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German Lawmakers To Vote Against Greek Bailout Saying Athens "Not Serious At All"
“What they are delivering at the moment is not serious at all.”
That’s Michael Fuchs, a senior lawmaker for German Chancellor Angela Merkel’s Christian Democratic bloc and it seems to accurately reflect the sentiments of Greece’s creditors with regard to the latest set of “proposals” submitted by Athens.
Indeed, some have suggested that Greek PM Alexis Tsipras’ latest ‘effort’ represents more a step back than a step forward. As a reminder, Greece handed in two three-page documents on Tuesday, one of which focused on fiscal targets and the other amounted to a request to tap the ESM in order to repay the ECB, which would amount to a similar (if not quite as egregious) circular funding scheme as that which the Greeks employed in May when they drew down their IMF SDR reserves to just €30 million in order to make a €750 million payment to the Fund.
On Tuesday, reports indicated that a rift between Merkel and German FinMin Wolfgang Schaeuble was growing wider, with many German lawmakers inclined to side with Schaeuble should it come to a decision between supporting Merkel’s inclinations towards concessions or the finance ministry’s less accommodative stance that implicitly sanctions cutting the Greeks loose.
Now, it would appear tensions are rising in Berlin with a growing number of German lawmakers committed to voting against a third bailout for Athens. Bloomberg has more:
Under the latest Greek plan, Tsipras wants access to bailout funds left in the European Financial Stability Facility and for the country’s banks to be allowed to buy more of the state’s short-term debt, an international official said. Greece also requested funds from the European Stability Mechanism to repay about 6.7 billion euros ($7.6 billion) of bonds held by the ECB that come due in July and August.
The official described the revised Greek plan as a vague rehash of earlier proposals and said it is not credible.
The Greek negotiating tactics are stoking frustration in Germany, where any changes in Greece’s bailout terms require backing by lawmakers. With legislators in her party bloc increasingly fed up, Merkel didn’t mention Greece during a speech Tuesday at a business conference in Berlin.
Tsipras’s government “hasn’t made a good impression on me in the last few days,” Thomas Oppermann, parliamentary leader of the Social Democrats, Merkel’s junior coalition ally, told reporters.
But it’s not just the Germans. Yesterday’s proposals from Athens have, by the looks of things, been roundly rejected by EU officials as a non-starter. Via Bloomberg again:
Impasse in talks between Greece and its creditors continues, no progress was achieved in Brussels talks on Tuesday, according to an international official directly involved in the negotiations.
Disagreements persist on fiscal targets, measures needed to achieve them, the person said, asking not to be named, as he wasn’t authorized to speak publicly on the matter.
On Wednesday, Tsipras will reportedly meet with Angela Merkel and French President Francois Hollande in Brussels in yet another attempt to use summit sideline diplomacy as an end-around to break the stalemate.
What’s important to remember here is that the reason Tuesday’s draft proposals didn’t appear “serious at all” could be because they indeed were not serious. We’ve suggested on a number of occasions that Tsipras is simply buying time, submitting drafts to keep up appearances with the real negotiations taking place between the PM and hardline members of Syriza, whose support is critical if Tsipras hopes to pass any agreement with creditors through parliament.
Bundling June’s IMF payments effectively gave Tsipras an extra three weeks to try and figure out what (if any) concessions would be acceptable to party hardliners. If he can successfully secure their support for ‘modest’ pension cuts and/or VAT hikes, he may be able to come to the table with something that will appear immediately agreeable to the troika compared to what the Greeks have suggested thus far. That, of course, would mean abandoning the mandate which got Syriza elected and, by extension would represent the successful use of financial leverage by creditors to effect political change and undercut Greeks' right to choose for themselves how they wish to be governed. It would also send a strong message to Podemos in Spain that reversing course on austerity could imperil the very existence of the party.
Still, it may already be too late to avoid a technical default on June 30. Here’s Reuters:
An EU official said no euro zone leader wanted to be the one who pulls the plug on Greece, and Athens knew that. On the other hand, there was no willingness either to accept the Greek terms, resulting in stalemate.
The official said it was already too late to release money from the current bailout by June 30. So the only way to avoid default was for the European Central Bank to raise the ceiling on how much the Greek government is allowed to borrow by issuing T-bills, short-term debt that is bought by local banks.
That way the government could raise the 1.6 billion euros it must repay the IMF by the end of the month to avoid default.
In the final estimation, a real 'breakthrough' (and by "breakthrough" we mean concessions from Greece to avoid economic collapse) won't likely come until later this month. In the mean time, Tsipras is playing a dangerous game, because as Schaeuble famously said last month, "experiences elsewhere in the world have shown that a country can suddenly slip into insolvency."
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Bullshit. You'll have ZDF do a hit piece on any lawmaker here who votes against it.
"If you don't support the Greeks in their time of need not only are you undermining the European Solidarity and Unity that the peace in our time is based upon, but you are no better than Adolf" or something equally stupid.
You'll have someone shove a microphone in a MP's face "Sir, with you refusing to support the Greek bailout you have abandoned the core principles you party stands for, and have adopted the policy of the NPD. Will you be resigning today or tomorrow?"
I'll believe it here when I see a vote.
Expect more resignations from the Union in short order.
The propaganda & fear-mongering is strong in Germany
If it's them against us....I vote us every time.
While this is common sense, in Germany this idea is called "nationalism" and is regrettably frowned upon.
I vote for "us" over "them" every time too. When people call me a nationalist, I take it as a compliment, as its most definitely what I am.
Yawn, who cares if Greece leaves the EU or defaults?
If it had happened in 2011 it would have been chaotic and posed systemic risk/panic. But today everyone is prepared/half expecting it.
Watch in awe as any Grexit is met with a giant tsunami of apathy.
yeah right... it's as if California would go bunkrupt and the Federal government was completely apathetic to its threats to leave the United States and join Latin America...
Just now i learn that the Greek government is going to be confiscating the properties of people owing money to the government...
No, the GDP of Greece is $240 billion. The GDP of California is $2,000 billion.
GDP of EU is $19 trillion, and GDP of US is $17 trillion.
The GDP of Detriot was $220 billion in 2005.
So....
Greece is an equivalent to the EU what Detriot was to the US.
Nobody gives a shit if Greece are declared bankrupt and default. Just like the Detroit bankruptcy did not destroy the USA, the EU will march on with 99% of it's population unaffected.
If Italy were to declare bankrupcy that would equate to California, but Greece? Who cares?
Merkel et al. have already spent far far too much time and energy on this issue, there are bigger fish to fry to the East. What they really want now isn't for the issue to be resolved but for it to go away permanently. So the politicla leaders can focus on matters with more gravitas. If that means Greece defaults and leaves the EU then so be it. The systemic risk has subsided since the crisis first emerged four, YES FOUR, years ago. Everyone has had ample time to prepare and plan. There is no more patience with Greece.
They will be cut loose or they will be forced to negotiate with junior German officials, whilst the adults look to the big strategic issues of Asia.
Your US example would work if the EU debts had been consolidated (ie the US fed ultimately deals with the issue of a bankrupt state) but they weren't so when a member state can't repay then that threatens the entire EU as well as it's ability to print money to keep the whole system going. If it were as simple as you mention then Greece would have already been kicked to the curb a long time ago.
I'm afraid not because regardless if people are ready for it, Greece leaving the Euro means it will not survive as others with high debts will seek to do the same thing. The situation is really a catch 22 since they can't let Greece leave (contagion) but Greece also can't service the debt either (continual bailouts) therefore the system at some point will fail, question is only when. This is why they are desperately talking about combining the debts of all member EU countries but unfortunately it will ony postpone the enevitable. The Euro will continue to strip mine all the economies until Europe reaches a tipping point and the is no room left to kick the can down the road.
You must understand that nationalism is exactly what all this has been conjured to kill. Open borders and commingled debts and monetary systems all designed to blur and eventually erase all "national" distinctions. The whole EU/Euro strategy was designed to create this mess, to create the despair and crisis thinking that only a "greater union" could offer remedy. And its coming to America. We are watching the dollars dominance fading quickly, as it the euro, a dominance that has been the only tool enabling the profligate policies that have sustained us while undermining our foundation. We have migrated to hot air balloons when faced with the rising waters of debt and wealth redistribution, burning our remaining wealth to stay aloft. We are quickly closing on that turbid surface as the last of our wealth goes up in smoke.
The problem with this idea is that it leads to supra-national socialism (e.g., its the wealthier nations (and thus their peoples) duties to support the poorer ones).
This has never worked. I'd rather a war once every 50 years or so than what we are turning into.
any talk coming from Greece, concerning this issue is merely a shuck 'n jive show to buy as much time as possible before pivoting East. and everyone knows it. it is in everyone's interest to allow this folly.
This makes no sense.
In a net cash short situation, time is your enemy not your friend. Delay makes it worse for them.
My bet is Tsipras has no idea what he is going to do. Completely over his head.
Yes, not serious enough with that war compensation thing...
THE GREEKS NEVER WERE SERIOUS!
DUHH!
See, there goes the Germans again thinking everybody else ist just like them or really wants to be
That's why they gave way too much money to Greece in the first place
The Germans must really believe they won the war.
What a bunch of block heads!
It isn't the German's fault. They are the ones who were pushed into this bullshit and just found a way to neuter the rest of the continent with it. Now they don't want to pay anymore, and I cannot blame them.
Germans really just want to be left alone, build nifty stuff, watch Bundesliga, BBQ when its nice and bitch about the weather when its not.
Was !? Kein Bier und Blutwurst !?
Und keine Antriebs 200 kph auf der Autobahn?
Sometimes your posts are spot on. Other times I feel like I am talking to a high functioning special-needs child.
Pick a persona.
See what I mean about Germans?
No.
It was a rhetorical question in your case.
Lol.
If that were the case they would still be using Deutschmarks and not be a member of the EU or the ECB and their banks would not be behind these debt deals.
I can believe a lot of German citizens feel the way you say they do; but their political, banking, and corporate systems obviously do not.
Greece can't possibly pay the debt; they are buying time.
The more Germany and the ECB and the Brussels Bandits can stoke the panic and the "EU must be saved" dogma the more money they can milk from their citizens and us U.S. citizens via the IMF.
The problem is the parasitic banksters and their debt heroin being dealt over a wide swath of humanity whose political leaders are either bought or the sovereignty over their own fate is non-existent.
Perfect conditions for the money-changers.
Tsipras is acting like someone with an ace up his sleeve, and it's probably written in cyrillic.
BRICS-Russia-China block is waiting with open arms......
The answer that is obvious to me is that they need to put together a super secret plan that no one is allowed to read but can only assume it is in everyone's best interest, and then sign it...or pass it, or what ever they must do to make it law, and only then will anyone be able to read it or have a clue what it all means. It works brilliantly in America. Regardless of how fucked up it is, and who it screws, it will take years to sort it out in court and by then, there will be a whole new crisis to deal with and no one will give a shit.
Tzatziki infused caviar
good points. the "European Solidarity Ueber Alles" faction is strong. But remember that the Second German State Channel, the ZDF is... fickle, politically
they are also the same that brought us the hilarious spoof "V like Varoufakis": https://www.youtube.com/watch?v=Afl9WFGJE0M
yes, the German Christian Democrats are social conservatives. Yes, they are sympathetic to social demands, and socialists in general... when moderate
but when it comes to fiscal conservativism, they are... well, beyond compare, worldwide. literally
So yes, they are willing, up to a point, to take your and my tax money and shower it in debt forgiveness over the Greeks, particularly in the face of all this propaganda about how all this was only a way to mask German (and others) bank problems, a point that hurts them
but not for a result that would include fiscal deficits in Greece. And that, I fear, is the point where the CDU might revolt against Merkel
This is how Merkel will sell it --
Dear German tax payer, if we shower the Greeks with more "free" cash, then they won't default. If we don't -- they will. Given our history, I think what we have to do is clear.
It's time you wake up !!!
Your tax money was used to bail out your banks and French banks, not shower money on Greeks, It's just that your politicians didn't bother to tell you. So it's time they level with you, and it's time for you accept that you have to pay. The Greek debt is odious. Period. End of. Greek society didn't benefit, your banks did, and you did but avoiding the cost of a financial collapse.
Stop spewing europhile garbage.how much? How much of this Greek debt is "odious"? is the part that already existed in 2007 "odious", too? just asking from my europhile spewing mouth
Yeah and why was Greece let in to the EU in the first place?
because we europeans love Greece, and find it very difficult to say no to Greeks
actually, I remember Bush being very upset that we did not allow him to broker a deal towards Turkey entering the EU
something which he saw as his right to dispend
an answer to your question, valid or not. now, where is the answer to my question? How much of it is "odious"?
How much is odious?
Exactly the amount they have no reasonable capacity to pay.
you mean european politicians find it very hard to say no to the US/NATO who says you should not say no to the Greeks?
I'm beginning to see the Euro-skeptics point of view now, the structure of the economic union of Europe is held together for political reasons, despite the actual economics...
WOW! Another supercilious and disingenous brusselite remark. North europeans only "love" Greece because they hate their own short days and damp weather, and only wish that they had had the luck of the draw for balmy islands and warm waters. The real German mindset is to disdain Greeks for being 'lazy', sloppy, and uncouth, jealousl of their undeserving natural bounty. It's a strange kind of love, that German love is.
Germans like women with mustaches?
Geopolitical nudging from the US was imperative that Greece be included in the "European family" to shore up the whole western sphere right up to the the black sea.
The same geopoltical consideration now has the US coming out to nudge the Europeans into keeping Greece in again.
Greece will keep abusing that "geopolitical command" card by trying to get a political solution from Merkel and Holland on the sidelines and ignore the economics.
The way the Germans are acting implies that someone actually worked for the money that Greece owes. The fact is that money was created as it was loaned to Greece. It is the bankers who creted it and also need the debt to continue to be serviced.
When Greece rolls over I am sure the media will trot out some Dutch couple who lost their entire life savings on Greek debt. The public will happily support the bailout of the banks.
** ALERT **
Watch out ZeroHedge commenters. The DOJ could be coming for you.
http://motherboard.vice.com/read/the-government-wants-names-of-online-co...
'Not serious' meaning not accepting more IMF debt slavery.
If greeks owe the Bank a couplle of K............thier problem
If Greeks owe the bank many Billions..................Banks problem
no, "not serious" means exactly that: not a proposal which is meant to be equitable for both parts. as a reminder, it's Athens that wants something. in fact, a lot, and pretty fast, too
Ghordius, normally I agree with everything you say, but this time I say no.
Let's see what happens if the Euro Banksters are not bailed out of their stupid decisions?
If an engineer builds a bridge and it fails, does he get a free ticket and more business? No he gets his @ss sued and his career is shot and he probably commits suicide in shame. Why do we agree to treate Banksters different?
Banksters should feel the downside of failed risk. Politicians should not be in a position to remove the risk from the banksters
So adorable how these democratically elected politicians think they have any say in the matter. Aren't they just precious.
I think it's adorable that you think you know everything about foreign polities
the Turks just gave their Presidential Republic proponent a serious "thanks, but no, thanks, we'll keep the less authoritarian Parliamentary Republic"
of course, in Turkey they don't vote for one person for only one seat in one oddly shaped district each
Bullshit, the European banks require debt slaves in order to survive.
perhaps you are right, up to a point. but there is also a strong component of projecting American issues on Europe
our banks are in many ways not comparable to your banks. our banks are generally speaking still retail banks with "investment banking" grafted on top
we generally still use a lot of cash, you don't. a bank account is generally speaking more usual then a credit card, here. in the US, it's the opposite
our "state regulated savings" are generally speaking managed by banks, your's are the famous 401(k) accounts, managed differently
our continental/eurozone banks generally speaking give business loans as a big chunk of their business. in the US, a business loan is... rubbish, generally speaking
we come up to silly ideas like putting a cap on banker's bonuses. you... even vote for bankers, as in the case of Corzine, something that would be nearly unthinkable, here
perhaps we should call our banks in a different way, just to make discussions a bit more sensible. all in all, our banks are... dinosaurs of a different age, compared to yours
Please, most of TARP and QE went right to European banks.
then name them, and the amounts. what you probably mean is the Great Swap between the FED and the ECB, which is something completely different
I think you want to see more differences between American banks and European banks then there actually are. Sure bank lending still works somewhat different. And trying to implement a cap on banker's bonuses is nice too but that's just because the EU likes to regulate things. Using more cash than credit cards is a consumer behavior and certainly not how European banks would like to have it.
Despite all the differences these European banks also speculated and lost plenty of money (UBS, Paribas, DB, MPS) to name but a few.
I worked for one of them, I know how blurred the institutional differences on both sides of the Atlantic have become over the years.
perhaps, though I have to note here that Europe is not the EU and it's not the eurozone
UBS is a Swiss, non-EU based company with a huge HQ in London and a huge HQ in Newark. DB is a "German" bank, yes. with a huge HQ in London, though. Paribas is the French version of those "financial battleships"
I'd break them up, all of them. In tiny little pieces. national pieces
Hehe, yes I agree that would indeed be better but bankers won't let that happen I fear.
it's not really an economic confrontation at all. The technicalities of funding mechanisms and repayment schedules are merely the instruments through which power is being exerted from one side and resisted from the other.
The ultimatum game teaches us that the Greek standoff can't be understood through the lens of economic rationality alone. Those who attempt to do so risk making a costly miscalculation.
http://www.bloombergview.com/articles/2015-06-10/what-game-is-greece-pla...
"Not serious at all" about selling their future generations into debt slavery because of the EU's predatory lending policies. Wow imagine that. . .
I love the smell of napalm in the morning.
Romeo Foxtrot. Shall We Dance?
https://www.youtube.com/watch?v=ZkH5Ak4wAnY
"Oh Lord, George...
Not the livestock."
Not "serious"? As opposed to the serious manner in which politicians and Central Banks responded to the 2008 crisis?
Fair enough. I mean, if I had a deep debt problem and wanted to resolve it "seriously", what better way than to create far more debt?
I would be refreshing if they actually were serious, but until they vote against further bailouts, and then refuse further bailouts, it simply looks like they are trying to school the Greek in game theory.
Athens must issue arrest warrants for Blankfein and Dimon now.
posturing aside the EU is desperate to keep Greece in the fold
posturing aside the EU is desperate to keep Greece in Debt!
Fixed it
This is becoming surreal.
Ground hog day.....................again
Isn't socialism cool?
Global bankers look ready to mop up Greece on the cheap http://www.marketwatch.com/story/global-bankers-look-ready-to-mop-up-greece-on-the-cheap-2015-05-12
EU’s bad faith in Greek talks exposes true motives http://www.marketwatch.com/story/eus-bad-faith-in-greek-talks-exposes-true-motives-2015-04-24
Greece Is Now Just A Political Issue http://www.zerohedge.com/news/2015-05-12/greece-now-just-political-issue
If Greece falls, no one wants their prints on the murder weapon http://www.reuters.com/article/2015/04/26/us-eurozone-greece-blame-analysis-idUSKBN0NH05320150426
Greek Payback Math at 0% Interest http://globaleconomicanalysis.blogspot.nl/2015/01/greek-payback-math-at-0-interest.htmlIMF same exact four-step program: http://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/
1.0 Privatization 'Briberization.'
2.0 IMF/World Bank capital market deregulation allows investment capital to flow in and out the "Hot Money" cycle.
3.0 Market-Based Pricing, a fancy term for raising prices on food, water and cooking gas
4.0 IMF and World Bank call their "poverty reduction strategy": Free Trade- "The IMF riot."
When will this Greek story end? Honestly, it's getting fucking tiresome already! Grow up, both sides, and get it over with one way or the other!
Maybe - just maybe - the Greeks realize this entire "game of thrones" isn't going to lead their people to the promised land or any where else for that matter but down the bottomless pit.
Morpheus: I see it in your eyes. You have the look of a man who accepts what he sees because he is expecting to wake up. Ironically, that's not far from the truth. Do you believe in fate, Neo?
Neo: No.
Morpheus: Why not?
Neo: Because I don't like the idea that I'm not in control of my life.
Morpheus: I know *exactly* what you mean. Let me tell you why you're here. You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad. It is this feeling that has brought you to me. Do you know what I'm talking about?
Neo: The Matrix.
Morpheus: Do you want to know what it is?
Neo: Yes.
Morpheus: The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work... when you go to church... when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.
Neo: What truth?
Morpheus: That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.
@bluez +100
Printing money never has been serious!
This Greek tragedy has been going on for far too long. Kill the hero and end it. Please!
What becomes of Greece if they do implement the various austerity conditions?
Is it even possible for them at any interest rate to service and or repay their debts?
Will they still be involved in a adding debt to debt cycle, even with austerity?
Will current austerity conditions become even more severe in future when it becomes obvioius Greece isn't succeeding to the planned outcome?
All I can see for Greece without doing the rigorous maths is that they will get into a cycle of being told to implement further austerity, legislate more to the benefit of creditors and sink much of the country into total poverty with rules of law making even more difficult for indegouns population to succeed.
Especially true if they have to trade with the same too strong a currency as a Germany has.
Looking down the track at the eventual longer term outcome for Greece and its citizens by playing the game, is it any worse than if they just crashed and burned now, but without having legislated away their countries engine and assets.
It would be a courageous Govt that let the country crash and burn into abject poverty in oreder to regrow over the longer term, than continue the morphine flow until...
In-sol-vent (adjective) unable to pay debts owed.
Greece=insolvent. Pull the plug, move on.
US more insolvent-pull plug move on..............
Two three-page documents? How much room do you need to say "we quit!"
Well Obama basically told Greece to drop dead "while kicking back and enjoying the Alpine View."
So whatever diplomatic efforts Merkel was trying to explain to him was met with the usual "yeah, yeah, yeah...blah, blah, blah."
My answer is: You have given me your money, you have given me too much of your money - but it was wasted.
Published: 09/06/2015 - 16:52 | Updated: 10/06/2015 - 07:06
Greek Finance Minister Yanis Varoufakis has criticised Greece's creditors for making "no concessions" and turning the negotiations "into a war". In an interview with Germany's Tagesspiegel he explains why a plan for debt restructuring is a Greek prerequisite for an agreement.
Yanis Varoufakis is finance minister of Greece, economics professor and a member of the Left Party Syriza. He spoke to Harald Schumann and Elisa Simantke for the Tagesspiegel.
Mr Varoufakis, the negotiations seem to have reached an impasse. The creditors and in particular the German government are not ready to grant further concessions and the same is true for your government. So what is there still left to talk about with Mr Schäuble?
We need to clarify something: We have not been negotiating with Germany and the European partners. This is the frustrating part of these negotiations. We negotiated with the troika, the representative of the IMF, the ECB and the EU Commission. It is not true that they made concessions and we made concessions and that there is a deadlock. They made no concessions. When we met the first time in February they came up with pretty much what they have now offered. Then we had months of negotiations in the so-called Brussels group. And there was a lot more convergence there.
So why did it not work out?
We sat down and made a record of those areas where there was agreement and of those areas where there was disagreement. We wrote down our position but also further concessions in order to get closer to the other side. This was what we presented as a proposal last week. What was presented by Jean-Claude Juncker to Prime Minister Alexis Tsipras with the support of Angela Merkel and François Hollande, was a return to the starting position as if the negotiations had never happened. This is a proposal you make when you don’t want an agreement. Though we were called not constructive, we have gone against a lot of our promises and we have crossed a lot of our red lines.
Can you give us some examples?
The primary surpluses. We offer them primary surpluses I don’t believe in. Just to come closer to their positions. We offered them an increase of the VAT, which will be problematic for us. They were gestures of good will, that we are genuinely interested in reaching an agreement. I will try to remain optimistic until the last moment, but it is clear that the other side has to come to the party now.
If you compare the figures of both proposals, the creditors demand fiscal measures of about €3 billion and Greece offers €1.87 billion. This does not seem unbridgeable, does it?
But it could be the difference between killing off what is left of the Greek economy and not killing it off. We are in a situation of seven years of continuous shrinkage. If we try to extract through tax and pension cuts more than €3 billion out of this economy there will be a greater deficit next year. It will be like beating a sick cow in order to force it to produce more milk, it will kill it. Even our own proposal of €1.8 billion surplus is excessive. What Greece needs now is a balanced budget.
But this would not be enough to stop the recession.
This is why all these fiscal measures and reforms are only one third of the package we are negotiating. We are very clear: We need a debt restructure to make our debt repayments viable. And we need an investment package. We are proposing it should come from the European Investment Bank (EIB).
Were there any positive signs from the creditors’ side concerning these ideas?
Not more than some positive noises. But what the other side needs to understand is that even the reforms we are proposing have to be part of a bigger plan to end the Greek crisis. This is not just a matter of ending the Greek program, because that is what the bureaucrats want.
But even if the current program is finished and the outstanding €7.2 billion is disbursed, Greece has to pay €30 billion until 2020 to IMF and ECB. So isn’t a third bailout package unavoidable?
We understand the difficulty of this question for the German government. So what we propose is that the conditions which have been negotiated since February become a common conditionality for a successful agreement now and for the next arrangement.
What should this next arrangement look like?
To be very clear: We are not asking for one new euro for the Greek state. What we are proposing is an intra-troika debt swap. We have €27 billion that we owe to the ECB, bonds from 2010 and 2011. They are maturing now very quickly, €6.9 billion alone this summer. These debts are a major problem because they prevent Greece from participating in Draghi’s “Quantitative Easing”…
….the ECB program to buy bonds off the member states.
It is like a rock, preventing Greece from returning to the markets. We should get a new loan from the ESM, the EU rescue fund, which can go directly to the ECB – so it is neutral to the Greek debt. But this would push the €27 billion further to the future and it allows Greece to return to the markets. It is a question of political will.
But additional liabilities for the German taxpayers because we are liable for what the ESM gives.
But you are also liable to the ECB. That is at least what Jens Weidmann thinks, the head of the German Bundesbank – so I will not dare to disagree. And then we should have a look at what will happen in 2022. The debt of more than €200 billion from the first and second program will be mature from 2021 onwards in high sums, from about €20 billion a year. Why? Because they have pushed back the interest payments that far. There is a cliff there. You could say: Why should we care about what happens in six or seven years? But this is wrong because what happens in 2022 changes today. If creditors think that a Grexit is not off the table but just postponed to 2022, they will not invest. This is why I we have to allocate the interest rates and I would like to link them to the growth of our gross domestic product. If we grow faster we will pay more interest, if we grow slower - less so.
All these points are not even mentioned in the creditors’ proposal right now. How should they become part of an agreement?
But they should know: Until we discuss these two options, the debt restructure and the investment programme, all bets are off from us, we will not agree on anything. If we want a comprehensive agreement it can’t leave out the debt situation.
In case a solution is not found, what is going to happen?
You should ask the troika, ask the institutions. We want a solution. What they propose is not a solution. It is a perpetuating of the crisis. We don’t have a mandate to perpetuate the crisis. They just want us to cut pensions and allow mass firings for the last few remaining large businesses we have in Greece.
Did you expect that your job would be so difficult?
I expected it to be hellish, yes. I am not disappointed.
So how did the debate became so personalised about you?
My prime minister said to me after the Eurogroup meeting in Riga: they are trying to get at you, because then the whole government unravels and then they get at me. But the degree of evident lies that have been treated as facts is astonishing. These rumours about what was going on in Riga, that I was forced out of the government, that I will resign… and when none of that happened: That I am not any longer a part of the negotiation team. This all was completely untrue, but it was written everywhere from Brazil to Brussels.
But do you really think this has been deliberately engineered?
It has been a character assassination endeavour, there is no other explanation. There is a saying, when war begins truth dies first. Unfortunately the institutions and our European partners have missed the opportunity that we offered: to look at these negotiations as a deliberation between partners. They turned it into a war against us.
We are talking a lot about your struggle with the creditors. This struggle seems to take up so much of your attention and time, so that the government doesn’t seem to have energy left for domestic affairs– to change some things in the structure of the Greek state you criticised yourself before the elections.
The most frustrating part is that these negotiations are taking up all our energy and time. And moreover: the institutions are telling us, if we legislate before we reached a comprehensive agreement this will be seen as a unilateral action and it will blow up the negotiations. One of the very first things I said to my Eurogroup colleagues was, why don’t we push some of the legislation we agree on – the taxation system, the anti-corruption rules – through parliament and meanwhile continue the negotiations? And I was actually told a number of times if I dare to suggest this again this would constitute reason to settle the negotiations.
This means you haven’t yet pushed through anything you planned?
We introduced a humanitarian bill which provides access to food, shelter and energy for the poorest. We also introduced a tax arrears instalment scheme. We have six million tax file numbers. Of those 3.5 million are in arrears to the state for less than €3,000. Not because they are tax cheaters but because they simply cannot pay. This is a tragedy for them because they can’t get a loan, they can’t start a business without a clearance from the tax office. Now they can pay back little by little. We have been harshly criticised for this law by the institutions.
But wasn’t this also because you did it without a threshold? So now also rich tax avoiders benefit from your generous amnesty…
That is a good point. But this is an emergency. In a normal country we would not have to introduce this instalment scheme. In a normal country we would prosecute the tax cheats. But we also have a broken down judicial system. With the big tax cheaters, if you take them to court they get a court case that will be heard in 2023. And by that time you won’t gain one penny from them. We don’t even have tax officers. The salaries for the tax officers were reduced a lot, so a lot of them went into private practice. The first day I was in office I asked: how many tax inspectors do I have access to? You know what the answer was? 100. 100 for the whole of Greece.
A frequently cited example is the so-called Lagarde list, with more than 2,000 names of potential tax avoiders and tax cheaters. Up to now only 49 have been investigated.
We don’t have the personnel and we are struggling with the banking system to allow us access to the bank accounts. But concerning the Lagarde list, the previous government didn’t do anything for years. So a lot of these cases are too old now. But we have new lists now and we are working very hard towards an algorithmic system of automatic checks of all the movements between bank accounts in Greece and abroad. We are making a lot of progress and we expect good results until September.
You have proposed that Chancellor Merkel should hold a “speech of hope” in Greece. This sounds very naive.
But why? This is what a hegemon needs to do. In 1946 the United States understood the difference between hegemonies and authoritarianism. Germany got a chance so Europe got a chance.
But we Germans don’t see ourselves as a hegemon.
I consider it to be my job to say to German leaders: you have to lead. I have been portrayed as anti-German or very sceptical towards Germany. But this is all false. What I want from Germany is leadership.
You talk about leadership and the Germans understand 'Varoufakis wants our money'.
My answer is: You have given me your money, you have given me too much of your money. But it was wasted. It vanished into a black hole of unsustainable debt, it never really went to Greece, it went to the banks. The bank bailout was presented as a bailout for Greece. That turned the Germans against the Greeks and the Greeks against the Germans. And Europe could get lost to the hands of the enemies of Europe. Someone has to lead Europe out of that crisis. I can’t, Greece can’t. Germany can do it, but it has to be a hegemon. It has to create a rational solution and this is not to ask Greece to take more of the same medicine that is part of the problem but not of the solution.
http://www.euractiv.com/sections/euro-finance/varoufakis-greeces-credito...
Really good read on the real feelings of a German politician:
http://fortruss.blogspot.ca/?m=1
DONT BUY GERMAN PRODUCTS! THESE MOTHAFUCKAS HAVE DESTROYED ALL INDUSTRY SOUTH OF THE RHINE ON PURPOSE. They have used low interest rates in Germany to drive everyone else out of business! You can't even buy an Italian car if you wanted to-they got fucked by high rates! DOWN WITH THE 4TH REICH!
The 4th Reich is alive and well in the US. It's called the Bush Family Tree. Everyone should look into it. Fuck, even the Royal family is German.
Greece is the word...........is the time...............is the place...........is the motion...........Greece is the way that I'm feelin!
The party is over. Greece does not have the FIAT currency to pay you back and you can't have the Parthenon.
Follow Icelands lead and start arresting bankers.
There is no question that Greece has been profligate with its EU-enabled bond sales and its loans from the Troika. There is also no question that Greece is in dire straits and that it cannot survive financially under the current repayment schedule.
Germany (as well as Austria and Hungary) was in a similar predicament after WWI: blame for the war was placed on Germany by the victors, and France especially demanded punitive reparations. The Reparations Committee continued to demand more gold payments than Germany could afford, and hyperinflation ensued; the people suffered mightily and - almost directly as a result - Hitler rose to power.
The parallels are striking, and the Drachma would certainly face high inflation in the case of Grexit, as did the Reichmark. The people will suffer.
Accomodation, distasteful as it is to Germany, is essential.
Come June 30th, you just know they're going to kick the can down the road, again. The EU is afraid of the pain they will endure short term, and Greece fears if they leave the EU, socialist policy becomes ludicrously expensive, eventually ushering in a new era of capitalism which they disdain.
The differences between the two sides since the latest revision from the Greek side is about 440 million.
So the Germans are going to shoot themselves in the head over 440 million because they can't do simple cost-benefit analysis?