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Greek capital controls open thread

by Migeru Sun Jun 28th, 2015 at 03:55:35 PM EST

Proto Thema (English): Breaking: Capital Controls taken – Banks closed for one week! (June 28 2015)

... The government said the decision came after a request by the Bank of Greece.

According to reports, the bank holiday will last throughout the week, with the maximum daily withdrawal reportedly set at a … princely 60 euros.

Another unconfirmed report deal with whether ATMs will function on Monday at all, given that technical modifications are necessary to cap withdrawals.

...

Capital controls will reportedly also affect credit cards issued by Greek banks, regardless if they are part of an international credit corporation, like Mastercard or Visa. If this measure goes into effect, cards will be useless both in Greece and … abroad. So much for Greek travelers without a lot of cash on hand.

Conversely, credit cards issued by foreign banks will not be affected, welcome news amid the ongoing “readjustment period” for tourists in the country.


In this series:

Display:
The eurogroup is totally and completely crazy.
by Xavier in Paris on Sun Jun 28th, 2015 at 05:01:21 PM EST
In that they clearly overreached, yes.

But in what they were trying (and they may yet succeed) to achieve, I believe the word is evil.

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

by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 29th, 2015 at 04:04:59 AM EST
[ Parent ]
Those who are aware of the real world consequences and are pursuing the policy stance anyway, for whatever reason (eg, unwillingness to admit to German voters that the German government loans that used Greece as a conduit to bail out German banks, instead of bailing the German banks out more directly, were never going to be paid back, because the choice of conduit was a choice of optics over prospect of being paid back) ... yes, given the impact of the policy stance on their fellow EU citizens, evil is the appropriate word.

Those who believe that the "structural reforms" being demand of the Greeks are some kind of magic bullet that will allow the Greeks to start repaying some of the debt that the previous government signed them up for as a consequence of being used as a conduit to bail out German banks ... insane is an appropriate word for that.

It is a peculiar form of insanity that has evil effects, and the fact that so many seem to susceptible to it does amplify the evil of the actions of those who know better but choose to pretend that they do not.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jun 29th, 2015 at 08:58:22 AM EST
[ Parent ]
I also meant that the Eurogroup was aiming to destroy an elected government as a matter of principle, because it did not sing the TINA tune.

That is very disturbing.

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

by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 29th, 2015 at 09:04:17 AM EST
[ Parent ]
The principle involved for the evil and the insane is different, though. The principle of involved for the evil is, "because we say so!!!". The principle involved for the insane is "we wish to destroy your economy for the good of the widows and orphans!!!"

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Jun 29th, 2015 at 09:10:42 AM EST
[ Parent ]
By that definition, on Saturday the Eurogroup's face went from insane to evil.

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 Jun 30th, 2015 at 12:24:21 AM EST
[ Parent ]
Saw a piece on Aljazeera America yesterday on Greece ... an older guy, academic, with a Greek sounding name and just lying his ass off about the entire situation. Greece was coming back economically until the current govt. got in, blah blah blah.

Any way for you to get interviewed on Aljazeera ... be nice to see some facts presented and love to see their response.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Tue Jun 30th, 2015 at 05:16:01 AM 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 Jun 29th, 2015 at 09:37:45 AM EST
[ Parent ]
Why is it good if a Eurogroup meeting is peaceful?
There are many disagreements between European nations, beyond the Greek situation, so peace would seem to be "sweeping things under the carpet."
by Metatone (metatone [a|t] gmail (dot) com) on Mon Jun 29th, 2015 at 09:57:11 AM EST
[ Parent ]
For once Schäuble's minions could feed the media with their version of events without the risk of Varoufakis publishing memos or tapes contradicting it.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jun 29th, 2015 at 03:27:57 PM EST
[ Parent ]
I think it's pretty bad, actually:
Dijsselbloem trat in dieser ersten Pressekonferenz anders als sonst nach Eurogruppen-Treffen alleine vor die Medien. Der große Ernst und die entschlossene Eindeutigkeit seines Auftritts beeindruckte nicht nur die Journalisten, sondern auch die anderen 17 Finanzminister. In ihrem gemeinsamen Sitzungssaal verfolgten sie mucksmäuschenstill die Pressekonferenz des niederländischen Finanzministers. Als Dijsselbloem zurückgekommen sei, hätten ihm die anderen stehend Beifall geklatscht, berichtet ein Teilnehmer.
In this first press conference Dijsselbloem went alone in front of the media, unlike after other Euro Group meetings. The great seriousness and resolute clarity of his performance not only impressed the journalists, but also the other 17 finance ministers. Together in their meeting room they followed the press conference of the Dutch Finance Minister silently. As Dijsselbloem came back, the others gave him a standing ovation, reported one participant.
See here for video of Dijsselbloem's press conference (first of 3 segments).

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 Jun 29th, 2015 at 04:14:36 PM EST
[ Parent ]
Why does it make me think of the Politburo?

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Mon Jun 29th, 2015 at 04:17:39 PM EST
[ Parent ]
Even though he was was talking about the European Commission rather than the Eurogroup, Björn Wahlroos was spot on when he claimed that the biggest difference between the Chinese politburo and these guys is that the Chinese politburo delivers 10 percent growth every year.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Jul 3rd, 2015 at 10:01:39 AM EST
[ Parent ]
WHEEEEEEEEEEEEEEE!!

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Jun 28th, 2015 at 06:23:21 PM EST
Folks, I know it's my birthday but you didn't have to go this far to make it memorable. Thank you.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Sun Jun 28th, 2015 at 10:57:50 PM EST
by das monde on Mon Jun 29th, 2015 at 03:46:53 AM EST
cool chart, questions is, who is the debt owed to?
by crankykarsten (cranky (where?) gmx dot organisation) on Mon Jun 29th, 2015 at 07:02:16 AM EST
[ Parent ]
For the government debt, all four sectors (the government debt not owed to government(s) is a net addition to private wealth).

For the corporate debt, mostly the finance sector.

For the household debt, mostly the finance sector.

For the finance sector, mostly the finance sector.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jun 29th, 2015 at 09:06:25 AM EST
[ Parent ]
Depending on how they count, the financial sector may also owe a lot to the government.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jun 29th, 2015 at 11:30:17 AM EST
[ Parent ]
Just after a loan bail-out, or if the monetary authority engages in purchases of private assets to inflate private asset prices (so-called "quantitative easing"), then the government can indeed own some assets that are promises to pay by the finance sector.

But still, a large share of the promises to pay by the finance sector will be to some other part of the finance sector.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon Jun 29th, 2015 at 09:04:30 PM EST
[ Parent ]
In the European version of central bank operations, liquidity is provided through the discount window, not primarily open market operations.

How the numbers look will depend very much on whether you net out those transactions or not.

I'm suspecting that the different countries in that chart have different conventions for netting out bilateral relationships prior to counting the debts.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jun 29th, 2015 at 11:47:29 PM EST
[ Parent ]
In the European version of central bank operations, liquidity is provided through the discount window, not primarily open market operations.

But total debts are a multiple of total money and total money is a multiple of total reserves, so even if all reserves are created through the discount window, that is not that large a share compared to the debts that finance sector firms owe to each other.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Jun 30th, 2015 at 01:35:51 AM EST
[ Parent ]
For once a very apt cartoon by Martin Rowson:



*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Jun 29th, 2015 at 05:27:50 AM EST
Bloomberg: What Are Greece's Capital Controls? (June 29, 2015)

  • From Monday, June 29, 2015, banks will remain closed up to and including Monday, July 6
  • Deposits are fully safeguarded
  • The payment of pensions is exempted from the restrictions on banking transactions. Management of credit institutions will announce how these will be paid
  • Electronic transactions within the country won't be affected. All transactions with credit or debit cards and other electronic forms (web banking, phone banking) can be conducted as normal
  • Prepaid cards may be used to the limit existing before the beginning of the bank holiday
  • From midday June 29, ATMs will operate with a daily cash withdrawal limit of 60 euros per card, which is equivalent to 1,800 euros a month
  • Foreign tourists can make cash withdrawals from ATMs with their cards without restrictions provided these have been issued abroad
  • A special Committee to Approve Bank Transactions has been established at the State General Accounting Office in cooperation with the Finance Ministry, the Bank of Greece, the Union of Greek Banks and the Capital Markets Commission. This committee will deal with applications for urgent and imperative payments that can't be satisfied through the cash withdrawal limits or by electronic transactions (e.g. payments abroad for health reasons). Wages paid electronically to bank accounts aren't affected


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 Jun 29th, 2015 at 09:40:14 AM EST
Greece threatens top court action to block Grexit - Telegraph

Greece has threatened to seek a court injunction against the EU institutions, both to block the country's expulsion from the euro and to halt asphyxiation of the banking system.

"The Greek government will make use of all our legal rights," said the finance minister, Yanis Varoufakis.

"We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable," he told the Daily Telegraph.

(...)  Any request for an injunction against EU bodies at the European Court would be an unprecedented development, further complicating the crisis.

Greek officials said they are seriously considering suing the European Central Bank itself for freezing emergency liquidity for the Greek banks at €89bn. It turned down a request from Athens for a €6bn increase to keep pace with deposit flight.

This effectively pulls the plug on the Greek banking system. Syriza claims that this is a prima facie breach of the ECB's legal duty to maintain financial stability. "How can they justify setting off a run on the Greek banking system?" said one official.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jun 29th, 2015 at 04:13:25 PM EST
Greek bailout: a payday loan with serious conditions attached | Business | The Guardian

It's the kind of hand-to-mouth decision many families whose finances are tight have to make regularly: how to meet the monthly mortgage repayment. But most people know that using their credit card, which invariably carries a far higher interest rate, is not a sensible answer.

Yet Yanis Varoufakis, the Greek finance minister, told a BBC interview on Sunday that's exactly what his government is being urged to do. And, in a sense, he's right.



'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 Mon Jun 29th, 2015 at 10:22:33 PM EST
Greece Over the Brink - The New York Times

It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency -- above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent's most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors' demands for harsh austerity, while the European Central Bank has managed to contain market panic. Paul Krugman Macroeconomics, trade, health care, social policy and politics.

See More »

But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls -- limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start paying pensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the "troika" -- the institutions representing creditor interests -- for yet more austerity.

The Troll-ka, here to save us from having to be friendly to our fellow EU-ers, and the banksters to ever have to say they're sorry.

'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 Mon Jun 29th, 2015 at 10:25:10 PM EST
Greece: EU parliament slams failure to reach deal | The Parliament Magazine

Reacting to these latest developments, parliament's European People's Party (EPP) group chair Manfred Weber said, "the Greek government should not continue telling untruths to the Greek people on what happened during the negotiations. Both the European commission and the Eurogroup made extensive offers and proposals. Europe has been doing everything it can to build bridges and is still ready to help".

He accused the Greek government having been "irresponsible during the whole negotiation process. The fact that no agreement could be found is its sole responsibility".

"All responsible politicians have made it clear that the eurozone cannot be subject to blackmail. Even a radical government must accept that there are rules, and that those should be observed. This is a signal sent to other countries also. What will be at stake at the upcoming elections is whether the countries concerned want to continue on a constructive path together with Europe, or choose egoism, radical positions and instability."

Gianni Pittella, chair of parliament's Progressive Alliance of Socialists and Democrats (S&D) group, warned that "the eurozone is now entering troubled waters following the rejection of the Greek bailout extension. All efforts must be done to prevent a Grexit".

The Italian MEP remained hopeful that, "the elements for a decent compromise remain on the table. The differences between the creditors' proposals and the Greek government can be bridged if everyone is ready to make an effort."

"It is not the time to further punish the Greek people. Everything must be done to keep the financial flows inside the country. Confronted with an unprecedented situation, Greek people must be offered the chance to choose their future. We are not afraid of any referendum", he added.

Meanwhile, Guy Verhfostadt, chair of parliament's Alliance of Liberals and Democrats for Europe (ALDE) group, warned that "a 'Grexit' is a lose-lose situation - creditors lose their money and the Greek economy will further crumble. A 'Grexit' will be seen by the world as an enormous management failure of a respected reserve currency". 

He urged Greek finance minister Yanis Varoufakis and the eurozone leaders "to come back to their senses".

"The current negotiations focused on quick wins such as tax increases and pension cuts. It was a programme that put the burden on the Greek population, but would leave the government and its bureaucracy untouched."

"The Greeks are not to blame for this mess, but their leaders are. It started with bad governance by Socialists and Conservatives, and is pursued by a Communist government that continues previous policies of clientelism and puts the bill of their failure in the hands of their citizens", he underlined.

Greens/European Free Alliance co-chairs Rebecca Harms and Philippe Lamberts commented, "while the Greek government made major steps towards a compromise, putting forward proposals that went much further than anything proposed before, the lenders remained intransigent in their demands."

"Greece's creditors continue to demand measures which would not help the country's economic recovery. Greece instead needs a commitment for a restructuring of the debt as well as the rapid set-up of a major investment plan to counterbalance the recessionary and self-defeating austerity measures requested by the creditors".

And Gabi Zimmer, chair of parliament's Confederal Group of the European United Left/Nordic Green Left (GUE/NGL) said, "the Eurogroup's cold hearted ideologues have once again trampled on European democracy. First they blackmailed the democratically-elected Greek government for months, now they have denied the Greek people the possibility to decide about the Eurogroup's proposal."

"It would have been no problem for the finance ministers to extend the programme for a few days to make this possible. But they did not want to give the Greek people this freedom. They prefer to see the only Left government in the EU failing and, because of this, they are putting European integration at risk. Now, EU leaders must find a last-minute solution. The EU's future lies in their hands."

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 30th, 2015 at 02:31:34 AM EST
Remember the good old days of deconstructing mainstream articles? I could not help but think of that during the opening paragraphs:

"the Greek government should not continue telling untruths to the Greek people on what happened during the negotiations."

Well, that is a wonder. Strange things were told by the Troika, until when Varoufakis revealed that he had taped the entire meeting it caused quite a stir. But apparently it's Greece that is lying.
Certainly not Junker, who just claimed that there was no hit on pensions in the last "offer", despite there not only being one in writing, but this also being among the points where Athens was vetoed.

"Both the European commission and the Eurogroup made extensive offers and proposals."

Extensive in their overreach, for sure. But the Greek government does not deny that the Commission and the Eurogroup made offers (although they could not really agree with the IMF on them) - the Greek government is asking its people to decide whether to accept them. That would logically imply recognising their existence. So what is the issue?

"Europe has been doing everything it can to build bridges"

I did not notice that there was a lot of infrastructure investment provided by Europe but it must be attention deficit.
Oh, he means metaphorically! Well, sure, we all saw how kindly Varoufakis was welcome. And how the goalposts never retreated anytime the Greeks looked like getting too close to them.

"He accused the Greek government having been "irresponsible during the whole negotiation process. The fact that no agreement could be found is its sole responsibility"."

Well, you can technically put it like that: they chose to not accept the Troika's starting position. This is what the Troika was used to, after all.

"All responsible politicians have made it clear that the eurozone cannot be subject to blackmail. Even a radical government must accept that there are rules, and that those should be observed."

Such as not using beggar thy neighbour policies, essentially the only economic policies pursued by the core in the past 15 years? Or not endangering the financial stability of a member state? Or not imposing odious debt? Or for Germany to honour its own debts and return what they looted when they wrecked the country? Or respecting the democratic sovereignty of countries? Or does he only mean the TINA rule?

"This is a signal sent to other countries also."

Ah, at last a moment of truthfulness. This was always about making an example to scare the others.

"What will be at stake at the upcoming elections is whether the countries concerned want to continue on a constructive path together with Europe, or choose egoism, radical positions and instability."

It was indeed what was at stake during the last Greek elections, and the former position won. This was not to the taste of this member of a party (EPP) standing for the latter, who would be a lot happier with his mates from Golden Dawn.
As for "radical" positions. Wow. EVERY macroeconomist I know has made it clear that the Troika was out of control whereas Syriza had been reasonable beyond belief in their positions - except when going economically way too far in an attempt to reach an agreement. Basic arithmetics is not a radical position.

"All efforts must be done to prevent a Grexit"

And yet, so far, all the efforts have been on the side of negative motivation: threatening them with destruction if they leave. No positive one, in the form of getting something in return for staying. All efforts? Right...

"The Greeks are not to blame for this mess, but their leaders are. It started with bad governance by Socialists and Conservatives, and is pursued by a Communist government that continues previous policies of clientelism and puts the bill of their failure in the hands of their citizens"

I'm sorry, what? A Communist government no less?
So, this must be a recent development. I was in Greece in April and did not get the impression that all means of production were publicly owned. Indeed, despite it making the fiscal situation worse, Syriza accepted some further privatisations requested by the Troika.
They also reduced stopped using the police to quash political demonstrations.
Some communist government. And I really am not too sure which "clients" Syriza has been pursuing, unless by that he means the Greek people.

It gets better by the end. It seems that only the Greens can make political sense these days...


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

by Cyrille (cyrillev domain yahoo.fr) on Tue Jun 30th, 2015 at 04:04:47 AM EST
[ Parent ]
Gianni Pittella, chair of parliament's Progressive Alliance of Socialists and Democrats (S&D) group, warned that "the eurozone is now entering troubled waters following the rejection of the Greek bailout extension. All efforts must be done to prevent a Grexit".
The Southern socialists, France's Sapin and Italy's Padoan, may have protested that the bailout extension should be granted (though only Sapin hinted at this, not Padoan) but in the end they fell in line with the Christian Democrats and the Northern Socialists (Dijsselbloem).

So Pittella can cry me a river.

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 Jun 30th, 2015 at 06:01:39 AM EST
[ Parent ]
You forgot the quotation marks around the word socialist.
by cagatacos on Tue Jun 30th, 2015 at 12:18:52 PM EST
[ Parent ]
If someone calls themselves a socialist or social democrat I won't dispute the label.

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 Jul 1st, 2015 at 04:17:46 AM EST
[ Parent ]
Greece in chaos: will Syriza's last desperate gamble pay off? | Paul Mason | The Guardian

Nobody knows what 50,000 drachmas will be worth if Greece defaults on its debts, but Kiritsis and his colleagues have for months been exposed to the basic dilemma of Syriza. It is a coalition - including the hard, pro-Moscow left who want that drachma note to become real; a centre around Tsipras who wanted to try to shrug off austerity within the euro; and former social democrats who want, at all costs, to do a deal with the lenders.

It was not until 4 June that Tsipras became convinced that his original strategy - to go on paying the lenders while negotiating the fine detail of an accord that never seemed to come - was fruitless. It was at this point that the forces in Syriza realigned leftwards and the strategy of the troika (the ECB, IMF and European Commission) - which had always been to split Syriza, forcing Tsipras and his own moderates into a coalition government with the centre parties - was in tatters.

The ultimate question for Syriza, with the banks closed and the referendum due, is: can it now function as a movement? It has ridden to power on the back of social movements but, unlike Podemos in Spain or Sinn Féin in Ireland, has never really been a mass movement itself.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 30th, 2015 at 03:50:53 AM EST
the strategy of the troika (the ECB, IMF and European Commission) - which had always been to split Syriza, forcing Tsipras and his own moderates into a coalition government with the centre parties

And while this is a foin strategy, its one thing to have it, its seems that its another to execute it. Notice that to split a governing coalition, you need to provide an offer acceptable to the one part and not acceptable to the other part.

Making offers unacceptable to all interests in a coalition is an approach more likely to unite a coalition than to divide it.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jun 30th, 2015 at 06:52:44 AM EST
[ Parent ]
I also take objection to the acceptability of this kind of strategy. This is something you may do in battle, not when seeking a mutually favourable agreement. And promoting regime change in a foreign country (a democratic one to boot) is not a minor thing.

Syriza is not a dictatorship violating human rights. The institutions are supposed to be representing the European people, as part of an organisation requiring the respect of democracy.

Yes, I know we have become cynical enough not to expect it. But I don't want to let the point go. There is nothing so profoundly inethical in Syriza to justify violating our most basic values.

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

by Cyrille (cyrillev domain yahoo.fr) on Tue Jun 30th, 2015 at 07:01:22 AM EST
[ Parent ]
The institutions are supposed to be representing the European people, as part of an organisation requiring the respect of democracy.

This is part of the EU democracy deficit.

There is no evidence in the actual rules of behavior created for the ECB that the ECB is either supposed to be representing the European people, or that it is supposed to be part of an organisation requiring the respect of democracy.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jun 30th, 2015 at 08:09:59 AM EST
[ Parent ]
It is the Central Bank of the Eurozone, an organisation that derives from the EU.

The EU is officially committed to democracy.

Indeed, the actual rules fail to reflect that.

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

by Cyrille (cyrillev domain yahoo.fr) on Tue Jun 30th, 2015 at 08:18:39 AM EST
[ Parent ]
ECB: Entretien de Benoît Coeuré, membre du directoire de la BCE, accordé à Nicolas Barré, Catherine Chatignoux, Jean-Philippe Lacour, Etienne Lefebvre, Guillaume Maujean, Dominique Seux et François Vidal, Les Echos, le 29 juin 2015.
La sortie de la Grèce de la zone euro est-elle désormais l'hypothèse la plus probable?

La sortie de la Grèce de la zone euro, qui était un objet théorique, ne peut malheureusement plus être exclue. C'est le résultat du choix du gouvernement grec de mettre fin à la discussion avec ses créanciers et de recourir à un référendum, qui a conduit l'Eurogroupe à ne pas prolonger le deuxième plan d'aide.



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 Jun 30th, 2015 at 08:34:10 AM EST
[ Parent ]
BCE: Entretien avec Les Echos  ECB: Interview with Les Echos
La responsabilité de la rupture est-elle donc entièrement grecque ? So the responsibility for failure lies entirely with the Greeks?
La décision d'interrompre les discussions a été prise par les autorités grecques. Cela nous a d'ailleurs surpris, car nous arrivions au terme d'échanges intenses et assez fructueux. The decision to discontinue discussions was taken by the Greek authorities. That also surprised us because we were drawing to the close of intense and quite fruitful exchanges.
Vous parlez des propositions au passé. La BCE considère-t-elle que la question qui sera posée aux Grecs lors du référendum est d'ores et déjà caduque, puisque l'extension du plan d'aide ne sera plus d'actualité le 30 juin au soir ?You speak of proposals in the past tense. Does the ECB consider that the question put to the Greeks in the referendum is already null and void, since the extension of the aid plan will no longer be valid on the evening of June 30?
D'un point de vue formel, le programme va en effet expirer mardi soir. Ceci dit, si la réponse est « oui », je n'ai pas de doute sur le fait que les autorités de la zone euro trouveront les moyens, sous une forme ou sous une autre de tenir leurs engagements. La question est politique. La réponse à cette question, ce sont les Grecs qui la détiennent. From a formal point of view, the program will indeed expire Tuesday. That said, if the answer is "yes" I have no doubt that the eurozone authorities will find ways, in one form or another, to meet their commitments. The question is political. The Greeks hold the answer to it.
Et si les Grecs répondent « non »...  And if the Greeks say "no"...
Ce serait un refus de l'offre des 18 autres pays de la zone euro. Il serait alors très difficile de renouer un dialogue politique. L'Eurogroupe a clairement considéré que les propositions des trois institutions étaient allées à la limite de ce qui était acceptable. It would be a rejection of the offer of 18 other countries in the eurozone. It would be very difficult to resume a political dialogue. The Eurogroup has clearly considered that the proposals of the three institutions had reached the limit of what was acceptable.

Benoît Coeuré questioned by the likes of Dominique Seux = tepid orthodoxy.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 30th, 2015 at 08:46:43 AM EST
[ Parent ]
The Eurogroup has clearly considered that the proposals of the three institutions had reached the limit of what was acceptable.

This phrasing is an indirect confirmation of the narrative that the Eurogroup tore up the offer the Troika had drafted to replace it with a more purist Austeritarian ultimatum.

Which is part of what is so outrageously anti-democratic about this ... the Greek government proposes to accept a quite insanely high primary budget surplus, and so the response is that the Eurogroup objects to the structure of taxes proposed to achieve that?

What fundamental underlying power does a parliament have if an informal group of a subselection of EU Finance Ministers can take over for itself the power to determine who is taxed?

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jun 30th, 2015 at 09:22:28 AM EST
[ Parent ]
All the more in that the EU (all institutions considered except to some extent the EP) has steadfastly imposed the policy of fiscal independence of member states as opposed to any proposal for centralised fiscal policy (such as would be called for by a single currency) or even harmonisation (apart from the feeble effort on VAT).

The fiscal independence of member states is an article of faith -- as long as it results in race-to-the-bottom fiscal competition. In the contrary case, it cannot be contemplated.

And Dijsselbloem & Co, echoed by robotic journalists and sold-out pundits, will repeat that there are "rules" to be respected.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 30th, 2015 at 10:08:21 AM EST
[ Parent ]
And to be clear, I am saying precisely that it would be a well chosen strategy in pursuit of that goal, if implemented less incompetently.

The goal being pursued is egregious and reprehensible, and in a sane world would be met with widespread condemnation by civil society ... and in countries with governments on a narrow majority, the fall of a government or two.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jun 30th, 2015 at 09:15:46 AM EST
[ Parent ]
According to a France TV report, Junker sent a "last chance" proposal to allow Greece not to default.

Here is how it would go:
-Tsipras commits in writing to applying the latest version of the Troika diktats
-If he does, Junker would do his best to convene a meeting of the Eurogroup to adopt (not sure how there could be a guarantee that they would) a resolution restating their 2012 (2012!) commitment to discuss a re-examination of the Greek debt (presumably the conclusion might be to then discuss a possible re-structuring a few decades later).

Wow. What an offer. How could Tsipras not call off the referendum immediately?

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

by Cyrille (cyrillev domain yahoo.fr) on Tue Jun 30th, 2015 at 04:41:11 AM EST
Greek debt crisis: hopes of last-minute deal on decision day for Alexis Tsipras - live updates | Business | The Guardian

...This morning the online news portal Newsit.gr citing exclusive sources reported that an "orgy of meetings" in Athens and Brussels were now taking place to break the impasse by midnight, when Greece's bailout programme officially expires.

..."According to [our] information, a serious plan is being organised by several sides so that an agreement can be reached by midnight.

"A very important point is that this deal will NOT include the IMF," it said.

France is believed to have played a central role brokering the agreement. Leading figures in Syriza are urging the government to accept an interim agreement if necessary to stave off bankruptcy.

Excluding the IMF? Interesting. But:



*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jun 30th, 2015 at 06:33:18 AM EST
[ Parent ]

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 30th, 2015 at 07:00:49 AM EST
[ Parent ]
Few signs of market panic as Greece nears default | Reuters

Eurozone stocks, low-rated bonds and the euro weakened on Tuesday as Greece looked set to default on a repayment due to the International Monetary Fund and to plunge deeper into financial crisis.

There was little evidence of panic, however, with investors pointing to Europe's improved ability to fight financial contagion since the height of the euro debt crisis in 2011.

How many previous MSM headlines about OMG! falling markets? In fact markets aren't going over the cliff-edge.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 30th, 2015 at 07:05:21 AM EST
Same as with Cyprus. The acute phase of the crisis is gone, this is the new normal.

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 Jun 30th, 2015 at 07:06:04 AM EST
[ Parent ]
In the midst of an editorial fraught with errors and buying into the EU propaganda, the Editorial Board of the NYT makes a call for:

"ripping up the IOUs."   Hmmm.

NYT Link

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Tue Jun 30th, 2015 at 07:46:38 AM EST
Current economic and monetary union likely to fail | The Parliament Magazine

The EU's economic and monetary union (EMU) needs urgent reform. The choice is clear: fix it or citizens will nix it. The euro's skewed architecture, the unconditional bailout of insolvent banks, as well as austerity in response to the financial crisis, have taken things from bad to worse. 

Growth in the eurozone is particularly weak and millions of citizens have lost their jobs. A bold reform of the EMU needs to focus on smart public investment, balancing intra-European trade and taxing unproductive wealth.

A common currency deprives member states of the possibility of adjusting exchange rates. It can therefore only work if wages against productivity (unit labour costs) - the dominant determinant of inflation - follow the central bank's inflation target.

However, the extreme wage restraint in countries such as Germany between 2000 and 2010 fuelled trade and capital account imbalances and undermined the effectiveness of a single monetary policy, since real interest rates diverged and displayed pro-cyclical patterns.

Consequently, excessive private sector leverage in peripheral countries, which was the flip-side of the German trade surplus, imploded in the financial and banking crises, and the respective governments had to shoulder massive bailout programmes.

About the author

Fabio De Masi (Confederal Group of the European United Left/Nordic Green Left, Germany) is a member of parliament's economic and monetary affairs committee

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jul 1st, 2015 at 04:52:12 AM EST
Naked Capitalism: Tsipras' Bailout Referendum Sham (June 27, 2015 by Yves Smith)
The creditors are known thugs. They have engaged in harsh austerity, putting it in one of the very worst downturn in an economy not in a state of war , used Greece to launder bailouts to French and German banks, not given Greece credit for having implemented numerous "reforms" and broke the last government. Paul Mason is correctly very critical of how the creditors behaved last week. Even I was surprised that they'd press their advantage so far when Tsipras has already crossed a red line while desperately trying to pretend he hadn't by claiming he wasn't cutting pensions when actually doing so by requiring increased contributions from retirees.

...

Among Sun Tsu's rules of war are "Know your enemy" and "Know yourself". Syriza appears to have not bothered understanding what they were up against They have seemed to be in denial for the last two months that the creditors were not afraid of a Greek default. Their assumption appears to have been that the national governments would find it too politically toxic to recognize losses on the debt they had extended to Greece through the EFSF and the Greek Bailout Fund. But maturities on these facilities have been extended and payments deferred. And the national governments do not have to mark to market. They will recognize losses only if and when Greece fails to make payments, which is years down the road. And even then, the pain is spread out over decades. That means Greece's supposed nuclear weapon turns out to be a pop gun.

...

So the only conceivable excuse for waiting this long is for Tsipras to attempt to save himself. If he were to reject the bailout, the decision is unquestionably his and that of his allies. That it precisely the sort of decision that government leaders are expected to make. Or he could just as well accept the bailout, recognizing that as bad as things are, that the country would be plunged into an even deeper economic sinkhole, putting the survival of even more citizens at risk. It would take forming a new coalition with To Potami and New Democracy, and that would mean that his and Syriza's position would become far more tenuous and he would be fiercely denounced by many if mot most Syriza MPs.



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 Thu Jul 2nd, 2015 at 09:22:51 AM EST
As usual, Naked Capitalism does not understand basic points about how complex institutions work, causing it to succumb to the Big Man theory of insurgency.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jul 2nd, 2015 at 02:49:49 PM EST
[ Parent ]
Extraordinarily sloppy logic:

"Syriza appears to have ..."
"They have seemed to be ..."
"Their assumption appears to have been ..."
...
"So the only conceivable excuse ..."

Something that is "the only conceivable" alternative after that much filtering is only a statement of what is passed through by the filtering.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Jul 2nd, 2015 at 09:39:46 PM EST
[ Parent ]
Times of Change: The full text of the decree establishing capital controls in Greece (29 June 15)
A full English translation of the presidential decree for "a Short Banking Holiday" which establishes capital controls in Greece.

Below is an unofficial translation by TheTOC of the full text of the government order establsihing capital controls in Greece:

Taking into consideration:

  1. Article 44 paragraph 1 of the Constitution.

  2. The extraordinary circumstances of an urgent and unforeseen need to protect the Greek financial system and the Greek economy in general by the lack of liquidity caused by the decision of the Eurogroup of 27 June 2015 to refuse the extension of the loan agreement in Greece.

  3. The proposal of the Cabinet, we decide:

  4. The period from June 28 until July 6 is declared a bank holiday. The bank holiday relates to all credit institutions operating in Greece in any form, including branches of foreign credit institutions within the scope of Law. 4261/2014 (A 107), the Deposits and Loans Fund, payment institutions of Law . 3862/2010 (A 113) and electronic money institutions of l. 4021/2011 (A 218), branches and representatives of authorized payment institutions and electronic money institutions established in other Member States of the European Union and operate legally in Greece (hereinafter the "institutions").

By decision of the Minister of Finance, the above period may be shortened or extended. During the bank holiday, institutions will remain closed to the public and only staff necessary for the implementation of this act and preparation for the resumption of trade with the public after the end of the bank holiday, will have access to them.

The payment of pensions is exempt from the banking restrictions herein. The management of credit institutions shall communicate the arrangements for the payment of pensions and specific branches per area, which will open for this purpose.

2. During the bank holiday the following can take place:

a) cash withdrawals from automated teller machines, subject to a daily limit per card, which is set at 60 euros, which might be amended by the Finance Minister. Automatic teller machines will work within twelve (12) hours on the first day of enforcement.

b) transactions without restrictions other than those in force before the adoption of this decree, with credit and debit cards for payments in the country, namely for payments credited to accounts held in Greece.

c) payments using prepaid cards only up to the amount left in the card before the start of the bank holiday.

New prepaid cards can not be issued

d) long distance transactions (e-banking -Web Banking- or transactions by phone) for payments within the country, namely for payments credited to accounts held in Greece.

e) cash withdrawals from automated teller machines with cards issued abroad. Limitations in withdrawal limits to these cards may be specified by decision of the Minister of Finance.

During the bank holiday no other banking transaction can be performed

By decision of the Finance Minister other categories of transactions, may be exempt and the decision will determine the process followed in those cases.

3. Paragraph 2 does not apply for:

a. transactions with the Bank of Greece,

b. cross-border payment authorizations that relate exclusively to crediting an account held in a credit institution operating in Greece,

c. clearing transactions, which are registered in central payment systems (TARGET2-GR, EURO1, DIAS) and arrangements, like the Athens Central Depository System for Monitoring Transactions in Book-Entry Securities / dematerialized securities before the entry into force of this Act,

d. specific transactions that are deemed necessary by decision of the Commission of the following paragraph, and

e. Transactions of the Greek Republic.

4. It is recommended to the General Accounting Office, to form a Banking Approval.Committee. The competence of that Committee is the enforcement of transactions that fall under paragraph 3, point d of this act, during the bank holiday, provided that those transactions are necessary to safeguard the public or social interest, including, inter alia, transactions for the payment of medical expenses or the import of pharmaceuticals. The Commission has five members and consists of the following persons:

a) the Director General of Fiscal Policy and Budget of the General Accounting Office of the Ministry of Finance, as Chairman, with the Director General of Budget Accounting Office of the Ministry of Finance as deputy,

b) the Director General of Economic Policy of the Ministry of Finance , the Director of the Credit and Financial Affairs of the Ministry of Finance, as a deputy,

c) the Director of Supervised Companies of the Bank of Greece and the Section Head of the Directorate of Financial Operations of the Bank of Greece, as a deputy,

d) a representative of the Greek Banks Association and a representative of the HCMC designated by their Presidents. The Commission President shall appoint an official from the General Accounting Office, of university education class (PE), as Secretary of the Commission.

5. There will be no due interest on arrears for the period of the bank holiday on claims that become due during it.

During the same period, the maturities and payment of securities are suspended as are judicial deadlines.

  1. The Bank of Greece is required to fine credit institutions for each violation of the current act with a fine of up to one tenth of the amount of the relevant transaction. Moreover, the credit institution is bound to terminate a contract of employment or work of the person responsible for the infringement.

  2. The Minister of Finance shall regulate any other matter concerning the application of the present act.

Article two.

The power of this, which will be ratified legally under Article 44 para. 1 of the Constitution, is effective on its publication in the Official Gazette of the Government.



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 Jul 3rd, 2015 at 12:50:03 AM EST


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