Greece Capitulates: Tsipras Crosses "Red Line", Will Accept Bailout Extension

Tyler Durden's picture

We’ve long said that negotiations between Greece and its creditors are more a matter of politics than they are a matter of economics or finance.

From the troika’s perspective, breaking Greece and forcing PM Alexis Tsipras to concede to pension cuts and a VAT hike is paramount, and not necessarily because anyone believes these measures will put the perpetually indebted periphery country on a sustainable fiscal path, but because of the message such concessions would send to Syriza sympathizers in Spain and Portugal. In short, the troika cannot set a precedent of allowing debtor nations to obtain austerity concessions by threatening to expose the euro as dissoluble.

On the Greek side of the table, Tsipras must convince Syriza party hardliners that concessions are preferable to Grexit and the economic malaise that would come with redenomination. For some on the Left Platform, compromising the party’s electoral mandate is simply not an option and it’s these lawmakers (who just two weeks ago voted to leave the euro and default) that Tsipras will need to sway or else attempt to push an unpopular agreement through parliament a gambit which implicitly assumes that the ensuing political upheaval and voter backlash is preferable to economic collapse. The problem with the latter approach is that it effectively means the troika will have succeeded in using financial leverage to subvert the democratic process, an eventuality that die hard Syriza hardliners are in no mood to suffer.

After one final attempt to table a proposal that retains some semblance of Tsipras' defiant posturing, it appears he may have finally broken after a meeting with ECB chief Mario Draghi where is sounds as though the central bank warned the PM that without concessions, ELA to Greek banks would be cut off and that, of course, would mean game over as Greeks would take to the streets en masse. From Bloomberg: 

European Central Bank President Mario Draghi told Greek Prime Minister Alexis Tsipras in meeting on Monday in Brussels that the ECB will help secure the country’s banking system as long Greece is in an aid program, Greek government official tells reporters on the condition of anonymity.

And shortly thereafter (via AFP):

Greece has accepted the principle of extending its current bailout programme which expires at the end of the month so as to keep it afloat while a long-term debt solution is worked out, Greek government sources said Monday.


"For the first time, we accept the extension of the programme as the only way forward," one source said as eurozone leaders discussed Greece's future in the single currency ahead of the June 30 end of its current aid programme.

And so, we turn to politics or, more appropriately, Greek politics because the fate of Greece now looks to rest in the hands of Syriza's far left factions. Dow Jones has more:

To avert a default and possible exit from the eurozone, Greek Prime Minister Alexis Tsipras must sell Germany's chancellor, Angela Merkel, on his plan to fix Greece's finances.


Then he needs to persuade Vassilis Chatzilamprou.


But out at the Resistance Festival, an annual gathering of Greece's far left, the lawmaker from Mr. Tsipras's left- wing Syriza party said he was in no mood for submission.


"We cannot accept strict, recessionary measures," Mr. Chatzilamprou warned. It was after midnight Sunday, and the weekend festival was winding down. "People have now reached their limits."


Syriza isn't a traditional party but a coalition of left-wing groups with an intricate family tree formed out of doctrinal splinters and squabbles. It is those many, disparate factions that Mr. Tsipras must also satisfy with any potential bailout agreement with Greece's creditors.


Mr. Chatzilamprou, for instance, is a member of the Communist Organization of Greece, which is an outgrowth of the Organization of Marxist-Leninists of Greece. It is distinct from the Communist Tendency, which has a Trotskyite bent. (Neither should be confused with the Communist Party of Greece, which is outside Syrzia.)


That unusual composition has made it especially hard for Mr. Tspiras to strike a deal with eurozone and International Monetary Fund officials. "The people who are responsible for the negotiation move within a frame that is determined by the central committee of the party," says Alekos Kalyvis, a longtime union official who is on the committee and responsible for its economic-policy portfolio.


The negotiators have some latitude to make decisions, he said, "but this shouldn't be interpreted as if they have a blank check from the party--neither them nor Tspiras."


Many of Syriza's factions regard the party's rise as a epochal moment for the left--and any compromise on a bailout as a deep betrayal of its principles.


Stathis Leoutsakos, another Syriza member of Parliament, said Germany and the other creditor countries are determined to defeat Syriza. "In my opinion, their aim is to humiliate the Greek government," he says. "They want the message that no other politics are accepted in the eurozone."


It is also uncertain exactly what kind of deal would be acceptable to the left wing of Syriza. The party's argument that fiscal austerity--steep budget cuts and tax increases--has deepened Greece's economic slump has been central to its popular success.


Most on the party's left wing reject any additional pension and wage cuts outright, saying Greek workers have suffered enough in years of depression since Greece's first bailout.


Mr. Leoutsakos, like others on the far left, also insist that at least some of Greece's debt must be forgiven. "In order to service it, we'd need to execute the Greek people," he said. "And nobody in Syriza is willing to do it."


There is also the question of Mr. Tsipras's future as prime minister if he does compromise. No one here is unaware of the fates of former Greek premiers George Papandreou and Antonis Samaras. Both signed bailout agreements with Europe.


Both lost their jobs, and Mr. Papandreou's party has been all but destroyed.


Going back on his leftist principals "would be political suicide for Tsipras," Mr. Chatzilamprou said. "It would mean he is also recyclable: They could replace him with someone else."

And DB has more color on the political fight Tsipras faces in the coming weeks: 

Subject to further progress this week, focus is likely to shift very quickly to the Greek domestic political front. Disbursements for Greece ahead of the IMF tranche due at the end of the month will require domestic parliamentary approval. It is likely that the Greek PM would first attempt to obtain approval from the SYRIZA party's 200-strong Central Committee before bringing an agreement to parliament. In the event of failure at the party level, a referendum would likely be called. In the event of party approval, a vote would be likely taken to the parliamentary floor. Depending on the process adopted, such a vote may take between 2 days to a week. 


It will remain a major challenge for the Greek PM to successfully pass a potential agreement through parliament. Local press reports that 10-40 SYRIZA MPs are likely to dissent (the government has an 11 MP majority), while overnight the Independent Greeks junior coalition partner (12 MPs) has also raised the possibility of withdrawing from government. How the political process plays out largely depends on the number of MPs the current government loses. A loss of less than thirty parliamentarians may force a change in coalition to include the two small moderate parties in parliament (PASOK and the River) jointly controlling 30 MPs. More substantial losses requiring the support of major opposition party New Democracy would open up the possibility of broader changes to the government or a referendum.

We'll close with what we said last week about the tough choice the PM faces: "Tsipras must decide how he wants history to remember his tenure as Prime Minister. Either he will be the leader who allowed Greece to crash out of the euro on its way to a redomination-driven economic collapse, or he will go down as the fiery advocate for change who caved under pressure and allowed the troika to stamp out democracy in the place where it was born."

*  *  *

And because this is Europe after all, someone had to deny the "rumors":


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Haus-Targaryen's picture

I hope he resigns, and Golden Dawn gets its shot next. 

Publicus's picture

Golden Dawn is the future.

espirit's picture

Kabuki Theater is the future.

Stuck on Zero's picture

I like this part:

Going back on his leftist principals "would be political suicide for Tsipras," Mr. Chatzilamprou said.

"Leftist principles" is certainly a contradiction in terms.

The Steaksmith's picture
The Steaksmith (not verified) Stuck on Zero Jun 22, 2015 5:12 PM

So I guess this means that, just like GREXIT 2011, we'll be holding our collective breath when GREXIT 2017 inevitably surfaces after a year hiatus from the headlines while Hitlery gets elected.. Only it'll be DIFFERENT that time. Kabuki theatre indeed!

Pinto Currency's picture



Now they've got him.

He'll keep borrowing to pay interest until Greece is foreclosed-on by the European elites. 

Germany sorely needs vacation property.

invisible touch's picture
invisible touch (not verified) Pinto Currency Jun 22, 2015 5:21 PM

as said before, it's very funny to see almost everybody here waiting something that has not been designed to happen.

J S Bach's picture

Only nationalism can defeat internationalism... EVERYWHERE.

greenskeeper carl's picture

"Congratulations Greek people, you won!!"

"What did we win?"

"7.2 billion more in debt! Yyaaaayyyy!"

Tall Tom's picture

Did you read the article or just the headline?


Not one damned thing has been decided other than to have the Greek MPs in Parliament to VOTE on the decision.


It will remain a major challenge for the Greek PM to successfully pass a potential agreement through parliament. Local press reports that 10-40 SYRIZA MPs are likely to dissent (the government has an 11 MP majority), while overnight the Independent Greeks junior coalition partner (12 MPs) has also raised the possibility of withdrawing from government.

tc06rtw's picture

C’mon, you dopes! You don’t really BELIEVE The Troika is gonna accept Greece’s budgetary ravings? They’ve just stopped SAYING NO (publicly).

Tall Tom's picture

Money talks and Bullshit walks.


Did Greece walk away with money?


You have a good assessment tc06rtw.


The EU cannot announce a default as that will topple their Banks. They are trapped into taking care of their friends in the Deadbeat Club.


For the next act...Italy and Spain. If the Greels can d it then why not?


The European Socialist Union is just the collection of Socialists that make up the Deadbeat Club.


And as for Brussels?


Anybody have Tulips?


They have been blowing up Bubble Markets over their for centuries.


Nothing is new.

weburke's picture

bet the greeks parliment decides to go brics.

Doña K's picture

Back to the motto. "Everything is manipulated."

For every up or down, GS makes billions.

Hopefully, they will loose control soon and with our large assymetric bet, we can trade our 28' sloop for a 65' ketch.


cookie nookie's picture

Silly people.  We knew this was going to happen.  Greece ain't going nowhere.  The bankers win again.  They always win.

greenskeeper carl's picture

@ tall tom, yes, i did read the article, and i realize nothing is finalized, all i really meant was the can has been successfully kicked one last time, for a little while anyway, but I don't think there is any doubt some kind of deal can be reached that will enable the greeks to borrow another 7.2B(i think thats the number) to use to pay interest on their debt and add to the balance.


And as far as 'trapped into taking care of their friends in the deadbeat club', what that really means is that german and dutch taxpayers are trapped into keeping their major banks solvent by giving the greek govt their money so they can then make the interest payments to the major EU zone banks who loaded up on greek debt. The real winner here is douche bank and all the rest who loaded up on greek debt looking for higher yields

Tall Tom's picture

Greece took the last free money and the Parliament will vote to default. They will not back Tsipras on this. That is my gut feeling.


Douchebunk will eat the Principal Loss on those Greek Bonds and the whole damned thing will Meltdown...not as a result of this.


This is the excuse after all.


The whole damned Derivatives Narket melts down because of the massive losses that Douchebunk realized because they bet LONG, extreme leveraged LONG... on Oil Prices.


That is what my gut tells me. This is all theatrics in order to place blame on the Greeks.


Douchebunk is cooked. Greece does not matter.


Pass the popcorn will ya?

Uber Vandal's picture

You are not the only person on here thinking exactly this.

invisible touch's picture
invisible touch (not verified) Uber Vandal Jun 23, 2015 3:12 AM

wrong, wrong and wrong.

you only see the situation the way YOU want it to finish.


you refuse to face the reality of the evidence :  why tzipras in hell did not just said what you pretend already.... whay asking more money if their goal is to quit and go full east...?

because he cannot, greece is euro condemned, instant devaluated neo drakm would make em impossible to get what they still importing such food.

situation would be worse.


greeks whine because they cannot buy what they want but they still have sun, sea and food, and economy is not that bad, let's be honnest, a population starving go to unrest, if you do not see them revolting, they just have full stomacs...

morality, they feel controled, but humans needs masters and control, you cannot let human without control, that is the main point  ALL here will not be agree with me, you cannot let the world without authority. but it is another story. do not be stupid enough to downvote me just for the last sentence, would you.

logicalman's picture

Only anarchism can defeat government.

Nationalism won't help, just another way to divide and conquer humanity.

Another on the list including race, religion, gender ......

Left/Right politics is total fucking bullshit.

No leaders means no wars.

Personally, I don't need, or want, a 'leader' telling me what I can or can't do.

Fuck 'em all.

new game's picture

you have nailed it- chaos, ropes, guns, and upheaval. or moar of the same. individually, we march to a different drum until the bankster matrix consumes our every movement of freedom, then the anarchism must proceed. we will know that tyme, when it arrives...

Al Gophilia's picture

Tyler observes that DEMOCRACY migt end in the country which invented it. Excellent! Democracy in Greece, as were its incredible architectual marvels, were only possible through the societal acceptance of slavery. Ancient Greece had a very large slave population, some of whom gained their fredom only through making themselves an invaluable part of the elite's system but that was very rare. The elites were afforded the time to philosophise, via the transfer of the responsibility of their personal labour onto the backs of their various slaves. Slaves were well educated and given highly respected tasks and a stipend, which allowed them some personal freedoms. However, The elites were the only ones allowed to vote in their "democracy", establishing privilege. The elites held the reins of power through controlling the money creation. They owned the silver mines and used slaves to work in the mines to produce it. If our times sound as though they parallel those of the ancient Greeks, you are on the way to understanding the process of how the elites control the populace, through controlling, issuing and owning the source of money.

The same system is employed today. They aren't stupid.

You, working like a slave to earn their "money", thinking you have choices and freedom through your vote, probably haven't felt the weight of your shackles. They control the voting system. That is why we have Obama, Jeb and Hillary.

Most of the Greek citizen-slaves are still begging to remain in the EU and still seek the security of their captors. Their insoucience towards their inevitable demise is only paralled by ours.

Welcome aboard, number 673. Find yourself a seat and take a firm grip on that long stick thingy there. When you hear a drum beat, pull hard on it but don't stop. If you do this, we promise to feed you, right up to the time of your death. P.S. Please read the disclaimer written in lemon juice on the bottom of you indenture agreement.

Doña K's picture

You failed to explain who the slaves were. They were captured mercenary soldiers who dared to attack Athens. Great disincentive, as you could be enslaved for very long time. Since Athenians were well educated, they needed them for the menial jobs and they gave then incentive to work hard to gain freedom. Brilliant I say. 20 years later they were too old to work anyway.

Nonetheless, I do agree that the system is similar today, but you can now choose your master and if you work hard and save enough, you can become a master yourself.

Al Gophilia's picture

"Nonetheless, I do agree that the system is similar today, but you can now choose your master and if you work hard and save enough, you can become a master yourself."

You've not polished that seat enough 673.

You havn't worked hard enough to be the master of the girl on the checkout next to yours.

You will never pay off your debts, 673; just as the Greeks can never pay off theirs. 

Regardless of whether or not the slaves were captured pirates, soldiers, women, children, the point is; they were sold as slaves and traded for cattle etc. They were treated well, yes, but slaves none the less. They were even allowed to own land but their work was taxed, just as yours is, by your masters.

Still brilliant? 

If so, you are yet to measure the weight of your shackles. Keep up with the beat.

In Case You Are Still Confused About Who Is In Charge

invisible touch's picture
invisible touch (not verified) logicalman Jun 23, 2015 3:24 AM

1- you never raped a girl you already though in yourself '" fuck ! she is nice i want to fuck her"

2- you never killed someone you though in yourself " this guy piss me of, i'm gonna kill him"

3- etc.... list is long.



morality : YOU OBEY to laws, into system you navigate because you have been educated to, formated to you are pupet like another, you think you act by yourself but you not.


anarchism is the 9years old mentality of adult thinking of playing back with little hotweels cars who can smash em with hammer without parents yelling into him.

anarchism is chaos.

chaos can be up to reconsider your own existence as an entity,  you consider yourself as an superior antity with control  to sub entities,  you are facing a dream, man, you must wake up, you are eaten by the system and you just do not accept  to be what you realize.


it is sad.


to be, and be safe, it is not the point of being in a no system. because chaos put yourself in danger, the solution is to stand oustside of the actual system you know how to navigate into, it is subtle difference.

you have no power to change it, so use it as your advantage but stay out of the thing.



Al Gophilia's picture

You've had a touch; of the sun.

Dathedr's picture

It is Mother Nature that is "dividing humanity" you stupid Western cunt! Carving differences and creating different species is the Mother Nature's work. How else do you think genders, races and cultures exist? Your liberal Western view of erasing identity, religion, culture, equating genders... how is that working for you?! Not so well, hm? You are spreading degenerations you stupid cunts! But what else can one expect from a libtard Westerner?! To put it in the simplest terms: you are scum! A blight upon the world!


And what do you know about divide and conquer tactic? The tactic is exclusively used against the same or similar entities, never between the entities which naturally differentiate. Supporting a weaker side in a conflict is the most common usage of that tactic.


Only in your degenerate Western culture, if you can call it that as your Muricano culture does not exist - it is an assemble of various cultures and has no authentic print, can obvious contradictions and contrasts co-exist peacefully alongside each other. Imagine, liberal Western scum is pro-queer, but accepting the fact that there are differences, natural differences, between genders is "divide and conquer" tactic to subdue them! That is kind of moronic stuff that stupid, degenerate, corrupting liberal Western scum is well known for after all!

Luc X. Ifer's picture

The problem is that vast majority doesn't understand what really has to happen, not what it is thought to happen. There is no sane mind either in the Trojka or Greece side who believes the debt will be ever paid back. All what they do is a political dance from which Greece is seeking to leave with the maximum benefit. Greece is dancing in-between EU & Russia and all what EU wants is a decent, face saving closing so that Russia doesn't get the maximum strategic benefit. The stalemate will just postpone the real trouble for somewhere/sometime in the future, so far in the future for the current Trojka leaders that they will not have do deal with it but another team. Greece will *seem* to be following a debt paying plan, Russia will start pumping the gas and provide a free rain of money to Athens, IMF/ECB will look like happy with the things as going. The real looser here? USSA - easy to see why. If Merkel, Hollande & the EU dark lords are behind this deal? You can bet on it, as I said yesterday, they just realized that in USSA vision they are just good to become dust & ashes, collateral damage in the muricans need of a war with the sino-russian alliance. EU needs stability at any price and Varoufakis knew it, pretty easy to see, Russia + China are just far too big and close to Berlin, Paris, London etc. to afford to pinch them too hard. Plus, the Islamic shit-storm just has reached much too close the European shores and the only ones able to stop-it for real are Russia & China - opposite to USSA which would benefit hugely from an Europe engaged in a cultural, religious war.

MarsInScorpio's picture

The hard-core truth of the situation is that what the EU, IMF, and ECB are doing constitutes an Act of War. Those entities are threatening to destroy Greece as a nation, and devastate its society.

The Greeks should immediately proclaim this reality to the world, seize everything EU, ECB, or IMF within its borders, especially all banking accounts, and raid the offices of these institutions with their armed forces.

Extreme? Yes, of course it is. But this is about power, not economics, or business. It is the imposition of the troika's power to rule Greece; when one entity attempts to impose itself on another, illegally and immorally, then it is an Act of War against the target.

So this is an extreme situation that has only two choices: 1) Submit to the rule of the troika - admit the parliament is no longer a national legislature, but is instead a regional whose laws and actions must be approved by the troika; or 2) Declare this an Act of War - and do everything that Greece can to do to destroy the troika, permanently.

Those are the real choices in this affair.

It is my hope that Greece will recognize the "Big Picture" of this and declare the troika's actions an Act of War against Greece.

But it is now obvious that the Prime Minister lacks the courage to fight for the freedom of his country. May history record him as the man who sold Greece to the EU banksters, and his grave be cursed forever.


Luc X. Ifer's picture

I think this was the case till very recently, probably just few days ago, till EU lords realized they are heading to becoming dust & ashes in murica's game. now, all it is about a conclusion allowing EU to leave with the heads-up and look further how to stay safe & stable. what u describe will be declared as fascist intervention in the internal affairs of a sovereign country and it started being presented as it just few days before by Tsipras. that would have started a shit-storm as Russia would have been entitled to present itself again as the european savior from the fascist forces, especially because of direct economical strategic interest in Greece. Figure out what Greece would have done with the armament they found ways to purchase recently and with the political support from Russia's side.

Doña K's picture

Do not underestimate CIA's ability to distabilize Greece from within. That is a fear to all Greeks and Tsipras needs to finesse it. (Think Ukraine)

Kaervek's picture

Don't underestimate good old european power circles. All the gold is in England and Switzerland, Fort Knox is just one bad joke waiting to blow up. The american dream is over, today muricans are enslaved by their own .gov way worse than europeans. More average debt per capita, less social benefits, schools are fucked, university is only affordable for the rich. And it's not going to get any better by printing more yellen bucks.  

Yes, a conflict with Russia is nothing the europeans want, but they are also big profiteers of middle-eastern instability and cheap oil. Brought to you by the united states. So it's not that easy to choose sides, it's a dangerous game.

conscious being's picture

"The problem is that vast majority doesn't understand what really has to happen ..."

Why democracy fails. Too many low information voters who don't understand where this is going and who too easily line up for the banksters paper offerings.

eforce's picture

Starting to sound like 1984.

UK leaves and joins America (Oceania), and the EU allies with Eurasia) etc.

Luc X. Ifer's picture

Holy gosh, good observation :) LOL, Orwell visionary intelligence, amazing ...

logicalman's picture

When government is the problem, there's only one solution...................

greenskeeper carl's picture

Very fitting statement from someone with your name...

SickDollar's picture

WOW this is honestly turning into a "DALLAS" style  soap opera

Kirk2NCC1701's picture

Not until somebody shoots 'JR'.

JR is.... ?

The Steaksmith's picture
The Steaksmith (not verified) Kirk2NCC1701 Jun 23, 2015 12:47 AM

dead.... Neidermeyer?

TheReplacement's picture

Hmm, Germany is the one that needs the bailout.  The bailout funds will not go to Greece, well, the VAST majority.

Ghostdog's picture

I thought it was pronounced Shitlery?

Antifaschistische's picture

But...that Varifokalis dude knows game least, he wrote a term paper on it, or soemthing like that.   Okay, even though that sort of like writing a masters thesis on coaching football (regardless of the shape of the ball you use), did anyone expect anything different....yes Steaksmith, Kabuki theater.

...the only thing I think I know I that we're one day closer to a real reckoning day.

Kaervek's picture

Knowing about game theory doesn't make you a good player. Varoufakis is a pawn, he wouldn't be able to change shit even if he wanted to.

SDShack's picture

Actually, Leftists have principles. But the problem is the principles are not founded in any type of tangible reality, and therefore can never achieved.