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Troika Says Greek Proposal Not Enough To Meet Targets, Serves As "Basis For Negotiations"
Early on Saturday morning, the Tsipras government passed the Greek bailout proposal which it told the Greek people to reject - which they did - less than a week earlier. The grotesque farce continued until the very end when 15 Syriza lawmakers who voted yes said they nonetheless are against the reform package and expressed their opposition to the government’s proposal in a joint statement issued immediately after the vote in parliament.
Seemingly unclear how this "democracy" thing works in the country that supposedly invented it only to spawn its biggest mutant yet, the "dissenters" added that they voted for the proposal in order not to give an excuse for the undermining of Alexis Tsipras government. What they really meant is what the angry people finally crack down on yet another government, they hope to have a get out of jail card. Literally.
Other were far more vocal in their condemnation of the capitulation: Energy Minister Panagiotis Lafazanis, Deputy Labour Minister Dimitris Stratoulis as well as the speaker of parliament, Zoe Constantopoulou, all called "Present", in effect abstaining from the vote and withholding their support from the government. "The government is being totally blackmailed to acquiesce to something which does not reflect what it represents," Constantopoulou said.
At the end of the vote, the Tsipras government narrowly escaped the loss of a parliamentary majority, as 17 Syriza lawmakers, which holds 149 seats in parliament, abstained, were absent or voted no. Among legislators who were absent were former Finance Minister Yanis Varoufakis (who went on holiday earlier to his wife's island vacation house), Speaker of Parliament Zoe Konstantopoulou (who penned the famous Greek "Odius Debt" declaration) and two cabinet ministers.
The ruling coalition's parliamentary majority was saved by the deputies of the right-wing Independent Greeks, who hold 13 seats in parliament. Additionally the three opposition parties handed Tsipras the mandate to negotiate and bring back a debt deal.
In any event, despite winning backing from lawmakers Tsipras now faces rebellion in his own party that could threaten his majority in parliament because while 10 Syriza deputies either abstained or voted against the measures another 7 were not present, leaving Tsipras short of the 151 seats needed for a majority of his own which means the next crisis in Athens will be a parliamentarian.
But while we will cross that bridge eventually, for now the ball is in the Troika's court (and yes, with Greece fully capitulation to the Troika we can now call the creditors by their rightful name: The Troika, which as a reminder, was the only "concession" won by the Tsipras team).
Here reports are conflicting, even if split according to Europe's (and the US) conventional pro and anti-debt reduction axes.
According to Reuters, the Troika told Eurozone governments that proposals from Greece for a bailout loan are a basis for negotiation, an EU official said on Saturday. "The three institutions have made a first joint assessment of the Greek reform proposals submitted Thursday night. Under certain conditions, they jointly see the proposals as a basis for negotiating an ESM program. This assessment was sent to the Eurogroup president last night," the official said.
That recommendation is an important step before the Eurogroup of euro zone finance ministers meets at 1300 GMT in Brussels to decide on Athens' request for help from their European Stability Mechanism bailout fund. Ministers' advisers are due to meet in the Euro Working Group at 0800 GMT.
Of course, nobody doubted that the proposal which falls back to what the Troika itself submitted two weeks ago, would be the "basis" for talks. The question is what the final draft will look like.
And it is here that the Troika will surely make Greek life a living hell as it returns with demands that force the government to shortly vote on a "deal" that has far greater austerity embedded in it.
First, Germany's Frankfurter Allgemeine Sonntagszeitung reported that Greece’s international creditors view the country’s reform proposals as insufficient to meet agreed budget surplus targets, citing assessment paper provided to euro-area finance ministers by the Troika. FAS adds that the "new plan insufficient in light of "significant deterioration of macro economic and financial conditions" in Greece. As a reminder, Greece hopes to achieve a 2015 surplus target of 1% in 2015 rising to 3.5% by 2018. This is not going to happen and everyone in Europe knows this.
In fact, Greece will be lucky to be able to ever reopen its banks again.
Europe's hard-line stance was confirmed on several more occasions. First, the Deputy Finance Minister of the Netherlands Eric Wiebes said that "the Greeks have made a step but at the same time we notice that the institutions are critical about the proposal" adding that "we have serious concerns on the power of the Greek government to implement but also the commitment because we're discussing a proposal that looks very much like a proposal that less than a week ago was largely rejected."
The logic continued: "the Greek govt said then it was in Greek interest to reject it. There are large concerns about that and that’s what we will discuss."
This position was echoed by Estonian Finance Minister Sven Sester who said that "Greece faces the hardest work at home because there is still lack of trust that even agreed reforms can be fulfilled eventually."
Considering that as part of its Third bailout proposal, Greece promised the implement reforms pledged in 2010, one can see why Europe is skeptical this isn't just another ploy by the Greeks to have the banks reopened so the depositors can withdraw the remaining money and then pull the plug on Europe once more.
And then, moments ago Irish Finance Minister Michael Noonan said the Greece’s bailout request probably needs extra measures and proof that it can be implemented, adding
most importantly that "the Greek paper was silent on banking" which as we noted yesterday will require another €10-20 billion bailout.
But the most interesting narrative is developing within Germany itself where Bild repeated what we said about the view split between Merkel and Schauble, reporting that "a power struggle is brewing between German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble" over how to proceed with Greece. Bild said that it was Merkel who out of consideration for EU partners, especially France, backs new talks with Greece, while Schaeuble regards Greek reform proposals as "inadequate" and opposes further negotiations. Then again this seems to be an exact rehash of what we said yesterday in our commentary to the Varoufakis op-ed so take it with a grain of salt.
But one thing that is certain: according to Dow Jones, as part of its Bailout Number 3, Greece will need €74 billion in fresh funding (i.e. debt), citing the Troika, of which €16 billion would come from the IMF.
Which means that Greek debt, already at 175% of GDP...
... is about to rise above 200%. Which brings to mind a statement by Latvia's outgoing president which we posted last week:
"this [Greek] debt is so big that everyone understands that it won’t be repaid. Loans to Greece have just bought time so that those in power don’t have to take decisions. This is like a game: who can hold out longer by not showing that this money has been lost? This burden has become bigger and there obviously is no possibility to repay. The debt writedown of Greek debt will come after bankruptcy of state."
In other words, all that may happen this weekend, assuming Tsipras can again can pass the revised draft of its debt proposal which will have far more austerity and pension cutting measures in it, is push the date of the Greek default back by a few months, while Greek debt goes from merely unsustainable to utterly ridiculous.
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"...institutions are critical about the proposal" adding that "we have serious concerns on the power of the Greek government to implement but also the commitment because we're discussing a proposal that looks very much like a proposal that less than a week ago was largely rejected."
Indeed it WAS, by an almost two-thirds majority.
Greece...TODAY is the day.
What is it going to be?
If you're going to endure even more hardship, and you will, at least do it for an INDEPENDENT future.
1. Get rid of Tsipras...NOW.
2. Repudiate ALL debt owed to the troika/EU. If it can or even should ever be repaid--now is NOT that time.
3. Call a new election to decide further participation in the EU, and the continued use of the euro. THAT vote, (which is essentially moot, as it has ALREADY been decided by the troika and the EU's actions), is a domestic formality, but is needed to FINALLY declare the Greek people's decision to LEAVE that oppresive system forthwith.
4. IF THAT VOTE is decided by a majority in the affirmative (as it MUST BE if Greece is to have any chance at a viable future), then DO IT.
5. Russia, China, and Turkey have all pledged support. No doubt they'll want something for it. IF a workable arrangement, favorable to Greece, can be reached...TAKE IT. You need the help NOW.
6. Greece must ALSO exit NATO, with it's departure. There can be no more bond with an intransigent EU, INCLUDING ANY military alliances.
Make it crystal clear, that with the end of Greece's NATO participation, ALL NATO forces MUST LEAVE Greek soil BEFORE year's end.
This is YOUR future at stake, Greece.
Get out of YOUR self-pity, and start LIVING IT.
m
i love the opinion of guys who have not a fucking atom of clue of the consequences of what they suggest...
you think greeks will leave nato with 300° of danger from egypt, libya , sirya and turey all around ? lolllllll you are the fuckest idiot i ever read comment.
you obliously ignore greek budget for defence of outer line of europ is the most important of whole EU cause of width of coasts...
and if you think they would let foreign people cross country to go italy, france, germany and so long, you are totally mindless, greek is part of shengen space.
anyway, you are totally empty, brainless.
In this poker game Greece overplayed it's hand. Varoufakis, who claims to be a game theory guru, should have seen that coming. Now the EU called the bluff and a big bluff it was...the Greeks never used all this time to have amy plan B. No new Drachma, no emergency plans, nothing! The whole strategy was to just squeeze out as much money as possible in return for as little as possible. While I totally despise the 'Troika', Investment Banks etc. I also depise corrupt bottom feeder governments.
The EU should declare:
1. Greece is a failed state
2. the Greeks incapable of governing themselves
and then put Greece into receivership, ie
1. impose an EU technocrat government to run Greece
2. impose martial law
then hunt down and eradicate all the socialists and communists.
It could be made a "protectorate" of Germany, sort of like Bohemia and Moravia.
WOW. I love the clarity of your presentation. Total transparency.
HERE! HERE!
But I do believe in the process of law, those socialists and communists should be judged in a court of law. Problem is, the legal system is entirely populated by socialists and communists! Both in Greece, and the European Courts. There is no fair courts in Europe. If there were, most of all the European Leaders would be in prison right now for breaking the Maastricht Treaty. And that's the problem here in Europe, the <strike>criminals</strike>socialists and communists are in power!
Ah, the Romanians really knew how to deal with corrupt politicians, remember Nicolae Ceaucescu?
The process of "law" is very simple and direct:
Those who steal other people's earnings, including using government as the instrument or weapon, deserve to die - as horribly as possible, especially if they use government as the instrument.
You're describing the banking mafia.
They use "socialists" to borrow money from the banks at a huge profit to themselves - as in reality the banks conjure the money out of thin air and then charge interest on it.
In countries without socialists they use politicians who want military spending instead.
Same thing though - bribe politicians to borrow money from the banks, banking mafia get rich off the interest payments, corrupt politicans go and work for the banks when they leave politicis.
It's all a scam and the people running it are the banking mafia.
The due debt comes to $164 per visitor. That just for running the country, not repaying debt.
And the Troika doesn't want this, they demand austerity, pension cut backs, tax increases for the general public (not corporations).
The Troika Demand their pound of flesh, and nothing else besides.
Greece is a sovereign country, nobody can simply come in and take over and install their own chosen government. Don't suppose Germany, France, Spain etc would be happy if that were suggested for their countries.
..In this poker game Greece overplayed it's hand.
Nope, if anything Tsipras lost his nerve, or got the Nuland offer that cannot be refused.
Greece played it perfectly, until the last second.
The poker game was over when V-fak left the table.
Dont forget that China and Russia are both in the game, the only difference between them and the others is they are playing Blind hands and doubling down, while everyone else is open with their cards on the table. I am interested to see what they are both holding when they open!
It's not over yet. Tsipras could resign, and call for new elections. There is no way that Tsipras signs an agreement that majority of Greeks rejected... unless of course he retires to "France" living next to Bruno Iksil, and has free access to his Swiss bank account(s).
Varoufakis will be heard from again... he will be the Economic Mnister under the "temporary" military junta that takes control of mGov't (and the streets) before the new year.
So what was the point of that referendum?
Same as the original vote on the TPP.
I read that the plan proposed by the Greeks looks a lot like the proposal they not only voted against in a referendum less than a week ago, but that the same government (with a new finance minister) also asked to vote against.
This really makes no sense.
I fail to see how that can be a serious and credible proposal. (dixit François Hollande).
According to my own estimates, the Greek debt will rise to 220% of BNP in the best of cases. So I agree with the article : they are only trying to save the Greek bank deposits and then wave good-bye to the EU. No passaran.
The next ten days will be "interesting". My understanding of upcoming Greek payments on debt in the next ten days*:
If any, or more likely all, of those payments are missed it will be game over. There will be no possibility of continuing bailout from the ECB and IMF.
Eventually someone will have to step in with lots of cash, on humanitarian grounds. Who will that be? China? Russia? or the U.S. just to keep China and Russia out of it?
* http://www.zerohedge.com/news/2015-07-09/what-happens-next-greece-2-simp...
Dear Leader will come to the aid of his communist brothers
Where does the money go after that? Is the IMF/EBC building another sky scraper for dead hookers or are their kids starving?
Greece should have come to me and I'd have told them to have an equal buget. You tax the guy working until he sells the whine he's got on the shelf. Then you can tax the guy making the new bottles and the guy buying the bottles and the guy selling the bottles to the guy making the whine and the guy helping him and the guy buying it and the guy delivering it to the store and the guy selling it at the store and the guy buying a bottle at the store and the guy again when he throws the bottle out and the guy driving the trash truck and the guy who runs the dump and the guy that picks the bottles out of the dump and again when he sells the bottles to the guy that says he makes them....That should be enough don't you think?
David McWilliams has a plan for Greece
How can they move onto a higher productivity level without all these debt repayments?
They can do it by adopting the Chinese Renminbi!
Yes, you read it right.
There’s no point for the Greeks in going back to the drachma if that will destroy its banking system.
Why not do what Ireland has done over the years and adopt some other country’s currency?
What’s in it for China? Everything!
The Chinese get a foothold into Europe. They invest billions into Greece, where they reassemble Chinese goods into Europe with no tariffs or hassle. They gradually move up the value curve, making ever more sophisticated goods in Greece – just as the Americans have done here.
http://www.davidmcwilliams.ie/2015/07/09/how-a-chinese-puzzle-could-enab...
So its a bad idea to use some empire's currency (i.e. the Euro) in place of your own but a really good idea to use some other empire's currency in place of your own.
Meanwhile, the empire that is your primary trading partner has to be double-crossed and totally screwed FIRST and then the idea is to sell cut-rate goods to them financed from the river of free unicorn cash that is going to magically materialize to replenish the empty bank accounts and build a behemoth Greek manufacturing base out of dirt and grapevines. And all in a week or two, because Greece is not broke in the sense of operating in the red but really mean-ass totally broke and in need of gobs of money tomorrow-- which the crashing Chinese economy will gladly fork over on the spot and this instant.
Yeah, uh-huh. I, for one, sure think that's a great idea and that Europe will totally roll with the idea of Greek repudiating their debts to them and setting up as an outpost of a rival manufacturing power in order to further damage the Eurozone economy.
I have no doubt that they will gladly welcome this dolchstoss and heartily thank the Greeks and do whatever they can to help further the process.
Plus, of course, China is always looking to help build up manufacturing rivals as a neighborly expression of kindness.
Finally, of course, China ALREADY HAS everything they want out of Greece-- a port in which to land domestic Chinese goods onto the shores of the EU market. And it essentially cost them nothing to get it.
Why..oh why.. do the Greeks make it so hard on themselves...buy the best money printing equipment in the world ... pay outstanding salaries to the best money engravers...print some euros, yuan, dollars, etc..and just pay your bills...next problem please...
Never trust a woman or a government. ......Yellowbeard
I never could understand Varoufakis taking a powder. Could it be this is all part of the plan (i.e. game theory).... and he pops back up again at some crucial point?
Perhaps or it could be Tsipras turned traitor so V left so he'd have clean hands for afterwards.
Simple solution:
Print up a bunch of Greek Euros. Buy a bunch of wheelbarrows, fill them with the Greek Euros, dump them at Merkel's doorstep with a note saying that the debt has now been paid.
Leave the Euro, start the drachma, get immediate "loans" from Russia, and let Russia open a few military bases and ports on Greek soil. Print up a bunch of Greek-Russian dictionaries and give them away for free to the populace.
Immediately file for war reparations plus interest from Germany at the International Court of Justice or the International Criminal Court.
Russia won't lend Greece a single ruble unless it's backed by ASSETS. Or, Russia will BUY some of Greece.
Unlike the EU, Russia won't be played for a sucker.
Greece will get money from Russia in return for allowing Russia to establish military bases and ports on Greek soil.
Come on people you know what Germanics want!:
{ http://bit.ly/1HVjc97 }
Have slavery to use this Greco-Roman People to clean, with a cloth and special liquid everyday of the year.
More to have, is to secure energy for generations to come..
And so much on debt that will be workers so chip that every Germanics will have the cake and eat it.
{ http://bit.ly/1M2iERm }
White Europeans at his best!...
White people are the only minority.
Well, well, well!! I'll say it...I will say it.... I TOLD YOU SO.
The Greeks are completely dishonest, corrupt, arrogant, IMBECILES.
These Greek politicians are running around like headless chickens. And the Greek people ARE SUCKERS. Now the question is, other than the few SANE PEOPLE like Schaeuble, WHY WOULD ANYBODY GIVE GREECE 70 BILLION EUROS MORE IF THEY CAN'T PAY BACK WHAT THEY OWE NOW! The French and Italian Communist governments should WAKE UP TO REALITY. FRANCE, ITALY STOP BEING IDIOTIC.
Greece is bankrupt. FORGET ABOUT DEBT HAIRCUTS....GO STRAIGHT TO LIQUIDATION. The Greek Country needs to start SELLING ASSETS.
MERKEL stop being a coward and start facing facts. GREECE IS FINISHED. KAPUT!
TIME TO LIQUIDATE GREECE!
"The Greeks are..."
I think the problem is they're fighting the banking mafia and the banking mafia keep bribing / blackmailing / bullying their politicians into working for the banking mafia.
They need to elect people who can't be bought no matter what.
Are you really that willfully ignorant?
"for a Third Greek bailout, one which would push total Greek Debt/GDP over 200%"
It's such a joke that we have a media that describes this ritual sacrifice of Greece as a bailout for Greece.
It's a bailout for the euro banks.
If the Greeks had any sense they'd declare the debt odious and go after the people responsible - that would pull back the curtain on the whole banking scam.
He who walks in the middle of the road get splattered like roadkill.
O Latvia, why must you always be a voice of sanity in an ever-insane world?