Posts Tagged: austerity


Presented with little comment aside to ask if someone is off-script?


“Financial arrangement with Greece, without immediate prospects of a follow-up arrangement, will require measures by the Greek authorities, with the technical assistance of the institutions, to safeguard the stability of the Greek financial system,” ministers from 18 euro area member-states say today.


“The Eurogroup will monitor very closely the economic and financial situation in Greece and the Eurogroup stands ready to reconvene to take appropriate decisions where needed, in the interest of Greece as euro area member” ministers say in statement after informal meeting in Brussels

Translationyou are on your own, f##kers >> Read More



Greece, the birthplace of civilization is divided over its deal with Europe. The European Central Bank has approved more emergency bailout money for Greek banks in return for a rise in taxes and pension and health contributions.

 The European Commission has promised an extra $39 billion (€35 bn) of funding if a Greek deal is reached by Wednesday. However, members of Alexis Tsipras’ Syriza party have warned the Greek Prime Minister against betraying the Greek people by reaching bailout compromises with Brussels.

Meanwhile, EU leaders continue to push for a deal to prevent the country from exiting the European Union. And a deal appears to be on the cards — but at what cost?

In what’s become a Greek ritual, thousands of people gather each night in Syntagma Square in Athens. Rival groups meet outside the Greek parliament. One side are demanding an end to austerity and more bailout deals with Europe. Another side are calling for continued membership with the European Union.

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Greece’s international creditors are aiming to strike a deal to stop Athens defaulting on its debt and possibly tumbling out of the euro by extending its bailout by six months and supplying up to €18bn (£12.9bn) in rescue funds.

The negotiators representing Greece’s lenders are also proposing to pledge debt relief for the austerity-battered country – but officials stressed that a breakthrough hinged on a positive response from the Greek prime minister,Alexis Tsipras.

Negotiations were continuing on Sunday night, hours ahead of crucial gatherings of eurozone finance minsters and leaders in Brussels, which Angela Merkel, the German chancellor, François Hollande, the French president, and Tsipras are expected to attend. All three leaders spoke over the weekend, with contributions from European commission head Jean-Claude Juncker.

The crisis meeting was convened in an attempt to ease Greece’s debt crisis before a critical €1.6bn payment to the International Monetary Fund falls due next Tuesday. >> Read More


A report from the Hellenic Parliament that says Greece should not pay the Troika

A truth committee was set up to look at whether the debts imposed on Greece were valid and their findings have been released today

“All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika‘s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.”

“Having concluded a preliminary investigation, the Committee considers that Greece has been and still is the victim of an attack premeditated and organized by the International Monetary Fund, the European Central Bank, and the European Commission. This violent, illegal, and immoral mission aimed exclusively at shifting private debt onto the public sector.”

Athens, June 17, 2015

Hellenic Parliament’s Debt Truth Committee Preliminary Findings – Executive Summary of the report

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Greek premier Alexis Tsipras warned Greece on Saturday to prepare for a “difficult compromise” with its EU-IMF creditors as his closest advisors delivered a last-chance proposal to avert a catastrophic default by Athens.

Cash-starved Greece is under huge pressure to strike an agreement to unlock vital bailout funds in the coming days, if not hours, after top eurozone officials turned the screws Friday and said they were preparing the ground for an Athens default.

The Tsipras envoys brought his latest bid to end a five-month standoff with the EU and IMF, who are demanding tough reforms in exchange for giving Athens 7.2 billion euros ($8.1 billion) still remaining in its international rescue package.

“If we arrive at a viable accord, even if it is a difficult compromise, we will take up the challenge because our only criteria is to get out of the crisis,” Tsipras was quoted as telling Greek officials late Friday in a government statement.

Whatever needs to be done “needs to be done quickly”, deputy finance minister Dimitris Mardas told Skai TV in Athens. He predicted there would be a deal. >> Read More


Government official reports Tsipras said Greece won’t hold referendum

In a meeting of colleagues on Friday, Tsipras said that even if it’s forced into yet another harsh round of austerity in a bailout deal, that the government will continue.

There’s talk today that internal divisions in Tsipras’ government are forming. If he accepts a creditor deal that includes pension reform or crosses other ‘red lines’, he may lose the support of his party.



Greece has very little in the way of bargaining power with European creditors.

Outside of gimmicks like tapping its SDR reserves, Athens has no cash to make payments to the IMF in June and, perhaps more importantly, there’s very little in the way of wiggle room when one looks at revenues versus spending (see below), meaning Greece will also struggle to pay public sector employees which, in combination with Greeks’ consternation about the safety of their deposits, could contribute to social unrest and put unwelcome political pressure on PM Alexis Tsipras and his Syriza party that swept to power just five months ago on a defiant (and apparently naive) anti-austerity platform. 

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On Tuesday, Greece postponed a scheduled Eurogroup meeting in Brussels without offering a reason as officials conducted “preparatory” discussions and held an evening teleconference with creditors. Face-to-face meetings will take place today with just 9 days to go until June 5 when Athens will miss a payment to the IMF, triggering an unprecedented default the repercussions of which no one can accurately predict. 

Also on Tuesday, Greek FinMin Yanis Varoufakis allegedly told Greek reporters that one measure under consideration to help stem the outflow of deposits from Greek banks was a levy on ATM withdrawals designed to encourage the use of credit cards over cash, a rather ironic suggestion coming from a government crippled by debt. The Finance Ministry was quick to deny that such a levy was being considered because after all, one way to ensure that ATM lines will get quite a bit longer is to suggest that depositors will soon be subject to a levy on withdrawals. Unfortunately, it appears as though the move to dispel the ATM tax “rumor” came too late because according to Kathimerini, deposit flight accelerated meaningfully on Tuesday. Here’s more

Statements suggesting the imposition of capital control measures over the upcoming long weekend, and Tuesday’s reference by the Finance Ministry to the possible imposition of a levy on cash machine withdrawals – later withdrawn – sent many to the ATM. At the same time, bank officials point to widespread concerns about the possibility of a rift between Greece and its creditors over the government’s failure to repay a scheduled installment to the International Monetary Fund next week.


Credit sector professionals reported that deposit outflows on Tuesday alone came to 300 million euros, against about 100 million euros per day in recent days. They said that while this amount is quite high, the situation is under control as citizens are remaining calm on the positive messages from Greek officials.


On Wednesday the ECB board is expected to decide on a fresh extension of the ELA mechanism following the addition of another 200 million euros last week to a total of 80.2 billion euros. Although pressure by certain ECB council members for a tougher stance toward Greece has grown, sources agree that the ECB will probably avoid making any decisions that could trigger any major developments.

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Up until this moment, Greece may not have had the financial wherewithal to pay its creditors, forced instead to use circular math gimmicks in which the IMF paid the IMF for the country’s most recent €750 million due on May 12 when it effectively pre-defaulted and used SDR reserves as “payment”, but at least it had a united facade when facing Europe and political cohesion when dealing with the Troika.

That too may have just evaporated over the weekend, when in a surprisingly close vote showing just how deeply the ruling Greek Syriza party has splintered, the hard line “Left Platform” a faction within Syriza, proposed that Greece stop paying its creditors if they continue with “blackmailing tactics” and instead seek “an alternative plan” for the debt-racked country. Its motion called for the government to default on the IMF loans rather than compromise to creditor demands, among which a change to value-added tax rates, further liberalization of the labor market and changes to the pension system, including further cuts to pensions and wages.

According to the NYT, which first reported the vote outcome, the proposal was narrowly rejected with 95 people voting against and 75 in favor.

The WSJ adds >> Read More

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