Greek debt crisis [update: 3rd Bailout deal reached]

[Fingolfin_Noldor]

Even the German Der Spiegel is running opinions like these:

http://www.spiegel.de/international/eur ... 41236.html

Greece's Referendum: The Price of Five Years of Cowardice

You had it coming, Europe. And how!

The decision over the weekend by the Greek government to hold a referendum on Sunday on the reform measures being demanded by its creditors threatens -- within just a few days -- to destroy the illusions of five years of policies aimed at saving the euro. The easy way out is to cast blame on Greek Prime Minister Alexis Tsipras and his government.

After months of negotiations and just before the expiration of the deadline in question, the Greek government has now decided that it is unable to take responsibility for a clear "yes" or "no" to the results of negotiations on its own. Why didn't the Greeks says weeks ago that they wanted to put the negotiations up for a vote? That would have been the democratic way to go about it. In the very best case scenario, Tsipras' about-face on the referendum is a populist move (assuming the decision was taken with any political calculation). In the worst case scenario, it is a cowardly one (if the head of government got cold feet about making such a difficult decision).

But "constant cowardice" is also the answer to another question -- namely how the rest of the euro-zone members, Germany above all, could have allowed a situation to develop in which the erratic leaders of an economically insignificant country with a population of just 11 million people could bring the currency union to the verge of collapse?

Protracting the Problems

For the past five years, politicians within the euro zone, under German Chancellor Angela Merkel's unofficial leadership, have shirked painful decisions that might have helped to solve the debt crisis in Greece. The consequence has been that the problems have been protracted rather than solved.

This trend began with the first Greek bailout program in 2010. In order to prevent a Greek default, the euro-zone states provided their first credit guarantees to Athens at the time. To do so, they used tricks to circumvent clauses in European law that prohibited precisely this kind of shared liability within the currency union. Even then, the more courageous act would have been to force Greece's private creditors to absorb their losses. Under that scenario, even if banks had fallen into financial difficulties, one could have still used tax money to either partly nationalize these banks or to refinance them with fresh capital. During the financial crisis, Great Britain showed precisely how that could be done.

The cowardice continued with the 2012 debt haircut for Greece. At the time, euro-zone officials lacked the courage to force Greece's private creditors to accept the total loss of their capital. They only had to accept losses of half. And it was already clear back then that Greece's debt load would remain unsustainable despite the 50 percent cuts. But the politicians ignored the uncomfortable figures and instead prescribed unrealistic savings and reform targets for Athens. They also entertained the comfortable illusion that a handful of troika officials could somehow rid Greece of its inefficiencies.
With these harsh policies, the creditor states contributed significantly to the fact that the Greeks voted at the beginning of 2015 for a new left-wing government. The way in which this new government was treated was demonstrative of the third case of cowardice. European politicians have refused to even negotiate a debt hair cut that Athens has continued to insist upon. The reason is clear: They are afraid of their own voters, to whom they would have to admit that the billions that have flowed into Greece have now vanished.

In all likelihood, that is exactly what has happened. Most voters will have suspected as much for some time now.

[His Divine Shadow]

Because the neo-liberal agenda of privatise profits and socialise loses has been ruling under the guise of 'adult' austerity the biggest fucking robbing of a taxpayer in Europe's history has just occurred.

Oh the neoliberal agenda has been reaking havoc way earlier than that and destroying all the post WW2 gains on social and economic equality slowly but surely.

[Thanas]

Fuck, even magazines like Forbes said - all the way back in 2012 - this is basically a recapitalization and not a reduction of the debt burden, and that it's a bailout of the banks - to give Greece time to avoid default, so that the banks could reduce their exposure to Greek debt. Which they did.

Happy now?

You are still not getting it. I am not talking about the bailout money. WTF happened to the money that was lent in the first place by Greece? Where did that go?

Even the German Der Spiegel is running opinions like these:

Don't be surprised by that, they have always been center-left. Do note that the German edition is also publishing other opinions and has called the Greek government a government of idiots.

J put it into context for you in a previous thread (here) that the only western nations to ever do what was demanded of Greece in the last 20 years were Russia, Norway and Finland and two out of those three did it due to large sustained oil exports when oil was trading at +$90 a barrel. What is being demanded of Greece wasn't achieved by Germany, Canada or Australia (the only developed economy that didn't suffer a recession during the GFC - and coincidently didn't do any of that austerity malarky either); so in what universe does this seem like a credible plan?

No other country has ever had as favorable conditions like Greece, in the meantime 2.3% of GDP for debt service is neither odious, but very generous. Germany has paid that and more for most of the 90s.

[Crown]

Even the German Der Spiegel is running opinions like these:

Don't be surprised by that, they have always been center-left. Do note that the German edition is also publishing other opinions and has called the Greek government a government of idiots.

Then those opinion editors are morons; I called it (to you specifically) back in February that while I wasn't surprised that SYRIZA caved at that negotiation, that only a moron would think in June/July they would do so again.

J put it into context for you in a previous thread (here) that the only western nations to ever do what was demanded of Greece in the last 20 years were Russia, Norway and Finland and two out of those three did it due to large sustained oil exports when oil was trading at +$90 a barrel. What is being demanded of Greece wasn't achieved by Germany, Canada or Australia (the only developed economy that didn't suffer a recession during the GFC - and coincidently didn't do any of that austerity malarky either); so in what universe does this seem like a credible plan?

No other country has ever had as favorable conditions like Greece,

*cough*West Germany post 1953*cough*

Here's a picture of Greek Foreign Minister forgiving 50% of Germany's debt;


And also a recap of the terms for repayment of the remaining 50%;

• Germany was able to repay most of its debt in its own currency, even though the Deutschmark had little value. The Deutschmark was neither a safe currency nor a strong one. (It is very rare that creditors accept that a country repay in its own currency if it is a weak currency. Usually hard currency, such as Dollar, Yen, or Pound, etc., is demanded.)
• Creditor countries promised to buy German goods in order to create an export market that would in turn produce commercial income, foreign exchange reserves and a healthy balance of payments.
• The creditors accepted that, in case of litigation with Germany, the German courts would be competent.
• It was decided that Germany would not use more than five percent of its export revenues to repay debt.
• Interest rates would not be higher than five percent and in some cases could be renegotiated and reviewed downwards.

But unfortunately the bright men who put this deal together are all gone, and we're left with neoliberal kleptocrats who are looking for a fire sale rather than rebuilding a country.

in the meantime 2.3% of GDP for debt service is neither odious, but very generous. Germany has paid that and more for most of the 90s.

Yes, but Germany didn't have to run a 4.5% budget surplus at the same time did it?

[Vendetta]

You are still not getting it. I am not talking about the bailout money. WTF happened to the money that was lent in the first place by Greece? Where did that go?

How the patient became ill is stunningly irrelevant to the matter of whether bleeding him to release the ill humours is an effective treatment.

Because that's what the bailout package entailed.

Which is why it didn't work and made the problem worse.

It literally does not matter one fucking bit how Greece got into the shit in 2010 because the shit it is in now is far deeper and is deeper specifically because of the conditions attached to the bailout, conditions which the Troika want to continue and deepen.

Miraculously, if you shovel enough shit on top of someone they stay in the shit, the shit does not build up under them and lift them out.

[Sea Skimmer]

From what I've seen the Greek GDP after its big fall is exactly where it would have been without a huge bubble effect in the run up to 2010. The Greeks just don't want to swallow that , or that they are not nearly the poorest country in the EU, or that they are clinging to standards like people able to retire as early as 50 which are simply alien to any other country around them. Its delusions about a delusion, and no wonder its all falling apart. They'd rather believe the world is conspiring against them like Argentina and Venezuela constantly do then admit they have structural problems. And as long as that doesn't change no credible reason exists why anyone should be generous to them. Bad money after bad money is not good policy.

Comparisons to Germany in the 1950s are pointless. Germany in the 1950s was as today the center of the European economy and everyone in the west knew it, and knew that if Germany didn't get going again they'd have a huge long term problem. And they knew why Germany was so indebted, a huge war thing followed by intentional dismantling of German industry and division of the country, and that Germany was not simply going to do the same damn thing again if it got debt relief.

[Thanas]

Then those opinion editors are morons; I called it (to you specifically) back in February that while I wasn't surprised that SYRIZA caved at that negotiation, that only a moron would think in June/July they would do so again.

And I called it that this would not accomplish anything, so glory to us I suppose.

*cough*West Germany post 1953*cough*

I suppose I should have added except for extraordinary circumstances like wars.

in the meantime 2.3% of GDP for debt service is neither odious, but very generous. Germany has paid that and more for most of the 90s.

Yes, but Germany didn't have to run a 4.5% budget surplus at the same time did it?

And neither does Greece, 1% is what the creditors demanded.


Oh btw, Crown, what about the following:
- Tsipras refused a large cut in military spending. It was the creditors that forced him to cut 400 million there, he wanted only 200m
- Tsipras refused to tax shipowners
- Tsipras refused to allow the revenue service the power to go after tax-dodgers wealth
- Tsipras refused to make the energy market competitive to get energy prices down
Source in German, but google translate should suffice:
http://www.tagesschau.de/wirtschaft/gri ... s-107.html

From what I've seen the Greek GDP after its big fall is exactly where it would have been without a huge bubble effect in the run up to 2010. The Greeks just don't want to swallow that , or that they are not nearly the poorest country in the EU, or that they are clinging to standards like people able to retire as early as 50 which are simply alien to any other country around them. Its delusions about a delusion, and no wonder its all falling apart. They'd rather believe the world is conspiring against them like Argentina and Venezuela constantly do then admit they have structural problems. And as long as that doesn't change no credible reason exists why anyone should be generous to them. Bad money after bad money is not good policy.

Comparisons to Germany in the 1950s are pointless. Germany in the 1950s was as today the center of the European economy and everyone in the west knew it, and knew that if Germany didn't get going again they'd have a huge long term problem. And they knew why Germany was so indebted, a huge war thing followed by intentional dismantling of German industry and division of the country, and that Germany was not simply going to do the same damn thing again if it got debt relief.

Amen to all of that.

[K. A. Pital]

The Greeks just don't want to swallow that , or that they are not nearly the poorest country in the EU, or that they are clinging to standards like people able to retire as early as 50 which are simply alien to any other country around them.

You keep saying "retire at fifty". Average retirement age in pre-crisis Greece was 61, around where Germany's average retirement age was. You are either dishonest or pursuing an agenda. The current stream of early retirees is actually the result of demanding Greece should abolish early retirement - which people understand and thus seek to retire as soon as possible to still jump on the train that's leaving.

[Thanas]

Meanwhile, the Guardian has published a rather gloomy opinion from an actual small businessman in Greece (Hey, when contributor pieces like the ones in Spiegel get passed out as they were opinions, it is only fair):

http://www.theguardian.com/commentisfre ... -austerity

There is a punchy but elegant Greek phrase that summarises the moment when delusion and deception are exposed: telos pia ta psemmata, the end of lies. You might have thought that point would have arrived on Sunday when it was announced that banks would not be opening the next morning. It did not. It will not arrive with the queues for petrol; or when Greek merchants refuse card payments; or even when supermarkets begin to run out of imported basics.

As I drove through the streets of Athens watching worried lines form at every cashpoint, radio bulletins were interrupted by commercial breaks offering cheerful suggestions on how to spend your summer euros. It felt like listening to a voicemail message from a dead relative.

This has been coming since the European elections of 2014. That was the moment when Greece’s conservative-led coalition – which had overseen an unpopular programme of financial aid conditional on spending cuts and reforms dictated by foreign lenders – was routed by populists of the hard left. The panicked handling of this development by Greece’s tainted political establishment and the intransigence of the European Union, the International Monetary Fund and European Central Bank, ensured that this momentum built.

It was at this point that I returned to Athens after a 10-year absence. I lived in and reported on Greece for several years prior to 2004 and spent the ensuing decade in the newsrooms of London and as a foreign correspondent in Africa and elsewhere. Taking a break from journalism, I joined a software startup that is trying to build a Greek success story in the midst of the economic wreckage. For all its rewards, this decision has given me an unwanted vantage point to observe the unravelling of an extraordinary country.

The collapse of Greece’s corrupt political centre was marked earlier this year by the election of the left coalition, Syriza. Its success was built on the lie that it could deliver the same financial aid with fewer of the austere strings than its predecessors. Now that this lie has run it course, Syriza has abdicated responsibility for its own failure.

The result will be a referendum this Sunday with a crudely designed ballot in which the “no” box is given top billing and the question is framed in almost meaningless bureaucratic language. Greece’s prime minister, Alexis Tsipras, who has gone into full obfuscation mode, will push for a “no” vote without any discussion of what that would mean. In other words, the Greek government will now campaign to have its own failure at the negotiating table endorsed by the very people it will hurt the most. And there is every chance this deception will succeed.

It has been clear that the choice awaiting Greece was a future that looked like Portugal, a degraded economy of the European south; or Serbia, a proud nation led into the international wilderness by populists’ lies and fantasies of Russian rescue. Neither are good choices, but one is incalculably worse than the other.

Now is the time when the lazy lie of Greek exceptionalism, dripped like poison for decades into the country’s dysfunctional, nationalistic education system, will find its full expression. Bankruptcy, rupture and isolation will be welcomed with unfathomably foolish pride. The giddy talk of a second “oxi day” (the anniversary of Greece’s second world war refusal to surrender to fascist Italy) will not be calmed. For all its lunacy a “no” vote looms.

Outsiders will look on in bewilderment. Unlike money, there is plenty of blame to go around. The scramble to avoid responsibility will be excruciating, as the press conference on Monday by European Commission head Jean-Claude Juncker demonstrated. But this shambles will be of comparatively little consequence for those outside Greece.

The return of the drachma will bring misery with it. Devaluation, runaway inflation, shortages of food and medicine will be managed by an administration and populace whose default response is to blame enemies abroad.

Many critics of austerity who cheer on Tsipras wear their ignorance of Greek specifics like a badge of honour, with the US economist Paul Krugman a particularly egregious example. Others, like the British broadcaster Paul Mason, who is steeped in the lore and mores of the Greek left, are willing to see the country used as the vanguard of a doomed challenge to capitalism. Perhaps when the coffee runs out – for all its sunshine Greece lacks the altitude to grow it – a reflection point will be reached. By now I doubt even that. In the Greece we love and are all complicit in creating, there will be no end to lies.

Meanwhile, the Italian PM had this to say:

Italian PM Renzi: "We haven't scrapped early retirements for Italians so that the Greeks could keep theirs"

And Russia has declined to do anything.

Finding a solution to Greece’s debt crisis is not a matter for Russia but for Athens and its creditors, Kremlin spokesman Dmitry Peskov said on Tuesday.
“This is Greece’s problem,” Peskov told journalists on a conference call. “(It’s a matter) of Greece’s relations with its creditors, it’s not a matter for us.”

[K. A. Pital]

The guy is blaming Syriza for bringing the matter up for a vote. As if Syriza could have decided this on their own. The truth is, sizeable fractions of the Greek left are pro-exit. Tsipras is not really in control of his party, and his line is the more moderate one. He still tries to say this is not a Grexit question when all the radicals are already gearing up pro-exit propagansa.

Frankly, if the only thing the EU can offer is "a degraded country", it was not worth entering, so I can certainly understand the sentiment.

The comparison with Serbia is a dumb lie, unless the EU bombs Greece and invades and occupies it, then forces ethnic minority enclaves to break off.

[Thanas]

Apparently Greece has just proposed a new, third bailout plan which does not include the IMF.

I can't imagine them having much luck with that and wonder why they would even bring it up.

[Crown]

Yes, but Germany didn't have to run a 4.5% budget surplus at the same time did it?

And neither does Greece, 1% is what the creditors demanded.

My mistake it's 1,2,3 and 3.5% there after each subsequent year (down from 4.5%) as quoted by the EC document you sourced in the previous page, and again; still something Germany never had do to.

Oh btw, Crown, what about the following:
- Tsipras refused a large cut in military spending. It was the creditors that forced him to cut 400 million there, he wanted only 200m
- Tsipras refused to tax shipowners
- Tsipras refused to allow the revenue service the power to go after tax-dodgers wealth
- Tsipras refused to make the energy market competitive to get energy prices down
Source in German, but google translate should suffice:
http://www.tagesschau.de/wirtschaft/gri ... s-107.html

Are you this obtuse? Because it literally does not matter. Tsipras was elected on a platform to end austerity; all of the above is more austerity. With no debt negotiation, with no growth and stimulus package it was just another case of kicking the god damned can down the road for 5 months.

From what I've seen the Greek GDP after its big fall is exactly where it would have been without a huge bubble effect in the run up to 2010. The Greeks just don't want to swallow that , or that they are not nearly the poorest country in the EU, or that they are clinging to standards like people able to retire as early as 50 which are simply alien to any other country around them. Its delusions about a delusion, and no wonder its all falling apart. They'd rather believe the world is conspiring against them like Argentina and Venezuela constantly do then admit they have structural problems. And as long as that doesn't change no credible reason exists why anyone should be generous to them. Bad money after bad money is not good policy.

Wow, I guess that means that the Troika are completely absolved of any responsibility in their part in crippling Greece ... what a relief!

Comparisons to Germany in the 1950s are pointless. Germany in the 1950s was as today the center of the European economy and everyone in the west knew it, and knew that if Germany didn't get going again they'd have a huge long term problem. And they knew why Germany was so indebted, a huge war thing followed by intentional dismantling of German industry and division of the country, and that Germany was not simply going to do the same damn thing again if it got debt relief.

Even if all of that were true; it still doesn't change the fact that one is an example of how to rebuild and enrich a country and the other is an example of how to create the worst god damned recession since the Great Depression.

Apparently Greece has just proposed a new, third bailout plan which does not include the IMF.

I can't imagine them having much luck with that and wonder why they would even bring it up.

Because all the crocodile tears last night were acting in 'shock' that Greece had left the negotiating table and 'their door was still open', so Tsipras just called them on their bullshit. If they are sincere that 'there is still time' and that 'the Eurogroup is here to help' and that 'they have the best interest of the Greek people at heart' and that 'their doors are truly open' then they have to look at his new proposal or it turns out they were full of shit.

[Crown]

Also one more thing; regarding the €60 per day capitol controls; my cousin living and working in central Athens at a security firm as head of marketing, employing 200 odd people is considered one of the 'better payed' employees and earns a massive €630 per month salary. €60 a day is not crippling anyone in the middle class; it's just there to stop people running on the banks.

Thought that I should put it into perspective for you all.

[Crown]

Troika admits internally what we all know already;

IMF: austerity measures would still leave Greece with unsustainable debt
Secret documents show creditors’ baseline estimate puts debt at 118% of GDP in 2030, even if it signs up to all tax and spending reforms demanded by troika

Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors.

The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.

The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession.

The documents admit that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes.

Even under the best case scenario, which includes growth of 4% a year for the next five years, Greece’s debt levels will drop to only 124%, by 2022. The best case also anticipates €15bn (£10bn) in proceeds from privatisations, five times the estimate in the most likely scenario.

But under all the scenarios, which all assume a third bailout programme, looked at by the troika – the European commission, the European Central Bank and the IMF – Greece has no chance of meeting the target of reducing its debt to “well below 110% of GDP by 2022” set by the Eurogroup of finance ministers in November 2012.

In the creditors own words: “It is clear that the policy slippages and uncertainties of the last months have made the achievement of the 2012 targets impossible under any scenario”.

These projections are from the report Preliminary Debt Sustainability Analysis for Greece, one of six documents that are part of the full set of materials that comprise the “final” proposal sent to Greece by its creditors last Friday.

These, which the Guardian has seen, were obtained by Süddeutsche Zeitung after they were sent to all German MPs with the expectation that the deal would need to be approved by the country’s parliament.

A vote in the Bundestag never took place as the Greek prime minister, Alexis Tsipras, rejected the plans and called a referendum on whether to accept the creditors’ demands.

While the analysis underlines the fact that Greece has already benefited from a number of debt-reducing measures – maturities have been extended, interest payments are similar to those of less indebted nations and the public sector intervention in 2012 cut debt by about €100bn – the document also admits that under the baseline scenario “significant concessions” would improve sustainability.

But despite the lenders’ admission that Greece cannot thrive without debt relief the documents provide no clarity about what such a package might look like, nor does it provide any detail of a third bailout programme despite assuming one would exist. They promise only a more detailed debt sustainability analysis in due course.

The documents also throw light on the €35bn investment package that several governments, including Germany’s, have this week pointed out was offered to Greece last week.

The second document in the pack of six, titled Reforms for the Completion of the Current Programme and Beyond, show there was less to this offer than suggested by commission president Jean-Claude Juncker and Germany’s vice-chancellor Sigmar Gabriel. The cash on offer is not an ad hoc investment but is actually an EU grant that is regularly available to all member states. And, as Süddeutsche Zeitung points out, accessing the cash requires a 15% co-financing in Greece’s case, which it cannot afford. Because of this, Greece has unspent sums from its €38bn 2007-2013 pot of available grants.

A third document outlines the “financing needs and draft disbursement schedule linked to the completion of the fifth review”, spelling out how Greece would have received €15bn to meet its obligations until the end of November. The cash would have been handed over in five tranches starting in June (as soon as the Greek parliament approved the proposals) to cover Greece’s financing needs. However, 93% of the funds would have gone straight to cover the cost of maturing debt for the duration of the extension.

The remaining documents cover the nuts and bolts of the actions that were expected to be taken by Greece in consultation with the EC/ECB/IMF. One of these papers was also published by the European commission over the weekend.

The plan is premised on a primary surplus target of 1%, 2%, 3%, and 3.5% of GDP in 2015, 2016, 2017 and 2018 respectively (both sides agree on these targets). It is anchored on VAT changes producing additional revenue of 1% of GDP and a reform of the pension system that leads to savings of 1% of GDP in 2016.

On VAT reforms, the proposal suggests broadening the tax base at a standard rate of 23%, and would include restaurants, and catering. There will be a reduced rate of 13% to cover a limited set of goods, that includes energy, basic foods, hotels and water (excluding sewage).

There was also to be a super-reduced rate of 6% on pharmaceuticals, books and theatres, an increase on tax on insurance and the elimination of tax exemptions on certain islands. The creditors had originally wanted only a two-tier VAT system.

In terms of pensions, which have been the stickiest point in the negotiations, the plan demands reforms to:

Create strong disincentives to early retirement, including changes to early retirement penalties
Adopt legislation so that withdrawals from the social insurance fund will incur an annual penalty, for those affected by the extension of the retirement age period, equivalent to 10% on top of the current penalty of 6%
Ensure that all supplementary pension funds are only financed by own contributions
Gradually phase out the solidarity grant (EKAS) for all pensioners by end-December 2019. This shall start immediately for the top 20% of beneficiaries with the details of the phase-out to be agreed with the institutions
Freeze monthly guaranteed contributory pension limits in nominal terms until 2021
Provide to people retiring after 30 June 2015 the basic, guaranteed contributory, and means-tested pensions only at statutory normal retirement age, currently 67 years
Increase the relatively low health contributions for pensioners from 4% to 6% on average and extend it to supplementary pensions
On Monday Juncker insisted – incorrectly – that these measures did not amount to a cut in pensions. However, the creditors were correct in saying that they had compromised and the plans had some flexibility. They also suggested that Greece could provide alternative proposals as long as they are “sufficiently concrete and quantifiable”.

The creditors’ proposals also suggested that corporation tax rise only from 26% to 28%. Greece wanted the rate set at 29%.

Seems to me someone in the IMF is 'going rogue' and leaking the obvious truth against the fucking clowns in charge to force their hand. Good on them.

[Thanas]

Yes, but Germany didn't have to run a 4.5% budget surplus at the same time did it?

And neither does Greece, 1% is what the creditors demanded.

My mistake it's 1,2,3 and 3.5% there after each subsequent year (down from 4.5%) as quoted by the EC document you sourced in the previous page, and again; still something Germany never had do to.

Eh....we are doing it for several years now. In fact, we are constitutionally obligated to run a balanced budget, so we always operate with a 2-3% primary surplus anyway.
EDIT: Data chart here

Oh btw, Crown, what about the following:
- Tsipras refused a large cut in military spending. It was the creditors that forced him to cut 400 million there, he wanted only 200m
- Tsipras refused to tax shipowners
- Tsipras refused to allow the revenue service the power to go after tax-dodgers wealth
- Tsipras refused to make the energy market competitive to get energy prices down
Source in German, but google translate should suffice:
http://www.tagesschau.de/wirtschaft/gri ... s-107.html

Are you this obtuse? Because it literally does not matter. Tsipras was elected on a platform to end austerity; all of the above is more austerity.

Actually it matters a lot if Tsipras plays the sad song of wanting to defend the poor in public but actually refuses to help them and has to be forced by the EU to do so. It also matters that he has to be forced to go after rich tax dodgers because it reveals the core of his "We are going to clean up the state" program to be a lie.

Granted, that should have been obvious to anybody when he refused to go after the tax dodgers in the first place and refused assistance with shadow bank accounts from Switzerland, but hey, some people are still under the illusion that Tsipras is actually a honest politican and not just another populist demagogue.

Because all the crocodile tears last night were acting in 'shock' that Greece had left the negotiating table and 'their door was still open', so Tsipras just called them on their bullshit. If they are sincere that 'there is still time' and that 'the Eurogroup is here to help' and that 'they have the best interest of the Greek people at heart' and that 'their doors are truly open' then they have to look at his new proposal or it turns out they were full of shit.

They looked at the new proposal, but apparently it is less of a proposal than a cheap publicity stunt as Tsipras asks for 30 bn with no strings attached.

[Thanas]

Some reactions from Athens:

Over in Athens SKAI news is reporting that at least 22,000 people have poured into Syntagma square to attend tonight’s “yes” rally, reports our correspondent Helena Smith. The gathering is so large that protestors are now crushed and spilling out of ALL the streets that run into the Greek capital’s main square. No demonstration, quite as big, has been seen in the five years that I have covered the crisis.

The passion of those attending was evident in the speech that an uncharacterically angry mayor of Athens, George Kaminis, gave at the start of the rally. Thumping the lectern, Kaminis accused the leftist-led government of masterminding a referendum that now puts Greek voters in front of a false dilemma.

Some pictures from the pro-EU rally:




Video:
https://twitter.com/jimwaterson/status/ ... 60/video/1


https://www.indiegogo.com/projects/gree ... und#/story
Also, one can now donate to the Greek people directly.
I put in 10€. EDIT: Well, I tried. Site crashed.

[Thanas]

Update: Donation does not work right now as the site keeps crashing over and over. Couldn't even enter my login data.

[Crown]

My mistake it's 1,2,3 and 3.5% there after each subsequent year (down from 4.5%) as quoted by the EC document you sourced in the previous page, and again; still something Germany never had do to.

Eh....we are doing it for several years now. In fact, we are constitutionally obligated to run a balanced budget, so we always operate with a 2-3% primary surplus anyway.

J already did this break down for you before not only is Greece meant to run a surplus every year, it's also meant to grow ever year of 3%ish to keep up with the debt interest rates. Would you for once negotiate in good faith and admit that this is fucking lunacy? To the point that the IMF know it too?

Actually it matters a lot if Tsipras plays the sad song of wanting to defend the poor in public but actually refuses to help them and has to be forced by the EU to do so. It also matters that he has to be forced to go after rich tax dodgers because it reveals the core of his "We are going to clean up the state" program to be a lie.

Granted, that should have been obvious to anybody when he refused to go after the tax dodgers in the first place and refused assistance with shadow bank accounts from Switzerland, but hey, some people are still under the illusion that Tsipras is actually a honest politican and not just another populist demagogue.

No, it doesn't matter. The cat is out of the bag. It's not only outside observers in their ivory towers who are pointing out that all these measures without a growth/investment package (aka an end to austerity) will not work. It's the IMF itself saying this! Jesus. Would you take your fucking head out of your ass for two god damned seconds to recognise that Greece could be magically reformed to a transparent and corrupt free country overnight and it would still be fucked.

Do you get this?

They looked at the new proposal, but apparently it is less of a proposal than a cheap publicity stunt as Tsipras asks for 30 bn with no strings attached.

Good. I hope he gets every fucking penny. They've effectively tried for regime change in Greece, he's sticking around. Much rather him than the others.

[Thanas]

Eh....we are doing it for several years now. In fact, we are constitutionally obligated to run a balanced budget, so we always operate with a 2-3% primary surplus anyway.

J already did this break down for you before not only is Greece meant to run a surplus every year,

Ah, the old "well shit, I got proven wrong, let's argue something completely different now". As the following discussion in that thread showed, this is not the end all to that debate. And I have no interest in rehashing it.

Doesn't matter anyway as there is nothing agreed to with regards to the primary surplus and creditors have said debt relief would come in return for reforms. The fact that Greece never got to the reform bit is their problem, not the creditors.

it's also meant to grow ever year of 3%ish to keep up with the debt interest rates.

Again, no. The ECB has been buying every greek credit auction via the ELA - and the profits there are returned to Greece. So if this keeps up the old debt will continue to be replaced with new debt for which Greece pays much less, if anything at all.

Would you for once negotiate in good faith and admit that this is fucking lunacy? To the point that the IMF know it too?

To be honest, even if the debt does not drop to below 120% and stays at 140%, that is still process. Oh, and here I thought the IMF was ideologically driven highway robbery, going by your earlier comments. Now they are suddenly credible?

Actually it matters a lot if Tsipras plays the sad song of wanting to defend the poor in public but actually refuses to help them and has to be forced by the EU to do so. It also matters that he has to be forced to go after rich tax dodgers because it reveals the core of his "We are going to clean up the state" program to be a lie.

Granted, that should have been obvious to anybody when he refused to go after the tax dodgers in the first place and refused assistance with shadow bank accounts from Switzerland, but hey, some people are still under the illusion that Tsipras is actually a honest politican and not just another populist demagogue.

No, it doesn't matter.

Why not? Because he gets a pass for lying? Because he gets a pass for not doing shit and breaking promises left and right? Accountability for politicians but not for darling Tsipras, friend of oligarchs and dictators, eh? No shame.

Here is the cold hard truth: Unless Greece changes massively, they will continue to be the beggars of Europe.
Syriza says: Trust us, we'll get to reforms
But if their actions say something different, then how can you trust them to deliver later when there is no leverage and no pressure on them?

Would you trust a proven liar to keep his word?

The cat is out of the bag. It's not only outside observers in their ivory towers who are pointing out that all these measures without a growth/investment package (aka an end to austerity) will not work.

Every side has economists on their side. At this point, it matters little.

They looked at the new proposal, but apparently it is less of a proposal than a cheap publicity stunt as Tsipras asks for 30 bn with no strings attached.

Good. I hope he gets every fucking penny. They've effectively tried for regime change in Greece, he's sticking around. Much rather him than the others.

Well sure, let Europe pay for it. Refuse to reform? No matter, here is another check. Also, apparently Greeks are against it.


And this just takes the cake:
https://twitter.com/traynorbrussels/sta ... 2472656896

in eurogroup teleconference @yanisvaroufakis tried to trade debt relief for referendum. got nowhere

So much for all that blabbing about letting the people decide. Apparently Greek democracy is just a bargaining chip for the defenders of democracy.

[K. A. Pital]

To be honest, even if the debt does not drop to below 120% and stays at 140%, that is still process.

You were unintentionally correct. That is still process. But a process of what?

[Thanas]

To be honest, even if the debt does not drop to below 120% and stays at 140%, that is still process.

You were unintentionally correct. That is still process. But a process of what?

Sorry, switching between languages did a number on me today.


Anyway, one has to wonder about that Guardian article Crown linked to. Reuters had access to the same analysis and is quoting it as having a completely different conclusion:

http://www.reuters.com/article/2015/06/ ... QI20150626

Greek debt sustainable in most scenarios, even worst does not require a haircut
Greek debt will not fall to the targets set out by creditors in 2012 because the country did not implement the agreed reforms, but it is still sustainable under two of three analysed scenarios, a debt sustainability analysis showed.

The analysis, prepared for euro zone finance ministers to help their financing-for-reforms discussions with Athens, says that even in the worst scenario, the lenders would not have to write off any loans.

Under a 2012 bailout agreement, Greece was to reach a debt-to-GDP ratio of 124 percent in 2020 and in 2022 a debt-to-GDP ratio substantially lower than 110 percent, down from 175 percent now.

"It is clear that the policy slippages and uncertainties of the last months have made the achievement of the 2012 targets impossible under any scenario," the analysis, seen by Reuters, said.

"The main factors behind the deterioration of the Debt Sustainability Analysis are the worsening of economic growth, the revised primary balance path, the lower privatisation revenues and possible additional financial needs for the banking sector," it said.

Under the revised forecast and the most optimistic scenario that Athens implements all reforms, Greek is debt to fall to 124 percent only in 2022 from 172.8 pct in 2015.

If it implements the reforms only partially, Greek debt will fall only to 135 percent in 2022 from 174.3 pct in 2015.

In the worst case, which the International Monetary Fund sees as its "baseline", which means most likely, Greek debt would fall only to 142.2 percent in 2022 from 176.7 percent in 2015.

The analysis stresses however, that focusing on the debt-to-GDP ratio does not give an accurate picture of debt sustainability and that this is better reflected by gross financing needs of a country.

Measured like this, Greece has no sustainability problem in any scenario, but would require help to improve the sustainability, via for example an extension of maturities, under the third, least favourable option.

"This gross financing need metric points to no sustainability issues under the first two scenarios," the document said.

"The gross financing needs remain well below 15 percent threshold, a threshold mentioned in IMF guidance for this criterion. Under this scenario, significant reprofiling of the stock of debt and concessional lending terms would improve sustainability," it said.

"Reprofiling of payment flows does not imply nominal haircut or budgetary costs for creditors. This would also entail further NPV gains for Greece, and strengthen the sustainability of the Greek public debt in the long-run." (Reporting By Matthias Sobolewski, writing by Jan Strupczewski; editing by Robert-Jan Bartunek)

[Crown]

Ah, the old "well shit, I got proven wrong, let's argue something completely different now". As the following discussion in that thread showed, this is not the end all to that debate. And I have no interest in rehashing it.

Nothing of the sort; I quoted the Finland, Russia and Norway example. It was talking about +3% sustained GDP growth year after year, I was negligent to not correct you in surplus straight away, only because you were calling it 1% when I was thinking 4.5%

Doesn't matter anyway as there is nothing agreed to with regards to the primary surplus and creditors have said debt relief would come in return for reforms. The fact that Greece never got to the reform bit is their problem, not the creditors.

Yeah, they also said that pensions weren't going to be cut. Do one.

Again, no. The ECB has been buying every greek credit auction via the ELA - and the profits there are returned to Greece. So if this keeps up the old debt will continue to be replaced with new debt for which Greece pays much less, if anything at all.

Simply not true; the IMF documents show that even in a best case scenario Greece will need debt relief and an end to austerity.

To be honest, even if the debt does not drop to below 120% and stays at 140%, that is still process. Oh, and here I thought the IMF was ideologically driven highway robbery, going by your earlier comments. Now they are suddenly credible?

I said quite clearly this seems to me that a staffer is going rogue and embarrassing his/her bosses by leaking this stuff. Also, if you didn't have the attention span of 2 year old, you'd know that the leaked documents from the IMF in 2013 that I posted in the original thread showed many members voicing concern that austerity was bullshit from the start and none of the proposed rescue package included stimuli for the Greek economy back in 2010.

Why not? Because he gets a pass for lying? Because he gets a pass for not doing shit and breaking promises left and right? Accountability for politicians but not for darling Tsipras, friend of oligarchs and dictators, eh? No shame.

Here is the cold hard truth: Unless Greece changes massively, they will continue to be the beggars of Europe.
Syriza says: Trust us, we'll get to reforms
But if their actions say something different, then how can you trust them to deliver later when there is no leverage and no pressure on them?

Would you trust a proven liar to keep his word?

The cold hard truth - you dumb cunt - is that if Greece even changes to saints it will still be fucked if it continues with austerity. Stop lying.

Every side has economists on their side. At this point, it matters little.

I'll repeat for the neutral observer since Thanas has clearly lost the plot; the IMF's own internal documents admit, without hesitation that if Greece did EVERY. SINGLE. THING. It was asked to do right now, it would STILL have an unmanageable debt; because what Greece needs more than anything else is debt relief and growth economics.

Once again, this is the IMF. Greece's creditor. Part of the Troika. Not some Noble winning economist (although plenty of them same the say thing), the actual fucking creditor is saying it internally.

Well sure, let Europe pay for it. Refuse to reform? No matter, here is another check. Also, apparently Greeks are against it.

If. IF what was being offered was reform for growth stimulus, I'd be more on your side. That's NOT what's on the table, it's do everything we say and even though we all know it's bullshit.

And this just takes the cake:
https://twitter.com/traynorbrussels/sta ... 2472656896

in eurogroup teleconference @yanisvaroufakis tried to trade debt relief for referendum. got nowhere

So much for all that blabbing about letting the people decide. Apparently Greek democracy is just a bargaining chip for the defenders of democracy.

Debt relief will mean that the proposals submitted on June 25th (more fucking Austerity) is off the table, which will mean the referendum question of 'should we accept the proposal of June 25th', is no longer relevant.

[Crown]

To be honest, even if the debt does not drop to below 120% and stays at 140%, that is still process.

You were unintentionally correct. That is still process. But a process of what?

Sorry, switching between languages did a number on me today.


Anyway, one has to wonder about that Guardian article Crown linked to. Reuters had access to the same analysis and is quoting it as having a completely different conclusion:

http://www.reuters.com/article/2015/06/ ... QI20150626

Simply not true; the Guardian quotes the document its self (seems to have been leaked from the German parliament of all places) and quotes the IMF in its own words; “significant concessions” would be needed under the baseline case to make the debt manageable. The Reuters article just has an analyst saying 'well we don't think that's necessary'. It doesn't change the fact that the IMF thinks it is.

[Crown]

The Irish Times - The Emperor has no Clothes.

Who will dare say out loud ‘emperor has no clothes’?
Fintan O'Toole: Myths about Ireland as Europe’s best behaved state are not harmless lies

In a normal democracy, urgent questions are asked when the prime minister says things that are wildly untrue. Was he lying or deluded? Which of these possibilities is more alarming? If he was lying, had he never heard of Google? If he genuinely didn’t know what the Government has been up to, why is he in government?

But we don’t bother to ask these questions about St Enda’s extraordinary epistle to the Athenians last week, when he urged Greece to follow Ireland : “in Ireland’s case we did not increase income tax; we did not increase VAT; we did not increase PRSI”.
Each of these claims is flatly wrong: all three taxes were very substantially increased, both by the present and previous governments.

But this truth is utterly irrelevant. Why? Because we all know that the Taoiseach wasn’t making a statement about reality. He was telling a story. At some point in our lives – usually when we’re three or four – we all ask the question: “Daddy, did this really happen or is it a makey-up story?” And once we know which is which, we’re okay with it.

And by now, we’re more or less okay with the fact that Ireland’s primary presence on the European stage is as a makey-up story. We don’t live in a country; we live in a narrative, a tale with no more truth content than Cinderella and considerably less than “The Emperor’s New Clothes”.

Our current story is called, according to the Minister for Foreign Affairs Charlie Flanagan, “the pride of Europe”. Of course this doesn’t mean that Europe is proud that we’ve almost doubled consistent child poverty, or that we keep centenarians for days on hospital trollies or that basic services like clinics for sufferers of rheumatic diseases are simply disappearing or that we’ve been left with unpayable public debt.

It surely doesn’t mean that Europe is proud that little Ireland was forced to bear the cost of a bank bailout put last week by Patrick Honohan, governor of the Central Bank, at €100 billion and rising. At the level of reality, it doesn’t actually mean anything at all. But that doesn’t mean that it’s a harmless fiction. “The Pride of Europe” is a makey-up story that is intended to take the place of the realities it displaces. It’s not a stand-alone narrative. It has an evil twin: Greece. It belongs to a particular genre of fiction: the morality tale. Ireland is the pride of Europe because it is the anti-Greece. We are good because we play along with the bigger stories of the euro zone crisis. Greece is evil because it stopped doing so.

One of those stories is that the crisis had nothing to do with reckless lending (by, for example, German state banks) and was created purely by reckless borrowing. The other, even more fantastical, is that so-called austerity (in reality a programme of sucking citizens dry to transfer their resources to private banks) produces economic growth.

These stories are as patently false as Enda’s fairy tale, but Ireland is the pride of Europe because it has gone along with them and Greece is the shame of Europe because it has not been able to sustain the suspension of disbelief.

Greece’s membership of the euro zone was always a fiction - a story that everyone agreed to believe because it was more convenient than reality. Greece never met the fiscal criteria for membership. So how was it allowed in? By cooking the books. A right-wing Greek government worked with Goldman Sachs to hide its debts using massive currency swaps at fictional exchange rates. Euro zone governments went along with the story.

When the crisis hit in 2008, there might have been a moment of truth. Instead we had the classic dynamic of a lie spawning more lies. The banks that lent so recklessly were bailed out by transferring their debts to European taxpayers and the IMF – their culpability disappeared from the story. A new fiction was invented – that Greece could simultaneously have its economy shrunk by relentless austerity and pay back hundreds of billions of euro.

The startling thing about the current debacle is that no one really believes this story any more. The IMF has long since admitted that its calculations about the economic effects of austerity were wildly wrong. No objective analyst believes that Greece can pay back its debts.

And yet the story must be maintained: Greece must keep punishing its people to pay back the money being borrowed to make the payments on the unpayable loans. In the upside-down world we inhabit, Syriza, which has called a halt to this fiction, is a bunch of mad fantasists, while the troika that goes on acting as if the fictions were real is the voice of hard-headed realism.
Everything - from the lives of ordinary Greeks to the foundations of the European Union - must be sacrificed to the story.
“The Pride of Europe” is Ireland’s special contribution to this toxic fantasy. We exist, not as a society, but as a necessary validation for a destructive fiction. Just as well that the Pride of Europe knows no shame.

[Crown]

Furthermore; Thanas just loooooooooves to call Tsipras a liar who isn't going after the oligarchy.

What he fails to mention (in between posting the Yes rally pictures) is that with the exception of the state run broadcaster (ERT) which Tsipras re-opened, every single one of the other broadcasters in Greece are owned by the said oligarchs who have been beating sky is falling and everyone should vote 'Yes' drum. What he has also failed to mention is that employers in Greece have told their staff to turn up to Yes rallies or face the sack.

Further, he quotes Juncker as some kind of honest broker. This is the man who was the Finance and then Prime Minster of Luxemburg for 18 years and systematically turned into the biggest corporate tax haven loop hole member state in the union. Then he was forced to resign for his own Watergate scandal (bugging offices of other politicians), but like a good slimeball landed into the European lap of failing upwards. During the possible French referendum on the EU he said "if the vote 'Yes' we continue, and if they vote 'No' we go on". And regarding debt negotiations earlier in the year he said "when it's serious, it's okay to lie".

But remember; it's Tsipras who we must not trust.