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Greece… this time for real? June 15, 2015

Posted by WorldbyStorm in Economy, European Politics.
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It’s sure looking that way, isn’t it, as ‘negotiations’ break down.

From RTÉ:

Talks on ending a deadlock between Greece and its international creditors have ended in failure, with European leaders venting their frustration as Athens stumbles closer towards a debt default that threatens its future in the euro.

European Union officials blamed the collapse on Athens, saying it had failed to offer anything new to secure the funding it needs to repay €1.6bn to the International Monetary Fund by the end of this month.

The Guardian:

Last-ditch talks aimed at breaking the impasse between Athens and its international creditors have collapsed in acrimony with European Union officials dismissing Greece’s latest reform package as incomplete in a step that pushes the country closer to leaving the eurozone.

What had been billed as a last attempt to close the gap between Alexis Tsipras’s anti-austerity government and the bodies keeping debt-stricken Greece afloat was halted late on Sunday after less than an hour of negotiations in Brussels.

Perhaps something can be patched up over the next few days or so, but Grexit here we/they go?

Again, the Observer had it, even given a somewhat chiding tone, just about right last week.

Comments»

1. Gewerkschaftler - June 15, 2015

I think it probably is.

I don’t think Grexit is necessarily on the table at first – there’s that pesky democratic mandate thingy that these leftists seem to be so keen on – and Syriza have no mandate to leave the Euro from their own electorate.

If only they would play by the accepted rules – promise one thing in the election and then making the first item of the agenda reneging on those promises. Sure they’re hardly house-trained at all.

The German SPD made it clear that they support the needs of the Troika than the people of Greece and their democratically elected government which is apparently, according to Sigmar Gabriel – in one of his regular cosy chats with Bild Zeitung – ‘made up partly of communists’.

Politically it would be better (i.e. be more damaging to the Austerians in Europe) if Greece were pushed out of the Euro rather than leaving it voluntarily.

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Gewerkschaftler - June 15, 2015

…rather than…

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2. Gewerkschaftler - June 15, 2015
3. Ed - June 15, 2015

Very moderate voices from within the mainstream, who could never be accused of socialist leanings – Wolfgang Munchau, Philippe Legrain – are firmly arguing that Greece should reject the latest demands out of hand and take the consequences; for Munchau, ‘the bottom line is that Greece cannot really lose by rejecting this week’s offer’ – either the EU backs down and starts talking about debt relief as the consequences of a Greek default sink in, or else they have to prepare for a Grexit, which would be hard but better than the certain catastrophe of following the Troika’s demands. I hope the Syriza leadership are listening; certainly they haven’t been talking like people who are preparing for a massive climbdown over the last couple of weeks, but we shall have to see.

http://www.ft.com/cms/s/0/5e38f1be-1116-11e5-9bf8-00144feabdc0.html

http://foreignpolicy.com/2015/06/12/why-greece-should-reject-the-latest-offer-from-its-creditors-germany-eurozone-debt/

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4. 6to5against - June 15, 2015

Though I’m sure they had moments of optimism around the election, senior figures in Syriza must always have known it was likely to come to this. I doubt they’re planning on offering a last minute capitulation. I doubt it would be politically feasible for them to do so.

But what happens next is hard to predict. The default does not in and of itself have to lead to leaving the euro. As I understand it, the next step would be that the ECB withdraws support from the banks.
As a response to that, the Greeks would have to impose some form of capital control. The most commonly anticipated scenario then seems to be – that the Greeks would pay their employees in Govt IOUs, which would somehow morph into New Drachmas.

But none of that seems inevitable to me. Will everybody on the ECB council play ball? Will the Greeks muddle through for a while longer? – without the IMF payments, they will surely have a little cash on hand. and as they muddle through, what will happen to the value of the Euro and what new pressures might that create within the EU?

Despite the best efforts of the press, Syriza could still come through this looking like the most sober and responsible group involved. If only because that is the actual truth.

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5. Joe - June 15, 2015

Fully agree with your last paragraph 6/5.
It sickens me to hear our local right-wing commentators gloating about where Greece is now. Geraldine Kennedy and the panel on RTÉ radio yesterday. Joan Burton opining that Greece’s case shows that Ireland took the right path.
Look, Greece elected a left-wing government and look at the state they’re in! Yeah sure, Syriza is the cause of the Greek crisis.

Fair play to Tsipras et al. Good poker players so far. I hope they have a good plan B for running the country after their European brothers and sisters tip them overboard.

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benmadigan - June 15, 2015

read somewhere Greece had been invited to join the new banking group that has been set up in opposition to the IMF etc (Russia, Brazil +??). Don’t know if there is any truth to the rumour but Tsipras was said to be delighted to receive invite.

If there’s a Grexit , Turkey will be less interested in a Turkentry – we might set up “our own area of interest”. Grandson of the Ottoman returns??

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fergal - June 15, 2015

Have to agree with everybody above sickening to listen to the smugness from irish commentators- nothing worse than the smugness of the middle class- brian hayes on the radio yesterday coveniently forgot to mention fine gael’s sister party and its role in pauperising huge swathes of Greek people.

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ar scáth a chéile - June 15, 2015

Joan Burton’s reported comments above shouldnt be surprising given what her party has become – but still shockingly ignorant and complacent.

RTE’s coverage seems quite biased to me – the story framed in terms of how the reasonable EU/Troika are running out of patience with the obstinate Greeks – but that’s RTE for you, most of the time more corporate than the corporates themselves

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irishelectionliterature - June 15, 2015

RTE are far from alone, that’s the way it has been framed throughout much of Europe.

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Gewerkschaftler - June 15, 2015

Indeed it has been so framed. The reasonable adults from the Troika trying to persuade the recalcitrant child to take it’s medicine.

But the bold child still refuses, insisting that the medicine is poison. Now those reasonable adults couldn’t be that abusive, could they?

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irishelectionliterature - June 15, 2015

Funnily enough I was talking to a number of people who work in Brussels at a function recently. Naturally they couldn’t understand what Greece were playing at and thought that Varoufakis and Tsipras were chancers of the highest degree.
They had apparentley had some goodwill initially but had wasted it all away as they were offering nothing in return other than a threat of leaving the Euro and defaulting.

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6. Pasionario - June 15, 2015

Ambrose Evans-Pritchard nails it at the end of this piece:

http://www.telegraph.co.uk/finance/11673989/Syriza-Left-demands-Icelandic-default-as-Greek-defiance-stiffens.html

“Mr Tsipras faces a critical choice. If he accepts creditor demands, he may lose a large bloc of his own party and have to rely on the establishment parties to push the deal through the Greek parliament.

Such a course of action would render him a Greek version of Britain’s Ramsey MacDonald, the Labour prime minister in the 1930s who enforced austerity and became the socialist figurehead of a Conservative national government.

MacDonald never overcame the accusations of betrayal by the Labour movement. He died a broken man.”

My hunch is that Tsipras is no MacDonald. And that means Grexit. About time too.

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Ed - June 15, 2015

The comments are a good laugh – confused Telegraph readers, the big bad EU is bullying a small country, but the brave patriots standing up to Brussels are socialists, so they’re struggling to find a way of being against both at the same time. Mostly they drone on like Bild journalists, ignoring what their own paper’s reporter has to say.

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