On the 25th of January, 2015, the Greek people elected the anti-austerity Syriza party to power, based on their campaign promises to restructure neoliberal economic reforms that plunged the country into years of recession, even outright depression. Since their election, the Syriza government, led by Prime Minister Alexis Tsipras and assisted by finance minister Yanis Varoufakis, have been undertaking lengthy, detailed negotiations with the creditors of the country’s sovereign debt – mostly held by the International Monetary Fund (IMF) and European Financial Stability Fund – to reform the crippling and onerous conditions imposed as part of the ‘bailout’ package deal agreed to by previous Greek governments.
The first negotiations took place quickly, with Varoufakis meeting with the finance ministers of major Eurogroup countries, and Tsipras touring Europe to discuss his new government and their policies with various heads of states. From the beginning, the European finance ministers and senior politicians were unsympathetic, stating unequivocally that Greece’s debt would not be written down (or off). By February 13th, two weeks before the deadline for the next release of IMF/EU bailout funds, the European Central Bank (ECB) had suspended a waiver that had allowed Greece to swap their junk-rated debt for loans, making borrowing more expensive for the country, and provided only a relatively small amount of extra funding under the ECB’s Emergency Liquidity Assistance (ELA) facilities, in order to help keep the Greek banking system operating. Various political and economic figures in the UK and US had also begun to talk of Greece exiting the eurozone, despite the adamant position of the Greek government that it intended to remain in the Euro currency union and repay its debt under restructured conditions.
Despite the initial pressure exerted, the IMF/EU creditors eventually signed off on a four-month bailout extension under the existing conditions, but not under the new conditions they were demanding for the next stage of the bailout. This was generally hailed as a ‘win for both sides’, with the Greek government stating that it gave them time to properly renegotiate the next phase of creditor lending without a risk of running short of funds to make loan repayments through the next few months. This was seen by some as a capitulation by the Greeks, as they had previously stated that they would not agree to any further lending under similar conditions of austerity. Tsipras, however, quickly declared that:
“Some have bet on a third bailout, on the possibility of a third bailout in June. I’m very sorry but once again we will disappoint them,” […]
“the Greek people put an end to bailouts with their vote.” […]
“Let them forget a third bailout,”
Perhaps emboldened by a seeming-backflip, the IMF/EU continued their hard-line stance against Greek debt restructuring or write-downs, insisting that any further loans would require the new austerity measures outlined in the ‘roadmap’ of the original agreements. These new austerity measures included further pension and social welfare cuts, something the Greek government had assured voters it would not accept.
The relationship between Greece and Germany began to quickly deteriorate, with Tsipras himself taking a harder line in negotiations by demanding Germany pay reparations owed to Greece as a result of Germany’s actions in World War II, when the Nazis forcibly extracted a large loan from the central bank of occupied Greece. It has been calculated that such reparations could, adjusted for inflation, constitute more than the entire sum total of Greece’s current sovereign debt. Needless to say, this caused a huge uproar in Germany, with the population split on the issue, some Germans even going so far as to personally pay Greece what they worked out as their personal share of the reparations. At the same time, the excreable German finance minister, Wolfgang Schauble, then began publicly talking about the possibility of a ‘Grexident’, or ‘accidental’ exit of Greece from the currency union.
By mid-March, the IMF was describing Greece as its “most unhelpful client ever,” (Greece should get a prize for that, IMO) and the Greek government had passed “humanitarian crisis” legislation, expanding social measures to provide help to the poorest in their population despite the strong objections of European politicians and financiers. There was also a ‘scandal’ in which German television showed footage appearing to show Greek finance minister Varoufakis ‘giving Germany the finger’, something that later turned out to be a ‘prank’ by German comedians. Varoufakis made a noticeable ‘Freudian slip’ in a tweet responding to the prank, considering that he had previously stated that one of his great fears was that he might “turn into a politician”…
“Humour, satire & self deprecation are great solvents of blind nationalism. We politicians need you badly.”
Despite the allegedly agreed-upon deal in late February, it seems that by late March the so-called ‘Troika’ of credators (pun intended), were using the funds as a ‘carrot’ to ‘dangle’ in front of Greece, with offers of extra cash as the country struggled to find enough money to get through the month. Tsipras went to meet German chancellor Angela Merkel in Germany, as part of an effort to repair Greek-German relations, stating:
“Today’s democratic Germany has nothing to do with the Germany of the Third Reich that took such a toll of blood,” he said, which comes on the back of disputes Athens and Berlin have had concerning the payment of war reparations dating back from the Nazi occupation of Greece during World War II.
He added that stereotypes that had been created over the last few years needed to be broken.
“Neither are the Greeks lazy, nor are the Germans responsible for all the ills that take place in Greece,” Tsipras said. […]
During his talks with Merkel, Prime Minister Tsipras slammed the EU for putting Greece in a situation in which tens of thousands of people are left starving.
“Is this the Europe that we are dreaming of? Is this the Europe that we are building? This is the Europe that with its choices has triggered a humanitarian crisis and admits it did so,” Tsipras said in his speech at the Bundestag in Berlin.
At the end of March, the ECB increased its ELA assistance to Greek banks by $1.1 billion, despite expressing concerns about the Greek government’s policies. This emergency ‘liquidity’ was likely required due to the record amount of savings being withdrawn from Greek banks by customers. One report puts it at €20.4 billion worth in the first two months of the year alone. Ratings agency Fitch also downgraded Greece’s sovereign debt rating from B to CCC, ahead of its scheduled review. On the 2nd of April, the Greek government submitted detailed plans for economic reform to its creditors, hoping to receive €7.2 billion in funds as part of the ‘bailout extension’ agreed to at the end of February. They then announced, a day later, via the UK’s Daily Telegraph, that a ‘Plan B’ of exiting the eurozone and returning to the drachma as a currency was a possibility they were considering.
After Yanis Varoufakis officially disclosed details of his economic reform package, it became obvious that the Greek government were not going to push further for debt write-downs or write-offs. His proposals were a good compromise, outlined via five key points:
First, it is a reasonable level of primary budget surplus about 1.5 percent of GDP instead of 4.5 percent agreed by the previous government which has led to a severe recession.
Secondly, it is a reasonable debt restructuring that will link payments with the growth rate of nominal GDP.
In addition, Greece needs an investment package from the European Investment Bank and the European Investment Fund, which should be placed mainly in the private sector in accordance with the new, non-bureaucratic procedures.
Fourth, Greece should pass on effective restructuring of troubled loans by allocating them to a ‘Bad Bank’ unlike other resources of the Fund for financial stability.
The fifth thing is significant reforms that will give support to creative people and businesses that produce tradable goods, with export prospects, he added.
On April the 8th, Tsipras flew to Moscow to meet with Russian President Vladimir Putin. The meeting was overwhelmingly positive, with Tsipras and Putin signing preliminary documents on natural gas transit deals and mutual agreement on many diplomatic issues such as EU-Russian relations, the civil war in Ukraine, and Victory Day celebrations for the 70th anniversary of the end of World War II in Europe. On the 9th, Athens made its €448 million payment to the IMF on time.
The response from the EU?
Even before the Eurogroup meeting in Riga, Latvia on April 24th, when the deal was to be formally considered, European finance ministers and other plutocrats were hinting to the media that there would be no agreement. In the lead up to the meeting, Varoufakis stated in an interview :
“Anyone who toys with the idea of cutting off bits of the eurozone, hoping the rest will survive is playing with fire,” […] Varoufakis warned that those in the EU who think they have been “ring-fenced” from the Greek struggle are mistaken.
“Some claim that the rest of Europe has been ring-fenced from Greece and that the ECB has tools at its disposal to amputate Greece, if need be, cauterize the wound and allow the rest of eurozone to carry on,” Varoufakis said. “I very much doubt that that is the case. Not just because of Greece but for any part of the union.” […]
“Once the idea enters peoples’ minds that monetary union is not forever, speculation begins … who’s next? That question is the solvent of any monetary union. Sooner or later it’s going to start raising interest rates, political tensions, capital flight,” Varoufakis warned.
It seems the Greek government were ‘reading the signs’ ahead of the meeting, as:
The Greek government has issued a decree envisaging the compulsory transfer of local and regional authorities’ cash reserves to the country’s central bank. It explained the move by saying it was an “urgent and unforeseen need.”
“Central government entities are obliged to deposit their cash reserves and transfer their term deposit funds to their accounts at the Bank of Greece,” the decree published on the government website on Monday said. The “regulation is submitted due to extremely urgent and unforeseen needs,” it added.
The government is ready to make an exception for funds needed by local authorities to make their immediate payment needs. The decree also excludes pension funds and some state-owned firms. It acts retrospectively from March 17.
Also, just before the Eurogroup meeting, Bulgaria announced a new $236 million gas pipeline project linking Bulgaria, Romania and Greece. Despite all these positive signs, the Eurogroup stated emphatically that the Greek proposals did not go far enough.
A comprehensive deal is necessary before any disbursement can take place,” Eurogroup President Jeroen Dijsselbloeme said at the press conference in Riga following the meeting Friday. “Responsibility for that relies mainly on Greece,” he said, adding that too much time was lost during the past 2 months.
“The current disagreements with our partners are not unbridgeable,” Varoufakis said in his blog, also saying Greece will agree to sell national assets to raise money and that his country’s tax system must be reformed. However, the finance minister stood firm against further wage and pension cuts.
So, despite the Eurogroup reviewing the Greek proposal for at least 3 weeks, apparently the Greeks were wasting too much time? Despite this stonewalling, Varoufakis responded diplomatically, and Tsipras announced in an interview towards the end of April that they expected to reach an agreement by the 9th of May. The negotiating team was also reorganised, with Financial Relations Minister Euclid Tsakalotos taking over from Varoufakis as lead negotiator with EU ministers. Apparently, Varoufakis’ forthright style was creating friction with senior financial Eurocrats.
The month of May brought a further lack of progress, with Greece making their IMF repayments on time, until the government announced on the 20th that they could not afford further repayments for June, and would most likely fall into arrears with their next repayment due on June 5th. During this time, the US asked Greece to give a higher priority to the US-backed Trans-Adriatic Pipeline project than to the Russian Turkish Stream pipeline, and to back the renewal of EU anti-Russian sanctions in June. Perhaps as a protective move, Russia responded by asking Greece to join the BRICS New Development Bank. As the month continued, the UK Times reported the parlous state of the Greek health system due to austerity measures, and PM Tsipras expressed further hope that a deal with the creditors could be reached by the June 5th IMF payment deadline.
Unfortunately, June 5th came and went with no deal achieved, although the IMF allowed Greece to bundle all its June payments together as long as the entire payment was made by the end of the month. At the beginning of June, Tsipras announced that the Greek government had made some “difficult concessions” with a new economic reform plan submitted to the creditors, with negotiations gaining some momentum due to the June 5th deadline. European Commission president Jean-Claude Juncker stated that the EU would loan Greece €35 billion further, through to the year 2020, if Athens agreed to reforms provided in the EU counter-proposal.
What did the EU counter-proposal contain? More austerity measures:
Tsipras said that the only offer worth considering and which held the basis of a deal with creditors was the one made by Athens earlier in the week and that other proposals set by Greece’s lenders were “unrealistic” and “absurd.”
“The proposals submitted by lenders are unrealistic, the Greek government cannot consent to absurd proposals,” he said. […]
Greece’s international creditors have said they want VAT reform, fewer tax rebates, pension cuts, a smaller civil service and more private sector investment.
But Tsipras has ruled out increasing VAT on energy and reducing supplementary payments for poorer pensioners.
After Athens rejected the counter-proposal, French finance minister Michel Sapin stated:
Sapin agreed the long-conducted negotiations could fail over the issue of pensions. However, he stressed that Greek government’s arguments were legitimate and urged it to seek new alternatives.
“They should make different proposals to try to achieve the same overall economic balance,” he said.
Varoufakis then encouraged Angela Merkel to make a “speech of hope” to Greece, similar to the one given by US Secretary of State James Byrnes to Germany after World War II. Alas, one did not eventuate, and international ratings agencies further downgraded Greek sovereign debt standings. As Greek trade unions conducted anti-austerity protests, blaming the government for not doing enough to address the situation, the IMF walked out on further negotiations with Greece and the EU, saying that:
“The ball is very much in Greece’s court,” IMF spokesman Gerry Rice told the media during a specially scheduled announcement, before his team returns to Washington. “There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.”
Unsurprisingly, negotiations then fell apart once more, with Germany’s economy minister Sigmar Gabriel then providing an interesting insight into the thinking of the creditors:
“A couple of game theorists in the Greek government believe that, in the end, the fear in Europe that Greece might leave (the euro) is so great that we’ll agree to anything. That’s not the case,”
Given the pathological, unforgiving way that the EU, led mostly by Germany, had conducted the negotiations up until that point, Gabriel’s statement is a clear projection of their own mindset onto the Greeks. After multiple concessions and compromises by the Greek government to get a deal done, it seems that the creditors decided amongst themselves that Greece would likely ‘fold’ and agree to all the extra austerity measures being demanded, rather than risk leaving the eurozone. This idiotic ‘game of chicken’ the IMF/EU have decided to play with Greece might just backfire on them – a few days later, British Chancellor of the Exchequer George Osbourne revealed that the UK was preparing for a Greek exit from the eurozone.
Indeed, they seem to have been considering that possibility for many months now, given their earlier statements. Interestingly, one commentator spoke about how financiers in London and Wall St were standing by to profit from any financial chaos that might occur should Greece be forced to leave the eurozone. One naturally wonders if this has been the plan all along, given that Goldman Sachs and other international bankers were behind the unsustainable and illegal loans given to Greek governments (and the other so-called ‘PIIGS’ countries) in the first place?
It is the events of the last two weeks that have proven most instructive though.
On Monday, the 15th of June, Greek banking customers withdrew €820 million worth of savings in a single day, and that figure increased to over €3 billion throughout the next few days. The Bank of Greece issued a statement warning that:
“Failure to reach an agreement would, […] mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union”
So with alarm bells ringing loud and clear, what did the Eurogroup have to say?
“Regrettable to say that too little progress has been made in the talks between EU institutions and Greece. No agreement as yet is in sight,” Jeroen Dijsselbloem, the president of the Eurogroup, said at a news conference following the talks.
He added, however, that “as of today it is still possible to find an agreement and extend the current program before the end of the month.”
“But the ball is clearly in the Greek court to seize that last opportunity,” he added, “…you know that the time is running out and the program expires by the end of the month… And therefore very little time remains.”
With this ultimatum from the Eurogroup, Tsipras then attended the St. Petersburg International Economic Forum where he gave a speech, stating:
“The world differs from what it was before. We in Europe had an illusion for a long time of literally being a hub of the universe, as a center of the world and continued to see and rely only on our direct surroundings.” […]
“The Eurasian [Economic] Union is a new formation of regional integration and is a potential example of new sources of wealth production, benefits and new economic powers” […]
“The crisis in Ukraine has opened a new wound in the heart of Europe, a wound of instability.”
“And this is a very bad sign for international relations because instead of prosperity and economic cooperation in the region, we see processes leading to war, militarization, and sanctions.” […][The European Union] “should find its way back to its statutory principles: solidarity, democracy [and] social justice. By sticking to policies of austerity, and policies which harm social cohesion, which aggravate the recession, this is impossible.”
IMF Executive Director Paulo Nogueira Batista also stated to the media at the SPIEF that the IMF had “failed” in Greece and Ukraine:
“And there are cases which are very difficult, or failures. I think Greece is one of them. Perhaps Ukraine is also another. Ukraine has had in the recent past as many as three unsuccessful programs – 2008, 2010, and 2014. And it’s now executing a fourth program with the IMF. […]
The Greeks are suffering a lot from misguided decisions that were taken not only by the IMF, but also by the previous Greek governments, by the European authorities, which led Greece to a serious impasse.”
However, he explained that if you look at what often happens in reality, it is apparent that the IMF’s actual behavior isn’t always “consistent with the rules,” because the fund “applies these rules flexibly” and there is also “a window for political interference on the part of major shareholders.” This “has happened on occasion in the IMF,” he added.
Naomi Klein’s book “The Shock Doctrine” goes into detail about how the IMF ‘applies its rules flexibly’ with ‘political interference on the part of major shareholders’. The organisation is essentially a tool of the anglo-American empire for the economic and political subjugation of other countries. It even seems to have its own propaganda strategy.
The Russian Deputy Prime Minister Arkady Dvorkovich also hinted at the SPIEF that Russia was willing to help Greece financially, should they ask for assistance.
As a side note, the tantrums the EU and US pulled against Russia while the SPIEF was being held were comical to behold, but that digression could be the subject of an article of its own, so I’ll stay on topic.
On Friday, June 19th, the Greek government submitted new proposals to the EC, ECB and IMF, compromising yet further with the creditors with minor pension reforms and tax increases. The ‘Troika’ responded by saying:
“Alexis Tsipras has convinced us of Greece’s seriousness and willingness to work constructively,” said European Council President Donald Tusk, adding that officials will work with Tsipras’ government to review the latest proposals from Greece. Greece’s latest plans “were the first real proposals in many weeks,” Tusk said.
These compromises were so far from Syriza’s original promises, that the vice-president of the House of the Greek parliament stated:
“These measures cannot be voted, they are extreme and anti-social. I believe that in the end, this package which you have at hand, cannot come to the Greek parliament,” the vice president of the 300-seat House, Alexis Mitropoulos was quoted as saying by the Guardian.
This, at the same time as crowds were rallying outside the Greek parliament to support Greece staying in the eurozone and reaching a deal with the creditors. And then, virtually the next day, pensioners rallied in Athens protesting the new plan!
And after all this?
The ECB, IMF and EC still rejected the deal and made a counter-proposal with further austerity measures!
Boggles the mind, doesn’t it!
Alexis Tsipras then tweeted:
The repeated rejection of equivalent measures by certain institutions never occurred before-neither in Ireland nor Portugal. This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed.
Obviously, the Greek government was not going to accept such treatment, and didn’t, rejecting the counter-proposals and criticising the EU for its pig-headedness. Of particular interest was the following:
While Athens is proposing to increase corporate tax rates from 26 percent to 29 percent, the creditors want it to be no more than 28 percent along with a more drastic pension reform to additionally save up to 1 percent GDP. Both sides are also unable to reach an agreement over VAT rates. The lenders also insist on the abolition of tax exemptions for island inhabitants, which are expected to be balanced by the increase of VAT, and the cancellation of tax exemptions on fuel for agriculture.
Clearly, the EU care only about the profits of private bankers and corporations and not one whit about primary production and social welfare. They obviously want to redirect as much GDP as possible to the banks in order to maximise the returns on unfair loans. Another example of the hypocrisy of these elitists is shown in Athens suggestions that it could cut its military spending; currently, Greece is the second-largest contributor to NATO (in terms of percentage of annual GDP) out of all the NATO countries. This provoked an immediate reaction from NATO secretary-general Jens Stoltenberg, who called on all NATO countries to ‘honour their spending commitments’. So it seems the political-economic complex in Europe really doesn’t mind Greece spending money like a drunken sailor… just so long as they spend it on weapons and financial speculation, not on social welfare or anything that might actually benefit the wider population.
“A ‘Grexit’ isn’t our aim but would be unavoidable if there is no solution in the next five days”
Then, after another rejection of the creditors’ demands and a late Friday night meeting of the Greek cabinet, PM Alexis Tsipras announced a referendum would be held on Sunday, July 5th, where the Greek people would directly vote on whether to accept or reject the terms of the IMF/EU creditors.
“These proposals, which clearly violate the European rules and the basic rights to work, equality and dignity show that the purpose of some of the partners and institutions was not a viable agreement for all parties, but possibly the humiliation of an entire people,” Greek Prime Minister Alexis Tsipras said in a televised address to the nation, as cited by Reuters.
Well, since that announcement, the proverbial brown stuff has hit the fan in Europe. RT is running an excellent live blog article on breaking news items – here are some highlights, with my commentary between:
Belgian Finance Minister Johan Van Overtveldt said the Eurogroup wasn’t planning to discuss the forthcoming referendum in Greece and would focus on “the most specific aspect of the talks between Greece and its creditors,” TASS reports. Johan Van Overtveldt also said he didn’t understand the aims of the Greek government as he regarded it senseless to hold a referendum on “something that the government opposes.” […]
Mr. Overtveldt seems to think that the function of government is simply to exercise power upon its citizens, and not to actually care about their collective will. I guess, to him, the idea of a government actually giving its people the right to influence its decision-making process when it already has a definite outcome in mind seems like some bizarre, irrational idea.
Jeroen Dijsselbloem, the Eurogroup president, told reporters before the emergency meeting in Brussels that he is “very negatively surprised” by the Greek government’s decision to reject the last proposals from the creditors and to hold a referendum. He called it “a sad decision” as it “closed the doors on future talks.” He said the Eurogroup would “talk about future consequences.”
Mr Dijsselbloem was no doubt “very negatively surprised” by these developments. Perhaps he fears how badly it will make their pathocratic neoliberal economic austerity religion look if Greek public opinion returns an overwhelming “NO!” vote… as for his feelings of ‘sadness’ (assuming he actually has them)… well, I guess now he knows how many Greeks have felt over the last few years.
Edward Scicluna, Malta’s finance minister, said Greece had decided to hold a referendum at the most undesirable moment, TASS reports. “Although every country has a democratic right to hold a referendum, it would have been better to have done it several weeks ago and not now – only a few days before the due date,” he said.
Perhaps he didn’t realise that the Greek government had obviously had enough of the EU’s game-playing, and no longer thought making the IMF payment was a realistic possibility? But clearly, to those ‘game theorists’ in the EU, the announcement to hold a referendum was simply another ‘strategy’ the Greek government were using to attempt to ‘bluff’ them in order to ‘win the game’. 😐
Yanis Varoufakis criticized the creditors for reverting to older and stricter bailout terms. He also attacked the Eurogroup saying that its refusal to extend the bailout up to the referendum date at Greece’s request would “certainly damage the credibility of the Eurogroup as a democratic union of partner member states” adding that “the damage will be permanent.”
Somehow, Mr. Varoufakis, I think the Eurogroup’s credibility has been more permanently damaged by their track record over the last few months of negotiations with Greece…
Yanis Varoufakis emphasized that the forthcoming referendum is about the creditors’ proposals and “not about the euro” (i.e. the possible Greek exit from the monetary union) adding that “there were no provisions for the country to leave the euro.”
This is an important point. Since the announcement of the referendum, many sections of the media (and social media) have been ‘framing’ the question as one of whether Greece stays within the eurozone or not – no doubt in order to play on the Greek people’s fears so as to force a “Yes” decision. That is a lie. The referendum – more accurately, a plebiscite (as the decision is not legally binding upon the Greek government) – is about exactly what the Greek government has stated: the specific demands of creditors regarding a loan extension of the previous ‘bailout package’.
Jeroen Dijsselbloem said the creditors had decided not to extend the bailout as the Greek decision to break off the talks and call a referendum was “untimely” giving the lenders no reasons to “allow more time”. He added that the situation could have been easier if the Greeks had called the referendum earlier or recommended that the people to vote for the austerity measures.
He also expressed hope that the Greek parliament would take “a wise position” that might “lead to a different political situation.”
Here we can see the blatantly undemocratic attitude of Dijsselbloem… he not-so-subtly suggested that the Greek parliament overrule Tsipras and his cabinet in some way. The response of the Greek parliament?
During a press conference on Saturday, Germany’s finance minister Wolfgang Schauble said that Greece was likely to get into a “difficult situation” as the forthcoming referendum would not solve any problems. He added that Greece was still a part of the Eurozone as well as a part of Europe, and that Germany would do “everything to help Greece and to fight any possible contagion”.
I cannot help but wonder exactly what Schauble meant by “contagion” here? A ‘contagion’ of the financial system? Or a ‘contagion’ of the EU political system?
Sunday, June 28th
Austria’s finance minister said a Greek exit from the euro – or Grexit – would only be possible if Athens first asked to leave the European Union and other countries agreed to its request.
“The consequences for the euro countries are not nearly as bad as for Greece. It’s clear that one country can under no circumstances blackmail the European Commission and the euro countries,” Hans Joerg Schelling was quoted as saying in Sunday’s print edition of Austrian newspaper Die Presse. (Reuters)
No… clearly it is the ‘job’ of the EC to blackmail individual European countries, not the other way around.
Greek Finance Minister Yanis Varoufakis told the German Bild newspaper in an interview that he placed the responsibility for the resolution of the Greek crisis on the German Chancellor Angela Merkel calling her “the representative of the most influential EU power.” He emphasized that she held “the key to the problem’s solution,” while also calling on other EU leaders “to act.”
Varoufakis added that Athens was ready to consider new creditors’ proposals and might even change the recommendation to the people and urge them to vote for the new suggestions, provided they were acceptable to Greece.
It looks like Varoufakis is covering the Greek government’s collective ass with this statement. He probably doesn’t seriously believe that Merkel or any other EU powerbroker has the slightest inclination to help Greece at this point.
US president Barack Obama and German Chancellor Angela Merkel discussed the Greek crisis on Sunday, agreeing that it is “critically important” to return Greece to a path that allows it to continue reforms while maintaining economic growth within the euro, Reuters has reported with a reference to the White House.
Obama seems to be showing vague support for the EU there, but the underlying message is probably, “Sort this one out yourselves.”
This stance may be intentional, not mere disinterest.
In a TV address to the nation on Sunday, Greek Prime Minister Alexis Tsipras announced a bank holiday and capital controls in Greece, blaming other EU countries and ECB for “forcing Greece’s hand.” He went on to call the decision to reject Athens’ request for a short-term bailout extension “an unprecedented act by European standards” that “questions the right of a sovereign people to decide.” He gave no details on how long the measures would remain in force.
Hellenic Petroleum, Greece’s biggest oil refiner, issued a statement on Sunday amidst growing fears of fuel disruptions and chaos in Greece, as reported by Reuters. The company said it had enough reserves to meet market demand for many months and that its refineries were operating normally.
The Greek Financial Stability Council has recommended a daily cash withdrawal limit of €60 from Tuesday, while ATMs will be closed on Monday, Reuters reports. Foreign bank card holders will be allowed to withdraw money in accordance with the limit set by their banks.
The Macedonian Central Bank has ordered all Macedonian banks to withdraw all deposits and loans from banks located in Greece, as well as from the branches of Greek banks located around the world.
Monday, June 29th
Greece quitting the eurozone is out of question at the moment, the Finnish Finance Minister Alexander Stubb told reporters on Monday. The Europeans continue to do everything possible to keep the country within the group.
It is interesting to contrast how many EU ministers have been saying that Greece “has to stay in the eurozone etc” against the EC/EU’s hard-line debt negotiations that have been effectively pushing Greece out of it.
Municipal transport in Athens will be free until the Greek banks start working, according to the Ministry of Transport.
PM Tsipras has written to all eurozone heads of government asking them to extend the Greek bailout, according the Financial Times.
The European Commission is not going to make new proposals to Greece to settle its debt problems, said Juncker. ‘Saturday Europe suffered a major blow. Egotism, tactical games, populism took precedence’
Juncker’s hypocrisy there is hilarious.
The lenders are not asking Greeks for wage and pension cuts, and have reduced their demands on Greece by €12 billion, said Juncker.
The euro is more than just a currency; it is a reflection of the mutual confidence in the eurozone, according to German Chancellor Angela Merkel. “If we lose the ability to find a compromise, we will lose Europe,” she said.
German Chancellor Angela Merkel is giving a news conference on the Greek crisis in Berlin. She’s criticized Greek Prime Minister Alexis Tsipras, saying his policy is threatening the whole eurozone.
Whoa! Hang on a minute… what about the Austrian FM’s comments that, “The consequences for the euro countries are not nearly as bad as for Greece” ? You can’t have it both ways Merkie… either Greece’s policies are a severe danger to the whole eurozone, or they aren’t.
Greece made a €50,000 deposit to the European Financial Stability Facility (EFSF) on Monday, according to German business paper Handelsblatt. The EFSF confirmed the receipt of the full payment from Athens on time. The fund could have said Greece was in default if it hadn’t met the deadline.
Nobel economist urges Greeks: Vote ‘yes’ in the referendum
The Nobel committee… from the folks who gave you the 2009 Obama Nobel Peace Prize.
Greek banks will be shut until July 6 and a €60 limit will remain on ATM withdrawals, the government announced on Monday. It added that foreign tourists aren’t subject to the restrictions.
Greek PM Alexis Tsipras called on Greeks to vote against the EU proposed terms for an international aid deal in referendum to be held on July 5. He said that a ‘No’ vote was necessary to demonstrate Greece’s strength in future negotiations concerning the debt, but stressed that it wouldn’t necessarily push Greece out of the eurozone. “I don’t think that their plan is to push Greece out of the euro, but to end hopes that there can be different policies in Europe,” he told Greek state television, as cited by Reuters.
Tsipras is very likely correct here, although he may not have considered that the anglo-American pathocracy may be pulling the strings to engineer a European financial crisis based on a Greek exit from the eurozone.
European Central Bank executive board member Benoit Coeure told the French financial daily Les Echos that “A Greek exit from the euro zone, so far a theoretical issue, can unfortunately not be excluded anymore,” Reuters reported. A ‘No’ vote in the upcoming referendum would mean that “it would be very difficult to resume political dialogue,” but in the case of a ‘Yes’ vote, he “has no doubt” that commitments to Greece would be honored.
Note the further attempts to frame the Greek plebiscite as a “Eurozone In/Out” question rather than an “Unfair Debt Conditions Yes/No” question…
Tuesday, June 30th
Fitch has downgraded Greece’s major banks to ‘restricted default,’ they announced in a statement.
“Fitch Ratings today downgraded Greece-based National Bank of Greece S.A. (NBG), Piraeus Bank, S.A. (Piraeus), Eurobank Ergasias S.A. (Eurobank) and Alpha Bank AE’s (Alpha) Long- and Short-term Issuer Default Ratings (IDRs) to ‘RD’ from ‘CCC’ and ‘C’, respectively. Fitch has also downgraded these banks’ Viability Ratings (VRs) to ‘f’ from ‘ccc’.”
The issue of Greece is a private issue related to its relationship with international creditors, Kremlin spokesman Dmitry Peskov told journalists on Tuesday, answering a question on whether providing assistance to Athens was being discussed at the highest level in Russia. Peskov also added that Moscow is closely monitoring the situation in Greece.
The former Finance Minister of Finland Juta Urpilainen told YLE TV she expects Greeks will vote ‘Yes’ in the July 5 referendum and for Greece to stay in the eurozone.
“I believe the Greeks will vote in favor of retaining their membership in the euro area,” she said, adding that then EU will probably have to negotiate with a new Greek government.
Note again the further attempts to frame the Greek plebiscite as a “Eurozone In/Out” question rather than an “Unfair Debt Conditions Yes/No” question…
The Luxembourg Bourse has halted trading in the bonds from some of Greece’s largest banks and institutions, as well as sovereign bonds. Trading in a number of Greek government bonds and other Greek-issued securities have been also blocked by electronic trading platform Tradeweb. The blocking came at the request of the UK Financial Conduct Authority. The yield on the 2019 bonds of the National Bank of Greece skyrocketed on Tuesday morning to 35.46 percent from 20 percent.
Greece can stay in the eurozone even with a ‘No’ vote in the July 5 referendum, German Finance Minister Wolfgang Schaeuble told a private meeting with lawmakers in Berlin on Tuesday, according to media reports. He added that the European Central Bank (ECB) would do everything to protect the euro should Greeks vote against the austerity reforms.
Is Schauble expecting a “No” vote?
Chancellor Angela Merkel said on Tuesday that Germany refuses to consider a third bailout package proposed by Athens before July 5 referendum, according to media reports. Earlier today, Greek Prime Minister Alexis Tsipras submitted a new two-year aid proposal to the country’s international creditors, calling for debt restructuring.
US President Barack Obama says the Greek crisis will not affect Americans in a major way: “In layman’s terms for the American people, this is not something that we believe will have a major shock to the system,” he said at a news conference. “But obviously it’s very painful for the Greek people, and it can have a significant effect on growth rates in Europe.”
Obama has explicitly stated that the Greek crisis will NOT cause a major shock to the American financial system. Just a bit of calming rhetoric for the American people?
It’s too late to extend Greece’s existing bailout, Eurogroup chairman Jeroen Dijsselbloem said after an emergency conference call between the Eurozone’s financial ministers.
“The political stance of the Greek government doesn’t appear to have changed,” Dijsselbloem said, adding that it would have to change before a new bailout program could be agreed upon.
Despite torrential rain, over 30,000 people have rallied in Athens to take part in a demonstration supporting the “yes” vote in favor of the proposals of the Troika of creditors. People gathered in Syntagma Square in the heart of Athens are loudly chanting the word “yes” and carrying banners with the slogan “we are living in Europe.”
International rating agency Fitch has downgraded the long-term foreign and local currency Issuer Default Ratings (IDR) for Greece from ‘CCC’ to ‘CC’, it said in a statement. The short-term foreign currency IDR was affirmed at ‘C’.
Greece misses its June deadline to pay €1.6 billion to the IMF, becoming the first developed country to default on its international obligations.
I think, technically, the IMF need to declare the country in “default”, otherwise they have only missed a payment.
IMF confirms Greece didn’t pay its debt by deadline, but asked for a repayment extension earlier that the Fund’s board will consider it “in due course.”
Wednesday, 1st July
Even if Greece accepted all of the austerity measures demanded by its main creditors, the Troika, it still would not be able to make ends meet by 2030, according to IMF estimates revealed in a set of documents obtained by a German newspaper.
Okay, exactly how far in advance did the IMF know this? According to this article, the documents were prepared only recently, but I find it difficult to believe that the economists at the IMF had no idea of this, given how long Greece has been in this situation. So, why were they pushing such a hard line with reforms? As Alexis Tsipras tweeted, “This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed.”
Russia is ready to assist for Greece economically, along with the cooperation in privatizing the country’s infrastructure, Russian Envoy to the EU Vladimir Chizhov told RIA Novosti on Wednesday.
“Russia is ready to cooperate with Greece. As far as I know, Greece has not turned to Russia for direct financial aid. We have the ability of increasing our economic cooperation, in particular Greece has the ability of privatizing, including railroads and the port [in Thessaloniki],” Chizhov said.
Thousands of Greek pensioners queued outside banks Wednesday but were told they would have to return Thursday or Friday. The Greek Ministry of Finance on Tuesday announced it would open some banks for pensioners who don’t have bank cards, to allow them some access to their money. Withdrawals were to be limited to €120 per person for the week.
Britain’s Chancellor of the Exchequer George Osborne called on Wednesday for the country to prepare for the worst in protecting the UK economy after Greece failed to repay €1.6 billion to the IMF, Sky News reported.
“Britain’s attitude to this developing crisis is clear: we hope for the best; but we prepare for the worst, and we stand ready to do whatever is necessary to protect our economic security at this uncertain time,” he said.
Osborne added that Greece’s failure to repay its debt to the IMF only deepened the crisis.
It seems like the UK has been ‘preparing’ for this possibility ever since the Syriza government was elected.
French President Francois Hollande said Wednesday it was the duty of other eurozone countries as well as Greece to keep the country in the single currency area, Reuters reports. He added that it’s not the time for vetoes or “intransigent statements” but for dialogue.
“It is our duty to keep Greece in the eurozone. That depends on Greece… But it also depends on us. As a European I don’t want the dislocation of the eurozone, I am not into intransigent comments, into brutal rifts,” Hollande said.
Really? Hard to imagine that Hollande and Sapin had nothing to do with the uncompromising approach taken towards Greece’s debt over the last six months.
Greek PM Tsipras says – We are fighting to protect people’s pensions
Holding a referendum in Greece is aimed at avoiding risks for the country, said Prime Minister Alexis Tsipras in a televised address to the nation.
Voting ‘no’ at the Greek referendum does not mean breaking relations with Europe, it would be a decisive step towards a better agreement with the country’s creditors, according PM Tsipras.
Tsipras: Those who say we have secret plan for Greece to exit euro are lying
Both Greece and the international lenders have come up with advanced proposals after the country decided to hold a referendum, Tsipras said at a televised news conference.
Looks like Tsipras has been doing double-time addressing all the lies and fearmongering that have been spread since the announcement of the referendum.
The possibility of a Greek exit from the eurozone has never been considered as a real prospect, the Eurogroup has always pursued finding a solution for the country’s sustainable growth, said Pier Carlo Padoan, Italy’s Minister of Economy and Finance.
Hard to imagine Italy had nothing to do with EC approach taken towards Greece’s debt over the last six months, either.
The talks between Athens and the Eurogroup will only be resumed after the referendum. Such a decision was made by the finance ministers of the Eurozone during the conference call, according to NOS TV channel.
Eurogroup head Jeroen Dijsselbloem has confirmed that no further negotiations with Greece will take place until after it holds a referendum.
“There will be no further talks in the coming days, nor at Eurogroup level, nor between the Greek authorities and the institutions on proposals or financial arrangements. We will simply wait now the outcome of the referendum on Sunday and take into account the outcome of the referendum,” he said.
Moody’s has downgraded Greece’s bond rating from ‘Caa2’ to ‘Caa3,’ as it has become the first developed economy to default on an IMF loan.
The agency placed the rating under review for further downgrade, expecting Greece to default on its privately held debt if creditors refuse to provide further financial support.
Thursday, 2nd of July
Varoufakis says that if the Greek people vote “Yes” in Sunday’s referendum, he will resign as finance minister on Monday night, according to Bloomberg
Greek banks will open as normal next Tuesday, as there’s no banking crisis in the country, he added.
Whatever you think about Varoufakis, you cannot deny that he is a man of principle. How often do we see pathocrats in the anglo-American empire offering to resign over matters of principle? Never, that’s how often.
President of the Eurogroup Jeroen Dijsselbloem said on Thursday that it’s hard to bridge “fundamental differences” between Greece and Europe, according to Reuters.
Yes, there are fundamental differences between a pathocracy and a government of the people, for the people.
Greece does not want to leave the eurozone and wants to remain part of the European community, Greek Finance Minister Yanis Varoufakis told Bloomberg TV on Thursday.
“We really desperately want to stay in Europe,” he said, adding that the desire is strong, despite the criticism from Greek authorities of the existing order in the European Union. The question for the Greeks is how to do it. To accept or reject the offers from creditors. The minister said that if Greece signs the agreement with its creditors then in 6-12 months it will be closer to insolvency than it is now.
Cash withdrawals nationwide hit €3,000 per second, as many ATMs were emptied, says The Times. The daily cash withdrawal limit is €60.
Greece needs and extra €50 billion over the next three years and a 20-year grace period on debt repayments, the International Monetary Fund (IMF) said on Thursday. The final payments should not take place until 2055. The country’s debts are “unsustainable”, according to the Fund.
In a message to European leaders, IMF officials said they would not be prepared to put a proposal for a third Greek bailout package unless it included a commitment to economic reform and debt relief.
A deal with creditors will be concluded within 48 hours after the July 5 referendum, Tsipras said.
Thousands of left-wing protesters in Paris have called on Greek voters to say “NO” to new austerity measures in a weekend referendum, Reuters reports. “Austerity basta” and “Solidarity with the Greek people, cancellation of debt,” said the banners of the protesters who converged at Bastille Square. French police estimate that 3,000 people took part in the demonstration.
The main aim of EU politicians is regime changing in Athens, not a deal, Paul Murphy from Anti-Austerity Alliance, told RT.
Most probably. But are the EU politicians themselves being manipulated?
Clashes broke out between supporters of the ‘left-wing’ coalition Antarsya and riot police outside the offices of the European Union (EU) in Athens, Thursday. Antarsya were marching to demand that no austerity deal between Greece and its creditors is agreed and their supporters called for the Greek people to vote ‘no’ in Sunday’s upcoming referendum.
Friday, 3rd of July
The current 100 percent in/out choice given to Greece is not appropriate and is a false dilemma, Bernard Lietaer, co-designer of the European currency told RT on Friday. He says there could be a third solution such as Greece having two currencies.
“Greece could be participant in the euro for tourism and shipping which are the largest sectors of the economy. At the same time it could have some new drachma which is playing on different rules and which is providing capacity to reanimate the economy at the grassroots level”, he said.
Exactly. Wolfgang Schauble also raised this possibility some weeks ago, so again – why the hardline approach during negotiations?
President of the Athens Chamber of Commerce Constantine Michalos told BBC Radio Four’s Today program that British tourists would be left without access to essential food and medicines within days if banks stay closed. The shops will begin to close on Friday and not reopen because they are unable to import products due to the bank closures, he warned.
“We will see as of next week shortages on the shelves. We are not in the position, although we may have funds in our accounts, to actually import goods and the major worry here is with basic sectors of the economy such as food and pharmaceuticals,” Michalos said.
Thousands of protesters in European cities are rallying in solidarity with Greece ahead of Sunday’s referendum over the austerity program. Protestors in Brussels, Amsterdam, London, France, Germany and Italy are calling on Athens’ international creditors to bundle the loan.
Greek Prime Minister Alexis Tsipras on Friday said the country’s debt will need to be cut by 30 percent, with a 20-year grace period for payment, in order to be sustainable. On Thursday the IMF said Greece would need €10 billion over the next few months and an additional €50 billion in the next three years to pay the country’s arrears. The last debt repayment should be no earlier than 2055, the fund added.
45.4 percent of Greeks will vote ‘Yes’, 45 percent ‘No’ and 9 percent will stay undecided at the Sunday’s referendum, according to an opinion poll, conducted by the Avgi daily newspaper on Friday. The survey with a breakdown by age and employment showed that 83 percent of students intend to voice ‘No’ on the country’s austerity program.
Students and pensioners on the same side! Imagine that! 🙂
The European Union wants to punish Greece as an example to the rest of Europe, Costas Panayotakis, a sociology professor, told RT.
“Punishment” is most likely an overly simplistic way of explaining their motivations, but there may be an element of that.
German Finance Minister Wolfgang Schauble told the Bild daily Friday that there will be no quick bailout deal for Greece after Sunday’s referendum.
Negotiations after the referendum will have to be held on a completely new basis and in complicated economic conditions, he said, adding that “will take a while.”
Schauble added that Greece would have to make efforts of its own in return for any new aid.
Schauble adding to fear-mongering there.
Greece’s Secretary General on government work coordination Christoforos Vernardakis told RIA Novosti on Friday that the country will resume negotiations with its creditors the day after the referendum.
“I believe that ‘no’ will prevail. Despite threats, despite terror from the European Union, despite the media… the Greek people will say ‘no’ and the next day [after the referendum] we will begin negotiations from a better position,” Vernardakis said.
Crown Prince Pavlos of Greece, the son of King Constantine II, told CNBC Friday that he hopes Greeks will vote ‘Yes’ in Sunday’s referendum. He also expressed his support for the ruling Syriza party.
“It is not all the fault of Greece here. Europe has put us in a very difficult position – people have been suffering dramatically”, Prince Pavlos said.
He added that Europe hasn’t given Athens any room for negotiating, and that it should give more breathing space.
If he really thinks that, then he should be supporting the “NO” vote. He’s either bought into the ‘Referendum = Eurozone In/Out’ lie, or he’s trying to have it both ways.
Greece’s top administrative court has rejected an appeal against the Sunday referendum submitted by two Greek citizens, Reuters reported.
Saying that the appeal against the vote on a bailout package from creditors was rejected, the presiding judge in Greece’s Council of State court, Nikolaos Sakellariou, said that “the referendum will be held” as scheduled.
Yep, this referendum certainly has the authoritarian types all ‘hot and bothered’.
Around 27,000 people are taking part in two rallies in central Athens, TASS reported, citing sources in local police.
Some 15,000 gathered at the Syntagma Square by the Greek parliament, protesting austerity proposals from Greece’s creditors. PM Alexis Tsipras is expected to address the crowds at this rally.
Another rally is taking place by the famous Panathenaic Stadium, which hosted the first modern Olympic Games. Some 12,000 supporters of a “Yes” vote in Sunday’s referendum have gathered there, according to police estimates, as reported by TASS.
The number of protesters is reportedly growing according to AFP, citing police. The agency says 25,000 people are at the “No” rally, while 20,000 have gathered to support the “Yes” vote.
Sunday’s referendum is about staying in the EU and deciding to live in dignity, said Greek PM Alexis Tsipras at a rally in Athens. He told the demonstrators that “whatever happens on Monday, this is a celebration of democracy.” He called on voters to give a “proud ‘No’ to ultimatums and those who terrorize you.”
It is plain to see, from the very beginning, the EC/IMF/ECB creditors never intended to negotiate a reasonable financing deal with Athens. It can even be surmised from the IMF report that the entire plan all along was to drive the Greek economy into complete collapse via unserviceable ‘bailout’ loans and then (probably) to ‘remake’ it according to the most predatory neoliberal economic models – the classic IMF “shock doctrine”. I guess they didn’t expect the Greek people and the Syriza party to put up quite such a fight.
As for the EU? Absorption of as much Greek sovereignty as possible and centralisation of policy and power in Brussels was (and still is) likely their political goal. The EU have really shown their true colours throughout this process, and they can be considered little more than pawns of Washington and London at this point.
But as Tsipras has pointed out, the Greek people have alternatives. They have a long-standing relationship with Russia, who stands ready to help them as an economic and political partner. If they get forced out of the eurozone, or even the EU, the Eurasian Economic Union beckons as a viable alternative. They have been invited to join the BRICS New Development Bank. Their energy industry (especially in the area of natural gas) can develop in leaps and bounds with the right investment and management.
For these reasons, the Greek people MUST vote “OXI” – NO! – at this upcoming referendum.
My hopes and best wishes go out to them.