Yanis VAROUFAKIS: On the Euro Summit’s Statement on Greece: First thoughts; July 14, 2015

— statement attached —

Yanis Varoufakis — thoughts for the post-2008 world
Posted on July 14, 2015 by yanisv

On the Euro Summit’s Statement on Greece: First thoughts

In the next hours and days, I shall be sitting in Parliament to assess the legislation that is part of the recent Euro Summit agreement on Greece. I am also looking forward to hearing in person from my comrades, Alexis Tsipras and Euclid Tsakalotos, who have been through so much over the past few days. Till then, I shall reserve judgment regarding the legislation before us. Meanwhile, here are some first, impressionistic thoughts stirred up by the Euro Summit’s Statement.

A New Versailles Treaty is haunting Europe – I used that expression back in the Spring of 2010 to describe the first Greek ‘bailout’ that was being prepared at that time. If that allegory was pertinent then it is, sadly, all too germane now.
Never before has the European Union made a decision that undermines so fundamentally the project of European Integration. Europe’s leaders, in treating Alexis Tsipras and our government the way they did, dealt a decisive blow against the European project.
The project of European integration has, indeed, been fatally wounded over the past few days. And as Paul Krugman rightly says, whatever you think of Syriza, or Greece, it wasn’t the Greeks or Syriza who killed off the dream of a democratic, united Europe.
Back in 1971 Nick Kaldor, the noted Cambridge economist, had warned that forging monetary union before a political union was possible would lead not only to a failed monetary union but also to the deconstruction of the European political project. Later on, in 1999, German-British sociologist Ralf Dahrendorf also warned that economic and monetary union would split rather than unite Europe. All these years I hoped that they were wrong. Now, the powers that be in Brussels, in Berlin and in Frankfurt have conspired to prove them right.
The Euro Summit statement of yesterday morning reads like a document committing to paper Greece’s Terms of Surrender. It is meant as a statement confirming that Greece acquiesces to becoming a vassal of the Eurogroup.
The Euro Summit statement of yesterday morning has nothing to do with economics, nor with any concern for the type of reform agenda capable of lifting Greece out of its mire. It is purely and simply a manifestation of the politics of humiliation in action. Even if one loathes our government one must see that the Eurogroup’s list of demands represents a major departure from decency and reason.
The Euro Summit statement of yesterday morning signalled a complete annulment of national sovereignty, without putting in its place a supra-national, pan-European, sovereign body politic. Europeans, even those who give not a damn for Greece, ought to beware.
Much energy is expended by the media on whether the Terms of Surrender will pass through Greek Parliament, and in particular on whether MPs like myself will toe the line and vote in favour of the relevant legislation. I do not think this is the most interesting of questions. The crucial question is: Does the Greek economy stand any chance of recovery under these terms? This is the question that will preoccupy me during the Parliamentary sessions that follow in the next hours and days. The greatest worry is that even a complete surrender on our part would lead to a deepening of the never-ending crisis.
The recent Euro Summit is indeed nothing short of the culmination of a coup. In 1967 it was the tanks that foreign powers used to end Greek democracy. In my interview with Philip Adams, on ABC Radio National’s LNL, I claimed that in 2015 another coup was staged by foreign powers using, instead of tanks, Greece’s banks. Perhaps the main economic difference is that, whereas in 1967 Greece’s public property was not targeted, in 2015 the powers behind the coup demanded the handing over of all remaining public assets, so that they would be put into the servicing of our un-payble, unsustainable debt.

Martin Zeis
globalcrisis/globalchange NEWS

Pepe ESCOBAR: BRICS/SCO Sow Panic in Exceptionalistan; RI, July 14, 2015


BRICS/SCO Sow Panic in Exceptionalistan
By getting BRICS, SCO and EEU leaders in one place Russia sent a graphic message about the emergence of a coordinated Eurasian drive towards a world order not dictated by the west
RI July 14, 2015


In „Secret“ Report Lagarde Says Greece Will Need Massive Debt Relief; Reuters 14.07.2015

zerohedge, 14.07.2015 — http://www.zerohedge.com/news/2015-07-14/imf-declares-war-germany-secret-report-lagarde-says-greece-will-need-massive-debt-re

IMF Declares War On Germany: In „Secret“ Report Lagarde Says Greece Will Need Massive Debt Relief

Update: Europe now looks to be in damage control mode. Here’s Reuters:


A divide between the IMF and Europe (read: Germany), regarding writedowns on Greece’s debt to the EU has been brewing for quite some time and recently returned to the international spotlight when, a few months back, the Fund indicated debt relief was a precondition for its participation in any further aid for Athens.

More recently, the IMF released a report on Greece’s debt sustainability just prior to the referendum. The timing appeared to be strategic and may have helped secure the „no“ vote for Tsipras.

Unfortunately, the IMF didn’t appear to anticipate the PM’s complete capitulation and now, the subject of debt relief has again been put off, this time until Greece officially passes the new „deal“ through parliament and legislates its terms.

Today, another „secret“ IMF document on the sustainability of Greece’s debt burden has surfaced and not surprisingly, the Fund is once again pounding the table on a haircut. One is certainly left to wonder if the US (and its veto power) are pulling the strings behind the scenes and orchestrating „leaks“ at opportune times. Here’s more from Reuters:

Greece will need debt relief far beyond what euro zone partners have been prepared to consider due to the devastation of its economy and banks in the last two weeks, a confidential study by the International Monetary Fund seen by Reuters shows.

The updated debt sustainability analysis was sent to euro zone governments late on Monday, hours after Athens and its 18 partners agreed in principle to open negotiations on a third bailout programme of up to 86 billion euros in return for tougher austerity measures and structural reforms.

„The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM,“ the IMF said, referring to the European Stability Mechanism bailout fund.

European countries would have to give Greece a 30-year grace period on servicing all its European debt, including new loans, and a very dramatic maturity extension, or else make explicit annual fiscal transfers to the Greek budget or accept „deep upfront haircuts“ on their loans to Athens, the report said.
Source: http://www.reuters.com/article/2015/07/14/us-eurozone-greece-imf-report-idUSKCN0PO1CB20150714?feedType=RSS&feedName=businessNews

In other words, the IMF is now openly at war with Germany (and its sound money compatriots like Finland) over debt forgiveness, which futher underscores the split in Europe between the German bloc and the those who favored leniency for Greece, and, by extension, a relaxation of the doctrine of strict fiscal discipline that has dominated EU politics (in word if certainly not in deed in the periphery) since the onset of the European debt crisis.

Of course any debt haircut for Greece will only serve to embolden other periphery debtor states, especially those where Syriza sympathizers enjoy growing support ahead of elections. In short, if parties like Podemos in Spain perceive that Germany has blinked on debt relief they too will push for writedowns, something we outlined in detail after the last IMF „leak“ in „Did IMF Just Open Pandora’s Box.“
(see: http://www.zerohedge.com/news/2015-07-02/did-imf-just-open-pandoras-box )


Martin Zeis
globalcrisis/globalchange NEWS

Peter WAHL: Griechenland – Plan B vorbereiten; Diskussionspapier, 13.07.2015

gepostet von Heike HÄNSEL, 14.07.2015, 12:39
Kontakt: <Heike Haensel>

Von: Peter Wahl [mailto:peter.wahl]
Gesendet: Montag, 13. Juli 2015 17:09
Betreff: Griechenland – Plan B vorbereiten

A u s z u g

Aus der Niederlage lernen – Plan B vorbereiten

Peter Wahl, 13.07.2015 *

Das Ergebnis der Verhandlungen über das neue „Rettungspaket“ ist eine Niederlage für Syriza. In der Sache hat sich bis auf wenige Nuancen der Austeritätskurs durch-gesetzt. Eine Wende wird es nicht geben, das Gewürge geht weiter.

Dennoch verdient Syriza Bewunderung dafür, sich der deutschen Dampfwalze ent-gegengestellt zu haben. Daher ist es auch selbstverständlich, dass jeder politisch anständige Mensch weiterhin solidarisch mit Griechenland ist.

Aber letztlich entscheiden über solche Konfrontationen die machtpolitischen Kräfte-verhältnisse. Die sind ihrerseits die Resultante aus einem komplexen Geflecht von ökonomischen, politischen, psychologischen, etc. von internen und externe Faktoren, über die keiner der Akteure die volle Verfügungsgewalt hat. Und diese Kräfteverhält-nisse standen von Anfang an sehr zuungunsten von Griechenland.

Plan B
Das schwerste Handicap Syrizas war es, dass sie keinen Plan B hatte – besser ge-sagt: nicht haben konnte. Die Festlegung auf den Verbleib im Euro und deren Veran-kerung bei der Mehrheit der Griechen, hat von Anfang an eine Pfadabhängigkeit für denkbare Verhandlungsergebnisse vorgegeben. Hinzu kam ein höllischer Zeitdruck, der den Aufbau substantieller Gegenmachtposition unmöglich machte.

Ohne eine Auffangmöglichkeit jenseits des Euro wäre ein chaotischer Grexit schlim-mer als das erneute Diktat. Dass die meisten Griechen und die Regierung Angst vor dem Sprung ins Ungewisse haben, ist verständlich und zu respektieren

Allerdings sollten jetzt die Lehren aus der Niederlage gezogen werden und für die unvermeidlich nächste Runde ein solider Plan B und dessen demokratische Legitimierung vorbereitet werden.
Dazu braucht Griechenland internationale Unterstützung. Allerdings besteht Solidarität nicht in blumigen Erklärungen oder markigen Manifesten, sondern in der Verschiebung der Kräfteverhältnisse im europapolitischen Diskurs auch und gerade bei uns. Das bedeutet als erstes den Abschied von den europapolitischen Illusionen der Linken und der Fetischisierung des Euro. (…)

* Kontakt mit dem Autor:
Peter Wahl,
WEED – Weltwirtschaft, Ökologie & Entwicklung
Eldenaer Str. 60, 10247 Berlin
phone: 0160-8234377
mailto: peter.wahl

— Volltext als pdf-Datei im Anhang verfügbar. —

Martin Zeis

Martin Zeis
globalcrisis/globalchange NEWS


Schäubles Plan: Deutschland muss raus aus dieser Euro-Zone

Schäubles Plan: Deutschland muss raus aus dieser Euro-ZoneDeutsche Wirtschafts Nachrichten | Veröffentlicht: 14.07.15 02:19 Uhr | 25 Kommentare

Die Demütigung Griechenlands beim Gipfel war kein Unfall. Sie ist Teil einer Agenda, die Wolfgang Schäuble seit langem verfolgt: Er hält die EU in ihrer derzeitigen Form für nicht funktionsfähig. Er strebt eine enge politische Union an. Diese ist nur mit ausgewählten Staaten möglich. Am Ende soll sich zeigen, wer zu Deutschland passt und wer nicht. Der Grexit ist fix eingeplant. Andere Staaten werden folgen. Das Tischtuch ist zerschnitten. Unwiderruflich. (…)


Greece Just Lost Control Of Its Banks, And Why Deposit Haircuts Are Imminent; zerohedge, July 13, 2015

zerohedge, July 13, 2015 – 16:30 local time — http://www.zerohedge.com/news/2015-07-13/greece-just-lost-control-its-banks-and-why-deposit-haircuts-are-still-coming — text also attached (2p) —

Greece Just Lost Control Of Its Banks, And Why Deposit Haircuts Are Imminent

Yes, Greek banks may have been insolvent – something that was clear since the first bailout of 2010 – but at least the Greek state had control over them: as such it could have mandated mergers, recapitalizations, liquidity injections, even depositor bail-ins (perhaps the harshest lesson for the ordinary Greek population as a result of this latest crisis is that deposits are not „cash in the bank“ but liabilities of insolvent financial organizations).
Starting on Wednesday that will no longer be the case.
Because while Greek banks will maintain their capital controls for months and withdrawals will be limited to €60 or less for months (the ECB is well aware that any boost to the ELA will result in a promptly surge in deposit outflows until the new ELA ceiling is reached, and so on ad inf) the one key change on Wednesday when the Tsipras government, whose coalition no longer has a majority in parliament and will have to rely on opposition votes, votes through the humiliating Greek „pre-deal“ to unlock negotiations for the promised €86 billion in bailouts (which will be used almost entirely to repay the Troika) is that it will hand over the keys of Greek banks to the ECB.

Here is Reuters with this little known fact:

One of the preconditions imposed on Greece for a deal is that it signs into law European rules that would put euro zone authorities at the ECB and in Brussels, rather than Athens, in charge of identifying and closing or breaking up sick banks.
This in turn could lead to a shake-up of the sector that could see some banks close, with losses pushed onto bondholders and possibly even large depositors. In such circumstances, there would be little that Athens could do to prevent this.
One European official had told Reuters that the number of big banks in the country could be reduced from four – National Bank, Piraeus, Eurobank and Alpha – to as little as two.