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Next For Greece: Imminent Government Reshuffle, New Elections
Yesterday Tsipras capitulated, putting 5 months of "memorandum scrapping" negotiations to rest, as Greece finally realized that in a centrally-planned world where it had hoped a market selloff would boost its negotiating leverage, whatever the ECB wants the ECB gets, and the ECB retaliated in kind by freezing Greek deposits and forcing capital controls which proved to be the straw that broke the Greek negotiating back.
Perhaps the most telling part of Tsipras' capitulation speech last night was that Greeks "can understand the difference between those who fight with their soul in battle and resist, and those who hand in their weapons and give up with no resistance. The outcome of these negotiations is of course not what we wanted."
In any event, while Tsipras won a small political victory, he lost the governmental war, and last night's vote cost him his majority coalition, after 32 Syriza members vote No, including Varoufakis, and 6 abstained.
As a result, the immediate next step for Tsipras will be a government reshuffle. As the WSJ reports, "to counter the rebellion within his party, the Greek premier is expected to announce a cabinet shake-up on Thursday, according to government officials. But it remains uncertain how long Mr. Tsipras can continue in office without calling new elections.
The vote “is a serious division in Syriza’s parliamentary group,” said a government spokesman. “The basic priority of the prime minister and the government is the successful completion of the agreement in the coming period."
Greece braced for a political shakeup Thursday after lawmakers approved a new era of austerity, a bitter turnabout that split the ruling party and spelled fresh economic pain for many in this struggling nation.
Prime Minister Alexis Tsipras was expected to purge his inner circle of dissenters after he was forced to push for the very belt-tightening policies he once campaigned against. He said that without the about-face, his nation would have been doomed to a humanitarian catastrophe.
* * *
The defectors included several members of Tsipras’s cabinet. Among the outcomes from the split could be the fall of Tsipras’s government and possible new elections — with all the fresh complications they could bring if anti-bailout forces gain ground.
At a minimum, Tsipras will be tasked with implementing unpopular measures with a greatly weakened base of support. In the end, 229 of the 300 members of the Parliament supported the bailout laws, but much of the support came from opposition parties.
As lawmakers hurled insults at one another ahead of the vote, anti-austerity protesters and riot police traded molotov cocktails and tear gas outside Greece’s neoclassical Parliament building.
Such clashes were a regular feature of anti-austerity demonstrations during the early years of Greece’s debt crisis. But recently they have been rare, and this was the first of any significance since Syriza came to power in January.
There was powerful symbolism in the half-hour burst of violence. Tsipras and his partners — who not long ago were manning the barricades against the authorities — now overseeing the crackdown on their anti-austerity base.
And confirming the new elections are indeed just around the corner, moments ago Reuters reported:
- GREEK INTERIOR MINISTER VOUTSIS SAYS SNAP ELECTION MAY BE HELD IN SEPTEMBER OR OCTOBER.
In short, just as Europe is preparing to implement a bridge loan (one which will be used up in 2 weeks after all the accrued IMF and upcoming ECB payments are made), and is starting debate on just what the Third Greek bailout will look like, Greece is about to commence yet another electoral campaign and the looming question: will anyone assume political ownership for a bailout which even Tsipras said he does not believe in.
While Tsipras' popularity is still very high, all it will take is for another anti-austerity group to promise tearing apart the latest and greatest "Memorandum" to win the support of the people, and for Europe to realize that just as its funds are being transferred, Greece may end up with a new government which is even more acutely positioned against the harhest austerity terms yet, this time coupled by an abdication of sovereignty, thus also incorporating the nationalist elements in the electoral process.
And unlike the last time, Greece now know what the worst case is, and as a result it will (or should) be actively preparing for Plan B: launching its own currency - after all even Germany now is pushing for a Grexit and what Germany wants, Germany also gets - if and when the next (and perhaps final) confrontation between the ECB and Greece arises.
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is there a MAN ........................in Greece?
No, only socialists unfortunately.
I see Syriza splitting over this, based off of Left Platform. This will put ND a the clear top dog in Greek politics. Perhaps Left Platform and KKE can merge and challange ND, but Golden Dawn will be scooping up people as well.
Greek politics is about to get even more dysfunctional if thats possible.
Yup. I've been saying that for a while, but no-one wanted to hear it. Or, given the emergence of straight up fascists in the comment section here, maybe they just didn't like my characterization of Golden Dawn, or my comparison between them and the Communist Party.
Vicky Nuland just popped a boner
Friggin double post
The Greeks just saw how much their votes mean to their government.
Next vote comes through the barrel of a gun.
Yes, Zoe Konstantopoulou, Greece's next and first female Prime Minister.
She will run on "the debt is odious" platform and unlike the europhile to the bitter end Tsipras she will have an executable PlanB. She will win by a landslide.
The Greek military is watching this spectacle and planning its moves. Soon there will be no need for elections.
Hello, Greeks! I'm from Goldman Sachs and I am here to help....say, that airport looks pretty nice...
Duplicate.
How much money will Greece have to borrow for conducting the new election?
How much money will Greece have to borrow for conducting the new election?
Germany and others will........................gladly pick up the tab!
It will be a historic struggle to create a scheme to make the unsustainable have any credibility of sustainability. Every living person with a brain understands this debt is not payable and therefore no new debt is credible, but they must make people believe it is, for if they must all concede it is not, then everything fails, then all debt becomes unsustainable and the financial system as we know it, crumbles.
Most have no idea how far it will go and how bad this will be, but everyone understands it is bad. This is why delusion is the only solution. Suicide.
Its like we have seen this before.
Will they destroy the EU to save the EU?
Is this a Bushism?
... a Bushism, perhaps, is similar to this ...
... during one of the WH daily briefings, the dick cheney announced to dubya that 3 brazilian soldiers were killed ...
... palms on cheeks, jaw slightly dropped, dubya says, "oh no, that's terrible!"
... the dick popped a frown, but didn't reply ...
... dubya hmmmed and asked, "by the way, dick, how much is a brazillion?"
Destroy the global economy to bring on the NWO.
There is a precedent, Bath House destroyed the US in order to save it...
Golden Dawn
Let me coin the word neodemocracy to describe the new form of government in Greece. Seems that anything with neo in it is always worse than the original.
"And unlike the last time, Greece now know what the worst case is, and as a result it will (or should) be actively preparing for Plan B: launching its own currency - after all even Germany now is pushing for a Grexit and what Germany wants, Germany also gets - if and when the next (and perhaps final) confrontation between the ECB and Greece arises."
imo too simple
as Haus-Targaryien and other ZH commentators in Germany can attest, it's not Germany that is pushing for GreXit, it's the conservative hardliners around Schäuble, a fraction of the Christan Democrats
some of them are also EUR hardliners, and some are even EU hardliners that are skeptic about the further use of the EUR for their further political integration goals, for example
meanwhile, many Germans are indeed listening to the neo-leftist mantra of "we need to cut some Greek debt immediately", while the conservatives see that as a price for further reforms, since the Greek State is still so damn incapable, ineffective and disorganized, particularly after the "tender care" Varoufakis gave to the Greek Finance Ministry
setting up a new/old currency, btw, also needs a state and government that is somehow capable of finding the way out of a paper bag
How will an extension of more credit in any way solve the problem? Does the German assets used to back these loans come from heaven or is it actual citizen capital? If this is a democracy, why does the German citizen not have a right to vote on this bailout, rather than the recipient?
You are in desperate need of a semester in reeducation camp. So am I, now that I think about it because I agree with everything you just said.
I think I miss enrollment in summer school. Now i will have to wait until fall.
Who needs citizens when you have the EC?
Oligarchs protecting bankers from their insatiable greedy mistakes.
Get to work, Mario, and print up some dough that looks like you didn't print it, three card Monte style swaps or something to keep that German bitch quiet.
Spain, Italy and France said their checks already in the mail.
Ghordo- I guess I'm following you around this morning because I find your comments absolutely fascinating. Like listening to crazy people explain how the spiders are coming to get them through the pipes.
I will live to see the day that you admit this whole Euro/political integration/United States of Europe thing that's being tried right now was just a flat-out stupid idea that should never have been tried and was doomed to failure from the beginning.
we'll see
for the record, I am a EUR partisan... while being against the "further integration" crowd, particularly the "let's be like the US" fraction of them
yes, european politics is a tad more complex, otherwise we would not have 100+ political parties
there is a currency war going on
You see things through the prism of..... I'm not sure exactly how to describe it..... "policy differences". Like if the pieces were arranged just so, everything would be OK and Europe would pull itself together finally. I don't think the problem is policy differences. The only place on Earth I could see that would be more difficult to make a common currency work would be the Middle East.
In the US we had "policy differences" once upon a time. We fought a civil war over it. Sure the south still hates the north for the "War of Northern Aggression" (and they're right to do so), but when the blood was done being spilled there was no doubt we were a union from that point on. Only AFTER that were we able to sustain a single currency. Europe is trying to go "one, two... six!" and I just don't see it working out anything like they expect.
Heh, those that thought they could emulate the US forgot that the US had free banking for 70-odd years before that was scrapped in favor of state ownership of all US gold which is where most people's understanding of history begins. The EU would work if they had free markets throughout the EZ. In fact, it would be a spectacular success. But instead, they use a central bank to artificially set interest rates and issue a single currency. This is the basis of communism. But no-one wants to hear about that.
Schäuble is pushing for a Greek exit for reasons I cannot explain.
I am starting to see a power struggle in Berlin between those who want the Europäische Einheit über Alles & those who have changed position for reasons unknown.
I don't trust any of them, as the situation in Greece hasn't changed since 2012, yet Schäuble has done a complete 180° turn.
Idiot German MPs will always vote to give the Greeks more money if it means preserving the Euro. Germany is going down with the ship on this one, that is almost certain.
I still think it'll be a quicker rebuild here in Germany than in the US.
Yes, if only because Germany actually knows how to build things. Its sort of what Germans do- what defines them.
By the way, when even you say you're not sure why German politicians are doing what they're doing, I get nervous.
You and I have been around here a while. We've been following these events for quite some time.
I cannot explain why Schäuble has completely reversed course on the theme of Euro irreversibility in exchange for debt relief.
Greece leaves and gets 100 billion EUR in debt relief, the only thing that makes any sense is that the remaining balance of Greek debt would still be denominated in Euros and payable only in Euros, and there would be a reprieve for paying it back for 5 years or so when Greece rejoins the currency union.
This would put Greece on a timeline to get its shit together so as to rejoin the currency union, which we all know they won't do -- else they'll be printing Drachmas to buy Euros to pay off debt -- e.g., exactly what killed the Reichsmark in the early 1920s.
I assume the thought is this would put the fear of God in the Italians and Spanish and French, while kicking the can for like 5 years for 100 billion or so in direct write downs.
Why he didn't think about this in 2010 or 2012 -- when everyone knew the Greeks would be back with their begging bowl, this is what I cannot understand.
Either he changed his mind, or someone told him to change his mind.
The other possibilitiy, is we all know there have been power struggle between Schäuble & Merkel -- here in Germany, Schäuble's popularity is better than Merkel's by almost 20 points. Perhaps he is starting to distance himself from her politices, so once the hammer falls, he can call a vote of no confidence, and take control via new elections as the head of the Union.
Either way, the German political process is starting to do things unanticipated.
At the end of the day though, the Germans do what Washington tells them to, so its all just worthless speculation.
"Germans do what Washington tells them to"... that thing is exactly smack in the middle of the conflict inside the CDU and their partner the SPD
meanwhile, it's France and italy that are in the same conflict field, and try to smooth a bit the German hand on the tiller
Yellen has not made her move, yet. we are still on the downward leg of this manouver in the middle of this currency war
https://www.youtube.com/watch?v=vyApjTai5qk
Schäuble is absolut loyal to Merkel. Since the assassination attack against him, when he lost the will to become chancellor one day, he is Merkel's lapdog. And why should he revolt against her? He is too old to become chancellor and Merkel killed all possible rivals. A revolt would damage CDU, since they do not have a candidate.
It was absolut clear in 2010, that the debt accumulated in Greece needed a hair-cut and it was also clear, that a Grexit, followed by a hair-cut would have been the best solution for all involved parties. But at that time Merkel publicly stated: If the Euro falls, Europe falls as well. It was the political will of Merkel, so Schäuble couldn't defend his position. At that time the german people weren't aware of the fact, that Greece is not resolved, just delayed, which is different now. Additionally the AfD grew strong and got votes from the right wing of CDU with their demand for the Greece leaving the Euro. As the MSM quickly appeared to destroy the rising party, which threatened CDU, Schäuble simply couldn't position himself to the core demand of the new competitor. Now that AfD is dead and the german people are sick of the endless Greek tragedy, Schäuble can position himself, where Lucke was positioned 4 years ago.
They better hope that plan b works cause I already know they aint gonna like plan C.
All they need is rid of Tsipras and Varoufakis takes over as Prime Minister.
"Election," haha.
What Varoufakis and those that stood with him against this deal is telling his Traiter PM is that I'd rather die on my Feet then live on my Knees. There are billions of People in this World that need to do the same.
As the debt is acknowledged as unpayable, are they trying to force Greece to pay it back, or simply refusing to loan them more? It seems they are voting to be bailed out without conditions. Are they black??
They can't acknowledge the debt instruments as worthless because if they do that makes them useless as collateral and causes cascading problems.
Haven't been the Greeks told, that after the capitulation all elections are unnecessary?
They can impose 70% VAT on those assets being sold off!
' cabinet reshuffle . . . ' my ass; just shuffle off into anonymity Tsipras for crying out loud. The damage is irreparable. Fear and loathing in Athens.
What do you mean "Headache?" According to most of the commenters and posts on Greece here, if the people of Greece elect new government, then all of the previous agreements can be tossed - there's no reason to stick with them.
No, really. Follow this brilliant logic. If the new government decides the scrap the deal, and the EU insists they stick with what they agreed to, then the world can just scream things like:
"The EU says there's no point in having elections anymore!"
"Germany destroys democracy!"
... and everyone can pat themselves on the back for supporting the victim. It'll be awesome.
Having proven once and for all that voting does not matter, the GoldMan Dawn Party will now officially and forever rule the serfs.
Most serfs seem very content to be serfs as long as the entitlements come through.
They just don't like being called serfs....so stop hatin on them!
The Greeks have suffered no indignation over accepting massive amounts of subsidization, only when their failed economy is pointed out publicly, do they become agitated.
You've got a hell of a nerve, telling the truth in the comment section of a zerohedge article!
Once the bail ins and plundering starts look for Europe to elect Far Right governments: Versailles Treaty 2.0: Cabal Unapologetically Shows How Modern Plundering is Done
http://winteractionables.com/?p=22850
From where shall a new Riot Dog emerge to lead the Greek people to FREEDOM?
They already have enough lap dogs.
The Greeks need some CANINE POWER.
The Euro is already in free fall.
WHY THE FUCK WOULD GREECE NEED TO EXIT NOW?
Like all fiat its ultimate support is confidence, which keeps getting smaller as the capital controls & soft martial law unfold
so it greece would have just agreeded 6 months ago while their economy was showing signs of recovery..... stupid.....
If your going to pile drive yourself into a pit (a hole being to small to describe this failure in leadership) the go bankrupt stay in the Euro and start a true recovery instead of this crptastic dance for political leaders to pad their bank accounts.
Tsipras is just like Boehner and McConnell - talk hard but vote softly...
Can't trust Germany ever since they bombed Pearl Harbor.
https://www.youtube.com/watch?v=V8lT1o0sDwI
All talk... no action.
Just like the fraudulent, toothless TEA PARTY.
Vote Golden Dawn or give up.
It doesn't matter what govt Greece has/gets - the outcome is going to be the same - they'd be better off with a govt chosen via lottery.
Representative democracy fails.
the best govt is no govt
There is no mentioning of the rift in the EU
Even Austrian PM Faymann is critisizing Germany . It is not only Italy, or France.
Of course he is not a filantrop.
But he gets a preasure form the business: no south stream, sanctions prevent Austria to export anything to Russia and hinders russian tourism in Austria.
Europe is a stupid american-jewish whore.
"Will anyone assume political ownership for which Tsipras does not believe in"...let me think about that... why yes there is no shortage of political "want to be" candidates....they may not solve anything..but they are lurking in the background.
So Mr Varoufakis.
Got a name for your new party yet.
You are the only politician of note with credibility left.
Go for it.
I took a Tsipras this morning
Fuck Greece. Let them starve if Tsipras isnt swinging from a lamp post come Monday