Greece's Euro Exit Seems Inevitable
We have been hearing about this for many months. I wonder if it will actually happen.
We have been hearing about this for many months. I wonder if it will actually happen.
That is a bed time story for the slaves (us) so we gave something "serious" to think of. In my opinion Greece should default and leave EU. Nothing will change if they stay. If they leave, then they maybe have some chance
That is a bed time story for the slaves (us) so we gave something "serious" to think of. In my opinion Greece should default and leave EU. Nothing will change if they stay. If they leave, then they maybe have some chance
They will not exit. All this is a drama for the voters. Nothing else
Germany says it's now up to Greece to come up with concrete proposals
- essentially nothing has changed in the process regarding Greek bailout
- Germany has no info about any special meeting of the Eurogroup on Greece
German fin ministry spokeswoman on the wires
Markets not taking much notice. Still about as exciting as the lunar eclipse earlier.. I'm sure it was great for those few not covered by cloud!
Did you see it? Got any pics? Stories?
Greece to Run Out of Cash by Mid-April
Greece has enough funds for less than a month to cover upcoming debt repayments as well as keep the country afloat, a source familiar with the proceedings told Reuters on Tuesday.
"Although it will be hard, the country can make it without help until about April 20, using the short-term borrowing from public entities," the official told the news agency.
The Greek government is working on a detailed list of necessary reforms to be delivered to its euro zone partners this week trying to gain access to remaining funds from its earlier bailout package and avoid default on its debt.
Athens has had to use repo transactions, borrowing liquidity from state entities, to cover its most pressing obligations. However, it can only continue to rely on that for a few more weeks, the official said.
The Euro Working Group of euro zone technical officials is expected to discuss on Wednesday a Greek request for the return of €1.2 billion from the EFSF. The meeting may lead to a special Eurogroup session on Friday or Monday which could approve the unlocking of further funds for Greece.
Greece could also receive the €1.9 billion from profits made by the European Central Bank on Greek bonds.
Austria Schelling: Euro FinMins Struggle to Trust Greece
Euro area finance ministers are increasingly struggling to restore faith in Greece, amid the chaotic decision-making of the Alexis Tsipras-led government, Austrian finance minister Hans Joerg Schelling said Friday.
"We have a crisis of confidence with Greece. Something is decided every day and on the next day it doesn’t apply any more," Schelling told reporters in Vienna.
However, a haircut would not ease Greece’s budget problems and was no solution to its fiscal woes.
'It brings nothing'
"You can easily calculate this: it brings nothing. [The Greek problem] will occupy us for some time. I don’t know what will emerge."
His comments came as Athens is expected to produce detailed economic reform proposals on Monday.
Greece Prepares To Leave
Speculation and expert comments are thrown around once more – or still – like candy on Halloween. Let me therefore retrace what I’ve said before. Because I think it’s really awfully simple, once you got the underlying factors in place.
But first, if one thing has become obvious after Syriza was elected to form a Greek government on January 25, it’s that the party is not ‘radical’ or ‘extremist’. Those monikers can now be swept off all editorial desks across the world, and whoever keeps using them risks looking like an awful fool.
All Syriza has done to date, when you look from an objective point of view, is to throw out feelers, trying to figure out what the rest of the eurozone would do. And to make sure that whatever responses it got are well documented.
Because of course Greece (through Syriza) is preparing to leave the eurozone. Of course the effects and consequences of such a step are being discussed, non-stop. They would be fools if they didn’t have these discussions. And of course there will be a referendum at some point.
There’s just that one big caveat: Syriza insists on needing a mandate from its voters for everything it does, whether that may be kowtowing to Greece’s EU overlords or walking away from them. At present, however, it doesn’t have a mandate for either of these actions.
The best it can do is to drag out negotiations as much as it can, and let Europe openly assert its perceived superior power over the Greek population as much as it wants to, complete with more iron-fisted demands for austerity, more budget cuts, more asset sales. Tsipras and his people will let this go on until the Greeks are even more fed up with Brussels than they already were when they elected Syriza in the first place.
It’s a subtle game, but it’s the only one open to Tsipras and his crew. Even if they’ve long concluded that trying to negotiate a deal with Germany et al was a lost cause way before talks started, Syriza has to go through the motions until it is confident the people of Greece are ready to vote in a referendum on eurozone membership.
A risky game, since it could bring back ‘the old guard’ of the handful of families that have governed the country for decades and that were willing co-operators with the Troika, but at the same time it’s the only game in town at the moment.
Tsipras needs to explain to the Greek people that the double mandate of staying inside the eurozone and at the same time ending austerity is in fact an empty mandate, because the eurozone refuses to allow it.
He needs to explain that this means the eurozone refuses to recognize the democratic values of one of its member states, voting to change policy. Brussels is in effect telling the Greek people on a daily basis that they don’t matter. That’s what Tsipras has to make clear, and then he can call the referendum.
It should be obvious that this whole mandate question changes potential actions by Athens to a huge degree. But from what I read every day, it doesn’t seem to be. Even within Tsipras’ own support base, perhaps some don’t understand what is going on. Either that or they’re part of the strategy. Judge for yourself:
Greek Crisis Nears A Turning PointStathis Kouvelakis, who teaches political theory at King’s College in London and is a member of Syriza’s central committee, says the party has to face up to the reality of its recent retreat on its election pledges and the nature of the forces arrayed against it. In particular, Kouvelakis notes the successive steps taken by the ECB to restrict the flow of liquidity to the Greek economy, shutting down or limiting Greek access to various types of ECB financing.“It should be clear, however, that these moves would bring about a dynamic that would breach fundamental constraints of the monetary union and would inevitably lead to the exit from it,” Kouvelakis wrote in his latest post at Jacobin. “In any case, the ECB’s relentless blackmail with its provision of liquidity places onto the agenda every day the issue of regaining sovereignty over monetary policy.” It was the stranglehold that prompted Tsipras in a recent interview with Der Spiegel to refer to the ECB “still holding onto the rope that is around our necks.”
But Kouvelakis argues that covering over the issues by renaming the troika “the institutions” or by using weasel words like “creative ambiguity” is not going to solve the problem. The initial euphoria over Syriza’s victory has quickly faded, but it can be revived, he says, if the party faces reality. “In order for this to happen, however, the horns of battle have to blow again, and the ensuing struggle has to be waged with all due seriousness and determination, not with PR stunts and rhetorical contortions.”He cited the widely quoted words from Interior Minister Nikos Voutsis earlier this month before the Greek Parliament, when he said “the country is at war, a social and a class war with the lenders” and that in this war “we will not go like cheerful scouts willing to continue the policies of the memorandum.” This is the kind of talk the world needs to hear from Greek officials, Kouvelakis says, “not the language of facile optimism that creates illusions and causes confusion that tomorrow may prove costly.”
Kouvelakis reasons from a standpoint that is not covered by Syriza’s present mandate. He at least should know this. Tsipras cannot afford to be seen by the Greek population as the man who hasn’t done all he could to keep the country in the eurozone while negotiating an end to austerity. It makes no difference at this point what his personal ideas are on the issue.
Kouvelakis does choose to let his personal opinions prevail. If Tsipras would do the same, a referendum would be much riskier for Syriza. The party was elected to represent its austerity-weary voters, not the subjective opinions of its leaders.
If Tsipras and Varoufakis should elect to give in to Brussels and Berlin, that decision would still need to be put before the people to vote on, because it would mean a prolongation of austerity. And that is not the mandate.
By the same token, if the leadership decides an exit is the only option, and that further negotiations are hopeless because Europe won’t accept anything else than strapping the proud Greek people in a straitjacket, that too will have to be put before a vote.
Of course Syriza, like any other government, keeps track of opinion polls, but they know there will come a moment when a referendum can no longer be postponed no matter what the polls say. In that, Greece is living up to its glorious past as the cradle of democracy.
And that makes it all the more cruel that the country has been ruled for such a long time by anything but a democratic system. Maybe we can say the circle is round. But the connection that closes the circle is still very fragile, and nobody knows that better than Alexis Tsipras.
Still, make no mistake: of course they’re preparing to leave.
I do not believe that they are doing that on purpose. Otherwise they would already start the referendum procedure
PIMCO says the Eurozone can't survive in its current form
In the UK Telegraph this weekend: Eurozone can't survive in current form, says PIMCOThe eurozone is "untenable" in its current form and cannot survive unless countries are prepared to cede sovereignty and become a "United States of Europe", the manager of the world's biggest bond fund has warned.
The Pacific Investment Management Company (PIMCO) said that while the bloc was likely to stay together in the medium term, with Greece remaining in the eurozone, the single currency could not survive if countries did not move closer together.
Talks With Greece 'Ongoing' but Revolt May be Brewing
Margaritis Schinas, the European Commission’s top spokesman, told reporters in Brussels on Monday noon that the negotiations between Greece and it creditors - the European Commission, European Central Bank and International Monetary Fund - are ongoing.
Deputy finance officials (Euro Working Group) will discuss the issues in detail on Wednesday afternoon.
The goal of the talks is to deliver an economic reform program that is "credible and comprehensive," Schinas said.
German warning
Meanwhile, the German Finance Ministry warned that Greece has not yet submitted a definitive list of reform proposals to its creditors.
The ministry cautioned that bailout funds will not be released until some measures have actually been approved by the Greek Parliament.
"Rupture" possible in Greece
Reports from Athens speak about "open warfare" among the various factions of the ruling coalition and many politicians and legislators have openly said that "rupture" with the euro zone would be preferable to "betraying voters" by breaking pre-election promises.
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Greece's money troubles resemble a game of pass the parcel, where each successive participant rips another sheet of wrapping paper off the box -- which turns out to be empty when the final recipient reaches the core. With time and money running out, a successful endgame seems even less likely than it did a week or a month ago. It's increasingly obvious that the government's election promises are incompatible with the economic demands of its euro partners. Something's got to give.
The current money-go-round is unsustainable. Euro-region taxpayers fund their governments, which in turn bankroll the European Central Bank. Cash from the ECB's Emergency Liquidity Scheme flows to the Greek banks; they buy treasury bills from their government, which uses the proceeds to … repay its International Monetary Fund debts! No wonder a recent poll by German broadcaster ZDF shows 52 percent of Germans say they want Greece out of the euro, up from 41 percent last month.
There's blame on both sides for the current impasse. Euro-area leaders should be giving Greece breathing space to get its economic act together. But the Greek leadership has been cavalier in its treatment of its creditors. It's been amateurish in expecting that a vague promise to collect more taxes would win over Germany and its allies. And it's been unrealistic in expecting the ECB to plug a funding gap in the absence of a political agreement for getting back to solvency.
There's a YouTube video making the rounds on Twitter this week of a lecture Yanis Varoufakis gave in Croatia in May 2013. The most arresting section comes after about two minutes, when the current Greek finance minister literally flips the bird at Germany while saying:
My proposal was that Greece should simply announce that it is defaulting, just like Argentina did, within the euro in January 2010, and stick the finger to Germany and say `well, you can now solve this problem by yourself'.
Maybe Varoufakis is all grown up now that he has a big government job and isn't just a maverick professor; moreover, he says the video has been doctored, although the German television channel that aired the footage on Sunday found no evidence of manipulation, according to the Associated Press. But the image of him raising his middle finger is emblematic of how the Greek government currently regards its biggest creditor.
And if what Varoufakis went on to say is instructive of the game-theory professor's mind-set, the lack of progress in negotiations with lenders isn't so surprising:
The most effective radical policy would be for a Greek government to rise up or a Greek prime minister or minister of finance, to rise up in EcoFin in the euro group, wherever, and say "folks, we're defaulting. We shall not be repaying next May the 6 billion that supposedly we owe the European Central Bank. My God you know, to have a destroyed economy that is borrowing from the ESM to pay to the European Central Bank is not just idiotic, but it’s the epitome of misanthropy. Say no to that. Put them in front of their contradictions. Make them face the contradictions of the euro zone themselves. Because the moment that the Greek prime minister declares default within the euro zone, all hell will break loose and either they will have to introduce shock absorbers, or the euro will die anyway, and then we can go to the drachma.
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