
Time for progressives to adopt more direct actions
“Australia is about to walk the plank and sign up to the Trans-Pacific Partnership even though much of the contents will not be publicly disclosed.”
Good points
On this point, here is Michael Pettis:
On a related point, the way many Greek expats treat their (old) country and fellow Greeks would make a great psychoanalytic treatise. My take is that the problems Greece has and the constant negative creditor propaganda make them feel too uncomfortable in the countries they live and thus their reflexive attitude is to side with all the negative criticism big time, only to occasionally brake down to nostalgia and heavy sentimentalism for a while, and then back to hatred and so on.
It’s really weird.
Well said as well Alan.
As for what you write about how many Greek expats treat Greece and Greeks I think you are write with your take and it is one aspect. And it would be a great psychoanalytic treatise. But it is not only weird it is sad and causes a lot of damage to Greece and its people.
That’s a great comment overall. Political economy keeps getting lost in the weeds of finance.
From my perspective, I would challenge the last bit a tad. The euro currency is an outgrowth of the underlying idea of integrating the systems of political economy in Germany and France such that war between the two of them was difficult (or at least, more difficult) in practical, commercial, resource terms. Hypothetically, even if the rest of the Eurozone left, just an integration of Berlin, Brussels, and Paris makes the euro the largest currency bloc in Europe. This is naturally harder to see from the US perspective because we simply don’t have any individual states as big as Germany and France.
To a certain extent, it is also an anti-US project rather than being part of American neoliberalism. The UK has pointedly refused to join EMU, carving out an explicit exemption not to adopt the euro. And more generally, the euro gave an aura of alternativeness to the dollar that the mark and franc could not on their own. Of course, here’s where things get really tricky behind the scenes, because sovereignty isn’t just in question for the Greeks. It’s in question for the Germans and French. When do they want to act independently of the Anglo-Americans? Or are they fully on board now with DC? Why exactly have the Americans imposed sanctions and/or taken military action against nations like Iran, Iraq, and Libya? What exactly is going on with national central bank reserves? Why exactly has NATO being so antagonistic toward Russia over the past couple decades? Etc.
So far, there’s not even a hint of indication that there is general discontent with the euro. That’s what is so remarkable – not that Greek leaders haven’t been able to articulate a compelling alternative vision to the Germans, but rather, that they haven’t been able to do it with the Spanish and Italians and Portuguese and so forth.
My recollection of studies in history and anthropology and sociology and psychology and philosophy and stuff, at that faint and fading undergraduate level, and what I really learned in law school, is that cultures that survive tend to be smaller, and for a variety of reasons have an ethos that embraces the oikos.
What’s the ethos of Modern Man? There are a few mopes burdened with the disabilities imposed on Randian Ascendancy by stuff like altruism and empathy, who pick up other people’s trash, tend the gardens, and wipe the drool off the rich shits’ chins when they are too old and infirm to be making billion dollar “trades.” But the most of “what we stand for,” what a poetic phrase with such multiple meanings, is just ‘MOREism.’ https://twitter.com/moreism
The PTB embody all the worst of that MOREism, and batter the rest of us every moment of every day with that ethic-free ethos as the summum bonum of all human endeavor. Mike Royko observed, a long time ago, that the unofficial motto of the Great City of the Sandbergian Broad Shoulders, now Rahm Emanuel’s privatizing prey, is and has been “Ubi Est Mea:” “Where’s Mine?” http://chicagocityofbigshoulders.blogspot.com/2013/05/ubi-est-mea-wheres-mine.html
All this complex talk about means and ends in the context of one little rat’s nest in one corner of the Kingdom of the Rats, as all the complexity unravels and starts to glow and smoke. Empathy for “the people of Greece,” but which ones? Seems mostly “about” the fear that we are all already, carelessly, vacuously, walked out onto the overhanging cornice of the unstable geology above a pit that never had to have been dug, if only “we” were different than we are. World Wars because The People and their institutions and “business interests” were “ready for them.” Collapsing “economies” and habitable environment because we can say “F__k those future humans and the weak ones that are still walking around — We Got Ours, and will get Yet A Little More, before that sudden rumble and drop as the coherence of that cornice breaks.
Thanks for so skillfully and knowledgeably painting the elements of futility and impossibility that are trembling beneath our feet, as the froth starts to encounter and commingle with the surfactants of necessity and reality and entropy. It’s been a fascinating read and ride, with some great thoughts and thought experiments, but is not the libretto for all this coming horror and collapse titled “No Exit”? And there’s no sense, any more, in “Waiting for Godot…”
And I suppose the people who support MOREism would be MOREists. Or perhaps — wait for it —
MOREons.
“Table” as a verb means the opposite of what you think it means.
“Table” is an auto-antonym. In the US, it means to postpone discussion; in the Rest of the World, it means to introduce for discussion. As usual, America is wrong.
I am non-plussed.
They tabled the document so that the situation would get unstable’d, I guess. In both meanings in the same leak.
Huh? I meant table as in table a bill, to introduce it so it can be debated.
You seem confused by the update. The EC most certainly did table a proposal, then tried to distance themselves from it.
When a comet is headed towards our planet with 90% probability of catastrophe….let’s all make sure the Europeans are *NOT* involved in deciding how to resolve the situation.
This entire episode with Greece has proven a reflection and abstraction of why the Eurozone doesn’t work. It has modeled the very dysfunction that is in need of desperate repair. Irrespective of the outcome they all walk away with an exaggerated, unnecessary reduction in world standing. Who wants the EU’s consultation and..ahem…leadership…when they can’t even seem to resolve their own problems in a mature and expeditious manner? Were the continent without means or intellectual capital it would be Worth pity. But there is ample resource, and it makes it all the more disgraceful.
I don’t think that’s fair. AFAIK the European project started out with the laudable, in fact, moral mission of preventing another European war, after millions got slaughtered in World Wars I and II. But then, for whatever reason, we got the Democratic deficit, and then the Euro/ECB and here we are. Certainly the project started out “mature” if not “expeditious.” What the heck happened?
Leaders failed to reign in the greedy bankers. Same as in the U.S.
Reign versus rein. Such a rich pair of totally apposite homonyms, in context…
FWho gains? Who rules? Who regulates?
I’m surprised by the EC’s position; actually looking for a solution. If the ECB and the IMF are now the bad guys it looks suspiciously like it’s really us. It a banking crisis, not a political one, after all. Interesting details about the bonds being written under British law which precludes the possibility of Greek sovereign money. The Greeks are prevented from restructuring their debt in drachma by English law. But it is arguable that the euro isn’t worth more than the drachma, they just hide the facts better. Look at what Ukraine just did; and they were able to do it because we are backing them – they just called a “moratorium” on their debt payments to Russia because Russia is attacking them. That must be English law too. And its a Gordian Knot for Germany too because if Greece can’t get out, Germany can’t get out and that leaves only the German taxpayer to pick up the difference when Greece defaults. Or let Deutschebank fall. But are Deutsche’s loans written under English law too? Serious head spin here. German taxpayers are pissed at the Greeks because they are saying Greek taxpayers are more prosperous that German
taxpayers… How is it that a German bank, who’s own lender of last resort is the German taxpayer, gave Greece all that money in the first place. Maybe Greek banks should make a few loans the British. Their economy is even worse that Greece’s. But their contracts are rock solid.
Here’s a take on the Juncker memo by Peter Spiegel, who is reporting from Brussels on the crisis:
http://blogs.ft.com/brusselsblog/2015/05/18/what-to-make-of-the-new-juncker-plan-for-greece/
It’s unclear to me whether there’s dissent among the members of the Eurogroup themselves, but the aftermath of this “leaked” memo (one in a series of drafts passing back and forth among the various players, perhaps) does suggest that the Commission and the Troika are not reading from the same playbook – and probably haven’t been since perhaps the Cyprus 2013 crisis.
Here’s a link to Costas Lapavitsas’s two-and-a-half hour interview with The Press Project:
http://www.thepressproject.gr/article/77164/Lapabitsas-Irthe-i-ora-ton-megalon-apofaseon
I would imagine TPP will run an English-language summary of highlights tomorrow. One interesting point: Lapavitsas noted that more and more MPs appear determined to oppose an agreement that would cross the government’s so-called “red lines” — from which I gather that members of the “moderate” wing of the party are coming round to the view of the hard left one-third (which as odd as it sounds, while it is not the governing block, is the power block). He acknowledged that the majority of Greeks want to remain in the euro, but stated that in his view this doesn’t mean they voted to remain at all costs (i.e. if the cost became hopelessly unsustainable).
Re: reliable sources, everyone trying to follow negotiations at a fairly detailed level has the same problem. I check The Press Project, which publishes some (not all) of its pieces in English translations; Paul Mason of Channel 4 news, jacobinmagazine (they’ve published long-form pieces by Kouvelakis and an interview with Lapavitsas), plus all the usual sources to which links here are provided (tovima, ekathimerini, ft, reuters, etc.). I check frances coppola, who writes on Greece occasionally, and follow dimitris rapidis at a site called Bridging Europe http://www.bridgingeurope.net/
Other suggestions would be very much appreciated, I’m sure, by all of us following the situation.
In a sense, about your comment on Lapavitsas’ statement, I can understand moderate people shifting to the “no hard lines crossed” stance: when I read the leak, about the commitment to the 3.5% primary surplus in 2017-18, I thought instantly: “Oh, no, not again in two years”. It is obviously a push of the problem under the rug, done to make numbers hold. Everybody knows it will be impossible to get it, even if Greece starts growing like crazy in the rest of 2015 and 2016; so it is a kick forward in the situation for two years. My mind shifted from: “they are crazy” to “pray Varoufakis and Tsipras don’t accept this” very quickly.
Yes, the problem is on both sides you have to filter out the noise. But even when officials are posturing or messaging, there is almost always some signal in the noise.
is this believable, or just political ass-covering?
European Commission trying to force ECB (& IMF) to release funds to further fund German/other EU banks … er, to “fund” Greece
sounds suspiciously like a GoodCop / BadCop negotiating tactic, staged just to fool the public about the slave auction and it’s attendant, shockingly vicious, haggling
from paul mason
“After a weekend of leak and counter-leak, in which we learned Greece cannot make critical payments to its lenders due from 5 June, today has seen another dramatic development: the leak to the newspaper To Vima of the European Commission’s proposal to break the logjam”.
I think you should trust more your Greek sources than Reuters and the Commission’s spokeswoman