The horizon is not so far as we can see, but as far as we can imagine

Syriza and the EU Seem to Be in Completely Different Worlds

Juncker, Hollande, and Merkel have all warned that a “no” vote in the Greek referendum will mean Greece will face leaving the Euro.

Meanwhile, Greek PM Tsipras argued today that a “no” vote gives the Greek government a stronger negotiating position.

So, yeah, who’s right?

Who knows.

Depends if the EU leaders are serious. I tend towards, “They are.” If so, Tsipras is misleading the Greeks. This is a vote on Grexit, not on getting a deal within the Euro.

Of course, European leaders could be just doing their best to get a “yes” vote: Greeks want a better deal, but don’t want to leave the Euro. To that end, they say: “There is no better deal, all you’re voting on is Grexit.”

Tsipras has said that in the case of a “yes” vote he will enact the legislation, then he will step down; he will not be a “humiliated Premier.”

I’d say to get out your popcorn, but the stakes here are very serious. Europe is prepared to lock one of its member states into a permanent depression for an amount of money that is less than one percent of the Euro’s GDP, for the forseeable future.  The Eurocrats and leaders seem to think they are protecting the EU’s legitimacy, but I suspect they are destroying it. If the EU does not include fair deals for all its members, all that is left is, “Well, we won’t allow WWII.” As the memory of WWII becomes purely historical, that will not be sufficient.

If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.



How Eurocrats, Greeks, Germans, and Eastern Europeans View the Greek Crisis


France Arrests Uber Executives


  1. Depend on whether you are in…

  2. vbd

    Heads the Empire wins, tails you lose.

  3. Joe

    As a highly civilized people, the Greek, all things being equal could dump the bums if anyone can. If they choose to. The Question is how dirty will the euro sharks get. They might well try to Haiti or Cubaize them. The greeks should look at that and inoculate themselves ( Russia, China) then get the hell out.

  4. anonymouscoward

    1. Syriza has indicated several times -last occasion Tsipras’ editorial to some Paris rag or other- that a Grexit spells the eventual undoing of the EU. Also, Syriza clings to belief that EU cannot actually throw them out. If the Masters Of The EUniverse did throw Greece out, it would be in violation of EU rules. The damage to the credibility to the “European Project” would be fatal and irreversible. This chain of belief constitute their bargaining power, as they see it. The Troika must deal on Greece’s terms eventually because the EU can’t afford to throw them out. All they have to do is resist capitulation, no matter what the three headed dog from Hades throws at them.

    2. Juncker is desperately exhorting Greeks to vote YES to whatever wording the Greek government uses in the referendum indicating acceptance of the last (allegedly withdrawn, allegedly inoperative) EU group proposal. Just vote YES he begged. And in an unintentionally revealing declaration of EU intent towards Greece, he added, “Don’t commit suicide just because you’re afraid of death.”

    If the proposal is no longer on the table, if it’s really Game Over for the Bailout Program as they say, if there truly is no possibility of bargaining a new deal after 11:59PM tomorrow, then why does Juncker give a damn at all how Greeks might vote on July 5th? He even went to the extreme of lying about the demands to cut Greek’s pensions – an easily disproven claim.

    Personally, I’d like to see the Eurozone destroyed, its people free to go their own ways, and for Greece to default on all the odious debts forced on them by the Euro-North. However, Syriza’s top leadership have a very different view than mine. They want to remain in the EMU and the EU. Most Greek people do too. I think they’re just nostalgic for the few years of improved purchasing power that they gained from it, but now the bill for all that has come due and they don’t want to acknowledge the permanent subjugation that Euro membership entails for them as a negative balance of trade nation. Syriza seem to believe that once the pompous pantomime of “deadlines” and “ultimata” are thrown back in the Eurocrats’ faces the real negotiation of debt writedowns can begin. I’ve no idea if they’re right that Greece’s Euro membership can be saved this way, and I doubt it’s worth saving, just as I doubt that the EU can be reformed.

  5. Syd

    …all that is left is, “Well, we won’t allow WWII.”

    Considering how the system is causing economic depressions and the rise of fascist parties in member countries, I don’t see how the Eurocrats can even make that small claim. The sooner the Euro is destroyed, the better.

    Since the EU leaders were willing to provoke this crisis over such trivial differences with Syriza, they must be really serious about kicking the Greeks out. Now it’s about “credibility” and genital size. Reason has no place here.

  6. Peter

    Depending on how the markets open tomorrow we may get a picture of what’s ahead, containment or contagion. Billions of dollars of savings has already vanished outside of Greece so the pain may be universal and not limited to the long suffering Greeks.

    In a tightly interconnected financial world built on bubbles and speculation one final straw can break the camels back even though we have been promised the system is resilient and recovering from the last catastrophe.

    I still expect the knuckle dragger authoritarians of the Troika to fold especially now that this conflict is not just a personality based drama but one directed by the actual population involved, they and others seem to be completely baffled by this development.

  7. guest

    If so, Tsipras is misleading the Greeks. This is a vote on Grexit, not on getting a deal within the Euro.
    No, this is vote on whether to accept the deal being offered, along with the austerity that goes with it. Maybe it isn’t on offer anymore, but since some of the same people saying it is not on offer anymore are also saying to vote yes, I’d say something is still on offer.
    Each voter will have to weigh what they think the consequences of a yes or no will be, but none of that is known or even knowable.
    Depending on how it plays out, maybe Greece will get kicked out of the Euro, and/or EU. If not, they can always have another referendum, even next week, on whether to leave the Euro or the EU if that’s what they want to consider.
    But they can’t put it on anyone else to make a deal to end austerity and stay on the Euro.

  8. I still expect the knuckle dragger authoritarians of the Troika to fold especially now that this conflict is not just a personality based drama but one directed by the actual population involved, they and others seem to be completely baffled by this development.

    They can’t fold in this way, they have raised the expectations of national parliaments who have to agree to any new offer, and said national parliaments are basically baying for Greek blood. The whole thing will have to be Eurofudged but it will have to be a very large piece of Eurofudge. A whole baking tray, really.

  9. VietnamVet

    Even the NY Times admits to three European crises; Greece, Ukraine and the rise of populist parties. They all are a result of the oligarchs’ counter revolt that successfully fought inflation by cutting workers’ wages and deregulation. Economic demand was cut and financial risks taken until the world’s total debt became unpayable. Unless banks are nationalized and the bad bets written off, all that is left is War or Extortion. If a debt cannot be paid it will not be. Is 21st century western society so atomized that we will suffer the broken knees and coercion alone or will people’s protection units rise?

  10. Peter (not that one)

    The whole thing will have to be Eurofudged

    Fudge all around. By now, just about every observer understands what only a few killjoy economists warned when the Euro was created. The root of the problem is that a common monetary policy can’t co-exist with differing fiscal policies, especially in economically stressed times. Neither side is talking about or even acknowledging this. The EU talks about the sanctity of debt repayment and Greece plays the nationalist sovereignty card while insisting it wants to hang on to the Euro. It’s a version of The Emperor Has No Clothes where even the child pretends the Emperor is dressed splendidly.

  11. gfg

    “The sooner the Euro is destroyed, the better.”

    If it’s destroyed, the Empire wins.

    If it survives, the Empire wins.

  12. markfromireland


    The Finacial Times have a leaked copy of the Greek Government’s latest bailout request in PDF form here:


    They also have a very useful annotated copy which, as the FT has a fairly stringent paywall I’m pasting in the comment below. I think I’ve managed to re-format the HTML so that it’ll pass WordPress’ filters. There are a lot of links in it so apologies in advance for giving you extra work


  13. markfromireland

    Alexis Tsipras, the Greek prime minister, has once again changed the terms of the debate in the ongoing crisis by requesting a new third bailout from the eurozone’s €500bn bailout fund, known as the European Stability Mechanism, just hours before his current bailout expires.

    According to a copy of the letter sent to the ESM and Jeroen Dijsselbloem, the Dutch finance minister who chairs the committee of his eurozone counterparts, which we’ve posted here, the loan request is for €29.1bn to cover debts maturing into 2017.

    That would seem to be a pretty traditional bailout request. But it also contains some untraditional demands that may be difficult for creditors to accept. Below is an annotated version of Tsipras’ letter:

    Dear Chairperson, dear President,
    On behalf of the Hellenic Republic (“the Republic” or “Greece”), I hereby present a request for stability support within the meaning of Articles 12 and 16 of the ESM Treaty.

    The ESM treaty is the law that now governors all eurozone bailouts. It wasn’t in place for either Greece’s first or second bailouts, but it would set the terms for its third. Articles 12 and 16 simply state the purpose of a bailout programme: to “to safeguard the financial stability of the euro area as a whole and of its Member States.” Unfortunately for Tsipras, Article 16 also happens to mention that a new programme must include a new “MoU” – or memorandum of understanding, a phrase that is politically poisonous in Greece.

    As you are aware, the Republic faces urgent and pressing financial problems in the second half of 2015 and for the whole of 2016 given that:

    * no disbursements from its second program (the “Program”) have been made since July 2014;
    * the Republic does not have access to market financing within the meaning of Article 1 of the Guideline on Loans (“Guidelines”) by the European Stability Mechanism (“ESM”);
    * the Program expires on 30 June 2015, and our application for an extension to conclude the pending negotiations has not been accepted; and,
    * the Emergency Liquidity Assistance (“ELA”) has not been extended by the ECB, and therefore, capital controls in the Greek financial system were necessary to maintain the financial stability of the Euro area.

    This is just a summary of the problems the Tsipras has had over the last five months. Because the current and preceding Greek government have not been able to agree a set of economic reforms that Athens would implement, the remaining €7.2bn in the current bailout has never been disbursed. It also has no access to the bond market, so it can’t raise money there. And emergency loans from the European Central Bank have been, as of Sunday, capped at €89bn, meaning Greek banks have no way to disburse more euros, requiring the bank holiday.

    Given the above and given that today, 30 June 2015, is the deadline set by the Eurogroup in the 20 February 2015 statement to reach agreement, Greece requests financial stability support from the ESM in the form of a two-year loan (“Loan”) as all of the conditions provided in Article 13 of the ESM Treaty and in Article 2 in the Guidelines are met. The Loan will be used exclusively to meet the debt service payments of Greece’s external and internal debt obligations.

    This is just a formal stating of the request – though interestingly, Tsipras is arguing the loan will only be used for debt servicing rather than funding government operations. This would require Athens to run a primary budget surplus – revenues minus expenses, when interest on debt is not included – for the duration of the programme. And that likely means a lot more austerity.

    In conjunction with the Loan, Greece requests that its EFSF debt be restructured and reprofiled in the spirit of the proposals to be made by the European Commission in order to ensure that Greece’s debt becomes sustainable and viable over the long term. By the end of the loan period or earlier, Greece aims to regain consistent access to the international capital markets to meet its future funding requirements.

    This is where things get a bit tricky. The EFSF is the eurozone’s old bailout fund which has lent Greece the bulk of its current bailout money. “Reprofiling” those loans means extending their payment plans, something eurozone officials have been open to discussing. But “restructuring” them suggests something a bit more radical – perhaps a debt write-down or lower interest rates. That would be a non-starter.

    Until this Loan is agreed and in force, Greece requests for the Program to be extended by the Eurogroup for a short period of time in order to ensure a technical default is not triggered.

    This may be the toughest request of all. Eurozone finance ministers have already rejected a request for an extension, and Donald Tusk, the European Council president, yesterday rejected it a second time. It is highly unlikely finance ministers, who are to hold a conference call again Tuesday night, will agree to this now.

    Greece’s is fully committed to service its external debt in a manner that secures the viability of the Greek economy, growth and social cohesion.

    Yours faithfully,

    Alexis Tsipras

    Source: Financial Times Leaked: Tsipras letter requesting a 3rd bailout | Brussels blog

  14. markfromireland

    Leaking going on all over the place it would seem, this from The Guardian reporting on a leak to Süddeutsche Zeitung

    IMF: austerity measures would still leave Greece with unsustainable debt

    Secret documents show creditors’ baseline estimate puts debt at 118% of GDP in 2030, even if it signs up to all tax and spending reforms demanded by troika

    Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors.

    The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.

    The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% which the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession.

    The documents admit that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes.

    Even under the best case scenario, which includes growth of 4% a year for the next five years, Greece’s debt levels will drop to only 124%, by 2022. The best case also anticipates €15bn (£10bn) in proceeds from privatisations, five times the estimate in the most likely scenario.

    But under all the scenarios, which all assume a third bailout programme, looked at by the troika – the European commission, the European Central Bank and the IMF – Greece has no chance of meeting the target of reducing its debt to “well below 110% of GDP by 2022” set by the Eurogroup of finance ministers in November 2012.

    In the creditors own words: “It is clear that the policy slippages and uncertainties of the last months have made the achievement of the 2012 targets impossible under any scenario”.

    These projections are from the report Preliminary Debt Sustainability Analysis for Greece, one of six documents that are part of the full set of materials that comprise the “final” proposal sent to Greece by its creditors last Friday.

    These, which the Guardian has seen, were obtained by Süddeutsche Zeitung after they were sent to all German MPs with the expectation that the deal would need to be approved by the country’s parliament.

    Read in full: IMF: austerity measures would still leave Greece with unsustainable debt | World news | The Guardian

  15. markfromireland: “…austerity measures would still leave Greece with unsustainable debt…”

    It is something to see this confirmed in official documents, but the confirmation only is the news, economists have been writing about this for years.

    Two things I am not seeing in the press: one, discussion of the suffering of the Greek people. It is perhaps old news, but it is the most pressing reality here. Two, discussion of the German leap into economic madness. Austerity has failed, and honest economists know it. Yet austerity, austerity, austerity is the drumbeat, picked up and amplified by most of the mass media. How can this be?

  16. Lisa

    Raúl Ilargi at the Automatic Earth has been doing some of the best coverage of this over the last year. He has been doing it long enought now to understand the nuances and players. This is a pertinent comment (I highly recommend reading his coverage):

    Europe’s Controlled Demolition

    “What changed is that after Juncker’s speech, the discussion is no longer about data or numbers or facts anymore (but who understands that?), because he never mentioned them.

    It’s instead now about fear and fight and flight and various other base instincts, you name them. And that’s not a coincidence. The reason he, and the EU as a whole, resort to this ‘message’ (and no, these guys’ spin teams are not stupid) is to a substantial extent that it’s simply all they have left. ”

    “If you saw Juncker yesterday, and it doesn’t even matter whether he was inebriated or not (does he perhaps wake up drunk, like Yeltsin?), accusing Tsipras of lying -for which he offered no proof- while telling big fat obvious lies himself (“we never asked for pension cuts”) -for which ample proof to the contrary is available-, y’all should realize that a bit more scrutiny of the man is obviously warranted. ”

    “I’ve written this story a hundred different times before already: the EU is an organization led by people with, let’s define this subtly and carefully, sociopathic traits (Antisocial Personality Disorder), simply because the EU structure self-selects for such people. As do all other supra-national organizations, and quite a few national ones too, but let’s stick with Brussels for now.

    That such people are selected is due in great part to the less than transparent democratic acts and procedures in Brussels. Which allow for ever larger numbers of the same ‘sort’ of people to accumulate. No coincidence there either. ”

    That last comment resonates with me, because I have seen it happen. Sociopaths clustering together to drive out the competent and ethical, eventually the whole organsation becomes sociopathic. Organisations like the EU bureaucracy are prefect environments for such people.

    When you are examining such events analysing the players is essential to understanding what is really going on. In the case of the EU/Greece situation if you frame it as a political power play, dedicated to ending even remotly similar to democracy rather than anything to do with economics, then it becomes very understandable. Link the actions it to the easy treatment of the Ukraine (in worse shape and not part of the EU) then it all drops into place (you can even throw in the TISA, TPP and TIPP to see the overall ‘grand strategy’ at play).

    For light relief read the ‘Old Guy’ series of SF books, such as:
    Neoliberal Economists Must Die ! (An Old Guy/Cybertank Adventure Book 3)

  17. Lisa

    As so often the case Dimitri Orlov sums it up nicely:

  18. markfromireland

    @ Raven on the Hill June 30, 2015

    Two things I am not seeing in the press: one, discussion of the suffering of the Greek people. It is perhaps old news, but it is the most pressing reality here.

    There is some but by no means enough. The establishment line is feckless Greeks vs. hard-working North European taxpayers given that the media generally is part of the establishment it’s not surprising that their’s so little focus on the impact on the Greek people.

    Two, discussion of the German leap into economic madness. Austerity has failed, and honest economists know it. Yet austerity, austerity, austerity is the drumbeat, picked up and amplified by most of the mass media. How can this be?

    Unfortunately my answer to your second question is pretty much the same as my reply to your first except perhaps even more so. The economics establishment is Friedmanite, or neo-classical, or whatever term you want to use. There’s not much debate about the desirability of austerity and those who question this orthodoxy are outliers and heretics to be derided. It’s been that way for most of my adult life, I remember as a cadet fresh out of school and taking economics as one of my subjects how … … … disconcerting, I found it that whereas in other topics such as law debate was encouraged in economics it most emphatically was not.

    SO you have two establishments – the economics establishment and the media one, both of them well and truly captured by a ruthless ruling class obediently reinforcing each others’ orthodoxies in the service of that class.


  19. Lisa

    MFI: If Emmualle Todd is correct (and he was about the USSR and the US) then there is a third German element at play. Economic and political power over Europe, the forth Reich.

    The previous Greek ‘bailouts’ (via the ECB) were actually bailouts of (mostly) the German Banks. Now that they are largely safe, then putting the boot into Greece, to deter Ireland. Spain, etc from even thinking about doing the same is a given.

    Their and the EU’s preferred opion would a totalitarian takeover of Greece, with the will to use massive violence on its populaion to make them conform and collapse living standards even more.

    That big ‘sucking’ sound you hear over Europe, is Germany sucking the life out of every other EU country. This is not going to stop since it has become the default German position (while sucking the life out of ordinary Germans as well of course).

    Germany entered the Euro at an artifically low level (due to its strain over absorbing East Germany) this meant its manufacturing wiped out the rest of Europe. The surpluses and resulting deficits were filled in by German (and other, ie Britiish) banks issuing debt. Eventually (duh) the whole scheme collapsed. Germany’s response has been, firstly to protect its bankrupt banks, secondly to enforce a political order that will continue to do so…and force those countries to expend their last grandmother’s tooth to support German banks and manufacturing.

    The EU, desperate to increase its powers has been w illing partner in all this, using Greece as an example to crush national sovereignty and establish itself as the premier power. On the other side various German elites woke up to the idea of maintaining the EU as a captive market (bit like South America and the US from the 50s onwards) which means ending national sovereignty to bend other EU countries to Germany’s benefit (again like South America).
    The obvious next stage is overthrowing the Greek Govt, which the Troika was a partial attempt at (Ditto the S. A example again).

    So Germany is back in the empire business again. What could possibly go wrong?

    Of course there is a link to the Ukraine, where after some internal fighting, the German elites have decided to work to keep Russia out of Europe, especially Eastern Europe. the smarter (?) (and not totally boguht and paid for US agents) amongst them hope to (like the others in the ME) to use the dying US empire to cement Russian exclusion, after which they expect to pick it all up after the US leaves, forgetting a little fact that the US will always prefer to leave chaos and destruction behind them.

    Their wet dreams, a German European Economic Empire (Russians enter at their own risk), Chinese economic empire, a crumbling Japan (annoying competitor), a crumbling US (after doing the military heavy lifting of course). Russia being a target (as usual) …..

    Just goes to show the German (oh so educated) elites can be just as stupid and short sighted and the US/UK neo-liberal and neo-con ones. Better start replacing those wooden sticks on your tanks with real guns boys…..

    And, finally…the final victory over broke, bankrupt, deindustrialised and useless England…..

  20. Fudge all around. By now, just about every observer understands what only a few killjoy economists warned when the Euro was created.

    The point was, the Eurofudge was supposed to have been made by Syriza capitulating in February after making a theatrical stand, and then Juncker showing Tsipras the ropes and where the Brussels fudge factories are. Then Syriza could be kept alive as austerity worked, with the worst effects held off by the application of fudge. Then when austerity finally worked to cause growth (yes yes I know) Syriza would by then be transformed into a better, more efficient version of PASOK. Everyone happy, yay. That this transformation simply didn’t happen was cause for a lot of confused consternation in German media when they realized that Greek politics don’t work that way. (I find it odd how congruent this seems to be with the mental model the NC crowd seem to have in their heads.)

    The reason why Samaras was allowed to fall was that they thought that austerity wasn’t working because Samaras was too slow in reforming, because he was too beholden to clienteles. Austerity, of course, MUST work, according to them. So they thought that it was a better bet to replace ND with a system-external party. The problem is that fixing the Greek state is a very long process that can’t be legislated through a few months of reform — Syriza must, no matter what its intentions, work with existing players within the system, which are in some ways more important to its survival than an agreement with the creditors. Otherwise nothing at all would get done.

    I would agree that there are lessons for left-wing governance here, but not the ones that a lot of people would like to learn. But of course the biggest error is the dogmatic belief in growth-by-contraction. I leave it as an exercise to the reader how German policy-makers think this should work.

  21. mike

    Mandos–Mike Norman has gone off his medications again at his site over Tsipras’ latest compromise offer today. As you have been one of the best observers/commenters on the scope and depth of what’s happening there on the blogs, do you see the Greek move as another sign that it fears losing power/causing Greek and European chaos/bringing on the Right as the public conspicuously wavers between exit and capitulation there? It’s seemed from the beginning that those who condemn the Greek leadership for its willingness to bargain rather than go “300” the movie have consistently ignored the potential for the Greek public to bring on Troika pain regardless of what wiser (or incontinent) bloggers think best. Can Tsipras even count on police and military not to engage in a purge, which leaves Syriza completely out and their political enemies in regarding that “fixing the Greek state” you speak of above, should domestic events head south? Where am I off on this?

  22. I had never heard of Mike Norman before. Hmm.

    I don’t think that there will be a military or police coup.

    I am reserving judgement on Tsipras’ latest move, because the world is slightly different on having defaulted to the IMF. In a sense, Lagarde is right about one thing: a default on the IMF is a default also on some poor countries who were dragged along for the ride — effectively a long-distance transfer from India to European banks. All this so that European politicians can justify doing the same to their own taxpayers.

    All that I know is that having had a referendum (regardless of the outcome) is monotonically better than not having had one. So I hope that the referendum is not cancelled, unless Greece gets some kind of brilliant capitulation by the creditors, which ain’t likely.

  23. Peter

    When some people chant the mantra ‘Austerity is not Working’ I can visualize the German Technocrats grinning into their beer and laughing at the naïve people who ever thought it was supposed to ‘work’ for them or was ever intended to work for them, them being the citizens of Greece or any other affected people.

    Neoliberal economics and its blunt force weapon Austerity was and is designed to humble the people of all countries under the rule of Capitalist, Extreme Center regimes as Tariq Ali describes them. Their goals, clearly evident as we have watched their implementation, in most all advanced economies have been to dismantle what remains of Social Democracy, worker security, retirement security, welfare’s existence and the theft of the remainder of the Commons.

    All of this is designed to guarantee the survival and prosperity of the Ruling Classes and their spawn who recognize that we are at the end stage of growth that could benefit the masses and this is strictly Class War over the remaining wealth.

    Syriza has thrown a sabot into the gears of the Technocrats well oiled machine but we will have to wait to see if calling on their citizens will supply enough shoes to actually stop this powerful machine.

  24. mike

    Mandos–Thank you for your quick response. Norman has a good site with posters like Tom Hickey and Roger Erickson as long as he stays off it. I’ll look forward to your analysis as this plays out. Thanks again.

  25. guest

    Now with Tspiras saying he will accept all conditions for a bailout (and it being rejected) I am very confused. But something tells me this means the Greeks will vote yes on Sunday, so this drama can go on for another 5 years, when the Greeks will be dead or refugees in the rest of Europe.
    Maybe that is the plan: dump all the refugees in Greece and turn it into one big refugee camp so the rest of Europe doesn’t have to deal with them.

  26. Now with Tspiras saying he will accept all conditions for a bailout (and it being rejected) I am very confused.

    Note that he offered to accept all conditions for the bailout and yet it was refused. Why? Because a referendum (the ultimate Euro-sin, to be avoided if possible on EU-level matters) is pending. We can’t know whether or not he knew it would be rejected, but I certainly would have predicted that.

    That’s because the actual content of the bailout document is not relevant. It will be Eurofudged to make it work, especially if a Euro-compliant “technocrat” government is brought again to power.

  27. RJMeyers

    Seems like the Germans have been plotting to oust Syriza from the start, at least if one “Senior German Official” is to be believed:

  28. Ian Welsh

    The problem with “we’ll Eurofudge it” is that the previous government was compliant and Greece’s economy still fell off a cliff despite Eurofudging. If they’d kept Greece’s economy to only declining as much as Spain’s or Portugal’s, this wouldn’t be happening.

  29. The problem with “we’ll Eurofudge it” is that the previous government was compliant and Greece’s economy still fell off a cliff despite Eurofudging. If they’d kept Greece’s economy to only declining as much as Spain’s or Portugal’s, this wouldn’t be happening.

    From the German/Eurocrat perspective, the previous government was not compliant to the extent that e.g. Rajoy is. Samaras kept asking for political extensions on parts of the reform program. Of course the whole point is that austerity is supposed to be a salutary context for the restructuring of the economy, but ND couldn’t (from the perspective of the creditors) summon the political courage or will to pass the agreed-upon legislative program.

    The Eurofudge is not to prevent the economy from going off a cliff — going off the cliff is the point — it is to mitigate protest while austerity magic restructures the economy. Merkel et al.’s diagnosis (this was in a Kathimerini article I can no longer find) was that Samaras was too beholden to interest groups to pass the full program, so it might actually help to bring in an outsider, if he could be properly tamed in a couple of months. Needless to say, it didn’t work…

    A German conservative told me a few years back, something like, “For those who won’t practice Ordnung, we will practice Meidung (avoidance).” It cannot be the case that restructuring-through-austerity won’t work, because it means that prosperity can happen without good governance. That Spain and Portugal implemented this program means that their economies should be shooting to the moon Any Minute Now. QE? What QE?

    That is why I think that this referendum, even if the answer is Yes, was the right thing to do. Never mind that the actual proposal is “off the table” or whatever: everyone who matters knows what this is really about. On a “yes” vote, the Greek people would be saying, OK, the issues that were red lines weren’t really, continue the experiment. If it doesn’t work, then Greeks can make the future rational decision to leave the Eurozone, knowing it was they who authorized the decision, which I believe will blunt the effect of Golden Dawn type nationalists who thrive on “They did it to us”. Obviously, since I too think the experiment won’t work, I prefer a “no”.

  30. Seems like the Germans have been plotting to oust Syriza from the start,

    Not necessarily from the start, no, if Tsipras had taken Juncker’s offer to help Syriza become a system party.

    That Germans want to oust Syriza now is not a secret in German media, where it is explicitly discussed and almost universally held to be an acceptable opinion, with the exception of explicitly left-wing media. Germans will not give money to anyone who does not at least pay lip service to restructuring the Greek economy, and by holding the referendum and campaigning for No Tsipras has proven beyond any possibility of doubt that he will not only not implement an economic restructuring program, he will actively campaign in favour of the destruction of German taxpayer money. ie, from their perspective, he is a thief and proud of it, and thief backed by communists trying to encourage Spanish populists to do the same (rob Germany). (If he had announced the referendum and even reluctantly supported “yes”, he might still have been tolerable.)

    That Germany has benefited from a low Euro because of all of this is completely absent from the discussion because it’s one of those silly Anglo-Saxon attitudes — the bulk of German export power is obviously the Ordoliberal Advantage.

  31. Lisa

    The power of serendipity strikes again. Good article on what neo-liberalism did to South America and what Germany (and the EU) wants to do to Greece (etc).

  32. mike connelly

    Ran across these interesting comments at Moon of Alabama:


    Yves Smith, at would no doubt disagree. She views the referendum as craven political gaming. She believes that Tsipras has set back “whats left of the European Left” by 10 years. Then there this:

    James Levy (a long-time and well-respected commenter at NC): So, since they “should have known” the Troika would not blink first, they should have rolled over and taken it up the tush on Day 1?

    Yves Smith: In word, yes.
    See Yves full response here:

    This exchange came after MONTHS of push-back in comments of Yves depiction of Syriza and the negotiations. Summarizing that push-back (which continues to the present) would not do justice to either side. Anyone that is interested should have a look back at NC Greek posts.

    Full disclosure: I was a frequent commenter at NC for over 5 years. I was put into moderation (for the first time ever) because I persisted in pushing back and found that my comments were no longer being posted on Greek-related posts.

    I was very critical of Syriza and Yanis after the February agreement. But after re-thinking Syriza’s strategy and recalling that Syriza had wanted to have a comprehensive negotiation, I had a change of heart. This was confirmed as it became clear that Syriza was resisting the Troika.

    The Troika had forced (by threatening Greek banks) a 2-step negotiation whereby Greece would describe how it would service the debt BEFORE any talks about debt restructuring. As a result, the Greeks resisted by being noncooperative (they didn’t deliver a proposal until well after the deadline of April 30, and it wasn’t acceptable). The Greeks were NOT incompetent and debt restructuring was still an important issue (because it was a big reason why the Greeks were resisting). Note: The Greeks had been promised debt restructuring/forgiveness in the past which never materialized.

    I believe that what Tsipras and Yanis have accomplished is to bring elevate the crisis from a commercial negotiation to a political issue for Europe. In the process they have galvanized the anti-austerity/anti-Troika sentiment in Greece (and in Europe) to a point where they now have a chance to win the mandate that they need to make a GRexit possible (if negotiations ultimately fail).

    Posted by: Jackrabbit | Jul 2, 2015 1:45:23 PM

  33. I saw that. Unbelievable. I can easily turn that logic around and use it for Obamacare. Well her links are still pretty good, I must say.

  34. Peter

    The reactions to the latest developments in this crisis have been as interesting as the actual issues and it may show that power and authority can be confronted. As long as the conflict was among the elites the usual PR and blame games could be controlled and dominant and submissive relations maintained. Now with the referendum calling the Greek people, and representing all the working people of Europe, to make a decision the elites are being bypassed and they are furious about this undermining of their power.

    Yves Smith seems to have sensed this undermining of authority as soon as Syriza came to power and began her personal attack on these subversive Socialists who threaten the proper Capitalist order and respect for power.

    She admonishes the brazen Socialist to be ‘nice’ to their tortures and submit to their status as supplicants and then immediately creates a strawman, tax collection, as a good governance reform that would please their tormenters. The fallacy of this diversion is that the Troika would never allow the Greek government to hire the multitude of ‘tax collectors’ necessary for this reform, Austerity rules out any such government hiring.

  35. anonymouscoward

    Watching Yves (and some others at NC) turn against Syriza as the inhumanity of the Troika has steadily revealed and reaffirmed itself has been hugely demoralizing. Some people just seem to want to back the winner, no matter what. If one side is losing some people who used to be enthusiasts seem to think it’s now time to call them stupid or weak or bought off. They switch sides to avoid losing, even though they aren’t involved in any way. I also have differences with Syriza. I think they should lead Greece out of the Euro, despite the fact that a majority of Greeks don’t want to give it up. I’ve always wanted the Eurozone to lose this fight and to blow itself up for good. Euro membership has turned into a poisonous deal for Greece and it’s never going to revert to its former sweetness. Everyone who has been on the losing end of the Eurostick is going to continue to lose. Syriza is trying to reason with the Unreasonable, and trying to get professional psychopaths to care about the human destruction they’re causing, and that’s a hero’s job – or a fool’s errand. If they can’t succeed at it it’s no wonder. There’s no cause to go after them however with vicious personal attacks. Syriza is only trying to do what they promised their voters they would try to do. But Yves seems to be taking Syriza’s non-compliance with her wishes and predictions in a very personal manner. She doesn’t accept Grexit as the only positive resolution, and she doesn’t approve of Syriza’s bargaining. But in bargaining you have to make concessions, or else the process comes to an abrupt dead end. Syriza bargained from a very weak position, no doubt, but that was clear from the start. If their bargaining has proved anything it’s that there really is no bargaining with the scumbags who run EUrope. Blaming Syriza for the psychopathology of Schäubel, Merkel and Junckers is like blaming Jews for the implacable anti-Semitism of the Nazis.

    Some days I’ve been hard put to avoid saying something like, What a crying shame it is that the Greek people weren’t wise enough to elect YOU President, Yves! So lately I’ve looked elsewhere for links to news items and views on Greece. NC is Yves Smith’s site. If she wants to make it a pit of toxic Syriza hate, that’s her prerogative.

  36. V. Arnold

    July 2, 2015
    NC is Yves Smith’s site. If she wants to make it a pit of toxic Syriza hate, that’s her prerogative.

    Seems to sum it up quite well, IMO.

  37. Lisa

    Oh I think the Greek Govt has handled this really badly. When all this started there were 3 possibilites that could happen to it:

    (1) The EU (etc) would negotiate something reasonably fair. This was a low probability outcome, given even 5 mins research.
    (2) The EU (etc) would organise a coup in Greece. Reasonable probability.
    (3) Greece would leave the Euro. Most probable.

    Their best option was to negotiate to gain time (and maybe get an agreement against all the odds), while shoring up defences against a coup and preparing (in secret) all the steps for leaving the Euro.

    It is pretty obvious that they have not done (2) and (3). This is even more stupid, because as time went on the probability of a reasonable negotiated settlement dropped….considerably, from low to zero.

    So I’d put the chance of a coup as being much higher now, since the EU and Germany have had time to work on it and if Greece leaves the Euro it will be a disaster, because nothing is in place.

    The EU and Germany sense that they are winning, because the Greek Govt gave far too much away in their all to fake ‘negotiations’. EU/Germany probably are calculating that if they engineer a total economic collapse (even more than already has happened) then the Greek Govt will capitulate.

    To many academics and not enough practical people, someone sensible would have already put in place all the necessary stuff for a Euro walk away tomorrow and in such a way as to hurt the EU/Germany as much as possible (after all there would be future negotiations about all sorts of things within the EU and a Greek hard line win would put them in a much better situation for those).

    I’m sure German military/national security people are having real close talks with their Greek counterparts, almost certainly with US and UK support. A nice brutal military dictatorship would suit the EU/Germany real well right now. Where is the Greek Pinchet waiting in the wings?

  38. Lisa

    As usual the Automatic Earth has it covered (and have moved there ).

    “Since it’s clear that Berlin is by far the strongest voice in the three-headed monster the Troika has become, it’s no exaggeration to say that what we see unfold before our eyes is yet another German occupation of Greece. There are no tanks and boxcars involved yet, but wars can be fought in many ways. And scorched earth can take up many different forms too. It’s the result that counts.”

    “European Parliament chief Martin Schulz even dares claim that Syriza should resign if the vote is yes, and it should be replaced with a bunch of technocrats.”

    “How come we moved so far away from that, so fast? What happened to us? What have we become? ”

    The answer to the last is obvious if you accept my hypotheses that (a) this is being partially driven by neo-liberal dogma (duh) (b) also this is Germany positioning itself for the end of the US empire (similar to Saudi Arabia for example) and carving out its European empire (using the US/South America model).

    In the case of (b) if somehow Greece does leave the Euro it will be in a totally shattered and impoverished state, as a disincentive to others like Ireland, Spain, etc, thinking about similar things. Starving and dying on the streets Greeks is a ‘good outcome’ under this scenario.

  39. mike

    I absolutely agree with everyone who has said that Syriza should have planned and made clear Grexit from the start and told everyone to take it or leave it. It’s what I would have done had I been elected the Greek leader. BUT I would NEVER have been elected. The Greek people by all accounts elected Syriza to restore Greece’s place in Europe politically and socially with at least some of the honor lost by past capitulations, to keep the Euro, and to end the austerity. That those were incompatible goals in too many ways given the rule of bankers which has infested our planet did not make them irrelevant, and the wonder of the Greek leadership is how well they actually did in pursuing those conflicting goals for as long as they did, much to the frustration and disrespect of those who weren’t elected to anything (we’ll leave Naked Capitalism out of this for the moment . . . oops). Now, faced with the ultimate Gordian Knot formed by those opposing goals, the Greek leadership has again turned to the voters and handed them Alexander’s sword to decide whether it should be swung or not. Illargi’s tone in his last post from Greece makes it sound like he’s seeing “Yes” winning, hook or crook, well, hook and crook, and that will be very frustrating and painful. BUT it will be DEMOCRACY, almost in pure form (sure wish those voting machines weren’t electronic). So the question is, for those of us really concerned about the banksters ruling Europe first and the rest of us in a few years and want democracy to prevail, what if democracy says “okay” to its own loss, as it will apparently in Greece, as it is doing conspicuously in Europe, as it already has here in the US with TPP as the latest example? What happens then?

  40. Note:

    2% growth is the new 4%,

  41. Thats in the US.

Powered by WordPress & Theme by Anders Norén