Greek Financial Crisis

[ToffeeDoug]

......I expect Russia are not only watching this situation carefully but talking directly to the Greeks. Putin could well be looking strategically at extending Russia's footprint into Europe.

Being reported on BBC News online today that the Russians are already offering the Greeks a direct energy supply to boost their economy.

 

[dholliday]

......I expect Russia are not only watching this situation carefully but talking directly to the Greeks. Putin could well be looking strategically at extending Russia's footprint into Europe.

It's like those old Risk board games always said: big players attempting to gobble up as much control as possible.

As ever in such things, it's the poorest who pay.

That has no relevance to what I said.

It does in that it offers an explanation of the counter to what you were saying.

you said: The Greek Government rejected the last raft of reforms proposed by the creditors because there was no upside for them.
i said: Which in turn makes it understandable the creditors are rejecting the new proposals.

As in (the creditor's thinking) why should there be an upside when so much has already been granted (as seen on the list I pasted).

So you've got one side (Greece) wanting strong upsides when being bailed out for the nth time, whereas the other side (the creditors) are not willing to do this based on Greece's history of not getting their act together.


Conclusion: the problem is Syriza.

Hope that's clear now.

As far as I understood it, the creditors accepted the new proposals and it was Schäuble, the Finnish government (because of the right-wing nationalists) and various other Eastern European countries who were holding out for rejection.

Not quite, only that some have voiced support for Syriza's proposal (France, for one).

 

[davek]

It does in that it offers an explanation of the counter to what you were saying.

you said: The Greek Government rejected the last raft of reforms proposed by the creditors because there was no upside for them.
i said: Which in turn makes it understandable the creditors are rejecting the new proposals.

As in (the creditor's thinking) why should there be an upside when so much has already been granted (as seen on the list I pasted).

So you've got one side (Greece) wanting strong upsides when being bailed out for the nth time, whereas the other side (the creditors) are not willing to do this based on Greece's history of not getting their act together.


Conclusion: the problem is Syriza.

Hope that's clear now.

Your examples were all of quid pro quo deals in the past. The very opposite of what was on offer prior to the referendum, which was an ultimatum by the Euro Group. My point was that the ultimatum was rejected by the Greek people in favour of a stronger negotiating hand to achieve an equitable deal whilst staying in the eurozone, but that this has been portrayed as a climb down.

 

[atrottel]

Not quite, only that some have voiced support for Syriza's proposal (France, for one).

The troika group of creditors (EC, IMF, ECB) said fiscal rigour proposals from Athens were a good enough basis but the finance ministers (Germany, Finland, etc.) so far said no. When the finance ministers decide, if they do, then it goes to the countries' leaders...

 

[hullefc]

The pressing for a new government in Athens has to be the point the Greeks walk away on. If Varoufakis was in there now this would be over. I know he gave his support on Friday to his successor to do a deal on the grounds they were putting forward, but I'd be interested to know what his thoughts are now.

I can see the practical problems of exiting and the short term pain it'd bring (very acute for Greek society), but a decision like that has to be taken. The IMF/US has to act here and save the Europeans from themselves.

The moment Syriza agrees this to happen, they will lose any legitimacy in the eyes of the Greek people.

'develop a significantly scaled up privatization program with improved governance. A working group with the institutions shall provide proposals for better implementation mechanisms; (unelected technocrats telling Athens what to do and implementing a world bank solution often imposed on the third world with disastrous consequences - no sovereignty to control economic and social policy. Unless the privatisation programme is drawn up in such a way that the country benefits.)

- amend or compensate for legislation adopted during 2015 which have not been agreed with the institutions and run counter to the program commitments; (abandon your own legislation that the Greek people elected you to implement).

- implement the key remaining elements from the December 2014 state of play of the fifth review of the second economic adjustment program. (something you campaigned on and was voted in not to do)".

Some of the Euro group are trying to run roughshod over the democratically elected government in Greece. And the Italians have already broke rank and had a go at Germany.

Money was lent to Greece under the old regime. The Greek people were offered a chance in May to vote of what the last government had done, and they gave a resounding raspberry to it. They wanted a different direction. No to 'austerity - or more appropriately no to 1930s slump policies-which isn't to the liking of Germany. Let's see how Cameron responds to the Scots 'no to austerity' proposals after the austerity budget. And it will be interesting how Sturgeon leads the Scots.

Syriza would have been daft not to have prepared for Grexit. They have made overtures to Russia for a proposed gas pipeline investment, overtures to China to increase its investment in port facilities, roads, rail, shipping and other infrastructure projects. It is this that is worrying the Americans.

The Americans have increasingly been forced to view Germany as an industrial competitor with its own agenda (hence the spying on Merkel). The Euro was designed so as to attempt to give Europe, and in particular Germany, a competitive edge selling manufactured goods.

Those Depressing Germans - The New York Times. 'German trade balances not good for Europe or the world economy' and 'for one thing, it was an indicator of the continuing refusal of policy makers in Germany, in Europe more broadly and for that matter around the world to face up to the nature of our (US) economic problems'.

Trade imbalance is an issue the US has with Germany. And the Us has often called on Germany to spend more and lower these imbalances. China is another. Increasing trade with China, resulting in even larger trade imbalances with the world has annoyed the US. and joining the Asian Infrastructure Investment Bank hasn't gone down well with the US. Who feel Germany can't be relied upon to take a tough stance with China. Many in the administration feel that Germany have gotten 'too big for their boots'.

 

[davek]

The moment Syriza agrees this to happen, they will lose any legitimacy in the eyes of the Greek people.

'develop a significantly scaled up privatization program with improved governance. A working group with the institutions shall provide proposals for better implementation mechanisms; (unelected technocrats telling Athens what to do and implementing a world bank solution often imposed on the third world with disastrous consequences - no sovereignty to control economic and social policy. Unless the privatisation programme is drawn up in such a way that the country benefits.)

- amend or compensate for legislation adopted during 2015 which have not been agreed with the institutions and run counter to the program commitments; (abandon your own legislation that the Greek people elected you to implement).

- implement the key remaining elements from the December 2014 state of play of the fifth review of the second economic adjustment program. (something you campaigned on and was voted in not to do)".

Some of the Euro group are trying to run roughshod over the democratically elected government in Greece. And the Italians have already broke rank and had a go at Germany.

Money was lent to Greece under the old regime. The Greek people were offered a chance in May to vote of what the last government had done, and they gave a resounding raspberry to it. They wanted a different direction. No to 'austerity - or more appropriately no to 1930s slump policies-which isn't to the liking of Germany. Let's see how Cameron responds to the Scots 'no to austerity' proposals after the austerity budget. And it will be interesting how Sturgeon leads the Scots.

Syriza would have been daft not to have prepared for Grexit. They have made overtures to Russia for a proposed gas pipeline investment, overtures to China to increase its investment in port facilities, roads, rail, shipping and other infrastructure projects. It is this that is worrying the Americans.

The Americans have increasingly been forced to view Germany as an industrial competitor with its own agenda (hence the spying on Merkel). The Euro was designed so as to attempt to give Europe, and in particular Germany, a competitive edge selling manufactured goods.

Those Depressing Germans - The New York Times. 'German trade balances not good for Europe or the world economy' and 'for one thing, it was an indicator of the continuing refusal of policy makers in Germany, in Europe more broadly and for that matter around the world to face up to the nature of our (US) economic problems'.

Trade imbalance is an issue the US has with Germany. And the Us has often called on Germany to spend more and lower these imbalances. China is another. Increasing trade with China, resulting in even larger trade imbalances with the world has annoyed the US. and joining the Asian Infrastructure Investment Bank hasn't gone down well with the US. Who feel Germany can't be relied upon to take a tough stance with China. Many in the administration feel that Germany have gotten 'too big for their boots'.

The US need a strong Euro to soak up the goods they're producing. Imperative that the Greeks stay in the zone.

I hope we're not hurtling now toward a position where the Greeks take on board more conditionality and then sent back home to prove what good trustworthy lads they are.

It's all designed to break them and I cant see what the government gets out of it. I'd predict a lot of street protests and Communist Party/Trade Union mobilisation and it'll wreck the whole deal being cooked up.

Ball in Syriza's court: dont bend the knee or you're toast.

 

[dholliday]

My point was that the ultimatum was rejected by the Greek people in favour of a stronger negotiating hand to achieve an equitable deal whilst staying in the eurozone, but that this has been portrayed as a climb down.

I got that and partially agree. Only partially because the amount of the proposed cuts outweigh the old proposals of the creditors (rejected by OXI) by about 40%.

It doesn't take much of a propagandist to portray this as a climb down.

The troika group of creditors (EC, IMF, ECB) said fiscal rigour proposals from Athens were a good enough basis but the finance ministers (Germany, Finland, etc.) so far said no. When the finance ministers decide, if they do, then it goes to the countries' leaders...

Thanks for clearing that up, mate.

The US feel Germany can't be relied upon to take a tough stance with China. Many in the administration feel that Germany have gotten 'too big for their boots'.

That thinking contradicts itself: so they feel Germany aren't 'tough' enough, and at the same time feel Germany is getting 'too big for their boots'.

I think we can 'reject' that thinking.

 

[davek]

I got that and partially agree. Only partially because the amount of the proposed cuts outweigh the old proposals of the creditors (rejected by OXI) by about 40%.

Nonsense. The new Greek proposals were larger in scale because of extra time period being asked for a new bailout (€8b over two years up to €13B over three).

The new insistence of the Euro Group now about conditions of the reform programme, if accepted, would be derisory though. They sound like they're buckling and have to reject it.

 

[hullefc]

I got that and partially agree. Only partially because the amount of the proposed cuts outweigh the old proposals of the creditors (rejected by OXI) by about 40%.

It doesn't take much of a propagandist to portray this as a climb down.




Thanks for clearing that up, mate.




That thinking contradicts itself: so they feel Germany aren't 'tough' enough, and at the same time feel Germany is getting 'too big for their boots'.

I think we can 'reject' that thinking.

Simple really. Germany has their own agenda that doesn't always fit in with the US's interests. They act independently against the wishes of the US for not taking tough enough stances against China, whether that is to do with trade or finance or politically. 'Too big for their boots'.

Edit. Have you actually read the Prior Actions document?

 

[dholliday]

Nonsense. The new Greek proposals were larger in scale because of extra time period being asked for a new bailout (€8b over two years up to €13B over three).

That's why I said I partially agree with your point on that.

But perceptions...

Simple really. Germany has their own agenda that doesn't always fit in with the US's interests. They act independently against the wishes of the US for not taking tough enough stances against China, whether that is to do with trade or finance or politically. 'Too big for their boots'.

oh woe is USA for other countries not doing things their way!

 

[hullefc]

Nicholas Hirst38 MINUTES AGO


POLITICO’s Tara Palmeri has seen a copy of the document drawn up by eurozone finance ministers which is now being considered at the summit.

The ministers recognise “there are serious concerns with sustainability of Greek debt” and raise the possiblity of considering “possible additional measures to further smoothen the path” for Greek debt – but they clearly rule out the possibility of another debt haircut.

By Wednesday this week, in order for negotiations for a new bailout to begin, the eurozone wants Greece’s parliament to agree in principle on a raft of reforms:

1. Streamlining VAT
2. Broadening the tax base
3. Sustainability of pension system
4. Adopt a code of civil procedure
5. Safeguarding of legal independence for Greece ELSTAT — the statistic office
6. Full implementation of automatic spending cuts
7. Meet bank recovery and resolution directive
8. Privatize electricity transmission grid
9. Take decisive action on non-performing loans
10. Ensure independence of privatization body TAIPED
11. De-Politicize the Greek administration
12. Return of the Troika to Athens (the paper calls them the institutions)

Finnish finance chief Alex Stubb has explained that Greece has just 72 hours to agree to the demands of its creditors.

As he left the eurogroup, Stubb explained that ministers were demanding “far-reaching conditionality, on three counts:

Number one, it needs to implement laws by July 15. Number two, tough conditions on for instance labour reforms and pensions and VAT and taxes.

And then number three, quite tough measures also on for instance privatisation and privatisation funds.

And the most important thing, he added, is that the whole package has to be approved by both the Greek government and the Greek parliament".

Labour reforms. Are they there?

From Reuters this morning. The Euro group document.

"- on labor markets, undertake rigorous reviews of collective bargaining, industrial action and collective dismissals in line with the timetable and the approach suggested by the institutions. Any changes should be based on international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth"

 

[The Esk]

The US need a strong Euro to soak up the goods they're producing

I take your point that the US do not want a strong dollar relative to the Euro. But just to clarify the US runs a fairly substantial trade deficit with Europe. Obviously that would grow higher with an even weaker Euro.

 

[davek]

Nicholas Hirst38 MINUTES AGO


POLITICO’s Tara Palmeri has seen a copy of the document drawn up by eurozone finance ministers which is now being considered at the summit.

The ministers recognise “there are serious concerns with sustainability of Greek debt” and raise the possiblity of considering “possible additional measures to further smoothen the path” for Greek debt – but they clearly rule out the possibility of another debt haircut.

By Wednesday this week, in order for negotiations for a new bailout to begin, the eurozone wants Greece’s parliament to agree in principle on a raft of reforms:

1. Streamlining VAT
2. Broadening the tax base
3. Sustainability of pension system
4. Adopt a code of civil procedure
5. Safeguarding of legal independence for Greece ELSTAT — the statistic office
6. Full implementation of automatic spending cuts
7. Meet bank recovery and resolution directive
8. Privatize electricity transmission grid
9. Take decisive action on non-performing loans
10. Ensure independence of privatization body TAIPED
11. De-Politicize the Greek administration
12. Return of the Troika to Athens (the paper calls them the institutions)

Finnish finance chief Alex Stubb has explained that Greece has just 72 hours to agree to the demands of its creditors.

As he left the eurogroup, Stubb explained that ministers were demanding “far-reaching conditionality, on three counts:

Number one, it needs to implement laws by July 15. Number two, tough conditions on for instance labour reforms and pensions and VAT and taxes.

And then number three, quite tough measures also on for instance privatisation and privatisation funds.

And the most important thing, he added, is that the whole package has to be approved by both the Greek government and the Greek parliament".

Labour reforms. Are they there?

From Reuters this morning. The Euro group document.

"- on labor markets, undertake rigorous reviews of collective bargaining, industrial action and collective dismissals in line with the timetable and the approach suggested by the institutions. Any changes should be based on international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth"

Of course that was there proposals, we dont know how far they got with them. I suspect they wont get any joy on the bulk of it.

IMO, the Greek negotiators should go back now and put this to their parliament with a recommendation it has to be rejected. The splits in the eurozone will be enormous. The French and Germans are daggers drawn.

National credibility is on the line now...and not just for the Greeks.

 

[BluePeadar]

this is getting feckin tedious now,
Greeks invented civilisation then they ate it - Dylan Moran

Pay taxes , declare your income or feck off you hairy turds

 

[davek]

Temporary exit for Greeks from EZ?!