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On SYRIZA, negotiations and compromise

by talos Wed Apr 29th, 2015 at 09:22:49 AM EST

There is a coordinated PR attack against the Greek government, unfortunately also deceiving people from the left, regarding the Greek government's intentions and actions so far. It is far from certain what the results of the negotiations will be, but preemptively announcing SYRIZA's retreat seems to me to be a performative assessment, meant to both flatter the prejudices on which most of the austerian EU governments have built their TINA alternative, and to dissipate international support away from a government that has up to now, in a small but significant way, made the first steps against the dominant narrative, anywhere in the West, over the past 20 years.

So let me put to rest some of the more obnoxious misinformation that is being peddled by "EU / ECB circles" and international media, subservient to the cause of pressuring the new Greek government to submission, by pointing out a few facts...

promoted by afew


  1. As Alexis Tsipras himself noted in a televised interview the current problem stems from the fact that the SYRIZA government was hoodwinked by both Dijselboem and Draghi into believing that there would be some sort of, perhaps limited but significant, liquidity / funding relief from the ECB especially regarding T Bills and ELA after the February 20 agreement. In short that the Greek government would be allowed a brief liquidity respite until June in order to get its house in order - especially since the budget surplus delivered by the previous government was much smaller than it was reported to be and arrears were amassing in payments to procurers well beyond what was declared by Samaras' ministers. This was not put to paper however (a fact that Euclid Tsakalotos admits shows the inexperience and naive good faith with which the SYRIZA gvt dealt with the institutions) and thus it was void and null as they soon found out. Tsipras reaffirmed in this interview that SYRIZA would not capitulate on any austerity measures. In fact, he announced that if the "lenders" insist on crossing the government's "red lines" (see below) there will be a referendum on the deal presented. So even if there are indeed compromises (which there will be, there already are) it seems unlikely that they will affect the main goal at this point which is to stop austerity.
  2. The reason that the negotiations are not going anywhere is neither Yanis Varoufakis', lack of proper table manners nor some sort of inability of the Greek government to quantify their plans. It is the simple fact that there is a very important political gulf between the two sides on the following four issues:
  • Labor laws / wages: the Greek government has already introduced a bill that restores labor protections and gradually raises the minimum wage in the private sector to 2009 levels, starting October and reaching 751 Euros/month next year. The Greek gvt is also unyielding to pressures aiming to further facilitate large-scale firings
  • Pensions: The Greek gvt is adamant that no further cuts to pensions is possible and insists on reintroducing the Christmas bonus ("13th salary") for those pensioners under 700 Euros per month. Pensions were paid until 2010 in 14 installments. The troika demanded that these be reduced to 12, thus enforcing a 14% cut across the board in all pensions, and this apart from other nominal value reductions of monthly pensions, or indeed purchasing power losses. The average pension has been reduced since 2010 by 30-40%. 66% of all retirees are paid less than 500 Euros a month
  • VAT tax: the Greek government is open to an increase in the luxury tax, but considers VAT to be ridiculously high at 23% already for an economy in its 5th year of depression. It also refuses to increase reduced VAT rated in the Greek islands, especially as the tourist season begins
  •  Public property: SYRIZA will not proceed with privatizations other than those already under way, and on those it wants a serious renegotiation of terms (which are colonial i.e. in the case of peripheral airports)

3. Regarding calls for SYRIZA to "ditch it's Left Platform" and the alliance with Independent Greeks, in order to forge a new government that could include Potami and PASOK, this is a no go as it would be politically suicidal:
  • There is no small "leftist opposition" within SYRIZA that is impeding a compromise. It is improbable that a majority of SYRIZA MPs would go along with a deal that significantly retreats from these red lines. The bulk of the SYRIZA base considers these lines to be an absolute minimum (and in fact already a compromise) if a left government wants to still call itself that. SYRIZA's commitment to stay in the Eurozone is not unconditional, there is no leadership of SYRIZA IMHO that can play along with an austerity agenda and still remain the leadership. In fact a majority of ministers would probably quit in such circumstances. Euclid Tsakalotos who is now appointed coordinator for the negotiations is, by all reasonable measures, to the left of Varoufakis. There is no SYRIZA ministry right now (and to this I can attest personally) that is planning anything but the dismantling of the austerity policies they have inherited, although the pace might vary.

  • The great political rift line in Greece is between the pro-austerity and the anti-austerity parties. To Potami (and obviously PASOK) are wedded to austerity, but beyond that, they are (reasonably) seen as having ties with the oligarchy and the bankers' establishment, and are part of the neoliberal consensus around the "Extreme Center". In fact even with the bills introduced in Parliament regarding the liberalization of Greece's (decrepit) penal and system and on the refugee issue, To Potami is much closer to the xenophobic and "security"-obsessed right than are the Independent Greeks, whose penchant for nationalist rhetoric hasn't stopped them from supporting some of the most progressive laws introduced in Greece in the past few years.

4. As for the lamentations regarding SYRIZA's alleged capitulation coming from the left: I'm not sure where these are derived from. Certainly they aren't based on the actual government policies being introduced. As we speak many small steps in reversing the austerity disaster of the past 5 years have been implemented:
In short, I see no preparation to capitulate, at most perhaps to compromise on particular issues, but that's hardly a surprise. That all this is considered some sort of "surrender in principle", seems to me to be plain silly at this point. This negotiation and the fight with neoliberal Europe can only be a marathon, in which every step will be fought tooth and claw against an increasingly undemocratic EU establishment. SYRIZA will either be forced to attempt to go it alone, or to remain within the EZ having created a space in which it can cultivate an anti-paradigm to current macroeconomic policies. If it is forced to submit, this will signal curtains for the whole European project as a democratically legitimate endeavour and the beginning of a very turbulent time for Greece.

Myself, I'd rather see my children go hungry than submit to what will have been proven to be a colonial plan to create a permanently dependent protectorate restored to its proper oligarchic masters and bereft of any hint of democratic legitimization.

Display:
   I visit European Tribune every day because there are commentors who put human beings first, not the "institutions".  It is no secret the ECB, EU and especially the financial German/USA elites are trying hard to keep Greece in bondage to have a deferential domestic sheep of a leadership politics to keep the shearing going, even if the sheep finally died of cold and and starvation.

I read the disgusting Murdoch rag "Wall Street" Journal, printing several  letters concerning Greece days after Syriza took charge, and the gleeful tone of one such, (gist) " Greeks finally would be denied extensions, forced to pay even more dearly, and a coming collapse would force them to beg, and lots of great properties would be had at fire sale prices. Can hardly wait!"

I realized Greece was to be made an example of - the ordinary people must have masters and peonage and suffer, regardless of if one is living in Iraq, or American inner cities, or the sunshine of a new Greece.

Timeo Danae dona ferentes, you financial wizards!

by Pete Rock on Wed Apr 29th, 2015 at 11:40:27 AM EST
Is this a welcome Pete moment? Or am I late?

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Wed Apr 29th, 2015 at 11:58:17 AM EST
[ Parent ]
never late to say  "Hi", first post in years (new version of Eu Tribune)  {smiles}
by Pete Rock on Wed Apr 29th, 2015 at 12:09:26 PM EST
[ Parent ]
Apparently Varoufakis even missed the gala dinner at the Riga summit:
Greece's Yanis Varoufakis had other dinner plans, he said, after a bruising first day of meetings in Riga that underlined his isolation as he tries to avert national bankruptcy.

...

"He is completely isolated," a senior euro zone official told Reuters on condition of anonymity. "He didn't even come to the dinner to represent his country," the official said of the event where ministers, serenaded by a Latvian choir, ate salmon and sea bass.

...

"Eurogroup ministers don't like the fact that he is giving a small lecture when he is speaking to them," one euro zone official said. "And for that reason (chairman) Dijsselbloem stopped him yesterday, saying: 'Yanis, you don't tell us what we want to hear.'"

(Reuters)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Apr 29th, 2015 at 11:50:15 AM EST
Condemned man ate a hearty meal? He skipped it, it wasn't to be his last one by any stretch.
by Pete Rock on Wed Apr 29th, 2015 at 12:13:35 PM EST
[ Parent ]
Well, thank you very much for this thread talos. You know that I regard your contributions about Greece as one of the most valuable thing in all media at the moment, really appreciate that you found the time for this one.

One thing is clear: your take is very different from the impression left from the media in the two countries I have regular access to, namely France and the UK. Your take is so much more positive for whoever still wants democracy to be fought for. Greece really is the centre of the world at the moment. If Syriza even 25% succeeds it will be a major dent in the consensus.
Shame that TARA (There Are Real Alternatives) does not appear to mean anything in Greek (although it sounds like it could). Well, it apparently means "Liberator" in Sanskrit, and is a deity supposed to teach the secrets of compassion, so that's not too bad on that front.

Regarding that:

Myself, I'd rather see my children go hungry than submit to what will have been proven to be a colonial plan to create a permanently dependent protectorate restored to its proper oligarchic masters and bereft of any hint of democratic legitimization.

While I appreciate the combative feeling, should it come to that, please just make your contributions paying. I would sure pay for them.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Apr 29th, 2015 at 12:25:08 PM EST
It is great that you are filling out TARA's character, Cyrille! We need greater prominence for archetypes that are liberators and who teach the secrets of compassion, especially now.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Apr 30th, 2015 at 10:21:26 AM EST
[ Parent ]
Very well done. i agree with almost all of this.

One question: doesn't a referendum imply that Greek people will finally be able to say "Yay" or "Nay" to austerity vs. the possibility of an exit out of the eurosystem?

If so, it also encourages the EU battleteams to imagine a Syriza-Pasok-Potami alliance, in the event the Greek people say, OK to Austerity.

I do think Tsipras is right to say the gov't will abide by the mandate of the people (rather than leaving the dirty work of killing the economy to someone else). That is true leadership--which is much more than we can say about New Democracy.

But at the end of the day, if Tsipras abides by the will of the people in the event of a referendum that accedes to EU wishes, Syriza as a whole will very likely not go along with him.

The referendum is the absolute key here.

I remarked several days ago that Tsipras should have campaigned on such a proposal back in January.

by Upstate NY on Wed Apr 29th, 2015 at 12:43:51 PM EST
Killing the oligarch-controlled media will be key to delivering such a referendum.

In that light, it is very encouraging that there is a crackdown on the more blatantly corrupt commercial television syndicates.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Apr 29th, 2015 at 01:45:00 PM EST
[ Parent ]
Naked Capitalism has been pretty negative since pretty early in the negotiations. Two arguments are usually fielded: Capital controls would have increased leverage and the final Memo was dictated not negotiated.

The first one never made sense to me. What would it accomplish? Making an exit slightly less damaging while damaging Syrizia's local support and kicking the Greek economy repeatedly in the face and telling tourists to visit a more stable country. Seems like a bad deal. The Eurogroup can live with capital controls far longer than Greece, for as long as the ELA flows the banks won't collapse and if the ECB decides to kill the Greek banks it can do so, capital controls or not. In that case Euros in mattresses are probably more accessible than those still in the banking system.
The above is particularly puzzling since Yves seems to Varoufakis' contention that given its deficiencies the Greek economy wouldn't benefit from an exit.

The second point is harder to dismiss. I'm not sure what her sources are but going by results its hard to argue that they weren't at least hoodwinked. First the Greek side thought it would get a few months of respite after signing, which obviously didn't happen. Also Tsipras argued that there was a verbal commitment to allow more T-Bills, which I have no trouble to believe. Why else would the Euros explicitly write down that the ECB is independent?

by generic on Thu Apr 30th, 2015 at 03:03:33 AM EST
Also Tsipras argued that there was a verbal commitment to allow more T-Bills,

Deserves a quote.

Full transcript of Alexis Tsipras interview to enikos.gr

Α. TSIPRAS: So I will explain that. So in the frame of this agreement, both myself and Mr. Varoufakis raised this issue. So in a contact that I had with Mr. Daisebloom and Mr. Varoufakis, when present before the Eurogroup, raised the issue. And there was a commitment that, upon the agreement, the European Central Bank decisions were about to be corrected.Our mistake is that we were based, that we accepted a verbal commitment instead of a written commitment. And in the frame of this agreement we were asking for an extension, not of the Memorandum, but of the loan contract, explaining the grounds on which we were asking for this extension. And there was an explicit ground.So we were asking for this extension in order to have the reintroduction of the waiver by the European Central Bank, but also in order to rectify this threshold, this cap as regards T-bills.So indeed the Greek government felt that there were good intentions behind this verbal commitment. And we also believed that this agreement of the 20th of February was about to be implemented in its entirety.
by generic on Fri May 1st, 2015 at 04:49:55 PM EST
[ Parent ]
There is no way Dijsselbloem could credibly make commitments in the ECB's name, and Varoufakis must have known this.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 4th, 2015 at 05:06:45 AM EST
[ Parent ]
Comments were also made though by Draghi himself directly to Tsipras, albeit in January prior to the election.
by Upstate NY on Mon May 4th, 2015 at 12:36:05 PM EST
[ Parent ]
But Draghi cannot speak for the ECB Governing Council either: he's its president, not its dictator.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 4th, 2015 at 12:45:29 PM EST
[ Parent ]
But then can the ECB be negotiated with? Or does it hold itself to be above negotiations?
by fjallstrom on Mon May 4th, 2015 at 02:27:54 PM EST
[ Parent ]
I believe the ECB people truly believe their role is non-political.

Check out this from Draghi: Introductory statement to the press conference (with Q&A) (22 January 2015)

My second question is on the risk-sharing. Could you perhaps explain to us why you decided to move away from your usual procedure of pooling all the risks, and in the context of that, if I understood you correctly, for 8% of government bonds, the ECB will still pool the risk. I would understand that you make an exception for euro area institutions, but why do you make an exception for these 8% of government bonds if otherwise, you decided it was wiser not to share risks?

Draghi: The answer to the first question, yes we will buy government debt up to the percentage that will allow a proper market price formation. Therefore, we have two limits. The first one is an issuer limit, which is 33%, and another one is an issue limit, which is 25%. In other words, we won't buy more than 25% of each issue, and not more than 33% of each issuer's debt. The 25% limit, by the way, is the one foreseen in order not to be a blocking minority in the collective action clause assemblies, basically, bond holders' assemblies, and it's the basis for us to be able to say, there is going to be pari passu.

So, you see, the ECB will not take part in negotiations on debt restructuring.
Question: My first question would be, it's not actually very explicit here in the press release whether that means that you're not going to buy into Greece's debt right now.

Second question would be whether you're also considering buying bonds which are actually already trading in negative territory when it comes to yields.

Draghi: Second question, the answer is yes.

And to the first question, let me say one thing here. We don't have any special rule for Greece. We have basically rules that apply to everybody. There are obviously some conditions before we can buy Greek bonds. As you know, there is a waiver that has to remain in place, has to be a program. And then there is this 33% issuer limit, which means that, if all the other conditions are in place, we could buy bonds in, I believe, July, because by then there will be some large redemptions of SMP bonds and therefore we would be within the limit.

And by the way, let me add, if there is a problem, if there is a waiver, all these are not exceptional rules. They were rules that were already in place before. So we're not creating.

All very non-political. As Karl Whelan said
I fully expect the ECB-as-heavy-hearted-technocrat angle to dominate press coverage of this story this month. That's a pity because the "ECB in politicised mission creep while helping trigger a bank run" story is more interesting and closer to the truth.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 5th, 2015 at 06:27:39 AM EST
[ Parent ]
Economics is a science, it's not political, it's all about laws of nature.

Don't you know anything?

by Colman (colman at eurotrib.com) on Tue May 5th, 2015 at 06:57:31 AM EST
[ Parent ]
Serious People Are Serious: a crucial element of the farcical facade of legitimacy.
by rifek on Sat May 9th, 2015 at 01:37:21 PM EST
[ Parent ]
If Tsipras believed he was dealing with people who had any intention of negotiating in good faith, it's no wonder he was hoodwinked.
by rifek on Sat May 9th, 2015 at 01:13:23 PM EST
[ Parent ]
That is a problem of Tsipras: very obvious bad judgement on the moral and democratic calibre of the EU powers.

That is, in my view, a big mistake on SYRIZA's part - they were actually quite moderate in their view of the intentions of the EU.

They seem to be paying dearly for such an obvious mistake.

by cagatacos on Mon May 11th, 2015 at 06:15:23 AM EST
[ Parent ]
Have to remember the larger context. The scapegoat and the blame game.

It is very important in the final fallout. Greece cannot be made to seem as anything other than earnest, no matter the position or behavior of the creditor.

by Upstate NY on Mon May 11th, 2015 at 09:08:19 AM EST
[ Parent ]
nitpicking:

has begun, I think, on the last bullet point in syriza realisations..

;-)

Excellent diary, and very helpful, as media reporting of Greece are not very hopeful at the moment. I was surprised and saddened by the demise of Varoufakis from the negociation team in Brussels, and I was unable to understand whether his role will dwindle or if this was part of the negociation with Bruxelles.

by Xavier in Paris on Thu Apr 30th, 2015 at 03:08:13 AM EST
Good to hear an update from Greece.

As just an example (there are now many) how Dutch media have been covering the head-bashing in Brussels: after the meeting in Riga, the Brussels correspondent for the (state-funded) news broadcasting organisation described the event last Friday as 'a groundhog day' and then proceeded to enlist what the Greek government should to:

 
"[O]m een deal te maken zal er echt behoorlijk moeten worden ingegrepen in Griekenland. De pensioenen moeten omlaag, de arbeidsmarkt moet worden aangepakt. De Grieken weigeren dat nog steeds te doen. En zolang ze dat blijven weigeren, krijgen ze de 7 miljard euro aan hulpgeld uit Brussel niet.""[I]n order to make a deal, there really need to be quite an intervention in Greece. The pensions have to be reduced, the labor market needs to be addressed. The Greeks still refuse to do that. And as long as they continue to refuse, they won't be getting the 7 billion euro of aid money from Brussels. "

Watching this last week, I was already appalled - an insult to the integrity of impartial journalism which seems more and more a fad of yore. More Dutch media also have shown a slant leaning towards the line of Dijsselbloem and the Eurogroup, though I rarely have seen it this brazen.

But I'm not buying at all this reporting was 'coordinated' in some way. Far more likely this is a combination of people in the media having drunk economic Kool-Aid, cultural differences, and some twisted sense of allegiance toward Dijsselbloem - or just a plain old 'scratch my back, I scratch yours' strategy in Dutch political news coverage.

by Bjinse on Thu Apr 30th, 2015 at 08:56:52 AM EST
The French media are staying resolutely mealy-mouthed about what the problem is. They would never dare spell it out like that : more pension cuts, liberalized labour market, etc : because that would trouble French readers.

No, it's all about how the Greeks haven't done their homework, while very rarely spelling out the sticking points.

That's actually worse journalism, in my book. Far worse. At least in the Dutch case they nail their colours to the mast and you can agree or disagree.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Thu Apr 30th, 2015 at 10:02:40 AM EST
[ Parent ]
and comprehensive report, focused on policy and on facts. Invaluable.

We sure don't get that from our local press, that is for sure.

Truly excellent, thank you so much, Talos.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Thu Apr 30th, 2015 at 09:02:55 AM EST
(with English translation).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 1st, 2015 at 09:10:27 AM EST
This whole negotiation also reminds me of this:

https://www.youtube.com/watch?v=1fuDDqU6n4o

by Upstate NY on Fri May 1st, 2015 at 12:43:39 PM EST
[ Parent ]


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 4th, 2015 at 05:05:28 AM EST
[ Parent ]
German President: Berlin should be open to Greek war claims

German President Joachim Gauck expressed support on Friday for Athens's demands for reparations for the Nazi occupation of Greece in World War Two, even though the government in Berlin has repeatedly rejected the claims.

Gauck, who has little real power in Germany but a penchant for defying convention, said in an interview to be published in Saturday's Sueddeutsche Zeitung newspaper that Germany should consider its historical responsibility to Greece.

"We are not only people who are living in this day and age but we're also the descendants of those who left behind a trail of destruction in Europe during World War Two -- in Greece, among other places, where we shamefully knew little about it for so long," Gauck said.

 "It's the right thing to do for a history-conscious country like ours to consider what possibilities there might be for reparations."



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Sat May 2nd, 2015 at 11:42:03 AM EST
His humility is quite presidential, exemplary in fact. Now if Japan would follow suit...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Sat May 2nd, 2015 at 03:28:49 PM EST
[ Parent ]
Abe would rather sign TPP for military revival...
by das monde on Sun May 3rd, 2015 at 02:31:23 AM EST
[ Parent ]
Thank you Talos, great summation.

Btw, does anyone have the link to the pdf of the Greek negotiation platform? A seven page reform list? I am planning a write-up in Swedish, and I think it is illustrative but I have lost it.

Speaking of illustrations, is the picture yours and if so can I republish it with my swedish write-up?

by fjallstrom on Mon May 4th, 2015 at 05:18:21 AM EST
The march version is here.
by generic on Mon May 4th, 2015 at 05:28:56 AM EST
[ Parent ]
Thanks.
by fjallstrom on Mon May 4th, 2015 at 06:52:58 AM EST
[ Parent ]
Naked capitalism: Are The IMF and the EU at Loggerheads Over Greece?
ndeed "Greece is so far off course on its €172bn bailout programme that it faces losing vital International Monetary Fund support unless European lenders write off significant amounts of its sovereign debt", Peter Spiegel wrote in the Financial Times on 4 May 2015. The reason for this is obvious: IMF regulations prevent the Fund continuing to make tranche payments to countries where there is a foreseeable financing shortfall during in the coming twelve months. The worsening in the Greek economic outlook and the consequent reduction in the revenue outlook effectively guarantee this shortfall.

But the sort of debt write-off the IMF is demanding of its European partners goes much deeper than that. Future IMF participation in any new Greek programme after June is also in doubt because without additional pardoning the debt will not be on a sustainable trajectory in terms of the objectives set down and  agreed upon in November 2012.  So you reach a point where extend and pretend hits the proverbial fan. You can, of course, do more extend and pretend till the next time it happens, but at this point the IMF seems reluctant to do so. On the other hand austerity-type spending cuts which only make the economy smaller and the growth path lower simply don't help in this context, since what they give with one hand (debt reduction) they take away with the other (in the form of lower GDP).



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu May 21st, 2015 at 04:20:02 PM EST
defined by the IMF withdrawal.

If the Germans don't offer substantial writedowns, the Greeks aren't backing down. Not the Government, not Syriza, not the citizens either. Euro exit and probable default.

Why Greece's Syriza party is not sticking to the script on an IMF deal | Paul Mason | Paul Mason

Zoe Konstantopoulou, a 39-year-old, Sorbonne-educated human rights lawyer who is now the speaker of the Greek parliament, is among them.

The Syriza MP has used her office set up three legal processes that could, even now, give the radical left government leverage over its lenders: a "debt truth" committee, a committee to oversee Greek war reparations claims against Germany, and a pipeline of high-level corruption cases targeted around public sector contracts with German firms.

It had been assumed in Europe that these initiatives were rhetorical, allowing Syriza to construct a narrative in government and nothing more.

Now I understand the debt truth committee has identified a tranche of Greek debt that looks - according to those who've seen the evidence - "unconstitutional". Ms Konstantopoulou told me:

"There is strong evidence on the illegitimacy, odiousness and unsustainability of a large part of what is purported to be the Greek public debt."

She warned creditors that the Greek people have the right "to demand the writing-off of the part which is not owed."



It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri May 22nd, 2015 at 07:26:16 AM EST
Why Euro exit necessarily?

Actually, how do you legally organise a Euro exit, even if you want to? And now if one of the parties does not want to?

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Fri May 22nd, 2015 at 08:39:26 AM EST
[ Parent ]
Why Euro exit necessarily?

Because - TINA! according to TPTB in Germany and amongst Germany's supporters in this matter.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri May 22nd, 2015 at 08:53:32 AM EST
[ Parent ]
Euro exit, because the ECB will destroy your economy otherwise (by denying latitude of action to your national bank). That's the short version, if I have understood correctly.

The question then becomes : renegotiation of the debt, or default?
Or selective default? Specifically on the odious debt identified by the parliamentary commission... I'd like to know more about that.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Fri May 22nd, 2015 at 09:23:14 AM EST
[ Parent ]
No. Default comes first, no two ways about it. What happens then isn't quite as clear. Since Syrizia doesn't want to leave and despite all their bluster the Euros don't want to throw them out I fear that the post default situation looks pretty much like the pre default one. Grinding negotiations while everything deteriorates.
by generic on Fri May 22nd, 2015 at 09:44:31 AM EST
[ Parent ]
Which is exactly why a Euro exit seems inevitable. Perhaps post-default, effectively. Because if default brings no effective relief (ECB imposing economic paralysis) then devaluation and a fresh start seem like a lesser evil, surely?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri May 22nd, 2015 at 09:59:02 AM EST
[ Parent ]
At some point? Sure. If Greece doesn't collapse first. And you know what follows Euro exit? Grinding negotiations since most private contracts will be affected and tons of EU laws broken. I see next to no prospect for a clean break.
by generic on Fri May 22nd, 2015 at 10:30:46 AM EST
[ Parent ]
Technically, default is almost a certainty. Through the IMF the USA is pressuring Germany to keep Greece in the EMU for political reasons and the IMF is pressuring the EC to give Syriza what it needs to have sustainability. For Greece to be sustainable a lot of debt needs to be written down. One obvious target is anything that can be shown to be 'odious debt'. The speaker of the Greek parliament is a Sorbone trained lawyer specializing in just such matters and who is preparing cases to go before international tribunals, so there is a real possibility that Syriza gets almost all of what it has been insisting on - in time.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri May 22nd, 2015 at 10:00:40 AM EST
[ Parent ]
The scoop about Konstantopoulou is the best substantive part of Mason's post, and this is the best comedy part:
In the script according to the eurozone, the expected ending is: Syriza splits; finance minister Varoufakis makes good his pledge not to sign a surrender and resigns. A government of the centre-left forms, with Alexis Tsipras now allied to the centrist Potami party and with tacit support from a liberal wing of the New Democracy party. Debt relief happens, but on the terms dictated by the lenders, and Syriza survives to complete its mutation into a centre-left social democratic party.
Comedy gold.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 22nd, 2015 at 10:41:48 AM EST
[ Parent ]
SYRIZA is behaving like a centre-left social-democratic party. It is just the whole of the EU that moved hard-right.
by cagatacos on Fri May 22nd, 2015 at 10:47:33 AM EST
[ Parent ]
You know what the eurogroup means when they say centre-left social-democratic party.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri May 22nd, 2015 at 10:56:32 AM EST
[ Parent ]
Dreams die hard. Whether or not those pushing this scenario believe it will happen the best part will be watching while they are being forced to do all of the things they are saying can never happen. They are public figures and can't really hide. Even more interesting will be what happens to TINA when obvious alternatives are being publicly implemented.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri May 22nd, 2015 at 01:40:32 PM EST
[ Parent ]
Here is the CV for Zoi Konstantopoulou. Better qualifications would be hard to imagine.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri May 22nd, 2015 at 01:48:06 PM EST
[ Parent ]
In the unlikely event that they succeed, will this be a precedent for other countries?
by gk (gk (gk quattro due due sette @gmail.com)) on Fri May 22nd, 2015 at 04:16:52 PM EST
[ Parent ]


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