2015 And EU Future Economic Predictions
- Thread starter Joseph C.
- Start date
dnmun
1 PW
Joseph C. said:
you seem to be totally clueless about economics in general and have this idealistic view that somehow the wrecking of the greek parliament is such a good thing. it was the fascist communist party of east germany that has totally solidified angela merkel's view of the communist syriza party and it's ability to hijack the greek elections back in the spring that led to this impasse.
i listened to an interview this evening with a greek guy who imports food into greece and he said that because of the bank crisis he had only been able to import about 3 weeks of food to sell and he was already making plans to leave greece at the end of the three weeks when the food he could sell ran out.
he did not wanna be in greece after there is no food and these kids go rioting all over the place burning down buildings and attacking all the people they see as agents of europe because they voted yes instead of no.
this self satisfied victory lap following the vote by the youth is gonna be the death knell of their society when they reject the plan put forward tomorrow.
dnmun
1 PW
and because of the cowardly behavior of tsipras in turning to this referendum which really means nothing to the people they owe money, the financial damage of closing the banks during this period will cost the european taxpayers tens of billions more euros to feed into the greek banking system to keep it afloat:
>>>>>>>>>>>>>>>>>>>>>>> from the wsj
Greece may need more financing than IMF estimated
By Ian Talley
Published: July 10, 2015 2:36 a.m. ET
WASHINGTON--Greece may need even more debt relief and financing from its eurozone creditors than the International Monetary Fund estimated less than a week ago, the IMF's chief economist said Thursday in comments likely to further complicate the country's efforts to win a new emergency bailout.
In a report published last week, the fund said Greece would need more than EUR60 billion ($66 billion) in new aid to cover its growing budget shortfalls, as well as substantial debt relief through bond maturity extensions "at a minimum" to return the country to health.
But that review of Greece's debt was prepared before Greece's government called a surprise referendum challenging the creditors' bailout terms, a move that subsequently forced Athens to implement growth-suffocating capital controls. The country has just a few short days worth of cash to fund operations and capital controls are the only thing preventing a complete collapse of the financial system.
"We believe that current developments may well imply the need for even more financing, not least in support of the banks, and for even more debt relief than in our [debt report]," IMF Chief Economist Olivier Blanchard said in an IMF blog post defending the IMF's Greek-bailout history.
Mr. Blanchard's comments signal the IMF may think that write-downs may be required should Greece's economic woes worsen. That is a position at odds with Greece's biggest and most powerful creditor, Germany. Officials in Berlin have ruled out any write-downs of their holdings. They have said they are open to considering debt maturity extensions at the very end of bailout talks, but only if Greece proves its commitment to tough budget cuts and economic overhauls.
"The room for agreement is extremely narrow, and time is of the essence, " Mr. Blanchard said. "It should be based on a set of policies close to those discussed before the referendum, amended to take into account that the government is now requesting a 3-year program, and a more explicit recognition of the need for more financing and more debt relief," he said.
The eurozone also believes the IMF is too pessimistic in its assessment of Greece's situation, Mr. Blanchard said, a factor that reduces the amount of projected debt relief needed.
The IMF's evaluation on debt relief may embolden Athens to ask Germany for more on debt relief than Berlin is willing to give, potentially confounding already strained negotiations.
Greece late Thursday offered bailout terms that move closer to creditor demands on some of the most divisive issues.
But since the referendum, German officials have said Greece's offer must include more stringent budget cuts and policy overhauls than creditors' last proposal.
So it remains to be seen a deal can be secured at Sunday's emergency eurozone meetings, where officials and economists say a deal must be concluded to prevent a Greek exit from the eurozone.
The IMF's chief economist cautioned against Europe being overconfident about the fallout from a eurozone exit. Europe has built up its bailout funds since the last time Greece's potential euro exit pulled the region into a growth quagmire, depressed investment and sparked debt worries about some of its other weak economies. The European Central Bank has also proved to markets it is ready to use its substantial monetary arsenal to douse financial fires.
But, Mr. Blanchard said, "There should be no doubt that exit from the Euro would be extremely costly for Greece and its creditors."
Failure to reach a deal by Sunday would likely mean the ECB cuts its emergency funding for Greek banks Monday morning, says Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics. That would push the country into a catastrophic recession, he said.
Write to Ian Talley at ian.talley@wsj.com
>>>>>>>>>>>>>>>>>>>>>>> from the wsj
Greece may need more financing than IMF estimated
By Ian Talley
Published: July 10, 2015 2:36 a.m. ET
WASHINGTON--Greece may need even more debt relief and financing from its eurozone creditors than the International Monetary Fund estimated less than a week ago, the IMF's chief economist said Thursday in comments likely to further complicate the country's efforts to win a new emergency bailout.
In a report published last week, the fund said Greece would need more than EUR60 billion ($66 billion) in new aid to cover its growing budget shortfalls, as well as substantial debt relief through bond maturity extensions "at a minimum" to return the country to health.
But that review of Greece's debt was prepared before Greece's government called a surprise referendum challenging the creditors' bailout terms, a move that subsequently forced Athens to implement growth-suffocating capital controls. The country has just a few short days worth of cash to fund operations and capital controls are the only thing preventing a complete collapse of the financial system.
"We believe that current developments may well imply the need for even more financing, not least in support of the banks, and for even more debt relief than in our [debt report]," IMF Chief Economist Olivier Blanchard said in an IMF blog post defending the IMF's Greek-bailout history.
Mr. Blanchard's comments signal the IMF may think that write-downs may be required should Greece's economic woes worsen. That is a position at odds with Greece's biggest and most powerful creditor, Germany. Officials in Berlin have ruled out any write-downs of their holdings. They have said they are open to considering debt maturity extensions at the very end of bailout talks, but only if Greece proves its commitment to tough budget cuts and economic overhauls.
"The room for agreement is extremely narrow, and time is of the essence, " Mr. Blanchard said. "It should be based on a set of policies close to those discussed before the referendum, amended to take into account that the government is now requesting a 3-year program, and a more explicit recognition of the need for more financing and more debt relief," he said.
The eurozone also believes the IMF is too pessimistic in its assessment of Greece's situation, Mr. Blanchard said, a factor that reduces the amount of projected debt relief needed.
The IMF's evaluation on debt relief may embolden Athens to ask Germany for more on debt relief than Berlin is willing to give, potentially confounding already strained negotiations.
Greece late Thursday offered bailout terms that move closer to creditor demands on some of the most divisive issues.
But since the referendum, German officials have said Greece's offer must include more stringent budget cuts and policy overhauls than creditors' last proposal.
So it remains to be seen a deal can be secured at Sunday's emergency eurozone meetings, where officials and economists say a deal must be concluded to prevent a Greek exit from the eurozone.
The IMF's chief economist cautioned against Europe being overconfident about the fallout from a eurozone exit. Europe has built up its bailout funds since the last time Greece's potential euro exit pulled the region into a growth quagmire, depressed investment and sparked debt worries about some of its other weak economies. The European Central Bank has also proved to markets it is ready to use its substantial monetary arsenal to douse financial fires.
But, Mr. Blanchard said, "There should be no doubt that exit from the Euro would be extremely costly for Greece and its creditors."
Failure to reach a deal by Sunday would likely mean the ECB cuts its emergency funding for Greek banks Monday morning, says Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics. That would push the country into a catastrophic recession, he said.
Write to Ian Talley at ian.talley@wsj.com
dnmun
1 PW
now anyone with any chance to leave is getting their cars packed and preparing to leave before the syriza party sends the kids back into the streets to burn down more banks and the poor people who work inside them.
>>>>>>>>>reuters
Passport applications spike in Athens suburbs that voted ‘yes’
By Ellie Ismailidou
Published: July 9, 2015 4:03 p.m. ET
Some of the wealthiest Greeks may be planning their personal exit strategy from the long-running Greek debt crisis.
The number of applications for passports with the National Hellenic Passport Center increased over 50% in the week after the referendum over the same time last year, according to Kathimerini, one of the biggest Greek newspapers.
The biggest increases were recorded in the northern and southern suburbs of Athens, Kathimerini noted, the same areas that voted overwhelmingly “yes” in the referendum on whether to accept creditors’ demands for further austerity measures in exchange for another Greek bailout, according to a breakdown of the vote by To Vima, another major Greek newspaper.
It’s unclear how many of those don’t want to stick around for the end of the country’s financial drama. Some passports could just be up for renewal — Greek passports are valid for five years — but others could want to ensure they have a document that allows them to live anywhere in the other 27 members of the European Union.
Greece is quickly running out of money and needs a fresh deal with its creditors before a 3.5-billion-euro ($3.8 billion) payment to the European Central Bank comes due July 20. If not, analysts warn it could be forced to leave the 19-member eurozone.
In the northern Athens suburb of Kifisia, passport applications soared 70%, Kathimerini reported. It’s the same place where 64% of voters said “yes” in Sunday’s referendum, one of the highest rates in the country, according to To Vima. The “yes” vote reached 70% in nearby town Filothei-Psichiko, another town in the area where passport applications are spiking.
Nationally, just 38.7% of voters sided with the “yes” camp. The “no” camp, which got 61.3% of all votes, was heavily supported by the 44% of the population that now finds itself living under the national poverty level of about 7,900 euros per person a year.
The towns where passport applications are jumping rank among Greece’s most expensive housing markets, according to a study by the University of Macedonia published in October 2014, which tracked average rent prices using online ads. And a 2012 report by the Ministry of Finance ranked postal codes in these towns among the 10 wealthiest, as measured by per-capita income based on tax returns.
>>>>>>>>>reuters
Passport applications spike in Athens suburbs that voted ‘yes’
By Ellie Ismailidou
Published: July 9, 2015 4:03 p.m. ET
Some of the wealthiest Greeks may be planning their personal exit strategy from the long-running Greek debt crisis.
The number of applications for passports with the National Hellenic Passport Center increased over 50% in the week after the referendum over the same time last year, according to Kathimerini, one of the biggest Greek newspapers.
The biggest increases were recorded in the northern and southern suburbs of Athens, Kathimerini noted, the same areas that voted overwhelmingly “yes” in the referendum on whether to accept creditors’ demands for further austerity measures in exchange for another Greek bailout, according to a breakdown of the vote by To Vima, another major Greek newspaper.
It’s unclear how many of those don’t want to stick around for the end of the country’s financial drama. Some passports could just be up for renewal — Greek passports are valid for five years — but others could want to ensure they have a document that allows them to live anywhere in the other 27 members of the European Union.
Greece is quickly running out of money and needs a fresh deal with its creditors before a 3.5-billion-euro ($3.8 billion) payment to the European Central Bank comes due July 20. If not, analysts warn it could be forced to leave the 19-member eurozone.
In the northern Athens suburb of Kifisia, passport applications soared 70%, Kathimerini reported. It’s the same place where 64% of voters said “yes” in Sunday’s referendum, one of the highest rates in the country, according to To Vima. The “yes” vote reached 70% in nearby town Filothei-Psichiko, another town in the area where passport applications are spiking.
Nationally, just 38.7% of voters sided with the “yes” camp. The “no” camp, which got 61.3% of all votes, was heavily supported by the 44% of the population that now finds itself living under the national poverty level of about 7,900 euros per person a year.
The towns where passport applications are jumping rank among Greece’s most expensive housing markets, according to a study by the University of Macedonia published in October 2014, which tracked average rent prices using online ads. And a 2012 report by the Ministry of Finance ranked postal codes in these towns among the 10 wealthiest, as measured by per-capita income based on tax returns.
arkmundi
10 MW
So not the Drachma, but adopt another countries currency, like the US Dollar or Chinese Renminbi? Interesting, a Plan D. But the premise is still that Greece needs foreign investment. Its all still the growth model. Which, from the Climate catastrophe perspective is not sustainable. Naomi Klein - This Changes Everything. Greece has the opportunity granted once in a generation to re-construct their economy and make the attempt for sustainability, for a stead-state economy, one that does not grow.
[youtube]pNMAAT_AzzY[/youtube]
Yes, We Can Prosper Without Growth: 10 Policy Proposals for the New Left
[youtube]pNMAAT_AzzY[/youtube]
dnmun
1 PW
link to nyt: http://www.nytimes.com/2015/07/10/business/international/deal-or-no-deal-greece-faces-a-difficult-aftermath.html?emc=edit_dlbkam_20150710&nl=business&nlid=49600008
ATHENS — As Greece hurtles toward a Sunday deadline for either reaching a bailout deal or risking a hasty exit from the eurozone, the one certainty is that its economy is already on the brink of collapse.
Businesses and humanitarian organizations are warning that the social and commercial damage now evident could become deeper and longer lasting if Greece and its international creditors cannot finally come to terms on a new bailout package.
“Greece already has a humanitarian crisis, and we’ll have to prepare for a harder aftermath if a deal collapses,” Nikitas Kanakis, the president of the board of directors of the Athens chapter of Doctors of the World, a health care charity, said Wednesday. “I’m not sure how proud we should feel about letting social destruction return within Europe.”
Weighing the Fallout of a Greek Exit From the EuroJULY 9, 2015
Banks remain closed and the government has nearly run out of money. Though a glimmer of optimism for an accord emerged late Thursday, Greece has become isolated from the international economy — a big problem for a country that relies on imports for 65 percent of its goods.
Cargo containers of food, some medicines and other daily necessities are beginning to pile up on the docks at Piraeus, the international seaport outside Athens, because capital controls make it difficult or impossible to pay the shippers.
“We can’t do anything to prepare for a situation like this,” said Nikos Manisoitis, who runs Nikos Manisoitis & Son, a family-owned importer of spices and dried goods like pasta and pet food, which was founded in Piraeus 95 years ago by his grandfather.
“We feel like hostages,” he said. “We can’t move our money from the banks, and we fear that we are about to lose everything.”
Mr. Manisoitis, who is also president of a local business group, the Piraeus Traders Association, said that some importers at the port had boarded planes with up to 60,000 euros, or about $66,000, in cash for day trips to Britain, Germany or other European countries to pay their suppliers.
That has become necessary, he said, to sidestep the government-imposed capital controls that have been in place since June 28. While not restricting the physical flow of cash within the European Union, the controls have forbidden making electronic payments outside of Greece.
“We’re living like we did 60 years ago,” Mr. Manisoitis said, referring to the bleak years that followed World War II and the Greek civil war.
Even though Greece represents just 2 percent of the eurozone economy, the implications of a brick’s falling out of the euro currency union could be unpredictable, especially if it occurs at the same time as the steep decline in the Chinese stock market.
Five years of economic crisis have already taken their toll on Greece, hollowing out the solid middle class and causing tens of thousands of small and midsize businesses to close their doors.
Businesses are bewildered about how to prepare for a situation in which Greece has to start functioning on i.o.u.s or shift to its own currency.
That cascade of events could begin as soon as Monday if a bailout deal is not reached and the European Central Bank cuts off the emergency lifeline that has kept Greek banks alive in recent months.
On Wednesday, the Greek government announced that banks would remain closed through Friday. Many Greeks doubted that they would reopen on Monday, the day after European leaders are to decide whether to accede to Greece’s latest bailout request.
Christian Noyer, the governor of France’s central bank, said Wednesday that the European Central Bank would have to stop providing emergency lending to Greek banks unless there was an accord with creditors by Sunday.
“The Greek economy is on the verge of catastrophe,” Mr. Noyer, a member of the European Central Bank’s Governing Council, said on Europe 1 radio.
Also on Wednesday, Greece’s main business associations said that the capital controls were causing “economic suffocation,” and they warned of an “explosion of unemployment” if Prime Minister Alexis Tsipras and other European leaders could not reach a deal that would keep Greece in the currency union.
“The business community of Greece wishes for our country to remain a member of the eurozone,” members of the Hellenic Confederation of Commerce and Entrepreneurship wrote in an open letter on Wednesday.
Unemployment recently shot back above 26 percent, and youth joblessness exceeds 50 percent. The economy, which after a five-year recession edged back into growth last year, returned to a recession in the first quarter, when the Tsipras government came to power on a no-more-austerity platform.
Economists say that during the second quarter, as Greece conducted fruitless debt negotiations with its eurozone creditors and the International Monetary Fund, the economy almost certainly continued its contraction.
Even if a deal is struck at the last minute, economists say, the economy has been set back by at least a year.
And by some estimates, Mr. Tsipras’s call for last Sunday’s referendum may have doubled or tripled the cost of any new bailout. Once he broke off debt negotiations, the creditors allowed the country’s existing bailout program — which had provided for €240 billion in loans since 2010 — to expire.
Eurasia Group, a London-based analytical firm, estimates that any new aid package might cost about $20 billion to $30 billion more than what Greece might have been able to arrange by renegotiating under the previous bailout program.
On Wednesday, Greece applied for a new three-year loan from the eurozone bailout fund. Details were not made public, though analysts said the government most likely sought €50 billion or more. Whether Greece will receive that money depends on the make-or-break negotiations over the next few days.
The European Commission president, Jean-Claude Juncker, said late Tuesday, after frustrated negotiators set the Sunday deadline for Greece, that European officials were making contingency plans for a Greek departure from the eurozone — which might include “humanitarian aid.”
“It reminds me of war,” said Mr. Kanakis, of Doctors of the World. “Before the bombardment, they say, ‘Don’t worry, someone will come and help you.’ ”
He added, “This leaves a very bitter taste in my mouth because we are used to hearing ‘humanitarian help’ as an expression used for third-world countries, not members of the European Union.”
At the Piraeus port, which has operated as a main gateway to Greece and one of the Mediterranean’s major ports since ancient times, Mr. Manisoitis, the importer, said he feared for his family’s business. It survived World War II, the civil war and the military dictatorship. But he is not sure it could survive the country’s exit from the eurozone.
For more than a week, a 15-ton shipment of black pepper that Mr. Manisoitis had ordered has been sitting in a cargo container under the baking sun at Piraeus. Although his company has more than enough money in its Greek bank account to cover the €150,000 cost, capital controls are blocking him from sending payment to the supplier in Vietnam.
Even if capital controls were to be lifted next week, the pepper might rot by then, he said, so customs officers would prevent him from taking the cargo. Yet he would still have to pay for the spoiled goods.
“We’re losing sleep at night,” Mr. Manisoitis said. “We can’t get the goods. We can’t deliver goods to those who placed orders from us. And we are about to lose even more money.”
He is holding out hope that a Greek exit from the eurozone can be avoided.
But if a deal is not reached on Sunday, Mr. Manisoitis said, “I’m pretty sure Tsipras won’t have a single idea of what to do if we’re out of the euro.”
ATHENS — As Greece hurtles toward a Sunday deadline for either reaching a bailout deal or risking a hasty exit from the eurozone, the one certainty is that its economy is already on the brink of collapse.
Businesses and humanitarian organizations are warning that the social and commercial damage now evident could become deeper and longer lasting if Greece and its international creditors cannot finally come to terms on a new bailout package.
“Greece already has a humanitarian crisis, and we’ll have to prepare for a harder aftermath if a deal collapses,” Nikitas Kanakis, the president of the board of directors of the Athens chapter of Doctors of the World, a health care charity, said Wednesday. “I’m not sure how proud we should feel about letting social destruction return within Europe.”
Weighing the Fallout of a Greek Exit From the EuroJULY 9, 2015
Banks remain closed and the government has nearly run out of money. Though a glimmer of optimism for an accord emerged late Thursday, Greece has become isolated from the international economy — a big problem for a country that relies on imports for 65 percent of its goods.
Cargo containers of food, some medicines and other daily necessities are beginning to pile up on the docks at Piraeus, the international seaport outside Athens, because capital controls make it difficult or impossible to pay the shippers.
“We can’t do anything to prepare for a situation like this,” said Nikos Manisoitis, who runs Nikos Manisoitis & Son, a family-owned importer of spices and dried goods like pasta and pet food, which was founded in Piraeus 95 years ago by his grandfather.
“We feel like hostages,” he said. “We can’t move our money from the banks, and we fear that we are about to lose everything.”
Mr. Manisoitis, who is also president of a local business group, the Piraeus Traders Association, said that some importers at the port had boarded planes with up to 60,000 euros, or about $66,000, in cash for day trips to Britain, Germany or other European countries to pay their suppliers.
That has become necessary, he said, to sidestep the government-imposed capital controls that have been in place since June 28. While not restricting the physical flow of cash within the European Union, the controls have forbidden making electronic payments outside of Greece.
“We’re living like we did 60 years ago,” Mr. Manisoitis said, referring to the bleak years that followed World War II and the Greek civil war.
Even though Greece represents just 2 percent of the eurozone economy, the implications of a brick’s falling out of the euro currency union could be unpredictable, especially if it occurs at the same time as the steep decline in the Chinese stock market.
Five years of economic crisis have already taken their toll on Greece, hollowing out the solid middle class and causing tens of thousands of small and midsize businesses to close their doors.
Businesses are bewildered about how to prepare for a situation in which Greece has to start functioning on i.o.u.s or shift to its own currency.
That cascade of events could begin as soon as Monday if a bailout deal is not reached and the European Central Bank cuts off the emergency lifeline that has kept Greek banks alive in recent months.
On Wednesday, the Greek government announced that banks would remain closed through Friday. Many Greeks doubted that they would reopen on Monday, the day after European leaders are to decide whether to accede to Greece’s latest bailout request.
Christian Noyer, the governor of France’s central bank, said Wednesday that the European Central Bank would have to stop providing emergency lending to Greek banks unless there was an accord with creditors by Sunday.
“The Greek economy is on the verge of catastrophe,” Mr. Noyer, a member of the European Central Bank’s Governing Council, said on Europe 1 radio.
Also on Wednesday, Greece’s main business associations said that the capital controls were causing “economic suffocation,” and they warned of an “explosion of unemployment” if Prime Minister Alexis Tsipras and other European leaders could not reach a deal that would keep Greece in the currency union.
“The business community of Greece wishes for our country to remain a member of the eurozone,” members of the Hellenic Confederation of Commerce and Entrepreneurship wrote in an open letter on Wednesday.
Unemployment recently shot back above 26 percent, and youth joblessness exceeds 50 percent. The economy, which after a five-year recession edged back into growth last year, returned to a recession in the first quarter, when the Tsipras government came to power on a no-more-austerity platform.
Economists say that during the second quarter, as Greece conducted fruitless debt negotiations with its eurozone creditors and the International Monetary Fund, the economy almost certainly continued its contraction.
Even if a deal is struck at the last minute, economists say, the economy has been set back by at least a year.
And by some estimates, Mr. Tsipras’s call for last Sunday’s referendum may have doubled or tripled the cost of any new bailout. Once he broke off debt negotiations, the creditors allowed the country’s existing bailout program — which had provided for €240 billion in loans since 2010 — to expire.
Eurasia Group, a London-based analytical firm, estimates that any new aid package might cost about $20 billion to $30 billion more than what Greece might have been able to arrange by renegotiating under the previous bailout program.
On Wednesday, Greece applied for a new three-year loan from the eurozone bailout fund. Details were not made public, though analysts said the government most likely sought €50 billion or more. Whether Greece will receive that money depends on the make-or-break negotiations over the next few days.
The European Commission president, Jean-Claude Juncker, said late Tuesday, after frustrated negotiators set the Sunday deadline for Greece, that European officials were making contingency plans for a Greek departure from the eurozone — which might include “humanitarian aid.”
“It reminds me of war,” said Mr. Kanakis, of Doctors of the World. “Before the bombardment, they say, ‘Don’t worry, someone will come and help you.’ ”
He added, “This leaves a very bitter taste in my mouth because we are used to hearing ‘humanitarian help’ as an expression used for third-world countries, not members of the European Union.”
At the Piraeus port, which has operated as a main gateway to Greece and one of the Mediterranean’s major ports since ancient times, Mr. Manisoitis, the importer, said he feared for his family’s business. It survived World War II, the civil war and the military dictatorship. But he is not sure it could survive the country’s exit from the eurozone.
For more than a week, a 15-ton shipment of black pepper that Mr. Manisoitis had ordered has been sitting in a cargo container under the baking sun at Piraeus. Although his company has more than enough money in its Greek bank account to cover the €150,000 cost, capital controls are blocking him from sending payment to the supplier in Vietnam.
Even if capital controls were to be lifted next week, the pepper might rot by then, he said, so customs officers would prevent him from taking the cargo. Yet he would still have to pay for the spoiled goods.
“We’re losing sleep at night,” Mr. Manisoitis said. “We can’t get the goods. We can’t deliver goods to those who placed orders from us. And we are about to lose even more money.”
He is holding out hope that a Greek exit from the eurozone can be avoided.
But if a deal is not reached on Sunday, Mr. Manisoitis said, “I’m pretty sure Tsipras won’t have a single idea of what to do if we’re out of the euro.”
dnmun
1 PW
Tsipras rattled his sabre until it was blunt – and for what?
Five months of brinkmanship has caused untold damage to the Greek economy for no purpose whatsoever
Larry Elliott
Friday 10 July 2015 06.19 EDT Last modified on Friday 10 July 2015 07.00 EDT
Part tragedy. Part farce. No happy ending. The final stages of the Greek drama have begun.
The tragedy is that there is no end in sight to the suffering of the Greek people. They have seen their country’s economy shrink by 25% in five years and it was already back in recession when the banks closed their doors two weeks ago.
The damage caused by the rapid descent into a cashless, semi-barter economy will be profound and long-lasting. It would take months if not years to repair the damage even if pro-growth policies are pursued.
That, sadly, will not be the case. Greece now faces a fresh wave of austerity policies – increases in VAT, public sector wage cuts, less generous pensions – that will put the brake on activity. This approach has been tried repeatedly over the past five years and it has failed repeatedly. It will fail again.
Greece is like Sisyphus, the king of Corinth who according to legend angered the gods and was condemned to push an enormous rock to the top of a hill. When Sisyphus neared the summit, the boulder would slip from his grasp and tumble back down to the bottom of the slope, forcing him to start again.
Alexis Tsipras, too, has angered the gods, in this case the European commission, the European Central Bank, the International Monetary Fund and most of the 18 other countries that are members of the single currency. His punishment for his five-month show of defiance will be to have Greece’s boulder replaced by an even bigger one.
For this is where the tragedy turns to farce. The terms Tsipras is now willing to accept are actually more severe than the ones he rejected two weeks ago. This was the moment in Brussels when the Greek prime minister stunned the rest of Europe by putting the terms on offer to a referendum.
It looked a bold, even foolhardy move. The ECB capped its emergency support to Greece’s banks. Limits were put on cash withdrawals of €60 a day. As the economy came to a halt, every European leader warned that a no vote in the referendum rejecting the austerity package was effectively a vote to leave the single currency.
Yet, despite everything, Greece voted no by a landslide. Tsipras asked for a mandate and got it. But if he thought this would force the creditors to offer concessions, he was wrong. The choice faced by his government this week has been stark: surrender or leave the euro. He has chosen to hoist the white flag over the Parthenon.
Greeks will be asking today what has been the point of the last month of diplomatic theatre: the endless meetings, the violent rhetoric, the walkouts, and the calling of the referendum. The answer is less than nothing. Untold damage has been caused to the Greek economy for no purpose whatsoever. Tsipras is a much-diminished figure as a result of the events of the last two weeks, and ought to pay a heavy political price.
So what happens now? In theory, there is a chance that the euro group – the conclave of finance ministers from the single currency – could say that the Greek surrender is not yet abject enough. They could ask for still further punitive measures before recommending that Greece be allowed to remain part of the club.
That, though, is not going to happen. There is much political pressure, both internal and external, to keep the euro intact. Greece might only represent a tiny fraction of the European economy, but its departure from the single currency would symbolise the failure of the project and set a precedent. The US has been putting pressure on Angela Merkel and François Hollande to ensure there is no Grexit.
Greece will also get some debt relief. That’s not because the creditors think they owe Tsipras something. On the contrary, he has destroyed most of the goodwill that previously existed. But it is clear to everybody that Greece’s debt outlook is unsustainable and becoming more so. Debts are already 175% of gross domestic product and the economy is going backwards. Shutting the banks for a fortnight makes matters worse. Even the hardliners in Germany recognise that something must be done.
Debt relief, though, is unlikely to be generous enough to make much of a difference. Greece will stay in the euro but the tax increases and the wage cuts will not deliver the promised economic recovery. A third bailout package will be no more successful than the past two. When the next episode in the crisis arrives, as it will, Greeks will look back to the moment when their government had the choice between austerity and the euro and wonder whether it made the right one.
Five months of brinkmanship has caused untold damage to the Greek economy for no purpose whatsoever
Larry Elliott
Friday 10 July 2015 06.19 EDT Last modified on Friday 10 July 2015 07.00 EDT
Part tragedy. Part farce. No happy ending. The final stages of the Greek drama have begun.
The tragedy is that there is no end in sight to the suffering of the Greek people. They have seen their country’s economy shrink by 25% in five years and it was already back in recession when the banks closed their doors two weeks ago.
The damage caused by the rapid descent into a cashless, semi-barter economy will be profound and long-lasting. It would take months if not years to repair the damage even if pro-growth policies are pursued.
That, sadly, will not be the case. Greece now faces a fresh wave of austerity policies – increases in VAT, public sector wage cuts, less generous pensions – that will put the brake on activity. This approach has been tried repeatedly over the past five years and it has failed repeatedly. It will fail again.
Greece is like Sisyphus, the king of Corinth who according to legend angered the gods and was condemned to push an enormous rock to the top of a hill. When Sisyphus neared the summit, the boulder would slip from his grasp and tumble back down to the bottom of the slope, forcing him to start again.
Alexis Tsipras, too, has angered the gods, in this case the European commission, the European Central Bank, the International Monetary Fund and most of the 18 other countries that are members of the single currency. His punishment for his five-month show of defiance will be to have Greece’s boulder replaced by an even bigger one.
For this is where the tragedy turns to farce. The terms Tsipras is now willing to accept are actually more severe than the ones he rejected two weeks ago. This was the moment in Brussels when the Greek prime minister stunned the rest of Europe by putting the terms on offer to a referendum.
It looked a bold, even foolhardy move. The ECB capped its emergency support to Greece’s banks. Limits were put on cash withdrawals of €60 a day. As the economy came to a halt, every European leader warned that a no vote in the referendum rejecting the austerity package was effectively a vote to leave the single currency.
Yet, despite everything, Greece voted no by a landslide. Tsipras asked for a mandate and got it. But if he thought this would force the creditors to offer concessions, he was wrong. The choice faced by his government this week has been stark: surrender or leave the euro. He has chosen to hoist the white flag over the Parthenon.
Greeks will be asking today what has been the point of the last month of diplomatic theatre: the endless meetings, the violent rhetoric, the walkouts, and the calling of the referendum. The answer is less than nothing. Untold damage has been caused to the Greek economy for no purpose whatsoever. Tsipras is a much-diminished figure as a result of the events of the last two weeks, and ought to pay a heavy political price.
So what happens now? In theory, there is a chance that the euro group – the conclave of finance ministers from the single currency – could say that the Greek surrender is not yet abject enough. They could ask for still further punitive measures before recommending that Greece be allowed to remain part of the club.
That, though, is not going to happen. There is much political pressure, both internal and external, to keep the euro intact. Greece might only represent a tiny fraction of the European economy, but its departure from the single currency would symbolise the failure of the project and set a precedent. The US has been putting pressure on Angela Merkel and François Hollande to ensure there is no Grexit.
Greece will also get some debt relief. That’s not because the creditors think they owe Tsipras something. On the contrary, he has destroyed most of the goodwill that previously existed. But it is clear to everybody that Greece’s debt outlook is unsustainable and becoming more so. Debts are already 175% of gross domestic product and the economy is going backwards. Shutting the banks for a fortnight makes matters worse. Even the hardliners in Germany recognise that something must be done.
Debt relief, though, is unlikely to be generous enough to make much of a difference. Greece will stay in the euro but the tax increases and the wage cuts will not deliver the promised economic recovery. A third bailout package will be no more successful than the past two. When the next episode in the crisis arrives, as it will, Greeks will look back to the moment when their government had the choice between austerity and the euro and wonder whether it made the right one.
arkmundi
10 MW
Tsipars caves - looking for MP approval of deal worse than rejected in referendum
... arrrggghhhhhhhhaaaaaaa
... arrrggghhhhhhhhaaaaaaa
arkmundi said:
As feared, Syriza are a centrist party when they needed to be left of centre. Left-wing my ass.
Another 52 billion about to be heaped on their national debt - making their default a lot worse when it eventually happens and it will.
dnmun
1 PW
it now looks like the finns and the hungarians and some of the other european members will refuse to go along with the ripoff anymore. i wonder if the finns just have not developed the guvment level corruption to the same level as the greeks where everyone and his uncle has a guvment job and gets guvment pension at 50. i wonder if the finns could even understand what it is like to lay about all day drinking and lounging about in the sun. it may be because the air is cold most of the year and they are so close to the earth that they developed a sense of self dependence that makes them resistant to getting paid off with a guvment job to support the guvment and their union benefits. thank god the communist party will be held responsible for this and maybe eventually they will be totally eliminated from the greek guvment. the poor greeks can only hope the communists will leave power without giving the country to putin. what tsipras and his cronie did to greece is a crime. now they will be back to burning down the banks and the poor people who work in them next week.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Eurogroup ends meeting with no agreement, will reconvene Sunday
By Ellie Ismailidou
Published: July 11, 2015 6:15 p.m. ET
Eurozone's finance ministers ended a marathon session with no agreement on Greece's latest reform proposal late Saturday night, ahead of Sunday's summit of Eurozone's leaders. The major point of resistance came from Finland, whose government appeared unwilling to support any new bailout funding for Greece, according to reports from the Finnish media. The Eurogroup of finance ministers failed to even to put together a common statement, and was considering, according to Italian newspaper La Stampa, drafting two options - one with the Finns and one without. On Sunday, the Finnish government would either yield to the eurozone's pressure and agree to a Greek bailout or a specific European Stability Mechanism emergency clause could be activated, which enables the ESM to grant financial assistance with only 85% of the votes. Finnish newspaper Kauppalehti also reported a third scenario, namely that the Finnish coalition government led by the right-wing True Finns party could be broken up. Meanwhile, the Guardian reported that Italy was ready to take a stance and demand that Germany hammer out an agreement with Greece. Earlier on Saturday, German media reported that Germany's finance ministry floated a document that outlined a temporary five-year Grexit from the euro, but not from the European Union. Eurozone leaders have demanded tougher reforms from Greece in exchange of what is now calculated at a potential new bailout of €74 billion ($82.55 billion).
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Eurogroup ends meeting with no agreement, will reconvene Sunday
By Ellie Ismailidou
Published: July 11, 2015 6:15 p.m. ET
Eurozone's finance ministers ended a marathon session with no agreement on Greece's latest reform proposal late Saturday night, ahead of Sunday's summit of Eurozone's leaders. The major point of resistance came from Finland, whose government appeared unwilling to support any new bailout funding for Greece, according to reports from the Finnish media. The Eurogroup of finance ministers failed to even to put together a common statement, and was considering, according to Italian newspaper La Stampa, drafting two options - one with the Finns and one without. On Sunday, the Finnish government would either yield to the eurozone's pressure and agree to a Greek bailout or a specific European Stability Mechanism emergency clause could be activated, which enables the ESM to grant financial assistance with only 85% of the votes. Finnish newspaper Kauppalehti also reported a third scenario, namely that the Finnish coalition government led by the right-wing True Finns party could be broken up. Meanwhile, the Guardian reported that Italy was ready to take a stance and demand that Germany hammer out an agreement with Greece. Earlier on Saturday, German media reported that Germany's finance ministry floated a document that outlined a temporary five-year Grexit from the euro, but not from the European Union. Eurozone leaders have demanded tougher reforms from Greece in exchange of what is now calculated at a potential new bailout of €74 billion ($82.55 billion).
dnmun
1 PW
Meeting on Greece Debt Breaks Up With No Deal
BRUSSELS — A meeting of European finance ministers broke up late Saturday with no agreement on whether Greece should be granted its third bailout since 2010, reflecting deep divides over whether the Athens government can be trusted to repay huge new loans and leaving the Continent hours from what could be a historic rupture.
The finance ministers planned to reconvene on Sunday, just before European national leaders are scheduled to meet in Brussels for what they have said would be a final decision on whether Greece should qualify for a new aid package, a step aimed at determining whether the country can remain in the euro currency union.
The failure by the finance ministers to reach an agreement, after nearly nine hours of talks, belied the optimism that followed the approval early Saturday by the Greek Parliament of a package of pension cuts, higher taxes and other policy changes long sought by Greece’s international creditors. In a remarkable turnabout, Prime Minister Alexis Tsipras had pushed the package through the legislature despite having led his country into a referendum six days earlier that overwhelmingly rejected much the same terms.
Despite Greece’s capitulation on those terms, many countries came into this weekend’s final round of negotiations skeptical of the Tsipras government’s commitment to seeing through the changes and putting his country on firmer financial footing — and weary of the constant brinkmanship that has characterized the months of negotiations over Greece’s latest crisis.
Instead of working through the night to hammer out a statement on requirements for Greece, as had been expected, the meeting was suddenly called off shortly before midnight, and ministers left without even holding a formal news conference.
“The issue of credibility and trust was discussed, and also of course the financial issues involved,” Jeroen Dijsselbloem of the Netherlands, the head of the so-called Eurogroup of ministers, told reporters. “It is still very difficult. but work is still in progress,” he said, adding that discussions would continue later Sunday morning.
From the start, it was clear that Mr. Tsipras’s gambit had not entirely won over Germany and other countries that have been skeptical about giving a new round of loans to Greece after years in which successive governments in Athens have struggled to carry out changes that creditors have demanded as a condition of the bailouts.
“We will have exceptionally difficult negotiations,” Wolfgang Schäuble, the hard-nosed German finance minister, said on Saturday before the meeting. “We won’t be able to rely on promises.”
His prediction proved accurate, as he and fellow ministers wrangled with little apparent progress, seeking more assurances from Greece that it was committed to changing its ways, and weighing the desires of France and Italy for a deal against the more skeptical stance of Germany and the possibility of outright opposition from Finland.
During their talks, the finance ministers called on their Greek counterpart, Euclid Tsakalotos, to put the package proposed by his government into swift effect to prove its willingness to make deep and lasting changes to the nation’s faltering economy. Greece, in turn, continued to seek some assurance that it would win the right to renegotiate the terms of its debt repayment.
It was not clear that the finance ministers’ meeting on Sunday morning would yield a consensus about how to proceed, increasing the possibility that they would leave final decisions to their national leaders, who are to gather in Brussels in the afternoon.
“I am still hopeful,” Pierre Moscovici, the European commissioner for economic affairs, told reporters as he left the Eurogroup meeting.
In an apparent effort to raise the pressure on Greece, some officials earlier in the day were informally passing around a one-page position paper, reportedly drawn up by the German finance ministry as a possible option for the negotiations, saying the Greek proposal fell short and suggesting options that included ideas like having the country leave the eurozone for five years and reapply for membership.
The idea of a break from the euro was not openly discussed at the meeting, according to one of the officials with direct knowledge of the talks, who like others spoke on the condition of anonymity because the discussions were private.
Mr. Schäuble, however, referred repeatedly to a plan drafted by German officials that would require Athens to transfer state assets into a trust fund to pay down its debt in order to stay in the eurozone, according to two people with direct knowledge of the discussions. Mr. Schäuble did not refer explicitly to the idea of a temporary Greek departure from the eurozone, these people said. But the tough approach by the German minister, they said, appeared designed to make clear that he now favors a Greek exit.
The European leaders have set this weekend as a deadline for settling the issue of whether to keep Greece solvent or cut off further aid, a step that would almost certainly result in forcing Athens to abandon the euro.
An exit by Greece would be a blow to Europe’s goal of ever-closer integration.
Greece’s banks are teetering on insolvency, the government is running out of cash to meet day-to-day obligations, and without an infusion, additional payments to international creditors will be missed in coming weeks.
Experts who reviewed Greece’s request for a third bailout program informed Eurogroup ministers that about €74 billion is needed to cover its financing needs for the next three years, according to a person with direct knowledge of the experts’ findings. That is far more than the €53.5 billion, or about $59 billion, that Athens has requested.
If loans for Greece are eventually approved, the majority will probably be covered by a new loan from the European Stability Mechanism, the European bailout fund. Other sources could include loans from the International Monetary Fund, funds raised through Greek government revenue and, eventually, new debt issued by Greece.
That discrepancy between what Greece had requested and the new estimate of its bailout needs may have further reinforced the doubts of those who wonder if the Greek government has a handle on its finances and will be able to carry out promised changes.
“Many governments — mine, too — have serious concerns about the commitment of the Greek government,” the Dutch state secretary for finance, Eric Wiebes, told reporters in Brussels before Saturday’s meeting. “After all, we are discussing a proposal from the Greek government that was fiercely rejected less than a week ago, and that is a serious concern.”
While no signed bailout deal was expected this weekend, the question is whether Europe will decide to continue negotiating a rescue with Greece, or leave its banks to collapse and its virtually bankrupt government to default. European leaders have said their Sunday evening meeting could be used to reach that decision.
The fear of Greece and its supporters, which include the French government, is that without an agreement to continue negotiations, Greek banks could collapse next week, raising the prospect that the country would quickly have to abandon the euro.
Mr. Moscovici, the European economic affairs commissioner who is a former finance minister of France, said as he entered Saturday’s meeting that the “Greek government has made significant gestures.” He said the Greek proposals form “a basis for a new program” of loans.
Before the meeting, the finance ministers received assessments of the Tsipras plan by experts representing the creditors.
“The papers of the Greek authorities contain positive elements, issues where clarification is needed, and some issues where the institutions wish to see stronger commitment to reform,” said a person with direct knowledge of experts’ findings. But this person also warned: “Negotiations will be tough. The chances for a deal are 50-50.”
The Eurogroup, with its 19 eurozone finance ministers, has some outspoken critics of Greece, irritated by the Tsipras government’s negotiating style and Mr. Tsipras’s decision the week before last to break off negotiations and call for the referendum. Mr. Tsipras surprised many in his own country and party on Thursday when he presented a plan containing many of the elements — including austerity measures — that the voters had just rejected by a wide margin.
The creditors now want strong evidence that Greece will honor its latest set of economic promises if it gets the new loans it is seeking, and an agreement to ease the burden of its current debt, which at €317 billion is equivalent to 177 percent of the country’s gross domestic product. By that measure, only Japan’s debt, at 245 percent, is higher among the world’s economies.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>
now tsipras and his cronie varoufuckyouupus can finally bear the burden of destroying their country's chance to stabilize the finances of the guvment until they were forced from power. it is now all over except for the firebombing and riots in the streets.
BRUSSELS — A meeting of European finance ministers broke up late Saturday with no agreement on whether Greece should be granted its third bailout since 2010, reflecting deep divides over whether the Athens government can be trusted to repay huge new loans and leaving the Continent hours from what could be a historic rupture.
The finance ministers planned to reconvene on Sunday, just before European national leaders are scheduled to meet in Brussels for what they have said would be a final decision on whether Greece should qualify for a new aid package, a step aimed at determining whether the country can remain in the euro currency union.
The failure by the finance ministers to reach an agreement, after nearly nine hours of talks, belied the optimism that followed the approval early Saturday by the Greek Parliament of a package of pension cuts, higher taxes and other policy changes long sought by Greece’s international creditors. In a remarkable turnabout, Prime Minister Alexis Tsipras had pushed the package through the legislature despite having led his country into a referendum six days earlier that overwhelmingly rejected much the same terms.
Despite Greece’s capitulation on those terms, many countries came into this weekend’s final round of negotiations skeptical of the Tsipras government’s commitment to seeing through the changes and putting his country on firmer financial footing — and weary of the constant brinkmanship that has characterized the months of negotiations over Greece’s latest crisis.
Instead of working through the night to hammer out a statement on requirements for Greece, as had been expected, the meeting was suddenly called off shortly before midnight, and ministers left without even holding a formal news conference.
“The issue of credibility and trust was discussed, and also of course the financial issues involved,” Jeroen Dijsselbloem of the Netherlands, the head of the so-called Eurogroup of ministers, told reporters. “It is still very difficult. but work is still in progress,” he said, adding that discussions would continue later Sunday morning.
From the start, it was clear that Mr. Tsipras’s gambit had not entirely won over Germany and other countries that have been skeptical about giving a new round of loans to Greece after years in which successive governments in Athens have struggled to carry out changes that creditors have demanded as a condition of the bailouts.
“We will have exceptionally difficult negotiations,” Wolfgang Schäuble, the hard-nosed German finance minister, said on Saturday before the meeting. “We won’t be able to rely on promises.”
His prediction proved accurate, as he and fellow ministers wrangled with little apparent progress, seeking more assurances from Greece that it was committed to changing its ways, and weighing the desires of France and Italy for a deal against the more skeptical stance of Germany and the possibility of outright opposition from Finland.
During their talks, the finance ministers called on their Greek counterpart, Euclid Tsakalotos, to put the package proposed by his government into swift effect to prove its willingness to make deep and lasting changes to the nation’s faltering economy. Greece, in turn, continued to seek some assurance that it would win the right to renegotiate the terms of its debt repayment.
It was not clear that the finance ministers’ meeting on Sunday morning would yield a consensus about how to proceed, increasing the possibility that they would leave final decisions to their national leaders, who are to gather in Brussels in the afternoon.
“I am still hopeful,” Pierre Moscovici, the European commissioner for economic affairs, told reporters as he left the Eurogroup meeting.
In an apparent effort to raise the pressure on Greece, some officials earlier in the day were informally passing around a one-page position paper, reportedly drawn up by the German finance ministry as a possible option for the negotiations, saying the Greek proposal fell short and suggesting options that included ideas like having the country leave the eurozone for five years and reapply for membership.
The idea of a break from the euro was not openly discussed at the meeting, according to one of the officials with direct knowledge of the talks, who like others spoke on the condition of anonymity because the discussions were private.
Mr. Schäuble, however, referred repeatedly to a plan drafted by German officials that would require Athens to transfer state assets into a trust fund to pay down its debt in order to stay in the eurozone, according to two people with direct knowledge of the discussions. Mr. Schäuble did not refer explicitly to the idea of a temporary Greek departure from the eurozone, these people said. But the tough approach by the German minister, they said, appeared designed to make clear that he now favors a Greek exit.
The European leaders have set this weekend as a deadline for settling the issue of whether to keep Greece solvent or cut off further aid, a step that would almost certainly result in forcing Athens to abandon the euro.
An exit by Greece would be a blow to Europe’s goal of ever-closer integration.
Greece’s banks are teetering on insolvency, the government is running out of cash to meet day-to-day obligations, and without an infusion, additional payments to international creditors will be missed in coming weeks.
Experts who reviewed Greece’s request for a third bailout program informed Eurogroup ministers that about €74 billion is needed to cover its financing needs for the next three years, according to a person with direct knowledge of the experts’ findings. That is far more than the €53.5 billion, or about $59 billion, that Athens has requested.
If loans for Greece are eventually approved, the majority will probably be covered by a new loan from the European Stability Mechanism, the European bailout fund. Other sources could include loans from the International Monetary Fund, funds raised through Greek government revenue and, eventually, new debt issued by Greece.
That discrepancy between what Greece had requested and the new estimate of its bailout needs may have further reinforced the doubts of those who wonder if the Greek government has a handle on its finances and will be able to carry out promised changes.
“Many governments — mine, too — have serious concerns about the commitment of the Greek government,” the Dutch state secretary for finance, Eric Wiebes, told reporters in Brussels before Saturday’s meeting. “After all, we are discussing a proposal from the Greek government that was fiercely rejected less than a week ago, and that is a serious concern.”
While no signed bailout deal was expected this weekend, the question is whether Europe will decide to continue negotiating a rescue with Greece, or leave its banks to collapse and its virtually bankrupt government to default. European leaders have said their Sunday evening meeting could be used to reach that decision.
The fear of Greece and its supporters, which include the French government, is that without an agreement to continue negotiations, Greek banks could collapse next week, raising the prospect that the country would quickly have to abandon the euro.
Mr. Moscovici, the European economic affairs commissioner who is a former finance minister of France, said as he entered Saturday’s meeting that the “Greek government has made significant gestures.” He said the Greek proposals form “a basis for a new program” of loans.
Before the meeting, the finance ministers received assessments of the Tsipras plan by experts representing the creditors.
“The papers of the Greek authorities contain positive elements, issues where clarification is needed, and some issues where the institutions wish to see stronger commitment to reform,” said a person with direct knowledge of experts’ findings. But this person also warned: “Negotiations will be tough. The chances for a deal are 50-50.”
The Eurogroup, with its 19 eurozone finance ministers, has some outspoken critics of Greece, irritated by the Tsipras government’s negotiating style and Mr. Tsipras’s decision the week before last to break off negotiations and call for the referendum. Mr. Tsipras surprised many in his own country and party on Thursday when he presented a plan containing many of the elements — including austerity measures — that the voters had just rejected by a wide margin.
The creditors now want strong evidence that Greece will honor its latest set of economic promises if it gets the new loans it is seeking, and an agreement to ease the burden of its current debt, which at €317 billion is equivalent to 177 percent of the country’s gross domestic product. By that measure, only Japan’s debt, at 245 percent, is higher among the world’s economies.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>
now tsipras and his cronie varoufuckyouupus can finally bear the burden of destroying their country's chance to stabilize the finances of the guvment until they were forced from power. it is now all over except for the firebombing and riots in the streets.
arkmundi
10 MW
Since his successful book, “Capital in the Twenty-First Century,” the Frenchman Thomas Piketty has been considered one of the most influential economists in the world. His argument for the redistribution of income and wealth launched a worldwide discussion. In a interview with George Blume of DIE ZEIT, he gives his clear opinions on the European debt debate.
Piketty: "Germany Has Never Repaid Its Debts; It Has No Standing To Lecture Other Nations"
Greece needs to do more to start third bailout talks - Eurogroup draft
Piketty: "Germany Has Never Repaid Its Debts; It Has No Standing To Lecture Other Nations"
Ouch! Blistering.
Greece needs to do more to start third bailout talks - Eurogroup draft
Two ways out of the Eurozone for Greece: They can leave by not striking a new deal, or they can get kicked out by a deal not being offered. Consequences would be the same either way.
dnmun
1 PW
tsipras is so full of himself and unable to accept the reality of what he has done by refusing to negotiate in good faith. may he burn in hell for what the greek people will have to endure because of his failure to lead:
>>>>>>>>>>>>>>>>>>>>wsj
BRUSSELS — Eurozone leaders gathered on Sunday to attempt to reach an agreement on a Greek bailout, after finance ministers demanded the Greek parliament start implementing unpopular overhauls and cuts before they take a decision on new rescue loans.
“I am here, ready for an honest compromise,” Greek Prime Minister Alexis Tsipras said on his way into the leaders’ summit. “We can reach an agreement tonight if all the parties want it.”
German Chancellor Angela Merkel said finance ministers won’t recommend starting negotiations for a bailout immediately, warning that a deal on Greece wouldn’t be made “at all costs.”
“The most important currency has been lost and that is trust,” Merkel said.
Finance ministers from the currency area convened earlier in the day, and discussed a draft statement that contains a “timeout” for Greece from the eurozone as a potential option, two European officials said Sunday. The statement, which may still change, will form the basis for crisis talks of eurozone leaders later Sunday, these officials said.
The statement says that “in case no agreement [on a new bailout program] could be reached, Greece should be offered swift negotiations on a timeout from the euro area, with possible debt restructuring,” one official said. The sentence is still in brackets, indicating that it doesn’t have the backing of all 19 eurozone countries.
However, French President François Hollande later said, “There is no temporary Grexit. There is only Grexit or not Grexit.”
An expanded version of this article appears at WSJ.com.
>>>>>>>>>>>>>>>>>>>>wsj
BRUSSELS — Eurozone leaders gathered on Sunday to attempt to reach an agreement on a Greek bailout, after finance ministers demanded the Greek parliament start implementing unpopular overhauls and cuts before they take a decision on new rescue loans.
“I am here, ready for an honest compromise,” Greek Prime Minister Alexis Tsipras said on his way into the leaders’ summit. “We can reach an agreement tonight if all the parties want it.”
German Chancellor Angela Merkel said finance ministers won’t recommend starting negotiations for a bailout immediately, warning that a deal on Greece wouldn’t be made “at all costs.”
“The most important currency has been lost and that is trust,” Merkel said.
Finance ministers from the currency area convened earlier in the day, and discussed a draft statement that contains a “timeout” for Greece from the eurozone as a potential option, two European officials said Sunday. The statement, which may still change, will form the basis for crisis talks of eurozone leaders later Sunday, these officials said.
The statement says that “in case no agreement [on a new bailout program] could be reached, Greece should be offered swift negotiations on a timeout from the euro area, with possible debt restructuring,” one official said. The sentence is still in brackets, indicating that it doesn’t have the backing of all 19 eurozone countries.
However, French President François Hollande later said, “There is no temporary Grexit. There is only Grexit or not Grexit.”
An expanded version of this article appears at WSJ.com.
arkmundi
10 MW
The Guardian, 12-July-15: Greek crisis: surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras
Noooooo....... DON"T DO IT Tsipras! Leave the Eurozone and don't look back.
Exactly. And just to keep the record here straight, its Merkel who is obstructing progress, not Tsipras.
dnmun
1 PW
now the eurozone members are demanding that greece actually pass a law by wednesday to curtail the pension giveaway and to increase sales taxes before the eurozone members will continue negotiations.
since tsipras does not have the courage to do this he will fall back on the party line of germans who stole their gold during WW2 or maybe it was WW1 when the germans stole their gold.
whatever, but now it is all over except for the suicides and desperate poverty and flood of greeks moving abroad.
before tsipras did this referendum stupidity the money needed to keep greece afloat was only $55 billion but now since the banks are destroyed by capital controls the amount needed has jumped to $96 billion and i doubt if the greeks can ever remove capital controls from the banks ever again. this is why everybody in europe recognizes it is now just wasted money flushed down the drain.
>>>>>>>>>>>>>>>wsj
BRUSSELS—The eurozone edged closer to a new bailout deal for Greece, but the agreement considered by European leaders meeting here Sunday would require almost complete surrender of the government of Prime Minister Alexis Tsipras to creditors’ demands.
A statement prepared by the currency union’s finance ministers ahead of the summit and seen by The Wall Street Journal said negotiations on a new rescue could only start once the Parliament in Athens had passed pension overhauls and sales-tax increases, along with further financial-policy measures.
The parliamentary votes would have to happen by Wednesday, according to the statement, which foresaw Greece’s financing needs rising to as much EUR86 billion ($96 billion), up from EUR74 billion estimated by the institutions representing Greece’s creditors on Saturday.
The statement from ministers was intended to serve as the basis of discussions for the leaders’ talks.
Despite the progress in talks on Sunday, Greece’s future in Europe’s currency union still hangs in the balance. In case no deal can be reached, the statement suggested that “Greece should be offered swift negotiations on a timeout from the euro area.”
While that sentence remained in brackets—a sign that it wasn’t backed by all 19 finance ministers—it made clear what was at stake in negotiations here.
Passing the measures through Greece’s Parliament could split Tsipras’s left-wing Syriza party, which in turn could trigger fresh elections. And there was no answer yet on how Greece would make a EUR4.2-billion interest and bond payment to the European Central Bank that is due July 20.
The level of detail in the ministers’ four-page statement underlined how much political goodwill Greece and Mr. Tsipras have lost during more than five months of often-acrimonious discussions.
“The most important currency has been lost, and that is trust,” German Chancellor Angela Merkel said as she arrived for the summit. A deal to keep Greece in the currency union wouldn’t be made “at all costs,” she warned.
An expanded version of this report appears at WSJ.com
since tsipras does not have the courage to do this he will fall back on the party line of germans who stole their gold during WW2 or maybe it was WW1 when the germans stole their gold.
whatever, but now it is all over except for the suicides and desperate poverty and flood of greeks moving abroad.
before tsipras did this referendum stupidity the money needed to keep greece afloat was only $55 billion but now since the banks are destroyed by capital controls the amount needed has jumped to $96 billion and i doubt if the greeks can ever remove capital controls from the banks ever again. this is why everybody in europe recognizes it is now just wasted money flushed down the drain.
>>>>>>>>>>>>>>>wsj
BRUSSELS—The eurozone edged closer to a new bailout deal for Greece, but the agreement considered by European leaders meeting here Sunday would require almost complete surrender of the government of Prime Minister Alexis Tsipras to creditors’ demands.
A statement prepared by the currency union’s finance ministers ahead of the summit and seen by The Wall Street Journal said negotiations on a new rescue could only start once the Parliament in Athens had passed pension overhauls and sales-tax increases, along with further financial-policy measures.
The parliamentary votes would have to happen by Wednesday, according to the statement, which foresaw Greece’s financing needs rising to as much EUR86 billion ($96 billion), up from EUR74 billion estimated by the institutions representing Greece’s creditors on Saturday.
The statement from ministers was intended to serve as the basis of discussions for the leaders’ talks.
Despite the progress in talks on Sunday, Greece’s future in Europe’s currency union still hangs in the balance. In case no deal can be reached, the statement suggested that “Greece should be offered swift negotiations on a timeout from the euro area.”
While that sentence remained in brackets—a sign that it wasn’t backed by all 19 finance ministers—it made clear what was at stake in negotiations here.
Passing the measures through Greece’s Parliament could split Tsipras’s left-wing Syriza party, which in turn could trigger fresh elections. And there was no answer yet on how Greece would make a EUR4.2-billion interest and bond payment to the European Central Bank that is due July 20.
The level of detail in the ministers’ four-page statement underlined how much political goodwill Greece and Mr. Tsipras have lost during more than five months of often-acrimonious discussions.
“The most important currency has been lost, and that is trust,” German Chancellor Angela Merkel said as she arrived for the summit. A deal to keep Greece in the currency union wouldn’t be made “at all costs,” she warned.
An expanded version of this report appears at WSJ.com
arkmundi
10 MW
You keep quoting the WSJ, and your perspective on the situation reflects it. Better, fairer coverage at The Guardian. Choose your news carefully because you just might find you've been influenced.
dnmun
1 PW
It took 17 hours and no sleep on Sunday for the eurozone’s political leaders to reach an 11th hour reform-for-aid deal on Greece on Monday, staving off a Greek exit from the currency union for now.
But to seal the crucial “aGreekment” — the name given by European Council head Donald Tusk — Greek Prime Minister Alexis Tsipras had to sign off on tough austerity measures and fiscal reforms. In what’s being seen as a capitulation, Greece’s negotiators agreed to a list of measures even stricter than those rejected by the country’s voters in last weekend’s referendum. These will have to be approved by Greek lawmakers, as well as by other European parliaments, before a formal bailout decision can be made.
In return, eurozone leaders said they will give Greece up to 86 billion euros ($96 billion) in new bailout aid, on condition that Tsipras manages to implement these measures. Here are the key reforms required, from a full list released by the Euro Summit of eurozone leaders.
By July 15, Greece should:
— Streamline its VAT system and broaden the tax base to increase revenue
— Implement upfront measures to improve long-term sustainability of the pension system as part of a comprehensive pension reform program
— Safeguard the full legal independence of ELSTAT, Greece’s statistics office
By July 22, Greece should:
— Adopt the Code of Civil Procedure, which is a major overhaul of procedures for the civil justice system, aimed at significantly accelerating the judicial process and reducing costs
— Implement the EU Bank Recovery and Resolution Directive, the BRRD, with support from the European Commission
Additionally, Greece’s reform measures need to be “seriously strengthened to take into account the strongly deteriorated economic and fiscal position of the country during the last year,” eurozone leaders said in the statement.
That means Greece will need to:
— Carry out ambitious pension reforms
— Adopt ambitious product-market reforms, including changes to Sunday trade, sales periods, pharmacy ownership and reforms for bakeries
— Continue with the privatization of the electricity transmission network operator (ADMIE)
— Undertake rigorous reviews of the labor markets and the process for holding strikes. On the basis of these reviews, labor-market policies should be aligned with European practices and not return to previous policies, which “are not compatible with the goals of promoting sustainable and inclusive growth”
— Strengthen the financial sector, in particular by eliminating political interference
On top of that, the Greek authorities need to:
— Scale up privatization efforts. Valuable Greek assets will be transferred to an independent fund and the monetization of those assets will become a source to pay down debt. Total value of the fund is expected to be around 50 billion euros. €25 billion will be used to recapitalize Greek banks, approximately €12.5 billion will be used for decreasing debt-to-GDP ratio, while the remaining €12.5 billion be used for investments in Greece
— Modernize the Greek administration system to reduce costs
— Allow the lender institutions to work on the ground in Athens to assess progress in implementing the reforms. The Greek government will need to agree with the creditor institutions before submitting legislation to parliament
But to seal the crucial “aGreekment” — the name given by European Council head Donald Tusk — Greek Prime Minister Alexis Tsipras had to sign off on tough austerity measures and fiscal reforms. In what’s being seen as a capitulation, Greece’s negotiators agreed to a list of measures even stricter than those rejected by the country’s voters in last weekend’s referendum. These will have to be approved by Greek lawmakers, as well as by other European parliaments, before a formal bailout decision can be made.
In return, eurozone leaders said they will give Greece up to 86 billion euros ($96 billion) in new bailout aid, on condition that Tsipras manages to implement these measures. Here are the key reforms required, from a full list released by the Euro Summit of eurozone leaders.
By July 15, Greece should:
— Streamline its VAT system and broaden the tax base to increase revenue
— Implement upfront measures to improve long-term sustainability of the pension system as part of a comprehensive pension reform program
— Safeguard the full legal independence of ELSTAT, Greece’s statistics office
By July 22, Greece should:
— Adopt the Code of Civil Procedure, which is a major overhaul of procedures for the civil justice system, aimed at significantly accelerating the judicial process and reducing costs
— Implement the EU Bank Recovery and Resolution Directive, the BRRD, with support from the European Commission
Additionally, Greece’s reform measures need to be “seriously strengthened to take into account the strongly deteriorated economic and fiscal position of the country during the last year,” eurozone leaders said in the statement.
That means Greece will need to:
— Carry out ambitious pension reforms
— Adopt ambitious product-market reforms, including changes to Sunday trade, sales periods, pharmacy ownership and reforms for bakeries
— Continue with the privatization of the electricity transmission network operator (ADMIE)
— Undertake rigorous reviews of the labor markets and the process for holding strikes. On the basis of these reviews, labor-market policies should be aligned with European practices and not return to previous policies, which “are not compatible with the goals of promoting sustainable and inclusive growth”
— Strengthen the financial sector, in particular by eliminating political interference
On top of that, the Greek authorities need to:
— Scale up privatization efforts. Valuable Greek assets will be transferred to an independent fund and the monetization of those assets will become a source to pay down debt. Total value of the fund is expected to be around 50 billion euros. €25 billion will be used to recapitalize Greek banks, approximately €12.5 billion will be used for decreasing debt-to-GDP ratio, while the remaining €12.5 billion be used for investments in Greece
— Modernize the Greek administration system to reduce costs
— Allow the lender institutions to work on the ground in Athens to assess progress in implementing the reforms. The Greek government will need to agree with the creditor institutions before submitting legislation to parliament
dnmun
1 PW
The fissures exposed between, and within, the warring groups of eurozone debtors and creditors are the widest and deepest in the past 5 1/2 years of turbulence over the single currency. The gloomy predictions of the late German-British sociologist Ralf Dahrendorf, who said before it started in 1999 that economic and monetary union would split rather than unite Europe, have become reality.
Angela Merkel, the German chancellor, has found herself under simultaneous attack over Greece from Germany’s traditional allies the U.S. and France — pleading for a more lenient line on Athens — as well as from hostile elements in her own conservative parties calling for the opposite.
The marathon talks painfully exposes the impossibility of a deal that would satisfy both creditors and debtors. The euro members have had to choose between several sets of unpleasant results.
Several “worst-case” outcomes are still possible, including the fall of the government of Alexis Tsipras and the calling of new elections in Athens; the introduction of a parallel Greek currency (backed by the remaining reserves of the heavily borrowed Bank of Greece, which are quite considerable if loans are not paid back); and Greek departure from (or suspension within) the euro.
Another result, if things go badly, would be the break-up of other European governments (including the German one). And that is not to mention the various unsettling geopolitical consequences of a Greek eurozone departure, including an intensified “arc of crisis” linking Ukraine to the Balkans to the storm-tossed countries of Syria and Iraq.
The accord unveiled today imposes harsh terms on Greece, turning the country practically into a vassal of the European Union.
The multilateral rifts within the creditors have been laid bare by French and Italian insistence (backed by Spain and Luxembourg) that Greece should be rescued. There are three reasons behind this: to salvage a semblance of European unity from the shambles of the past few weeks; to force a climbdown from German insistence on austerity over everything else; and to ward off the danger that the European monetary union (EMU), in losing Greece, would become more exposed to financial assault on vulnerable and much larger members.
Yanis Varoufakis, the firebrand former Greek finance minister who resigned a week ago, has made way in the ministerial chamber for his quieter former colleague Euclid Tsakalotos. But he has been stoking the flames from the sidelines with weekend allegations that Germany has wished to bring Greece to heel to discipline France.
Varoufakis’ claims, underlining that Greece is both a pawn and a buffer in long-running monetary warfare between Germany and France, do not tell the whole story, but are based partly on first-hand experience. The ultimate fault line in the EMU edifice runs between Paris and Berlin.
The accord unveiled this morning in Brussels imposes harsh terms on Greece, turning the country practically into a vassal of the European Union, unwinding most of the election promises of the Syriza government that came to power in January and signalling its ritual humiliation. Whether the terms are politically acceptable to a restive Greek parliament and whether they can be implemented are important, but perhaps not the most relevant, questions.
Even if the Athens parliament does approve higher taxes, reforms to pensions and labor markets, a return of the troika and much more vigorous privatization including quasi-sequestration of state assets, it is unlikely that the package will generate the growth and debt sustainability that Greece and its creditors badly need. The Greek prime minister failed to get the early pledge of debt relief that Athens insiders believed was the minimum to gain parliamentary acquiescence.
The convoluted, confused negotiations between Greece and its partners reflect the reality that different groups have been talking at cross purposes for the past month. The amount of money at stake, the length of time of any further Greek subjugation to its creditors and the degree of political sovereignty being jettisoned or fused have all greatly increased in the past few weeks.
The Greek electorate in the July 5 referendum said “no” to a set of creditors’ terms for a relatively small extension of bailout money (7.2 billion euros) due to have been disbursed by the end of June. The volume now being requested is 12 times bigger — 82 billion to 86 billion euros, including money for recapitalizing Greek banks hard hit by dislocation. So the creditors’ conditions are far more onerous, and are far less likely to be met in any satisfactory way.
We have been here before. The developments of the past few days are reminiscent of the great monetary skirmishes of November 1968, the first act in 30 years of currency attrition centered on the Deutsche mark and French franc that ended in 1999 with the subsuming of both currencies into the EMU. Despite furious pressure from the French, Americans and British, the Germans refused to revalue the mark, and instead, Bonn decided on a package of border taxes to make imports cheaper and exports more expensive, claiming that this was a more flexible method of countering currency inflows. The Brussels debacle has, however, been on a far grander scale and the fractures unveiled more powerful.
One of the drawbacks for non-EMU countries like the U.K., it was said in 1998-99, was that they would not be allowed to take part in important meetings on the future of Europe where participation would be limited to euro members only. After weeks of unedifying summit gatherings in Brussels, the reluctance to sign up for the euro by non-members — relatively untroubled countries such as Sweden, Denmark, Poland and the Czech Republic as well as the U.K. — can only have increased. The abiding impression of the past few weeks’ squabbles is that EMU has developed into a permanent source of divisiveness.
Angela Merkel, the German chancellor, has found herself under simultaneous attack over Greece from Germany’s traditional allies the U.S. and France — pleading for a more lenient line on Athens — as well as from hostile elements in her own conservative parties calling for the opposite.
The marathon talks painfully exposes the impossibility of a deal that would satisfy both creditors and debtors. The euro members have had to choose between several sets of unpleasant results.
Several “worst-case” outcomes are still possible, including the fall of the government of Alexis Tsipras and the calling of new elections in Athens; the introduction of a parallel Greek currency (backed by the remaining reserves of the heavily borrowed Bank of Greece, which are quite considerable if loans are not paid back); and Greek departure from (or suspension within) the euro.
Another result, if things go badly, would be the break-up of other European governments (including the German one). And that is not to mention the various unsettling geopolitical consequences of a Greek eurozone departure, including an intensified “arc of crisis” linking Ukraine to the Balkans to the storm-tossed countries of Syria and Iraq.
The accord unveiled today imposes harsh terms on Greece, turning the country practically into a vassal of the European Union.
The multilateral rifts within the creditors have been laid bare by French and Italian insistence (backed by Spain and Luxembourg) that Greece should be rescued. There are three reasons behind this: to salvage a semblance of European unity from the shambles of the past few weeks; to force a climbdown from German insistence on austerity over everything else; and to ward off the danger that the European monetary union (EMU), in losing Greece, would become more exposed to financial assault on vulnerable and much larger members.
Yanis Varoufakis, the firebrand former Greek finance minister who resigned a week ago, has made way in the ministerial chamber for his quieter former colleague Euclid Tsakalotos. But he has been stoking the flames from the sidelines with weekend allegations that Germany has wished to bring Greece to heel to discipline France.
Varoufakis’ claims, underlining that Greece is both a pawn and a buffer in long-running monetary warfare between Germany and France, do not tell the whole story, but are based partly on first-hand experience. The ultimate fault line in the EMU edifice runs between Paris and Berlin.
The accord unveiled this morning in Brussels imposes harsh terms on Greece, turning the country practically into a vassal of the European Union, unwinding most of the election promises of the Syriza government that came to power in January and signalling its ritual humiliation. Whether the terms are politically acceptable to a restive Greek parliament and whether they can be implemented are important, but perhaps not the most relevant, questions.
Even if the Athens parliament does approve higher taxes, reforms to pensions and labor markets, a return of the troika and much more vigorous privatization including quasi-sequestration of state assets, it is unlikely that the package will generate the growth and debt sustainability that Greece and its creditors badly need. The Greek prime minister failed to get the early pledge of debt relief that Athens insiders believed was the minimum to gain parliamentary acquiescence.
The convoluted, confused negotiations between Greece and its partners reflect the reality that different groups have been talking at cross purposes for the past month. The amount of money at stake, the length of time of any further Greek subjugation to its creditors and the degree of political sovereignty being jettisoned or fused have all greatly increased in the past few weeks.
The Greek electorate in the July 5 referendum said “no” to a set of creditors’ terms for a relatively small extension of bailout money (7.2 billion euros) due to have been disbursed by the end of June. The volume now being requested is 12 times bigger — 82 billion to 86 billion euros, including money for recapitalizing Greek banks hard hit by dislocation. So the creditors’ conditions are far more onerous, and are far less likely to be met in any satisfactory way.
We have been here before. The developments of the past few days are reminiscent of the great monetary skirmishes of November 1968, the first act in 30 years of currency attrition centered on the Deutsche mark and French franc that ended in 1999 with the subsuming of both currencies into the EMU. Despite furious pressure from the French, Americans and British, the Germans refused to revalue the mark, and instead, Bonn decided on a package of border taxes to make imports cheaper and exports more expensive, claiming that this was a more flexible method of countering currency inflows. The Brussels debacle has, however, been on a far grander scale and the fractures unveiled more powerful.
One of the drawbacks for non-EMU countries like the U.K., it was said in 1998-99, was that they would not be allowed to take part in important meetings on the future of Europe where participation would be limited to euro members only. After weeks of unedifying summit gatherings in Brussels, the reluctance to sign up for the euro by non-members — relatively untroubled countries such as Sweden, Denmark, Poland and the Czech Republic as well as the U.K. — can only have increased. The abiding impression of the past few weeks’ squabbles is that EMU has developed into a permanent source of divisiveness.
kd8cgo
100 W
It seems the Troika are having a hard time dealing with the fact that they loaned far too much money on far too risky a client - sound familiar? I think it's from the Banker's Playbook on Populace Stranglehold, page 32. Well, at least we can have a repeat of the events in a year or two in time for the next default, of course after some fat cats make some money gutting public infrastructure for profit. Ah, the spoils of economic war!
kd8cgo, I was wondering what the hell the EU were playing at lending more money that Greece could never repay. Asset-stripping the country was the missing piece of the puzzle.
http://trueeconomics.blogspot.ie/2015/07/13715-promise-of-deal-actual-surrender.html
http://trueeconomics.blogspot.ie/2015/07/13715-promise-of-deal-actual-surrender.html