A small amount of money was made available to the Greek banks to keep them in buisness (1.5 billion euro) during the week - 2 billion was withdrawn from Greek banks though sparking fears they may impose restrictions like Cyprus did in 2013.
When asked of Greek banks would be open on Monday a spokesman said they would tommorrow (Friday) but unknown about Monday.
Asking Greeks to think and plan more than a couple days ahead at the moment is a bit unfair when the rest of the world has even less idea about what’s going to happen, and the consequences.
And the sad thing is … one really has to have some sympathy for the Greeks, and even the Tsipras Gang. Only by employing the lame argument that “they all partied at others’ expense” can this position be sustained. Greece is in its present position because of the irresponsibility, cowardice and corruption of a succession of (generally) right-wing and centre-right governments and their political and financial supporters, who allowed the country to be run largely for the benefit of a small number of local “oligarchs” and bought political support by maintaining a “lenient” social and economic policy involving its own low-level of corruption and tax evasion. This was only exacerbated by Greek entry into the EU. It is highly questionable whether EU accession was timely or even appropriate. The main effect on its economy was to pump new, foreign money into the country’s corrupt, dysfunctional system. By contrast with, say, Ireland and Portugal, the Greek system responded to EU initiatives such as the “Structural Funds” programmes, not by developing new infrastructure and enterprise but, by and large, by diverting large amounts of this funding into the existing rotten, stagnant system. As for the adoption of the Euro currency - there is no way that Greece was ready for this, or that it should have been permitted. Tying the Greek monetary system to that of (notably) Germany was an act of political folly, totally unjustified by any clear-sighted economic appraisal. One wonders whether the would-be Masters of the Universe in Brussels were really fooled by the then (centre-right) Greek government and its fraudulent national accounting. I am (unusually for an Irishman) an unabashed anti-Single Currency person (although now that we are stuck with it, there may be no way back that avoids disaster). However, the lack of realism in admitting Greece was a peculiarly fantastical example of EU political imperialism forcing economics into a pattern fitting its purposes. As the old song says, “He’s your guy when stocks are high/But beware when they start to descend …”. When the great international financial/banking/monetary disaster struck, the fundamental differences between the Greek and the German economies emerged in earnest and, trapped in the Euro, the Greek economy had no way of making the monetary adjustments demanded by the new situation.
So where are the Greek people now ? Unemployment is huge, and the safety-valve (for youth unemployment in particular) of emigration is highly restricted by a myriad of cultural and political restraints. The situation has become so bad that, as Tsipras himself recently pointed out, cuts in pension commitments would ruin a large number of Greek families who now actually depend on the pensions of the family’s elder members for survival. The EU is alleged to have suggested increasing the Value-Added Tax (VAT - the Sales Tax) on electricity and on fuel generally. Fine - except that, as a member of the national Chamber Orchestra of Greece recently pointed out on Irish radio, even Greeks who were relatively affluent find fuel costs beyond their ability to pay, and many (even of the hitherto relatively well-off) have shivered through a number of cold Greek winters for want of an ability to pay for electricity or gas. Public sector pay cuts and additional redundancies ? Great - the Greek civil and public services are manned on a “how many Greeks does it take to change a lightbulb” basis, and this problem needs to be addressed. However, addressing it “with extreme prejudice” just now can only magnify all the population’s existing problems in merely surviving. The apparent policy of the EU/IMF/ECB “Troikists” appears to be merely to squeeze the rock harder and harder. No blood can be squeezed from a stone. They are all done.
The Central Bank of Greece is, in one sense, right. Greece needs some sort of renewed interim “bailout”. In the alternative, having scraped the very bottom of the financial barrel, having employed the most “creative” of money-gathering “expedients”, Greece and its banks will surely default calamitously, leading to capital controls, self-expulsion from the Euro, and possible departure from the EU. In the short term, this would result in a huge depreciation in the Greek currency and chaos in its trade relations, along with the exclusion of Greece from the financial markets. The “austerity” implied by this scenario would make the terrible “austerity” experience so far seem slight. And it is hard to see how this can be borne by ordinary people.
On the other hand - and in a way I hate to say this - the Tsipras Gang is also right. One can argue the rights and wrongs of this, of how we got here. However, the reality is that firing a lot of people and “reforming” (i.e. cutting) pensions and salaries would reduce much of the Greek population to something less than penury. This would pave the way for severe civil unrest and, at higher political level, for the possible loss of Greece to the sphere of Putin’s influence, something that the latter could not have hoped for up to recently. How to square this vicious circle ?
The Eurozone “managers” have set their face against outright debt relief, notwithstanding the fact that Greek repayment of loans on any normal timescale really is impossible. Very well - there are reasons for this. However, debt restructuring, allowing the bulk of Greek debt to be put on a “never-never” timescale (already done for other Member States owing money in this direction) is possible, and should be seriously considered. This should initially done on a short-medium term basis. In the meantime, core reforms in the matter of pension rates and eligibility, Greek public sector salaries and employment levels, pricing and taxation of essential public services and so on should be imposed on a gradual basis in line with the (hopeful) growth of the Greek economy that should (hopefully) be permitted by such an enlightened policy. This would still be very, very hard on the Greek people. However, it would at least offer some possibility of a recovery - which the present Wolfgang (Barney Rubble) Schauble hardline solution does not offer.
May happen. We shall see. Best regards, JR.
Substitute any other developed, and undeveloped, country’s economy for “Greece” in the preceding statement and, to varying degrees, it covers all of them.
Then we have the countries run as the workers’ paradise, such as the USSR and its present reduced form of Russia along with the People’s Republic of China which, being nobly and ideolocially focused on elevating the proletariat to dizzying heights of fair wages and living standards, didn’t. Yet they all managed to elevate their rulers and favoured elites to levels of avarice beyond those of the worst capitalist countries.
What’s wrong with the usual solution that those who did not benefit from the massive profits leading to the collapse should pay for it? This is the standard solution to excesses of capitalism, cronyism, and anything with laissez faire in front of it.
Greek public servants and pensioners didn’t design or control the system which has brought Greece to its knees, any more than a tiny number of economic brigands (I prefer to see them as criminals guilty of massive national economic crimes who should be treated as traitors to my nation) destroyed much of Australia’s economy several decades ago, as part of my nation’s steadily downward trajectory under the impetus of big money and the craven politicians in big money’s pockets.
I’ve wasted half a century discharging what I now realise were my seriously misconceived principles that it is a matter of honour to pay one’s debts on time and a civic duty to pay one’s tax for the common good.
These are the foolish notions of the bulk of the decent common people.
The rich, the criminals, and the politicians don’t subscribe to these principles.
So what does that have to with Greece, and the consequences of its default in Greece and globally?
The rich, the criminals and the politicians won’t be the ones shivering through a Greek, or any other, winter because they can’t afford the energy bills.
But the rich and the politicians, in and out of Greece, will be the ones making the rules determining who gets the energy to endure the Greek winter, and taxing and acting accordingly.
Meanwhile the criminals will just take what they want and not pay any bills, and probably extort money from those who can’t pay their bills.
It was ever thus.
I fully sympathise, RS*. And so, I suspect, would most of the Irish population. But will we do anything about it ?
“As soon as this pub closes, the Revolution starts !”.
Doubt it. Yours from the Slough of Despond, JR.
No, because representative democracy in the modern developed (and I use ‘developed’ with some cynicism) world usually means choosing one of two (or one of two and a bit for conservative coalitions that can never get their own majority) parties comprised of professional self-seeking party apparatchiks whose potential contribution to the common good is limited by their own lack of personal and social experience and utility. The constant factor across all parties and candidates is that they all excel at being useless arseholes given to spurting out meaningless daily messages determined by party HQ for consumption by the news media. The people who run our Western democracies are hidden turds who run focus groups and generally tell our elected representatives what these turds think we think, because our elected representatives are too busy listening to these turds instead of talking to us to find out what we think.
If these arseholes had been in power on both sides in WWII, there would have been almost no deaths as each side confined itself to flinging violent but ultimately empty rhetoric at each other.
Maybe that’s something to aim for, but in the meantime the revolution will start when this pub closes. 
Just for a bit of proletarian musical video on working men, here is an Irish version (which curiously starts out with and briefly maintains an Australian Aboriginal didgeridoo twanging beat ):
https://www.youtube.com/watch?v=EvFqVgz1AGo
And an Australian version, which no longer involves the spectacular burning of the canefields (sung by a major Australian rock singer who, like many of our rock singers, was a post WWII migrant and, even worse, a Scot 
:D):
https://www.youtube.com/watch?v=PeDHRjr8TzE
And here is the same Scot with what has pretty much become the unofficial anthem for many of our Vietnam veterans (despite no Australians having been anywhere near Khe Sahn):
https://www.youtube.com/watch?v=JDpZlBJQmbY
Well, ladies and gentlemen, the Balloon is well and truly up, the flares are in the air, and the Big Push has commenced along the Tsipras Line. Maybe. Also, it is less than clear at this stage who is pushing whom. Today, we have a fully fledged Eurozone emergency Council. By now, senior officials should have met to asses the latest (how many is it now ?) Greek proposal. Shortly, the Finance Ministers should take over discussions, followed by a meeting of Eurozone Heads of State and Government this afternoon, with further technical discussions, at official level, scheduled for this evening. Doubt whether it will run as smoothly as this schedule suggests. The end-result is supposed to be a “deal” that will allow the last tranche of the current Greek “bailout” to be released by the Troikists. Should this not happen, the dreaded “Grexit” from the Eurozone will come very close (if still stopping short - just - of inevitability).
The latest metzedakia menu from Athens appears to be a bit more specific than the many previous Stifado menus offered. However, at this point, Tsipras and his crew are still saying that they will not budge on pension cuts or increasing Value-Added Tax on electricity. The EU Commission has welcomed this latest proposal as positive, and a possible basis for a settlement. Clearly, they know something not revealed to the general public. Or maybe not - desperation and denial may be present here.
It has become painfully clear over the last few days that the Greek government’s hopes rest heavily on their ability to persuade Chancellor Merkel to accept something like their latest proposal, and basically force the rest of the Eurozone to accept it. This suggests that he is still hoping that the decisive stage of today’s process will be the meeting of the Heads of Government and Heads of State. This is already looking a bit problematic. The spin from Brussels last night was that the Heads of Government and State expect to be presented with a near-complete agreement by the officials and Finance Ministers; also, their target, Frau Merkel, previously indicated that she thought an agreement would be impossible today unless it had essentially been agreed over the last weekend. It is not clear that this has happened; far from it. Not, on the face of it, very promising.
And yet … there is a distinct odour of fudge mixed with that of cordite. Tsipras is now under serious and public pressure from the Masters of the Greek Economy to come to some sort of deal to allow the release of the final tranche of the current “bailout” money. Merkel, even if she has not blinked in this game of chicken, is definitely showing tremblings of the eyelid. At this stage, the Greek banks are, actually, insolvent. They only survived the last week because the European Central Bank extended a drip feed of cash to balance the gathering run on the Greek banks. The “drip feed” is of dubious legality of course but … the is the New Yerp. It is bonkers to continue drip-feeding the Greek banks with cash, only to see it all go out the door in withdrawals. Into the Gap of Death … JR.
Well. After a day of meetings in Brussels, the EC Commission and the Eurogroup bureaucrats have welcomed the latest Greek proposal for a deal to release their final tranche of bailout #1 funding as a “possible basis for agreement”. Details are to be fleshed out by a special Council of Eurozone Finance Ministers today, in preparation for yet another emergency Council of Group Presidents and Heads of Government tomorrow (Thursday). So - everything settled ? Er … not quite.
The contents of the Greek proposal remains somewhat obscured by the fog of war, not to mention fudge fumes. However, the details that have emerged are not particularly promising. Proposals for the target area (from a Eurozone viewpoint) of pension reform are vague. So are those on VAT (sales tax) - although a general rise in VAT is proposed. How the sensitive area (for the Greek people) of electricity and fuel will be treated is not clear. It would appear that heavy reliance is to be placed on income taxes on the “better off” element of the population and on increases in business taxes. What emerges is probably more specific than previous Greek “reform” proposals … but can it work ?
In the dear dead days of my youth, I worked in the Emerald Isle’s finance ministry on both corporation tax and VAT, so I have some idea as to how changes in the rates and effective rates of these taxes are likely to work. Cutting through the detail, the problem with relying on corporate taxes for significant increases in revenue (which also applies to the “soaking the rich” through increased income taxes) is that one is launching a direct attack on the interests of that section of the population most likely to be able to resist, avoid and evade, even within a generally efficient and effective tax regime. The Corporate Tax Unit of the Greek Finance Ministry will soon cease to feel overmanned as it becomes completely clogged with representations from lawyers, accountants and other lobbyists representing the “rich”. Meanwhile, the clever lawyers that only companies and the “rich” can afford will be busy weaving new schemes of avoidance and evasion. It is no exaggeration to say that substantial increases in the nominal burden of taxation in this area can result in yield reducing rather than increasing. This ties in with a connected economic consequence - increases in company tax and in tax on “high earners” will discourage investment in Greek enterprises, especially among high-value foreign investors who could contribute to a badly-needed modernization and diversification of the Greek economy. In summary, this element of the “package” may be appealing to the left-wingers of the Greek régime, but it seems less than likely to raise substantial increased revenues, and may significantly impair the development of the Greek economy. An unpalatable truth, perhaps - but nonetheless true.
As for VAT - this is essentially a tax on final consumers of goods and services. The way it works - all manufacturers and service suppliers in the supply chain of consumer goods and services pay VAT invoiced to them by their suppliers and reclaim it from the revenue, with the eventual burden of the tax falling on the final consumer, or the last supplying entity not registered for the tax. This can, again, be a very effective model for a consumer tax, at least in an efficient and effective tax system. The system under which commercial suppliers in the supply chain reclaim “input VAT” invoiced to them by their own suppliers provides a strong incentive for them to comply with the tax, and the standard form of VAT accounting should (and, in Ireland, does) make it difficult for all but the most clever fraudsters within the system to avoid detection indefinitely. Ahem. The problem with Greece is that it is not noted for having an efficient, effective tax system. The predominance of a “cash economy” in Greece has long been recognized to supply ample opportunity to evade the tax at all stages of trade. If this happens, and the revenue supervision system is less than effective, increases in rates (except in services closely controlled by the government) cannot be relied upon to produce proportionate increases in yield. There is also an economic point here - the narrowly-based Greek economy relies disproportionately on tourism, and VAT, being a “scattergun” tax, will adversely impact in this area. One of Prime Minister Tsipras’s close parliamentary colleagues says that he will not vote for any VAT increase that affects the Greek Islands, which are almost totally dependent on tourism and which are already suffering their own version of the EU’s African/Syrian refugee crisis. I can see his point.
Overall, if the new Greek proposal is, as appears, heavily dependent on measures such as this, its prospects of raising the required additional revenue are slim. As a former Finance official, I know well that my former colleagues in our Department of Finance, and their colleagues in other Eurozone finance ministries, will be well aware of this - which explains why leaks from yesterday’s meeting of Eurozone finance ministers describe it as “heated”. Today’s meeting - which is supposed to develop the Greek proposal for potential ratification by the Heads of State and Government tomorrow - is unlikely to be particularly friendly, either.
Whether the Greeks themselves are oblivious to these concerns is unclear. If the rhetoric of their equivalent political space here - the Sinn Féin Party, the Socialist Party, the People against Profit group et cetera - is anything to go by, their ideological position may persuade them that such measures may work, in the face of all international evidence. Or - more likely ? - they are just codding, having no real expectation that these measures will work, but will at least succeed in their getting their hands on the money, and in kicking the can down the road to the next Battle of the Tsipras Line by at least six months. Either way, this approach may “work”, if only because the Eurozone governments, following Chancellor Merkel (as usual), now seem desperate to avoid a Greek exit from the Euro at any cost. If that is the case, the infuriating Greek tactics in these protracted “negotiations” may be regarded as delivering them a “win”. But that can only be of the “battle”. Whatever the Masters of the Euro may decide tomorrow, the war will certainly go on … Yours from the Slough of Despond, JR.
Tumultuous fortnight along the Tsipras Line. After ten days of mutual insult and high-level meetings in Brussels, the Greek government appeared to walk away from discussions, and blew the whole thing out of the water by calling an a referendum at one week’s notice (!), asking the Greek people whether they approved of, or disapproved of, the latest Troika proposal for a “deal”. One problem with this - with Greece’s withdrawal from discussions and unilateral decision to call a referendum, the proposal upon which the Greeks will be voting became invalid. Another - nobody seems to have taken account of the difficulty of calling a national referendum in a largely rural/island based state at one week’s notice (we Paddies could have told them …). Then, there is the little difficulty of what proposal the bemused electorate will be voting on, and the consequences of the result either way. The Tsipras Gang are calling for a “No” vote on the basis that it would, allegedly, “strengthen the government’s negotiating position” (regardless of the fact that there is a huge difference of opinion between Athens and Brussels as to whether there is actually a process of negotiations in place. At the same time, the Troikists are claiming that anything but a “Yes” vote will be regarded as a vote “for exit from the Euro”, if not from the EU in total. Further exchanges of fire continue as to what any of this means. One contributor on Irish radio this morning recalled a statement from former Northern Ireland MP and MEP John Hume, who once remarked that anybody who claimed to be able to explain the Northern Ireland “sitiation” could not really understand it. That is about where Greece is at the moment. God help the electorate.
Anything, anything could happen. I still think that something will be fudged together at least to postpone the next Battle of the Tsipras Line for six months or so. However, this is far from certain. With their record of contradictory (or at least “overly subtle”) series of statements, “offers” and accusations over the last five months, they are now heartily distrusted by the “Troika” side, who clearly wish they would go away to be replaced by a more pragmatic régime. In any event, another comment from a commentator on Irish radio seems appropriate - “the Greek government is a caution against putting the Students Union into government”. Whether one agrees with their fundamental position or not (and I do have a lot of sympathy with it), the people in charge of Greece at the moment would certainly be more at home in university politics than in real politics. Maybe even in student politics. They appear incapable, or unwilling, to adapt to the real world represented by the Eurocracy and the IMF. They claim that an agreement is “very close”. However, there is every reason to believe that a pragmatic approach would have produced a settlement of sorts months ago that would at least have put the whole Greek default problem aside for 6 months to a year, allowing time for further, pragmatic negotiations on the overall, enormous problem of Greek indebtedness. Instead, we are all left staring at the “Time-Bomb of Athens”; the ticking has stopped - now it is merely a question of whether or not it actually goes off and, if it does, who it blows to the heights of Olympus, or deep into the Styx. We shall, I suppose, see. Yours from Charon Ferries, JR.
Yesterday on the news in the UK they had an alleged proposal that the ‘Greeks’ had put to the ‘Troika’ last week and which was rejected.
Lenders accept a shaving of 30% off of the loans they have made, loans not to be paid back for 20 years (to allow for recovery).
In the meantime Greeks were told that the rumour of their savings in Greek banks being shaved by 30% were false. No reduction in pensions and no increase in pensionable age (which is much lower than the UK).
Seems to me they have gone from the hope for part of the debt to be written off to a partial debt write off and not pay back what they owe for years (yet still able to borrow more money from those same people who are not going to get back what they are already owed - something odd there). No real reform or reduction in spending to live within the country’s means.
Reminds me of the third world nations in the 70/80’s that were in the news all the time getting all their debt written off as they had no hope of repaying - then promptly going out and getting new loans to buy new palaces and military equipment then defaulting again.
Whatever happened to the old rule: Don’t throw good money after bad?
Which, alas, is no consolation for the average Greek citizen facing misery and ruin.
But isn’t there an issue that Germany needs to keep Greece in the EU as Germany is a very strong export economy and it would be disadvantaged by a stronger Euro following Grexit? So Greece is playing that card to blackmail Germany into keeping Greece in?
That one might take some explaining to the German electorate.
Chaos along the Tsipras Line. The Greek “Big Push” in the form of their referendum proved a stunning success, somewhat to their own surprise. The week leading up to the vote was loud with sententious saber-rattling from the Troikists, insisting that a “No” vote would be a vote for Greek exit from the Eurozone, and possibly from the EU. By contrast, the Greek government - who clearly realized that the referendum might prove to be a self-annihilating own-goal - retreated into hysterical, inflammatory insults in the Troikist direction and appeals to the electorate to uphold Greek “dignity”, “honour” and such by voting “No”. In spite of predictions that the vote would produce a narrow “Yes”, it actually produced a whacking 60 per cent-plus “No”. Another one for the opinion pollsters (LOL).
The reactions have been interesting. The Troikists, buoyed up by their usual arrogance, clearly expected a “Yes” vote, and have been back-tracking on the “vote No for Grexit” line, mind you, in considerable confusion. On the Greek side there has been a marked lack of triumphalism. The wild insults have stopped. Also, Tsipras has dropped his provocative (and much disliked by Troikists) Finance Minister Verofakis, replacing him with an urbane smoothie technocrat reckoned to be more pragmatic. The terror felt by the Troikists at the imminence of the Time-Bomb actually exploding is now all too clear.
And the explosion really could be, at long last, imminent. The formal Greek economy is melting down, a lot faster and more dramatically than seems to have been expected. The banks are closed, and Greek account holders are limited by capital controls to withdrawing €60 per day at ATMs (that is, assuming that the ATM actually contains cash, which it often will not). In a peculiar irony, Athens and other traditionally wealthy parts of the country are suffering most from this. Those who are least affected are Greeks living in areas totally dependent on tourism - the islands, and mainland historical sites. This is partly because foreign tourists are not subject to the capital controls affecting ATM and credit card use, but mainly because savvy tourists are now (prudently) carrying more Euros and other hard currency in cash, which preserves a semi-normal currency system in such places. Nonetheless, the Greek Central Bank and commercial bankers are warning that “liquidity” in the system is about to evaporate completely. They are literally running out of Euros to stock the ATMs. Unless some solution is arrived at, the Greek government will have to start issuing IOUs (similar to the “assignats” of the French Revolution) or else issue a new currency (the Drachma, perhaps?). In either case, the much-feared “Grexit” would be touching-close.
Hence, Prime Minister Tsipras, complete with new Finance Minister, journeys yet again to Brussels today for yet another emergency Summit. He is supposed to have yet another Greek proposal to put on the big table. The issues remain the same - the mix of fiscal “reforms” to be required of Greece, and the issue (one of principle for the Greeks) of securing a formal, total write-off of the massive overall debt. The latter point may appear inconsequential - after all, the same effect could be achieved by restructuring the overall debt, delaying repayments and adjusting interest rates to put the debt on the “never-never”, much as a fair whack of Irish and Portuguese debt has been kicked into Neverland. For the Troikists (and for the EU Troikists in particular) there is a very practical problem with formal debt write-off. Apart from the fact that all write-offs have two sides (someone’s balance sheet, somewhere will take the hit, Euro for Euro), there is the problem posed by other “programme” countries. These are Spain, Portugal and, of course, Ireland. All of these consistently managed their Troika situations in a positive (indeed sometimes ruthless) way. They played largely by the Troika rules. In the case of Ireland in particular, the impact of Troikist impositions was mitigated to some extent by skilled negotiation. In the case of Spain, Portugal and Ireland, this process was conducted at substantial economic and social cost and, for Ireland and Portugal at least, their economies are showing definite recovery. However, the issue of whether these countries should have received a formal write-down of debt has not really gone away. Should the errant, incompetent, uncooperative Greeks receive a formal debt write-down, this could revive demands from the “good boy” programme states for similar relief, and set a precedent for possible future car crashes such as Italy, and even France. Thus, the implications for someone’s balance sheet could be huge, especially for the main “funding state”, Germany. Try explaining that one in words of one syllable to the German electorate.
All that having been said, the Troikists are in such a state of panic at this stage (about time, too) that some solution is likely to be fudged out over the next couple of days. However, this is unlikely to do more than avert the imminent disaster. Even if this “Time-Bomb of Athens” is defused, it may only make place for another that will start ticking on a time scale not likely to exceed one year. We should be a lot wiser within the next 36 hours. Otherwise - expect a bang loud enough to be heard in Australia … Yours from the Anthill, JR.
“So all day long the noise of battle rolled” …
Tennyson, "Morte d’Arthur.
Sounds from Brussels do not sound good. Possible that Merkel and Shauble have done the job of “hard-lining” their allied Eurozone states all too well. Things do not look good … JR.
I thought your comments were a rallying cry for electoral reform and P.R. until I got to the last line. 
But there’s always Rawhide https://www.youtube.com/watch?v=IWMDuRZBnnw
Friday, 10 July - bomb or dud, we should be a lot wiser by Monday next. This is because by then, the European Central Bank will have run totally out of excuses for funding the Greek Central Bank to fund, in turn, Greek retail and commercial banks that are to all practical purposes, not just illiquid but insolvent, and spectacularly so. The IMF already seems to have crumbled, and sounds from Brussels and Berlin today seem, surprisingly, mutedly positive. The latest Greek proposal - on which the Greek government is understood to have had “assistance” in its composition from French officials - seems to have persuaded Chancellor Merkel and Finance Minister Schauble that it contains enough meat to allow the last tranche of its recently-expired bailout to be released. So, then, on to the next bailout, which Prime Minister Tsipras has already applied for. Mind you, it is hard to see how all the parliamentary formalities required, in Greece and elsewhere, can be completed in the time available but … this is, after all, the EU. A greater threat to the defusing of the Time-Bomb at this stage may be that Tsipras may have difficulty in steering this (at least theoretically) pretty “austere” package through his own parliament. The trick would seem to lie in persuading the Greek deputies to accept more austerity reforms than they would really like in return for larger reconstruction funds in the next bailout. After al that gush about pride, honor and dignity, will this trick come off ? Remains to be seen. Another busy weekend in Brussels, at any rate … Yours from the Lex Building, JR.
Latest from the Brussels Anthill - it now appears that the emergency summit of all EU Heads of State and Government planned from next Sunday may not take place if the Eurogroup Finance Ministers can sign off on a Greek bailout-release deal tomorrow. Can’t say I blame the Heads - they must have worn out the carpet in the Justus Lipsius in the last few weeks. The “defusing” of the “Time-Bomb” seems a done deal as far as the EU (and presumably the IMF) are concerned. Not sure how the Greek parliament is going to handle this; if they reject it and precipitate another Greek general election, anything could happen … JR.
So for the latest, Greece has till Wednesday night to put into law some of the reforms they have proposed (the Euro Zone ministers seem reluctant to accept yet more promises after previous ones have not been implemented).
Tsiparis seems to have admitted that he made stupid promises to get in power (maybe not in so many or so few words), ones it was impossible for the Greek nation to keep due to the financial circumstances.
The Greek people saying they have their pride so will not bow down to the troika’s demands - that pride though does not seem to go as far as - not holding out a begging bowl nor to demanding more and more money (while of course expecting it all to be written off - many investors have already seen 30% wiped off their ‘loans’ and told to accept it or get nothing back). Selective pride!!!
They blame the Troika for Greece’s problems and will not accept it was their elected governments that led them into this position (So ultimately they are to blame). Their votes that brought in popular governments and poor coalitions - those elected governments that failed to introduce the measures needed over decades.
Heavy government subsidies or government ownership of huge money losing buisnesses, earlier retirement than other nations (so an increasing and hefty pension bill), failure to collect taxes and low tax rates have contributed to their present predicament - An economy that was not stable enough to meet the rules of the ERM (Exchange Rate Mechanism) which was the first step to forming the Euro - which Britain joined in 1990 then left in 1992 after being unable to meet the stringent demands of it - of course Europe then relaxed the rules of the ERM to allow weaker economies in - (Britain though once bitten twice shy stayed out after Black Wednesday although sometimes termed White Wednesday as the british economy took a huge upward turn afterwards with interest rates plummeting).
At the moment, the hapless Tsipras is trying to sell the “deal” to his fractious coalition. Not surprising that this is proving difficult. Incredibly, the overall “package” now being proffered by the Troikists is even more harsh than the one the Greek electorate voted emphatically against just over a week ago. I have to say that I do not have much knowledge of the ins-and-outs of the Greek legislative system. However, it now appears that Tsipras (who is beginning to look like a Greek tragic hero) will be dependent on the support of opposition parties to get the general vote, and initial “financial resolutions” through parliament. Not promising, since it will put the opposition parties in a position to pick off subsequent “reform” measures (expected by the Troikists), making for a highly unstable political situation. The “Time Bomb of Athens” is still live …
Whatever eventuates - enormous damage has been done to the EU and its undemocratic system of governance by this lamentable epic.
Yours from the ship-lines at Troy, JR.