More Greek gamesmanship…

With the Greek Parliament, and Greece’s creditors in Europe and elsewhere, discussing the latest sudden manoeuvre by the game theory academics in the Syriza-led Greek Government, via the Guardian’s live-blog, here’s a reminder of Alexis Tspiras’ criticism of ex-PM George Papandreou’s, failed, attempt to hold a similar referendum in 2011.

With the new manoeuvre almost certainly designed to short-circuit the result of the last one [the 30 June deadline for the €1.6billion repayment to the IMF], as the BBC economics editor Robert Peston points out, the European Central Bank now faces a dilemma.

Much hinges, therefore, on any statement later today from the Eurogroup of finance ministers, after their scheduled meeting.

If they give a welcome to Alexis Tsipras’s referendum plan, and urge the Greek people to vote for the bailout, if they extend for a few days the current bailout programme for the country, then the ECB will, I am told, do what it can to reassure Greek depositors that they will have continued access to their cash.

But whether the Eurogroup can give an enthusiastic endorsement to the plebiscite is moot – because Alexis Tsipras was last night so emotionally antagonistic to the imposed bailout terms, and because Mr Tsipras has timed the poll in such a way that the country looks set to miss its IMF payment.

Because of the fragility of Greek banks, this is the most important weekend in the eurozone’s 16-year life.

Financial decisions will be taken, by eurozone finance ministers and the European Central Bank, that will have profound social and political consequences – mainly for Greece, but also for the whole European monetary project.

Assuming the ECB avoids the blame for kicking Greece to the kerb this weekend, what happens next?

Having been elected railing against measures introduced by the previous Greek Government – as a result of their negotiated financial support from the EU, the ECB and the IMF – the new Greek PM, Alexis Tspiras, may have just discovered that it was probably the best deal on offer which allowed Greece to remain in the Eurozone, and the EU.

Calling for a slightly constitutional referendum on an offer Tsipras has described as a “humiliation” and “unbearable” has been interpreted as closing the door on further negotiations – As RTÉ reports

“We have no basis for further negotiations,” German Finance Minister Wolfgang Schaeuble said. “Clearly we can never rule out surprises with Greece, so there can always be hope. But none of my colleagues with whom I’ve already spoken see any possibilities for what we can now do.”

“Greece has left the negotiating table and so we are in a situation where on Tuesday the programme ends, because there are no more negotiations,” he said.

Finland’s Alexander Stubb called it “potentially a very sad day, specifically for the Greek people. I think with the announcement of this referendum we’re basically closing the door for any further negotiations.”

“There is pretty much a consensus inside the Eurogroup that we cannot extend the programme as it stands and consequently I would argue that Plan B becomes Plan A.”

Minister for Finance Michael Noonan said he was disappointed with the Greek call for a referendum saying they had unilaterally discontinued negotiations.

He said he does not know what next week holds and “we’re going into totally uncharted waters”.

That referendum might just be seen as Tspiras’ attempt to solve the conundrum described by no less a figure than Jean-Claude Juncker

“We all know what to do, but we don’t know how to get re-elected once we have done it.”

If the Greek people say “Yes” to the latest ‘unbearable’ bailout will Tspiras resign?  [Probably not – Ed]  But his Syriza-led government might not survive…

[And if they say “No”… – Ed] Well, let’s hope that Ireland, north and south, learns whatever lessons are available…

Update The Eurogroup of finance ministers may have short-circuited the short-circuit…

[Jeroen Dijsselbloem, president of the Eurogroup] says that talks were still continuing between Greece and the creditors last night, when the Greek delegation suddenly had to leave the room.

The other 18 members of the eurogroup regret the fact that Greece has rejected these last proposals from the institutions, he continues.

The proposals on the table had already offered the “maximum” flexibility possible, he continues.

But the proposals weren’t concluded, they weren’t finished, but yet the Greek government has rejected them and put them to the Greek people.

Given that situation, however regrettable, the Greek programme will expire on Tuesday night.

We’ll see.

Further Update  The latest from Greece [28 June]

It’s official, capital controls are being imposed in Greece, as the financial crisis takes an even more alarming turn tonight.

Speaking on live TV, Alexis Tsipras is saying that the Greek central bank has been forced to recommend a bank holiday and the introduction of capital controls.

He blames the ECB, and other institutions, for trying to obstruct the democratic referendum he has called for next Sunday. This is a “insult” that shames European democracy, he says.

Tsipras also appeals for calm, and he insists that bank deposits are secure.

Of course they are…

BBC report adds

Earlier, the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks.

Greece is due to make a €1.6bn (£1.1bn) payment to the International Monetary Fund (IMF) on Tuesday – the same day that its current bailout expires.

Without new emergency funds, Greece risks defaulting and moving closer to a possible exit from the Eurozone.

Greeks have been queuing to withdraw money from cash machines over the weekend.

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  • the rich get richer

    In Fairness, Europe’s Super Bankers/Super Politicians wouldn’t be interested in Democracy.

    They prefer Rubber Stamping their Own Decisions and feathering their nests.

    Wasn’t Greek the birthplace of Democracy.

    If I was Greece I would go with my Home Grown Democracy.

  • Turgon

    This is an interesting move. Some economists have suggested fairly cogently that Greece’s best option all along would have been to leave the Eurozone (even better not to have joined it in the first place). However, most Greek voters seem to have been opposed to leaving.

    As such this could be part of a strategy by Syriza to ensure Greece leaves the Eurozone but which also allows Syriza to blames others for the implementation of what was its strategy all along.

    As Pete notes it could be part of Syriza’s game theory.

  • Turgon
    I think you’re probably reading too much into it as being “part of a strategy”. Though, it is a repeated tactic…
    And you’re certainly reading too much into my reference to “game theory academics”.
    It’s not meant as a compliment.

  • chrisjones2

    The ECB seems to have rationalised its dilemma and there are already queues outside Greek cash machines. Looks like when those are empty that is it. Heaven help them. They have relied on fools and shysters

    Expect 2 bank holidays on Monday and Tuesday

    Drachma by Friday and a horrendous devaluation over next few weeks?

  • D99

    Game theory assumes that the players, if they are rational and understand the stakes involved, will agree on an outcome that is least damaging to both sides.

    But the Euro Group leaders are ideological rather than rational – for them it is austerity or nothing and democracy is an inconvenience.

    Syriza could not accept the terms on offer, not only because they would be humiliating and disastrous for Greece, but because they would not get them past their own parliament.

    Now everybody loses.

    Now we are faced with a Greek debt default and likely exit from the Euro Zone that will be ten times worse than any debt restructuring that Syriza was asking for.

    And already the Investment Banks and Hedge Fund Managers are gambling on which country will be next to go – France, Spain, Portugal, Italy …

  • D99

    I assume you’re talking about the Euro Group here Chris?

    They have not rationalised anything. They have made an ideological choice to insist on austerity for all, regardless of the outcome.

  • Sergiogiorgio

    You’re a bit ass about face D99. The Greeks want to keep getting the free lunches and although they can’t pay the bill, they refuse to even wash the dishes. This wasn’t ideological on behalf of the IMF/EU, it was common sense. The Greeks may think they deserve a blank cheque, but they don’t. You vote in fairy tale politicians, you usually end up coming down to earth with a bump.

  • chrisjones2

    No …the ECB was providing the liquidity.

    The Greeks gambled on a free lunch. They didn’t get it

  • chrisjones2

    “most Greek voters seem to have been opposed to leaving.”

    If I had a mechanism whereby the ECB paid all my bills I would too

  • D99

    90% of the loans to Greece were used to pay off the Private Banks that caused the crisis in the first place. Now Greece owes the money to Countries (i.e., tax payers across Europe) because of the crazy bail outs insisted upon by the Creditors.

    In the end, Greece couldn’t win whether they chose to accept or reject the Euro Zone offer – humiliating compliance or exiting the Euro Zone both lead to economic disaster for the Country.

    However, I think you might find that now it’s not just Greece that hits the ground with a bump and has a lot to lose from this outcome.

    To force Greece would be highly illogical, wreckless and idiotic. But the ball is now in the Euro Zone’s court – maybe they’ll come up with a last minute compromise to save the European Union.

  • D99

    They were bailing out the Private Investors who lent Greece the money in the first place to bail out other (or the same) Banks and Investors that caused the financial crisis that left the Country in debt to start with.

  • Sergiogiorgio

    I must remember the next time I ask for a mortgage that I set the interest rate and the repayment terms. Was the Greek government asleep at the wheel when they negotiated the loans? Did they not read the “small print”? I thought it was the Greek negotiators that unilaterally walked out of the talks last night. There is no such thing as a free lunch or a money tree. If I stop paying my mortgage I loose my house. Can I turn to the IMF/EU for a free loan? Reality bites for Greece and socialism in general.

  • Korhomme

    “Wasn’t Greek the birthplace of Democracy.”

    Sort of. The Demos were the people; they didn’t have a vote. Only citizens could vote. Women didn’t have the vote. The voters were the 1% of their day.

  • james

    Rather chastening for the SF economic model.

  • notimetoshine

    The Greeks did borrow the money themselves you know. The Greek crisis was not a banking crisis in and of itself, a corrupt and inefficient economy and some dodgy massaging of the books to get into the EU are more to blame than anything else.

  • D99

    Yes Serg, if you can’t pay your mortgage, you may well loose your house. But if the bank wrecklessly lent you and millions of others the money to buy your house in the first place knowing full well that you could never afford to pay for it, should they be bailed out by tax payers across Europe?

    And yes, it seems that the Government of Greece and all other governments were asleep at the wheel when they allowed a deregulated finance system to spiral out of control.

    The negotiators for Greece could not recommend the deal on offer, but they were prepared to put it to their people by referendum. Seems less like ‘walking away’ and more like the democratic thing to do.

  • Gopher

    I’m still not sure Greece will leave the Euro. I have an odd feeling EU appointed commisioners will administer the budget maintaining Greece in the Eurozone until such times as a Greek government can show competence.

  • D99

    Hmm, are you saying that you borrowed the money that the British government secured from creditors to rack up the trillion pounds of debt they have. Maybe you want to accept responsibility for the Iraq war too? Or all the other idiotic things that the current and all past governments have done in your name?

    Yes the figures were massaged, but who exactly did the massaging? I believe Goldman Sachs may have had some minor involvement and certainly the German government were happy to benefit from the arrangement.

    If you lend money to someone you know can never pay it back and deny them the opportunity to create conditions under which they could ever pay it back, then you must share responsibility for the situation.

  • Sergiogiorgio

    Sorry D, I just don’t buy it.

    The Greek economy clearly cannot support its spending. Neither can it pay back the loans it undertook. Neither does it wish to meet the demands and the people holding its debt. Yet it wants those same people to lend it more. It’s simply throwing money down the drain. Its dressed up to be some complex financial arrangement – it’s simply not. Either piss or get off the pot.

  • Sergiogiorgio

    My last comment is under moderation D. In essence I borrow what I know I can pay back. I don’t blame the bank for being reckless. It’s called personal responsibility and it works the same for the individual as it does for a country.

  • Sergiogiorgio

    I have to agree with you James but SF and economic realities don’t really marry.

  • D99

    Administer what budget?

    Do you mean they’re going to have a coup and over throw the elected government of Greece and install technocrats?

    Maybe they’ll do that in the UK too if the referendum results in a vote to leave the European Union.

    But you’re right – it’s not over yet. The Euro Zone Leaders may yet compromise to keep Greece on board and save their Union.

  • Dan

    Maybe Chris Hazzard could explain that again for us all … For a laugh

  • D99

    I don’t understand the moderation bit Serg.

    But I still contend that the original lenders (I.e., the investment banks) share responsibility and should not seek to avoid the resulting liability of Greece not being able to pay, by off loading the debt on to tax payers from other countries.

    That’s what happened.

  • Gopher

    The only budget Greece have is what the EU give them. I dont think there will be now any money without EU oversight. That will be the compromise

    The chances of a coup and remaining in the EU are nil. I dont know what way the Greek referendum will go but withdrawl from the EU will probably see a mini break up of Greek provinces and Islands.

    Its not a matter of the EU compromising, Merkel, Hollande et al need something for their electorate. The compromise is the EU are baling the Greeks out. Thats the bit you and the Greeks dont get.

  • D99

    I agree with your point about the German and French electorate. If Greece gets a reasonable deal, then maybe others in Spain, Portgugal, Ireland, etc will want less austerity too. Which would be no bad thing and could promote growth.

    But if there is no compromise from the Euro Zone Leaders, I think Greece will default on their debt and be forced out of the monetary union fairly quickly and there will be no future bail outs to manage.

  • Sergiogiorgio

    I used a rude word D, hence the moderation.

    The lenders made the loan. The Greeks accepted the terms of the loan. The Greeks won’t meet said terms. It’s up to the lenders to determine is they adjust the terms. Period.

    A few other facts, I would contend –
    1. The Greek economy cannot support its spending commitments.
    2. It refuses to address those weaknesses in any meaningful manner.
    3. It seeks a loan extension to its already outstanding loan – loans upon loans.

    Would you fund it, from a personal, commercial perspective?

    Bottom line, the Greek economy is a disaster, it voted in a fairy tale political party. Do you feel the lenders have some sort of social requirement to fund these clowns? Cos I don’t. They need to get out of the Euro, as their economy cannot support its requirements.

  • Mister_Joe

    As Judge Judy would say, they ate the steak, no use saying afterwards that they didn’t like it. They still have to pay for it.

  • D99

    Sometimes rude words add colour to the conversation.

    In any case, Greece should never have been in, they will soon be out and no matter what austerity measures they introduce, they will never be able to pay off the debt. Everybody involved knows this.

    So the choice is to write off most of the debt or let them go. There’s definitely no point lending them more money to simply pay the interest on the debt they already have. This is effectively what the Euro Zone Leaders are proposing.

    So I agree with your points 1 and 3; but I would argue that burdened with their current debt, there are no meaningful ways for Greece to address their economic weaknesses. To suggest otherwise is absurd. It’s the BIG lie at the heart of the Euro Zone’s proposals. Cutting everything, hurts everyone; it reduces spending and tax take; it leads to economic stagnation; and it prevents growth.

    So, despite the inevitable and disastrous hardship that will result, I think that Greece will default before the end of the month.

  • mac tire

    “…dealing with crooks…”
    Syriza? The Greek people?

    Your constant negative blanket description of groups of people on here have become wearisome and should be clamped down upon. It never adds to the discussion and is lazy.

    If it’s not SF baa baas, your constant referral to only the workshy when discussing benefit cuts (as if the workshy are the only ones that need to be rooted out) and now another political party, or perhaps nation, are ‘crooks’.

    Boring, repetitive rubbish.

    Personally, I wish the Greek people well and hope a deal can be struck in which all sides can sign up to.

  • Zeno

    Funny the banks didn’t borrow what they could pay back. Play by their rules.

  • Gopher

    Nope, the present Greek government (elected) have put their nation in a position where a loss of soveriegnty is now inevitable. Greece is looking at break up without Euros. They blinked with the referendum and the EU are going to ram home the advantage. A bluff is always a fiasco when you lose. The referendum ploy shows you aint got a card left, they forced you to play and its the duece of clubs. The EU can set whatever terms its minded to now. God is on the side of the big battalions.

  • Gopher

    It looks like the first assertion of EU administration will take place today with the cutting or rationing of ECB emergency bank lending. The EU has just imposed capital controls and a bank holiday.

  • chrisjones2

    “To force Greece would be highly illogical, wreckless and idiotic. ”

    Then its a pity bthe Greek Government engineered this situation

  • chrisjones2

    The Greek line today is that all the other states are wrong. As there is no mechanism to leave the euro they have to stay in and as they re in ECB must bail them out in perpetuity as they owe it to the people of Greece

    That is so risible it defies basic analysis. This Government has brought this on themselves. It now up to them to cope as best they can and account to the Greek electorate

  • chrisjones2

    Did the lenders fake their annual; accounts to dupe the bank into lending them money?

    Did they allow rampant tax evasion and corruption?

    Did they award pensions to citizens from the age of 50???

  • D99

    Yes the Lenders did help Greece to fake their accounts – they used Goldman Sachs who performed so brilliantly during the US financial crisis – and were happy to ignore the fact that Greece was not ready to join the Euro club.

    Yes, to rampant corruption from the lenders too – have you not been watching the countless banking scandals over the past few years – PPI mis-selling, rigging the LIBOR rate and money laundering to name but a few?

    And Yes, UK and many other EU countries turn a blind eye to tax evasion and fail to collect billions of pounds every year.

    No to the pension question: they raised retirement age to 66 or is it 67 in the UK and some other countries – not a great idea when there’s millions of young people trying to find work. But it’s nonsense to suggest that most Greek people can take their pension at 50. Maybe you’ve been reading the Daily Mail again Chris? Only UK and European bankers and politicians get to retire at 50 and walk away with a generous pension – usually just after they’ve been caught hood winking the public in some way.

  • GEF

    Looks like the Russian Navy has already dropped their anchors in Cyprus.

  • Further Update The latest from Greece [28 June]

    It’s official, capital controls are being imposed in Greece, as the financial crisis takes an even more alarming turn tonight.

    Speaking on live TV, Alexis Tsipras is saying that the Greek central bank has been forced to recommend a bank holiday and the introduction of capital controls.

    He blames the ECB, and other institutions, for trying to obstruct the democratic referendum he has called for next Sunday. This is a “insult” that shames European democracy, he says.

    Tsipras also appeals for calm, and he insists that bank deposits are secure.

    Of course they are…

    A BBC report adds

    Earlier, the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks.

    Greece is due to make a €1.6bn (£1.1bn) payment to the International Monetary Fund (IMF) on Tuesday – the same day that its current bailout expires.

    Without new emergency funds, Greece risks defaulting and moving closer to a possible exit from the Eurozone.

    Greeks have been queuing to withdraw money from cash machines over the weekend.

  • Old Mortality

    Please explain how the private banks caused the crisis which is generally accepted to be the consequence of chronic public sector deficits. Should they have avoided lending to the Greek government? In that case, the crisis would have been apparent much sooner.

  • Old Mortality

    I meant d99, of course.

  • Gopher

    Banks might be shut unil the referendum (and beyond depending on vote) this includes cash machines so if your in Greece on holiday you better hope you have cash or a credit card.

  • Sergiogiorgio

    Tsipras should tone down the rhetoric. His bankrupt country cannot service their loans. No point playing the big histrionics that the ECB are trying to insult democracy. It just plays into the hands of the majority that want to see Greece out of the Euro.

  • Sergiogiorgio


  • D99

    If you mean did the right of centre governments in Greece spend more than they could afford to pay back, both before and after the 2008 World Financial crisis, the answer is yes. But, as in most other European countries, ordinary people did not exactly reap the rewards of this excess. And having to bail out too big to fail private investment banks didn’t help either.

    Yes, definitely they should have avoided recklessly lending to a country that could not afford to pay the loans back. Or, given that they were prepared to ‘gamble’ on Greece, they should have accepted the resulting losses involved in their bad bet and not forced their political cronies to transfer the liabilities to the taxpayers of Europe yet again. As usual, they privatised their profits in the good times and socialised their losses when things turned bad.

    Irresponsible borrowers can’t exist without irresponsible lenders. And, when you add ineffective regulators and corrupt politicians and to the mix …

  • james

    And indeed if a majority really do want Greece out, and it’s democracy you’re after……

  • james

    Homegrown democracy elected the government that screwed them over in the first place.

  • mickfealty

    In the prisoner’s dilemma we assume that both players are on an equal footing. In this ‘game’, the power is unequally distributed. The EU has spent most of the time since the first bailout trying to stablise the wider system so that it can withstand a #Grexit.

    When you consider Greece hit this crisis with a 100% debt to GDP ratio, trying to fix it now might rightly be considered madness, but as Richard Corbett points out ( the picture is much wider than what many opinion formers right now might want to consider:

    “Over the first decade of this century, unit labour costs rose by over 30% in Greece (compared to 5% in Germany). For public employees, this was even more striking: up 117%! It is not surprising that, as a result, prices in Greece rose by 30% above the eurozone median — a massive divergence of competitiveness.”

    The fit between the Eurozone economy and Greece’s may just be too wide to practically bridge. There is plenty of blame to go round on this. Not only the important question of how on earth they were let in in the first place, but also the crap (read, non existent) fiscal governance structure for the Euro itself.

  • Mister_Joe

    A guy called Don Pittis, whoever he is when not selling Fuller brushes, thinks that it is worth the pain to keep Greece within the Eurozone. A guy called Joe Harron, whoever he is, disagrees. Is either of them right or is either of them wrong? You pays your money and you takes your choice. Most people are fed up and just want it to be over. Greece wants it to go on forever so that they never have to pay for the steak. They need to wise up – either pay their debts or suffer. Their choice, but please let it be over.

  • Mister_Joe

    You can always eat crow. I think it will be a popular food for Greek politicians soon.

  • Kevin Breslin

    The optimum strategy for Syriza to leave the Eurozone is actually quite simple and straightforward – to willingly demand to leave the Eurozone rather than try to change it from within. Everything else is a mixed message rather than a bluff.

    Greek government has two objective choices within the Eurozone, Make efforts to Stay in or Make efforts to Leave, and two sub-choices on leaving “choose to leave” or be forced to leave.

    Syriza can blame the ECB, the IMF or whoever for any fallout of that decision. I think people won’t care about the “blame game” when facing either an Argentinean like debt disaster of a default or the continuation of the crisis of the status quo, the end of austerity has to deal with international markets rather than just European ones, the “responsibility game” is needed.

    He has Golden Dawn with one “narrative” on the one side and all the more pro-European rivals on the other side of his government coalition elsewhere. He’ll either be critised, or the opposition will choose their fights carefully on this. Of course given Golden Dawn are demagogues who don’t have any power, much like pre-Stormont DUP and UKIP, they will pick a fight with anything and fight their own shadows, if they have to.

    Whatever he does someone is going to blame his government instead of Europe, so since he can’t control the will of the public, why not stand by its own convictions and be damned for what it is?

    The referendum on the bailout conditions would certainly give the Greeks an ownership of the debt crisis, and I back the decision fully.

    Someone within Greece is going to have to take responsibility for getting Greece out of the debt crisis, and a Grexit won’t end the debt, anymore than the Weimar Germans devaluing their own currency did very little to end its debts.

  • Kevin Breslin

    I think D99 was probablily best to explaining game theory, what a Nash Equillibrium is, and why it is particularly relevant in this case.

    But Mick’s description of the prisoner’s dilemma leaves one major issue here, who’s the judge here? who’s the adjudicator? Financial Markets, God, The Illuminatii, Breton-Woods Formula, cabals of rich bondholders and golden circle holders clinging to intangible financial derivatives?

    The Prisioner’s Dilemma is a bad analogy, because there really isn’t a payoff that favors one side or the other, and there isn’t a fixed sentence deal that both sides have been offered.

    Also we’ve already seen Syriza demand German war reparations, and Merkel’s government saying each euro zone country was on its own when it came to bailing out its banks. That’s a double defection, which is the worst deal in the Prisoner Dilemma game. There wasn’t any belief, that lenders would assume total responsibility for leniency or borrowing Greeks would assume total responsibility on either party leniency, so the probabilities of defect-cooperate scenarios were zero.

    When both sides have defected from one another, both sides had limited co-operation and both not out of the crisis. They are both tied to the Eurozone and neither the Greeks nor the Germans want to leave it, when either could make the case.

    We are talking the equivalent of Northern Ireland choosing to leave the UK, the pound and default on all its debts in doing so, the shock that would have on the UK, the pound and the British economy would not be as big as that on Northern Ireland.

    Only if Scotland is driven to leave by it is it a threat, likewise anyone in the EU following Greece, like say Spain.

    The question of a Grexit is not the economic fallout, that does depend on who’s accountable, even if the ECB is responsible for a large chunk of the Greek debt, it would consolidate where Greece may not.

    I even as an Irish nationalist, don’t believe that Northern Ireland would be let off debt free simply by leaving the Union and the Sterling Zone and making a default on its debts before possibly joining a United Ireland, and the Eurosceptic often British nationalist unionists who are this forum don’t believe this would be the case.

    Northern Ireland’s defaulted on British debt by leaving the UK, it would have 34 billion British pounds (it’s forgiven share of the deficit, as the UK would forgive ) to subsidize itself apparently, no more deficit, and the freedom to use its money its own way.

    Like Greece it’s the poorer party in a currency union.
    Like Greece it’s a heavy borrower, a net importer and heavily subsidized by the Union.
    Like Greece it faces harsh austerity that undermines its potential to grow.
    Like Greece it wants greater social protections than the main provider wants to provide for them.

    If a Grexit is a good idea, a NIexit must be also by that logic.

    NIexit isn’t happening because there’s a unionist majority, Grexit isn’t happening because the Syriza government want to stay in.

  • Kevin Breslin

    To be fair, with regards to the Private Investors would the Greek people rather that be the Eurozone’s problem or their own?

  • D99

    In the real world, the two sides are rarely equal in terms of power. But Greece clearly still has some moves to make or cards to play. And the ‘best’ outcome is still the one that is least damaging to both ‘players’.

    I can’t disagree with any of the other points you make. It’s the deception at the heart of the Euro Zone Group’s position that I hate – the pretence that by implementing more austerity, Greece will be able to turn things around in their economy and pay back the debts. This is just absurd.

  • D99

    To be accurate Serg, the lenders in the Euro Zone want to lend more to keep Greece in the Euro; Syriza actually want debt restructuring, i.e., payment of their debt extended over a longer time frame. Please don’t be fooled by the way the media frames this.

    But, as you say, it’s time for Greece and the Euro Group to ‘either piss or get off the pot’. I think Syriza, or rather the people of Greece, are about to do just that. Next Sunday in their referendum they will either give in once more to financial blackmail and continue with externally imposed austerity, or they will reject the Troika proposals and be forced out of the Euro and toward maybe an even more disastrous future.

    Not much a choice, but a choice nonetheless. A kind of ‘democracy’.

  • Kev Hughes


    Seeing as without external debt payments (in the event of a default of course) and if it could create some kind of peg to the Euro (pretty tough to do) it could possibly bounce back quicker than expected, however, let’s see what happens. Juncker was a scream today, all sweaty palms and worrying about his legacy, the guy positively freaked out this morning, great TV…

  • D99

    Yes Kev, Juncker & Co are worried about this being the beginning of the end of the Euro Project. They don’t want Greece to leave. But they don’t want to be seen to ease up on austerity, as people in other countries like Spain, Portugal, Italy, France and even the UK would then want less austerity too.

    Greece don’t want to leave the Euro either. But the austerity proposed by the Euro Zone is humiliating, crippling their economy and endless. EVERYBODY knows it won’t facilitate growth in Greece or enable them to repay their debt.

    But if (probably when) Greece defaults and/or if the people of Greece vote on Sunday to reject the Euro Group proposals, they will, after some time, be forced to leave the Euro. This will dangerous and potentially disasterous for Greece. Not so much because they couldn’t bounce back when not burdened by massive debt – this is possible. But because the Euro Group couldn’t possibly let a Greece outside the Euro succeed. They would do everything they could to ensure Greece failed. Because if Greece were more successful outside the Euro, others would get ideas and would want to leave too.

    That said, maybe it’s better for Greece to put up a fight rather than die on their knees. If people in Spain, France, Italy and elsewhere follow their example, then maybe they have a chance.

  • D99
  • Kevin Breslin

    They CAN’T be forced out of the Euro if they reject the Troika proposals. The Greek government have said they will sue if they are forced to leave the Euro.

    They can negotiate to leave if that’s their will … which is democratic.

  • Kevin Breslin

    If Private Banks aren’t culpable for many of the problems that have caused the crisis, then really they aren’t culpable for anything.

  • D99

    I hope you’re right on this one Kevin.

    However, it’s becoming clear that Euro Group will only settle for total capitulation from Syriza. Tsipras can’t be seen to have won any sort of austerity reduction or loan restructuring for Greece.

    Merkle & Co are gambling on a yes vote from the Greek people which will weaken Syriza’s hand; and they are ‘banking’ on the right wing media creating fear among the voters – suggesting that consequences of a No vote would lead (sooner or later) to Grexit and all that involves.

    As for democracy – that’s a minor inconvenience, that they can spin their way around, or just ignore when it suits them.

  • Kevin Breslin

    I disagree that loan restructuring is off the table, because that has been put on the table by both sides, and some degree of austerity and reform has been put on the table by Greece.

    I also disagree that right wing Merkel who is in a government with a left wing junior coalition and left wing Tsipras who is in a government coalition with a right wing junior coalition party can’t read off the one page. The left-right divide is the straw-man narrative played by both left and right wing medias to draw up partisan support when this is righty-lefty vs. lefty-righty which is simply getting nationalist and there’s a broad spectrum of opinions within both nations.

    They are stuck in a co-operative game while both their countries are in the Eurozone, and ultimately the fate of the Euro does give both a common ground.

    If the UK and Ireland were to import Greek debt effectively through a default we’d get moaners and complainers left, right and center, similarly if we were to be forced like Greece to cut the army, raise taxes and privatize national infrastructure due to the credit expansion.

    Capitulations don’t really deal coherently with the allocation of fault. I’m sure no country wants to repeat the cultures that have caused situations like this to happen.

  • D99

    No, it’s definitely left V right.

    And total capitulation is the aim.

    Will fear or dignity win on Sunday?

  • Kevin Breslin

    Indignity and fear has won already regardless of the result of the referendum. The Eurogroup could simply allow Greece to default, cut its losses, cancel the debt and leave Greece to raise from the only country it could raise money from Greece. Of course Romania who do pay off debts and loans to the trioka probably think Greece is being right wing.

  • Kevin Breslin

    The UK right are happy the Greeks have voted No/Xoi must have a lot of solidarity with the Greek worker then I guess D99? Didn’t know Farage was so left-wing in your book.

    This is not left wing vs. right wing, this is nationalism vs. internationalism and always has been.

  • D99

    We may have to agree to differ on this one Kevin.

    However, I must point out that Farage’s is a right wing politician with a relatively small mandate. He is extremely anti-EU and will gladly point to anything that indicates that it might be failing. He wants the UK out of the EU at any cost.

    Syriza, on the other hand are a radical left political party with a huge mandate from the Greek people. And like the vast majority of the people of Greece, they want to remain in the EU and in the Euro. They reject the need for endless austerity.

    To be clear, my view is that the ‘disagreement’ between Syriza and the Euro Group is about Anti-austerity V Austerity; it’s about Left V Right. Or if you prefer, it’s a class war.

    The following extract from a recent Chomsky interview captures my view on this:

    “What’s going on with the austerity is really class war. As an economic program, austerity, under recession, makes no sense. It just makes the situation worse. So the Greek debt, relative to GDP, has actually gone up during the period of—which is—well, the policies that are supposed to overcome the debt. In the case of Spain, the debt was not a public debt, it was private debt. It was the actions of the banks. And that means also the German banks. Remember, when a bank makes a dangerous, a risky borrowing, somebody is making a risky lending. And the policies that are designed by the troika, you know, are basically paying off the banks, the perpetrators, much like here. The population is suffering. But one of the things that’s happening is that the—you know, the social democratic policies, so-called welfare state, is being eroded. That’s class war. It’s not an economic policy that makes any sense as to end a serious recession. And there is a reaction to it—Greece, Spain and some in Ireland, growing elsewhere, France. But it’s a very dangerous situation, could lead to a right-wing response, very right-wing. The alternative to Syriza might be Golden Dawn, neo-Nazi party.”

  • Kevin Breslin

    The original Nazis were the ones who didn’t believe they owed Europe anything and they would take what they wanted from Europe. Simply put it’s easy to argue that the Nazis wanted to end austerity and the evil Capitalist West were just too happy to impose it.

    The private debt thing is a left wing myth, the creditors Greece has to pay are national governments who are lending out of the finances that pay their public services. Choamsky can say what he likes about the banks he was happily cheerleading reckless lending before the Great Recession, it doesn’t surprise we he wants 27 countries or more to recklessly lend to Greece now with no fear of the consequences

  • D99

    Chomsky was never a cheerleader for reckless lending or a fan of the banks that caused the Financial Crisis. His point is that in desperate times, people can turn to the right as well as to the left. As in Nazi Germany after WW1, this can be very violent and very dangerous. Watch out for the rise of extreme right wing parties across Europe – in France, Italy and once again, even in Germany.

    What do you think would happen here if the UK government decided to end the £12 billion per year block grant tomorrow? Would not this place start to quickly find itself in a Greek like situation? Watch out for the outcry here on Wednesday when George Osborne ramps up his own version of austerity in a relatively minor way, compared to what’s happening with Greece.

    In any case, it looks like you may get your wish – the Euro Group now intend to make an example of Greece and squeeze them until they break. Greece and democracy can’t be seen to win any significant compromise, as this would give the people of Spain, Portugal, Italy, etc. the idea that their votes or actions matter in the face of corporate totalitarianism.

    Looks like it will be a slow death for Greece, or a very painful Grexit.

  • Kevin Breslin

    Firstly you agree that this is not something that easily reduces to a simple left vs. right issue, you’d have complete realignment of positions based on the experience.

    Secondly it is my opinion Chomsky is effectively a libertarian in socialist clothing rather than a puritan socialist, every excuse he makes about the vices of government, and the very things financial institutions use to argue that they should not be regulated by government. Most democratic socialists would argue for state based control of the financial institutions, he would not because he effectively argues that the government can be just as corrupt as the banking administrators anyway. (All true of course.)

    I have no wish to see Greece squeezed until it breaks, but undermining and attacking the Eurogroup is phyrric and counterproductive. When confidence in the Euro falls so does the exchanable value of the few Euros the Greeks can take out of ATMs.