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Why Germany Will Throw Up On The Greek "Reform Proposals": Wage Hikes, Foreclosure Protection, "Red Lines"
For those keeping tabs on the Greek tragicomedy, now in its 5th season, today before midnight Yanis Varoufakis will submit a list of "reform measures" it plans to undertake to the Troika, pardon, Institutions. But while we patiently await the reveal of the full list of proposed Greek reforms, we can fast forward to the German reaction, because we already know what it will be:
Why? Because as Bloomberg reported earlier today, citing government spokesman Gabriel Sakellaridis says in interview broadcast live on Skai TV today, the Greek government will implement legislation allowing taxpayers to repay overdue taxes in 100 installments. This not new: in fact, it was proposed back in November, when Greek Enikos said "the country's international lenders are not pleased with the new law voted by the government, which allows tax payers to pay off their debts towards the State in 100 installments."
So while the Troika will ask why nothing has been done on this until now, Greece will have no retort but instead will say that the easier repayment terms for overdue taxes will boost liquidity in state coffers especially since the cash situation “is not easy.”
Among the other proposal is that the government will introduce legislation tackling NPLs issue in the summer, not immediately; target is to strengthen country’s financial system. This is a key issue because Greek NPLs, currently around 40%, are far above where Cyprus banks were in March 2013 when the infamous bail in hit.
Which begs the question: why does anyone assume that just because Greece has a deal, as tentative as it may be, that the Greek bank run is over? If anything, the local banks have merely bought the local population some breathing room in which to quietly and effectively withdraw as much ECB-backed funds as they can before the capital controls and/or "bail-in" trapdoor slams shut.
But what is sure to make Schauble go berserk with rage is that Greece is now openly tearing apart the "existing programme" with its firm demand that the protection of primary residences from foreclosure will be upheld, saying that it creates no burden for banking system or the state budget: a state budget which as a reminder will be out of cash some time this week!
Needless to say Germany will cross this proposal out with a very bright, very red pen.... as well as then next: "Minimum wage will be raised gradually until 2016, to allow businesses to adapt to labor cost increase."
At this point Germany will point out the deflationary vortex in which Greece has been stuck in the past 5 years and say "what labor cost increases", and cross that "reform" as well.
We also learn the Greek government plans to restore labor relations, labor law, collective bargaining saying the current regime resembles “dark age" (it does - thank the common currency for putting you there) which is incompatible with European labor culture, and will assesses proposals to secure liquidity of pension system, aim is not to cut pensions further. The German response to the latter? You guessed it.
The punchline: "Red lines still apply and government will respect popular mandate."
And... cue Germany's reply:
Because from the start, this was all an exercise in Germany showing Greece that no, the popular mandate, is irrelevant when Germany pays the bills, which will be the case as long as Greece is in the Eurozone.
And this is why as soon as Germany sees the Greek "reform" proposal it will stamp it with "Nein, Nein, Nein" from top to bottom, and tomorrow's "emergency" Eurogroup meeting is assured, in which the Troika throws back the proposal in Greece's face and demands that it strip all its "reforms" to comply with whatever was in the original memorandum, in the process making the Tsipras government nothing more than an extension of the hated Samaras administration.
Because Greece bluffed... and lost, and now it no longer has any leverage in negotiations with Europe until the next, even more unpredictable Greek government, comes to power.
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Hmm. Wonder if Syriza has thought of that. But I bet it's maybe occurring to some of the Greek population, now. :-)
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A Greek Cesearian ?
http://denaliguide.blogspot.ca/2015/02/a-caesarian-delivery-for-greece.h...
The world is often in need of a "bad example". During the cold war we had Russia and the Eastern Bloc to show us how miserable it would be to be communist. But that bad example faded when Russia and even moreso China adopted capitalism.
These days we need a bad example to show what happens when you take on a lot of debt and then default. The default part is what western banks fear. And now Greece is rushing headlong into volunteering to be that bad example. And they will suffer miserably for it and thus make others not want to join them (i.e. default).
The world is often in need of a "bad example". During the cold war we had Russia and the Eastern Bloc to show us how miserable it would be to be communist. But that bad example faded when Russia and even moreso China adopted capitalism.
These days we need a bad example to show what happens when you take on a lot of debt and then default. The default part is what western banks fear. And now Greece is rushing headlong into volunteering to be that bad example. And they will suffer miserably for it and thus make others not want to join them (i.e. default).
The problem of Greece - and most of other members - is that they speak about and probably pass some law but will never act that way over time.
Since the birth of Euro it is one of the fundamental weaknesses of the currency. Never in the world and never in history such currency-unit like the ECU with souvereign countries ever could exist longer than a few years. All died in bad desaster. Without any exeption.
So the Euro will end. Everybody knows this. But nobody has balls to say it in public. That´s the main problem in Europe because this way the EU-community will be destroyed and ruined. So it is the existent Euro that means the end of Europe in total. The political plan was just the opposit. But so are politics and politicians not only in EU.
If the central bank/ government systems in Europe are anything like those in the US, then the power elite would rather bankrupt every household in Europe then take a loss themselves. They wont back off the Euro until they've decimated the continent.
true dat.....
People are wondering why Syriza do not just default and start issuing the drachma. My theory is it's because it's what they are - socialists. What they want is more euros, not having to go through a couple of years of pain after a devaluation, and not being able to access the credit markets.
Basically, why work when you can possibly get more money out of other "taxpayers" ('rich' Germans mostly).
Yes, and the problem is deeply ingrained in the culture. They believe that wealth and security come from government, not from hard work and self sufficiency. They can never make a go of the Drachma and reclaim their sovereignty. They've done too much damage to their credibilty around the world. Would you buy Greek bonds? Nobody else will either, so how can they fund themselves? leaving the EU will make "austerity" seem like the roaring twenties.
I believe the Greeks can get a nice loan from Russia and by Germany via a "secret" door. How would the EU and Langley and company feel about some Russian military bases being quickly erected? Consider that 40% of food exports are banned by Russia and that could be lifted tomorrow and Putin is using that as but one of a few carrots.
Any Military bases would bring in revenue as well. Also, the Gazprom pipeline can go through Greece and that too is revenue. Just saying; the Greeks are in the Catbird's seat, but someone must be willing to secure their personal safety or make a bloody sacrifice.
That is what Greece can look forward to if they hold firm, but the propaganda machines will be in full swing with death threats and more.
Scroll to the very bottom and see the map; ignore the BS of Russia hurting.
http://www.businessinsider.com/russia-turkey-black-sea-pipeline-2015-1
Completely agree with you and also with brushdog.
Too simplistic.
They are a coalition governing the country, not some armchair generals. They understand that some Greeks will be hurt and others frightened when Greece leaves the euro. They also understand it is going to be a big deal internationally when Greece defaults.
So they want Greece to be pushed out of the euro (and then default) rather than Greece unilaterally exiting and defaulting. That way they will plausibly claim "we tried everything we could to stay in the euro and keep paying our debts, we made all sorts of accommodations, but wicked Germany, with the connivance of Draghi, simply made it impossible and pushed us out, and because of their actions we are forced to default".
That's what all the manoeuvering is about.
Both sides in this Greek Drama can keep blinking as much as they like. But the Greeks have two strong levers:
(1) the amount of money they already owe and (2) if they proceed to exiting the EZ, Spain, Italy, Portugal and possibly France will follow suit at some time.
The EZ will then implode. Of course, we should not ignore that this might be exactly what Germany wants to happen because it will then be free to turn towards Moscow & China for its future. Amusingly, they might well find themselves sitting at the same table as Greece ;-) Imagine that(!)
OMG: none of that would make Washington and Westminster very happy.
{shrug}
<<OMG: none of that would make Washington and Westminster very happy.>>
Germany is the one with the big decision to make. Maybe not today, maybe not tomorrow, but soon, and for the rest of their lives...
"Germany is the one with the big decision to make."
Indeed. From an economic standpoint, it's an easy one: Russia & China export markets are where the growth will be for the next few decades. That would keep VW, BMW & Merc very busy. The problem is managing their exit from the EZ (and possibly the EU too) without getting blamed for creating the huge mess that would result. A tricky gameplan.
If Germany stayed inside the EU, its geographical position would place it right at the centre of Europe and Eurasia. Washington/Westminster would go flat out to scupper any such alignment.
They (Germans) already have and are positioning themselves toward the EAST and the Western Langley operatives are already sending more troops, both overt (US Military) and covert (CIA) into Germany; primarily Ramstein.
Germany will do & is doing all it can to show Greece the door while the EU Commission will do everything it can to keep the doors & windows closed.
Too bad that murder and other high crimes have to be in the mix; otherwise this would be a "done deal".
That could very easily trigger WWIII. And I would predict that if WWIII happened because of that, and Germany again lost, Germany, as a country would cease to exist and never would again.
I hate to be so blunt, so unsophisticated, so uncool, but fuck Washington and Westminster, especially the latter as I have to live under them and their bumsucking policies towards DC and the Anglo-Zionist project.
If I may coin a phrase: "What difference does it make?"
Money is worthless. The real mental exercise for fat Germans, Europeans and Americans is to appreciate what it means that money is created from thin air. They could write this debt off and it wouldn't make a dent but then it would expose how all debts are merely invisible shackles that the shylocks have created and put on the nations and the peoples of the world.
You confuse GOVERNMENT entities with a nations citizens.
I do not think the Europeans, Americans, or Germans , as a people, are very happy or approve of what the Central Banking Cabal has done to each of their nations...however it does get much worse before it gets better, for the great unwinding needs to take place before mankind can start over. The outcomes will always be the same because of the inherited nature of man.
Wish I could give you one million up votes !!!!!!!!
The Jewish World Government, England, America, and France told Germany Nein, Nein, Nein, Nein during interwar years.
Germany couldn’t grab enough hard currency, especially dollars, to pay interwar debts.
This ultimately led to the hyperinflation and then the rise of Hitler, then destruction of Germany in WW2. If anybody should be sensitive to Greek tragedy, it should be Germans.
But, since Germans are not allowed to question the holocaust, or dig too deeply into that era, German’s are ignorant. Germans don’t know their own history.
The triangular flow was credit dollars borrowed on Wall Street, which then went to Germany municipalities. These dollars found their way to Reichsbank, and from there they paid Versailles reparations. England and Germany then took those dollars and paid their war debts to the U.S. Treasury.
During this interwar triangular flow period, debt instruments grew with usury. In the meantime, the Reichsbank was forced into becoming private by Wall Street. Germany couldn’t export to get dollars. This ultimately led to shorting bear raids causing FX collapse of Reichsmark, which then induced the hyperinflation. In 1933, the International Zionist declared War on Germany, thus showing their true intentions, hence subsequent trade sanctions further disabled German ability to trade goods for hard currency.
Hitler used to always talk about how Germany was stabbed in the back, and he blamed German Jews. Where there is smoke there is fire. Prior to WW1 Zionists did maneuver American election of 1912 to get Wilson elected. Passed in short order were 16, 17’Th amendments, Fed Reserve act, IRS, and then WW1. These actions codified long planned private banker control over Washington. These maneuverings brought America into the War – funded by Fed Reserve, which was quid pro quo for then secret Balfour Doctrine. Britain now grateful for American winning the war for them, gave the Zionists what they so desired; Palestein – now Israel. Britain had no legal right over Pale stein, yet she took it anyway. The stabbing was German Jews supporting Germany during WW1, but at the end of the War, supporting England/America in order to get Balfour and Israel.
All of this maneuvering ended up causing Germany to lose WW1, then Versailles debt hook, hyperinflation, then Fascism. Whenever a population is stressed, they will elect a populist. Expect Greece to react to their pressure, much the same as Weimar Germans. Don’t be surprised if Germans cause Nazi’s to rise in Greece. By not releasing debts and acting like a predatory creditor, Germany is behaving like an International Jew.
Let’s also not forget about Wall Street funded Bolsheviks and their terror reign in the Soviet Union. Weimar Germany was being surrounded by money power constructs. These same private money power constructs – using debts, manipulating FX rates, mercantile trading etc., all were in play in Weimar. Humanity doesn’t seem to learn –especially when top predators will not let go of their private credit parasitic ways.
Germany, you are better than this.
You might want to forget the past and come to the present; All nations suffer in various ways because of "any" war. Germany does know better, for they have been holding up the broken EU for the past 6-7 years with very little help and at the expense of their people; they have had enough and who, but you can blame them?
Bravo! Plus 6,000,000 lies
"Germans don’t know their own history."
Amazing, but true. Could have something to do with being turfed in jail if you dig too deeply.....
Heaven knows I'm no apologist for the Zionists, who I detest, but the concept of the 'stab in the back' is much more complex than you present it here and involved many others including members of the Weimar govt, journalists and newspaper owners, some of whom were Jewish. But it also include trade unionists and communists and others capable of or perceived as constituting a threat to the NSDAP. As yopu present it, it is in fact an historical nonsense. In view of this I'm inclined to discount the other stuff you write about, though I havbe no detailed knowledge of the Wison era. What you fail to mention is that Hitler was bankrolled by J P Morgan, Chase Manhattan and many others including a number of particulartly virulent industrialist anti-semites such as Henry Ford.
Hey Germany, why has your poverty rate gone up so dramatically?
Where's your gold?
Didn't you live high on the hog since you joined the euro at the expense of the other countries that should have never joined you?
You bought lots of villas in Italy with those DeutscheMarks. Now it's time to pay back.
You have that completely backwards. The Roman Catholic PIGS nations are in massive debt, while the Reformed nations are holding up the broken pillars.
Yes, the German government has much to say and it has. Germany wants the Greeks to leave the EU knowing it will cause a domino effect and destroy the EU. Why? Germany is sick & tired of holding up the entire EU and "atlas is ready to shrug".
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The Langley boys (aka: CIA, Al-CIAda, IS, ISIS et al) are moving more US Military into Germany and more covert forces over to Ramstein because they do not want Germany turning East and making alliances with Russia and by default China. However, like the Swiss, Germany knows how this is going to go and needs to find an easy way out and the Greeks being ousted from the EU is the best opportunity. They are already positioning themselves East and are against the Russian sanction, but the political aspects (think US bully) make it hard.
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This ends real ugly and people in high places will surely die.
May I interest you in a nailgun sir?
LOL..poison will be the preferred method..
-Merkel better resign and find a nice cozy position within the IMF very soon; she is between a rock and another rock and a hard place. She must openly play with D.C./Brussels/Tel-Aviv & Vatican City, the nasty Banking caballllls, while feeling another rock from the German citizens and industry that is suffering more than usual due to the Russian sanctions...which I am sure when Langley finds out she has been "skirting" the sanctions; she my be forced to wear a "skirt".
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Perhaps Merkel and Lagarde could have a "Mud Wrestling" match for the IMF position; both must wear clothing that cannot reveal any cleavage as that would ruin the fun and disgust almost everyone.
I see a bright, yellow sunrise in the future. A Golden Dawn if you will.
Oh and violence. Lots and lots of violence.
five neins, are forty-five, four plus five is nein; it's nein alright.
When both parties to these loans knew from the beginning that they had borrowed/loaned more than they could ever hope pay or be payed back then the transactions in their entirety were a complete farce. If Germany can't afford to write down these loans to bad and if Greece can't afford to pay them back then the same goes for them, they will, and each must, in turn suffer the consequences of this imprudence and they both will suffer make no mistake.
http://vineyardsaker.blogspot.com/2014/09/return-of-magyars-hungarys-pre...
I found this ^^ great article on Saker's blog some time ago. I encourage everyone to read it and think about what Orban said there, and perhaps even be inspired by it. Plenty of good stuff too, here are some highlighted parts:
"… because liberal values today incorporate corruption, sex and violence and with this liberal values discredit America and American modernization."
"The purpose of a sovereign nation is the health and long-term well-being of the majority population of that nation, not globalist ‘values’ or economic growth divorced from human needs."
"...the new state that we are building is an illiberal state, a non-liberal state."
"Now the only question that remains, honourable ladies and gentlemen, and it is a question that I am not entitled to answer, that in times like this, when anything could happen, should we be afraid, or should we instead be hopeful? Because the present order of the world is not exactly to our taste, that this future, although it is uncertain, it could even cause huge trouble, it also holds opportunities and developments for our Hungarian nation."
Well it seems the author has no idea what liberalism really is. So well yes to judge something liberal which isn't is the hint that the author favors socialism, and indeed he wants an illiberal state. So in short for anyone else I translate that
I do know what's good for you.
This has nothing to do with Germany "not respecting" Greek democracy. The Greeks (and this new Governmnet in particular) are bunch of parasites, and the German taxpayer understandably doesn't want to provide them with neverending subsidies. So the choice is simple, either they stay with the program, or go their own way. But the Germans won't bail them out (nor should they!).
I agree with the first part but not with the last sentence. It would kind of surprise me if Germany would stop financing Greece. I agree with the part that we should not. But the whole EU should not have bailed anyone out. That's the simple law which was established but nevertheless broken.
Agreed! But, it seems obvious that the bailout is as much for German banks as it is for anything. When a country as dead beat as Greece can't afford to pay their loans a well diversified and prudent lender just writes down the value. Of course, Gemany should try other avenues to recoup some of the residual value of the defaulted loans but given Greece's financial state what can one realisticly expect? There is more than one party trying to be saved from bankruptcy here. Both sides are hopelessly deparved and reprobate.
Greece lied, mislead, falsified figures and made promises they knew they culdn't keep when applying for those loans.
They colluded with the EZ in a lie that was known to both parties but accepted by both because they all wanted Greece in the EZ.
And about those loans, I know this is going to come as a shock to you but almost every country in the world, including the US, Japan, the UK, and most of the EZ has applied for loans they can never repay but were hoping inflation would vaporize. And as the major countries keep demonstrating, they all lie, provide false and misleading figures. So why you think Greece is so terrible is a mystery.
Hey, pal, things are a bit more complicated than that.
A bit maybe, but not all that different.
Ever been to Greece?
Griechenland muss sich bücken und nehmen Sie es schwer
Here is Deutsch Banks version (leaked official EU position?) of whats ahead :
http://uk.businessinsider.com/greece-deutsche-bank-timeline-2015-grexit-...
The problem - and the real issue - whether it be the USA, Japan, Europe Greece or Germany, is government and taxes. Just consider my example: self employed:
$30,000 net income
Federal tax: 20% $6000
FICA/Medicare/caid: 15% $4500
State tax (NY): 5% $1500
Property tax (NY, I work from home): $3000
Total: $15,000 (yeah, half)
The add 8% sales tax on everything other than food that I purchase, and hidden taxes like in your utility bill, phone bill, cable bill, gasoline tax, etc. Another $2000? (my phone bill is 29.95 a month, not a bad deal, until you add in the taxes of roughly $18 a month)
These are general assumptions and approximations, and I do know ways around them and use them, but, is my solution to earn more, only to be taxed at an even higher rate (raped harder and deeper), find more ways to get around the system (shell corps, cash sales, barter, taking every possible deduction and expense imaginable), or just throw hands up and join the FSA.
We are all just working to survive, and by far, the greatest expense and toll on our labor is government.
A few quotes from Edmund Burke:
People crushed by law, have no hopes but from power. If laws are their enemies, they will be enemies to laws; and those who have much to hope and nothing to lose, will always be dangerous.
When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle.
Magnanimity in politics is not seldom the truest wisdom; and a great empire and little minds go ill together.
All who have ever written on government are unanimous, that among a people generally corrupt, liberty cannot long exist.
All that is necessary for the triumph of evil is that good men do nothing.
As noted here, that last quote is "probably the most quoted statement attributed to Burke, and an extraordinary number of variants of it exist..."
Still, we'll take it.
Property taxes and others, along with Obamacare going to eat whatever money the 99% have.
Honestly; to whom did you vote for in 2008 & 2012? Hope & Change; looks like you and a bunch of others are left with a lot of change, a little in the pocket and a lot toward the intended purpose of destroying the American middle-class.
-I do sympathize with you; I laugh at Obamacare; who would ever believe that the government adding 21 additional taxes would improve healthcare? Only an idiot living willfully ignorantly...isn't that the majority?
Obama is the most effective President since FDR, for he has accomplished the cabal's goals with break-neck speed, divided a nation in many different areas, and he ain't done till they, his puppet masters, are done with him...they will throw him under the bus when they are ready. He is the perfect "Patsy" and that event will divide the nation in ways unexpected...as Emanuel said "never let a good crisis go to waste"; especially one created by our Master's and carried out by "us minions"...hehehe I'm safe in the Chicago hive..hehe.
if you only take home 50% of your income, you are doing something wrong
Das Krümelmonster sagt NEIN!
http://youtu.be/x4TDbDeozs0
So any government that gets "a popular mandate" not to pay the national debts is off the hook then?
No, you're off the hook when you have no capacity to repay the debt, which is where Greece is.
The popular mandate is not about the debt but about abolishing the harm Greece has been obliged to do to its citizens that has nothing to do with repaying the debt but is Germany's wish to inflict pain because Greece can never repay most of the debt.
Not sure how to answer that one except to say: If you are elected with a crystal clear mandate, then carry out that mandate. The people have spoken.
five neins is forty five.. i make this the next bailout amount to fund Greece til the end of 2016!
Democracy is turning into demonocracy
Schauble and his peers are losing it...
Look, EU...you took Greece as she was...and you kept her going despite clear unwillingness--or inability--to change.
If you want a divorce, fine. Cut her off and let her be.
If divorce is too expensive (and it is), then someone pleeeeze shut Schauble up, and keep Greece going without requiring her to become...Germany.
She will never be Germany.
You KNEW that from the start.
So, fund her, or divorce her...
Just get on with it already. There is nothing to be gained with all of the collections bullshit. YOU are as much to blame for this crap as anyone else.
m
I would say Greece is the one holding all the cards here. First off, they already got the cash, and spent it. Germany has to get it back or the German peole are going to be in the streets with torches and pitch forks. Not to mention the possible conflaguration to the Euro in general. IF Greece leaves, which I think they should, how long until the other weak nations take the same route? Thus further infurating the people left to pick up the tab.
No I would say Greece hold ALL the cards.