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IMF discusses when to crash Greece

by fjallstrom Sat Apr 2nd, 2016 at 07:54:24 PM EST

Wikileaks has released transcripts of an IMF discussion of how to get Germany to accept IMFs proposal for austerity and debt relief for Greece. The method seems to be to create a crisis in April by threatening to pull out.

WikiLeaks - IMF Internal Meeting Predicts Greek 'Disaster', Threatens to Leave Troika

Thomsen said internally that the threat of an imminent financial catstrophe is needed to force the other players into a "decision point". For Germany, on debt relief, and In the case of Greece, to accept the IMF's austerity "measures," -- including raising taxes and cutting Greek pensions and working conditions. However the UK "Brexit" referendum in late June will paralyse European decision making at the critical moment.

Wikileak has the transcripts as PDF or HTML Greece government is not amused according to Greece demands IMF explanation over leaked debt transcript | Reuters

Greece demanded an explanation from the International Monetary Fund on Saturday after an apparent leaked transcript suggested the IMF may threaten to pull out of the country's bailout as a tactic to force European lenders to more offer debt relief.

EU/IMF lenders will resume talks in Athens on Greece's fiscal and reform progress next week aiming to conclude a bailout review that will unlock further loans and pave the way for negotiations on long-desired debt restructuring.

The review has been adjourned twice since January due to a rift among the lenders over the estimated size of Greece's fiscal gap by 2018, as well as disagreements with Athens on pension reforms and the management of bad loans.

frontpaged - Bjinse


IMF plots new “credit event” for Greece — Paul Mason — Medium

So let me decode. An “event” is a financial crisis bringing Greece close to default. Just like last year, when the banks closed, millions of people faced economic and psychological catastrophe.

Only this time, the IMF wants to inflict that catastrophe on a nation holding tens of thousands of refugees and tasked with one of the most complex and legally dubious international border policing missions in modern history.

The Greek government is furious: “we are not going to let the IMF play with fire,” a source told me.

But the issue is out of Greek hands. In the end, as Thomsen hints in the transcript, only the European Commission and above all the German government can decide to honour the terms of the deal it did to bail Greece out last July.

So, does it mean what it appears to mean? Will it matter in setting new austerity targets for Greece? And will Portugal's new anti-austerity government change anything in the discussions or is it as it appears strictly a matter between Germany, Greece, IMF with the Commission playing some role on the side?

Display:
Sorry about the lazy links, I wrote it on my tablet.
by fjallstrom on Sat Apr 2nd, 2016 at 07:55:43 PM EST
(I killed my diary when I spotted this) prior one!)

Surely something must be done about Wikileaks.

Probably someone inside the IMF has, like so many of us, had far more than enough of the ongoing spectacle of the 'Greek debt crisis'. Similarly for the 'leak' of the Tsipras letter. Perhaps bringing the hypocrisy and machinations to light will assist in a more reasonable solution - or not. But this beats the usual Friday afternoon press dump as it puts the news beyond the deadlines for most Sunday editions, and I have to wonder how many publications have 'exclusives' on this story. Not the Guardian as I post this diary.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Apr 3rd, 2016 at 12:48:59 AM EST
Yeah, this must be insiders leaking. The Greek letter was probably CC:d to HuffPo or something, while in the IMF case it is less stratetic so an oppositional insider would fit the bill.
by fjallstrom on Sun Apr 3rd, 2016 at 05:42:36 AM EST
[ Parent ]
Greece Demands IMF Explain `Disaster'Remarks In Explosive Leak    HuPo

A letter from Greek prime minister Alexis Tsipras questions whether the country "can trust" the lender.

The leaked remarks of International Monetary Fund officials suggesting the lender may threaten to pull out of Greece's bailout are eliciting anger in Athens and could jeopardize debt negotiations. The Huffington Post exclusively obtained a private letter on Saturday from Greek prime minister Alexis Tsipras to IMF managing director Christine Lagarde, demanding answers for some of the controversial comments in a March 19 teleconference between Poul Thomsen, IMF European director, Delia Velculescu, IMF chief of mission in Greece and IMF official Iva Petrova.

Wikileaks released a transcript of the phone conversation earlier on Saturday in which Thomsen and Velculescu indicate that only a new crisis would prompt both Greece and Germany to fulfill their obligations under the bailout agreement. Velculescu raises concerns that while more time may be needed to push the parties toward an agreement, postponing a meeting could be a "disaster."

Tsipras wants to know whether Thomsen and Velculescu's apparent belief that the IMF must rely on another crisis-inducing "credit event" to force Greece's hand "reflects the official IMF view." If so, Tsipras challenges the IMF to defend the policy, given accepted norms of negotiation.



As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Apr 3rd, 2016 at 12:59:48 AM EST
Press Release: IMF Managing Director Christine Lagarde Letter to Greece Prime Minister Alexis Tsipras
Of course, any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense.
by Katrin on Sun Apr 3rd, 2016 at 04:57:41 PM EST
[ Parent ]
Sounds like my children re where have all the cookies gone.
by Katrin on Sun Apr 3rd, 2016 at 05:09:28 PM EST
[ Parent ]
I am sure that your children operate on a far higher level of moral development than does the IMF, the ECB or the European Council - especially the Council.


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Apr 3rd, 2016 at 10:55:07 PM EST
[ Parent ]
She does not even try to make it sound credible. What do you mean,  cookies?  The hamster must have left its cage, opened the cookie tin, and then it ate all the cookies, and now let's talk about something more important than cookies. It is normal for children to take more than their fair share of the cookies, children and parents know that. No occasion to think about morality, it's just how families' cookie distribution works.

Lagarde uses the same tone.

by Katrin on Mon Apr 4th, 2016 at 02:59:40 AM EST
[ Parent ]
Almost certainly she soon will internalize a more consistent code of self conduct. I am sure Legarde did also, many years ago, but it no longer applies too strictly in 'the real world'. The 'logic' you cite is not too distant from what we hear from too many 'leaders' on the subject of Greece or ECB policy.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Apr 4th, 2016 at 09:55:13 AM EST
[ Parent ]
At four, the hamster seems like a credible scapegoat.  By 14, you're supposed to know better.  I think Lagarde & Co. are regressing en masse.
by rifek on Tue Apr 5th, 2016 at 01:19:58 PM EST
[ Parent ]
Our investing clients like your islands and antique spots. They are ready to clean up.
by das monde on Sun Apr 3rd, 2016 at 05:10:57 AM EST
by das monde on Sun Apr 3rd, 2016 at 05:38:59 AM EST
Having slept on it, I think the positions are as follows:

IMF: Austerity and debt relief
Germany: Austerity
Greece: Debt relief

There are a lot of percentages discussed in the leaked discussion. My impression is that they are discussing targets for Greece to reach to gain debt relief, where IMF wants those targets low enough for Greece to get debt relief, but don't wnat to go low to quick because they need Greece to first accept another round of austerity.

The Commission appears to be mediating or something, and everyone else is irrelevant.

by fjallstrom on Sun Apr 3rd, 2016 at 05:40:27 AM EST
Greece challenges IMF over 'debt transcript leak' - BBC News

The IMF would not comment on the purported leaks but said its public position on the matter was clear.

Former Greek finance minister Yanis Varoufakis said: "As WikiLeaks revealed today, the IMF is planning to stall until July to bring Greece to its knees [again!] in order to force Angela Merkel's hand.

"It's time to stop Greece's fiscal waterboarding by an incompetent, misanthropic troika."

by Bernard on Sun Apr 3rd, 2016 at 05:49:38 AM EST
[ Parent ]
Greece And The IMF: That Wikileaks Release Is Pretty Much What We All Knew Anyway - Forbes
Or rather, the supposedly shocking release by Wikileaks of an IMF conversation about Greece and the debt crisis is pretty much what we all should have known all along. Because it's really just a restatement of the basic set up of the Troika in the first place. The IMF is there to reassure the more nervous members of the Eurozone that the EU itself, or the Commission, won't be able to just cave in in order to smooth over any idea of a crisis about the debt or the euro. That's why those more nervous members insisted that the IMF must be involved. The IMF is insistent that any long term solution to the Greek problem itself must involve debt relief: and not just extension of terms but a cut in the headline debt. That's the bit that the EU and the Commission cannot stomach.
by Bernard on Sun Apr 3rd, 2016 at 05:50:38 AM EST
Leaked Memo Reveals IMF (Still) Wants Out of Greece Bailout and Plots to Pressure Germany to Act | naked capitalism
It is almost certain that this leak was sanctions, with the intent of putting pressure on the principals, and was done via Wikileaks to create a fig leaf of plausible deniability. This isn't the first time in the Greek negotiations that there has been a leak from the IMF that appeared almost certain to have been authorized by the senior levels of the European team (Poul Thomsen is seen not just as powerful in the IMF but indispensable; he's their best kneecap breaker). The first about Thomsen telling the Eurogroup* in April 2015 that Greece needed debt relief. The leak took place an unheard-of two weeks after the event, strongly suggesting it came out of the IMF because it had become clear their message was ignored. The second was the one we mentioned earlier, the disclosure of a debt sustainability analysis (which has serious weight for the IMF procedurally) that showed that Greece needed debt reduction. The report said as clearly as you can in IMF-speak that its loans were not likely to be money good even in the event of very aggressive maturity extensions and interest rate reductions. Translation: if you don't make haircuts, you'll get a default down the road. That looked to be a staff rebelllion (again, likely at the European team level, which by all accounts had had it in dealing with Greece, plus by the IMF breaking its "no more Argentinas" rule of making loans that could not be repaid). As we discussed long form last year, Lagarde tamped down the media firestorm and kept the IMF in the deal.


Nur der Euro bleibt stehen - von Berlin bis Athen - Georg Kreisler
by generic on Sun Apr 3rd, 2016 at 07:29:51 AM EST
Leak "authorized by the senior levels of the European team"? And "via Wikileaks to create a fig leaf of plausible deniability"?

With all due respect to Yves Smith, aren't we bordering tinfoil hat territory here?
Granted, this leak ""is pretty much what we all knew anyway", but one has to ask what the IMF "senior levels" would gain by leaking such transcripts? Forcing a reaction from the Syriza government? Putting pressure on the German government (W.Schäuble)? All of the above?

by Bernard on Sun Apr 3rd, 2016 at 08:14:05 AM EST
[ Parent ]
Can't say that I have really thought this through. However I think we can agree that, when dealing with the European institutions and governments, going through the channels does exactly nothing. And if the Europeans have enough weight to prevent the IMF from just throwing up their hands and leaving then passive aggressive leaks might be all they really can do.

Nur der Euro bleibt stehen - von Berlin bis Athen - Georg Kreisler
by generic on Sun Apr 3rd, 2016 at 05:48:33 PM EST
[ Parent ]
But isn't being a confidential source to a serious business journalist more fitting then leaking such a long conversation to Wikileaks? And also much more controlled?
by fjallstrom on Sun Apr 3rd, 2016 at 06:08:06 PM EST
[ Parent ]
Sure. But would anyone even care? This at least got some traction.
Not that that proves anything but the theory doesn't seem so ridiculous to me.
Of course, as always everyone will blame the Greeks.

Nur der Euro bleibt stehen - von Berlin bis Athen - Georg Kreisler
by generic on Sun Apr 3rd, 2016 at 08:24:10 PM EST
[ Parent ]
Maybe IMF wants to influence those German and Eurozone voters who don't follow serious business journalism.

A leak in the Wikileaks is more likely to reach people who are not too established to vote AfD because they don't like Greek debt relief than a business journal scoop.

by Jute on Mon Apr 4th, 2016 at 12:13:52 PM EST
[ Parent ]
Endgame for the IMF-EU Feud over Greece's Debt - Yanis Varoufakis - Spiegel Online (yes really!)
... we are approaching something of a hazardous endgame.

Ever since the first Greek 'bailout' program was signed, in May 2010, the IMF has been violating its own "primary directive": the obligation not to fund insolvent governments. As a result, the IMF's leadership has been facing a revolt from its staff members who demand an exit strategy arguing that, if the EU continues to obstruct the debt relief necessary to restore the solvency of the Greek government, the IMF should leave the Greek program.

Five years on, this IMF-EU impasse continues, causing a one-third collapse of Greek GDP and fuelling hopelessness to a degree that has made real reform harder than ever.

...To recap, the Wikileaks revelations unveil an attrition war between a reasonably numerate villain (the IMF) and a chronic procrastinator (Berlin). We also know that the IMF is seriously considering bringing things to a head next July by dangling Greece once more over the abyss, exactly as in July 2015. Except that this time the purpose is to force the hand not of Alexis Tsipras, whose fresh acquiescence the IMF considers in the bag, but of the German Chancellor.



Schengen is toast!
by epochepoque on Sun Apr 3rd, 2016 at 01:47:33 PM EST
Creditors, both public and private, stopped dealing in good faith with debtors long ago.  Any country that believes the IMF is any different has passed through the Looking Glass.  The country will cut its own throat on the IMF's demand and learn after it has bled out that all its blood was never going to be enough.  Better to tell the IMF to pound sand up front while there is some piece of your country left.
by rifek on Sun Apr 3rd, 2016 at 08:50:26 PM EST
Tsipras should, without fanfare, appoint Varoufakis as a Minister without Portfolio and instruct him to continue working towards an emergency plan to exit the Euro if need be. But I don't know if this is feasible with the current Minister of Finance and it would have to be a very stealthy program.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Apr 4th, 2016 at 08:16:57 PM EST
[ Parent ]
Frankly I don't see how Tsipras can do anything anymore. Who would trust him after capitulating without firing a shot the last time?
And we shouldn't completely exonerate Varoufakis for his part in the fiasco. The plan B came months too late and never went beyond being a plan to have a plan, not only because the Syrizia leadership wouldn't commit but also because he was emotionally too committed to the EU to risk blowing it up.

Finally China still has no reason at all to help. There's already no part of Greece's infrastructure they don't get to run if they have a mind to.

Nur der Euro bleibt stehen - von Berlin bis Athen - Georg Kreisler

by generic on Tue Apr 5th, 2016 at 04:04:00 AM EST
[ Parent ]
I'm sympathetic to Varoufakis, but he was too wedded to the idea of the EU as he'd like it to be rather than as it was.

Not entirely his fault, of course, as it's Tsipras's government, and nobody should trust Tsipras as far as they can throw him.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Apr 5th, 2016 at 03:26:21 PM EST
[ Parent ]
If you want to know why Varoufakis was wedded to the idea of the EU, read his latest: Yanis Varoufakis: Why we must save the EU (The Guardian, 5 April 2016).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Apr 6th, 2016 at 07:54:59 AM EST
[ Parent ]
I should probably clarify:  When I say he's wedded to the idea of the EU, I really mean the eurozone.  Varoufakis seems to think they should have both.  In theory I might agree with that under the right circumstances.  In practice I think it's clearly unworkable.

I think Greece's insistence on remaining in the common currency is, far and away, the most likely avenue to unleashing a fascist regime in the future, and that Yanis should've set about immediately to convincing Tsipras to allow him to put a plan for exit from the euro in place ASAP.

I'm entirely with him on opposition to Brexit.  I still don't understand what the hell the Brits are on about.  "It makes it easier for you guys to hop on a plane and go get wine-drunk and annoy Spaniards.  What's the problem?"

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Apr 6th, 2016 at 11:15:03 AM EST
[ Parent ]
Drew J Jones:
I still don't understand what the hell the Brits are on about.

The privileged elite (at least, part of it) firmly believes they'll get a free-trade deal à la Switzerland or Norway that will allow them to enjoy all the benefits of EU access without the encumbrances: Britain demands. The EU will comply.

Dr Wolfgang (and others) might disagree.

by Bernard on Wed Apr 6th, 2016 at 03:31:51 PM EST
[ Parent ]
Switzerland? All the benefits of EU access? Really?
Switzerland is no longer part of the "Champions League" of European research. Scientists tell swissinfo.ch their future is uncertain following the European Union's decision to exclude Swiss institutes from funding within its flagship research programme.

[...]

But all this was thrown into turmoil when as a consequence of an anti-immigration initiative - approved by voters in February - the European Council excluded Switzerland as an associate member, suspending cooperation between researchers from Swiss institutions and their European partners and putting a hold on funding within Europe's Horizon 2020 research programme.

by gk (gk (gk quattro due due sette @gmail.com)) on Wed Apr 6th, 2016 at 03:39:30 PM EST
[ Parent ]
Right, but what are the encumbrances?  That's what I don't really get.  What is it they're so pissed about all the time, beyond some sort of vague bit about "unelected bureaucrats telling us what to do" stuff?

I know they're more entangled with the EU than the Swiss, but how much of a burden can that possibly be to warrant all the outrage?

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Apr 6th, 2016 at 05:23:45 PM EST
[ Parent ]
Once the "unelected bureaucrats telling us what to do" bogeyman can no longer be used, how are they going to keep the Scum and Fail readers angry?
(Gee, we hadn't thought of that...)

I'm not too worried: I'm sure they'll find a way to blame Johnny Foreigner nonetheless.

There's also the EU budget, of which the UK is a net contributor, despite Maggie "I want my money back", that benefits poorer EU countries: Ireland, Portugal & Greece in the 80s, Eastern countries now.

by Bernard on Thu Apr 7th, 2016 at 03:03:57 AM EST
[ Parent ]
After the Greek debacle and the refugee treatment it's increasingly hard to fathom what the EU is for, let alone what holds it together, or why anyone except the Eastern Europeans would have any faith -or want to stay- in it.
If they hadn't made it so difficult to leave probably several nations would have bailed by now, especially if referendums were held.

The troika has made few friends, indeed it has not even seen the sense in trying to. Their job needs no marketing, they're the cleanup crew who leave the place worse than they found it.

I kinda hope the UK does leave, it might induce some self-critical reflection in Brussels. Anything but this entropic crumbling amid political inertia. About the only semi-credible ideational alternative is Varoufakis, and he's got quite the job ahead of him convincing a largely ignorant, linguistically challenged populus of 500 million souls to reverse neoliberalism and its attendant brain rot.
 .

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Apr 7th, 2016 at 05:53:38 PM EST
[ Parent ]
Yeah, check it out, the Tories are screaming "No taxation without representation."
by rifek on Thu Apr 7th, 2016 at 08:55:05 PM EST
[ Parent ]
Well, they mostly are screaming "no taxation".

Any addition is purely decorative.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Fri Apr 8th, 2016 at 02:23:44 AM EST
[ Parent ]
This belief in their inherently strong bargaining position for keeping all the advantages of EU membership is pretty mystifying.

It seems logical to me that, when finance sector operators think about relocating from the City, France and Germany will be falling over themselves (and stabbing each other in the back) to accomodate them.

What am I missing? What are the downsides for the EU in giving short shrift to the UK's attempts at keeping its EU advantages? Will the 25 cave, and give the UK most-favoured nation status?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Fri Apr 8th, 2016 at 01:03:34 PM EST
[ Parent ]
I had a vision earlier of an England, rejected by the EU in referendums - including Ireland - with an ongoing battle about Scottish independence or a unilaterally independent Scotland, an active Welsh independence movement, reactivated troubles in Northern Ireland, an isolationist US and bits of the City falling off.

The rest of us might be very glad they have no steel manufacturing capability left ...

by Colman (colman at eurotrib.com) on Fri Apr 8th, 2016 at 01:22:37 PM EST
[ Parent ]
The rest of us might be very glad they have no steel manufacturing capability left ...

You mean the Yanks won't save them?
 

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Apr 9th, 2016 at 11:20:11 AM EST
[ Parent ]
The Indians won't save them, you mean.
by Bernard on Sat Apr 9th, 2016 at 02:12:24 PM EST
[ Parent ]
Take a look at our "salvation" record (Central America, Philippines, Indochina, Iran, Iraq, Syria, Chile, etc., etc., etc.), and you would conclude that having us come to the rescue is a country's worst nightmare.
by rifek on Tue Apr 12th, 2016 at 11:19:26 AM EST
[ Parent ]
Hence Drew's sig line...
by Bernard on Tue Apr 12th, 2016 at 02:53:39 PM EST
[ Parent ]
A lot of it is the continuation of the right wing divide and conquer policy. In the US the xenophobia is targeted at minority groups. In the UK, it's targeted in all sorts of ways, and filthy Europeans are a natural part of that. And the tabloid media base their sales on screaming at someone - the garlic and wine swilling continentals are a historic target.

The referendum is as much about internal Tory manoeuvres for power as any disagreements.  

by Colman (colman at eurotrib.com) on Fri Apr 8th, 2016 at 05:39:12 AM EST
[ Parent ]
>I think Greece's insistence on remaining in the common currency is, far and away, the most likely avenue to unleashing a fascist regime

You say that like it's a bad thing.

>I still don't understand what the hell the Brits are on about.

The Brits are being sold a glorious return to proud imperial sovereignty, with no more bullying by greasy foreigners, and a Cross of St George and a white van for all.

The reality is the Tories want to sell off education and health care to the Americans, and also turn the UK into a capitalist paradise with as few worker protections as possible. The EU - even though it's an appalling mess - might get in the way of that.

So it's a toxic combination of little Englander rhetoric and the usual business interests.

A sizeable percentage of the UK population is violent, stupid, ignorant, and selfish, and trying to explain how they're caught between Wall St and Frankfurt realpolitik is like trying to teach a five year old something really hard, like basic hygiene.

I was expecting a Bremain vote, but the unexpectedly timely arrival of the Panama papers and a corresponding anti-Cameron propaganda blitz makes me suspect that the official plan is now to push for Brexit, replace Cameron with a quasi-Fascist hardliner, and lean on the unparalleled awesomeness of the UK to negotiate a favourable deal, which will be welcomed by everyone left in the EU, because Britain, fuck yeah.

By the time the slumbering masses wake up to the fact that immigration is continuing thanks to special visa waivers for cheap labour, and all the family silver has been sold off to Wall St, and the land-owning aristocracy is getting substitute CAP payments direct from Westminster, it will be too late.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Apr 10th, 2016 at 05:07:43 AM EST
[ Parent ]
Cameron is taking a page from the Trump playbook:  Make the UK great again!
by rifek on Tue Apr 12th, 2016 at 11:13:10 AM EST
[ Parent ]
And if I were Varoufakis, I would run, not walk, away from that.  His original proposal was basically a more refined version of my comment and based on the same concern, that the other side was negotiating in bad faith.  Tsipras sacked him for it.  Too late to fix it now.  Tsipras is drowning in his own soup, and anyone who tries to save him will just be dragged down with him.
by rifek on Tue Apr 5th, 2016 at 01:28:47 PM EST
[ Parent ]
The problem is that he is as good as it is likely to get for Greece. That leaves the vast majority of the public up shit creek without a paddle and in a sinking boat.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Apr 5th, 2016 at 11:52:35 PM EST
[ Parent ]
You call appointing Varoufakis a minister without portfolio "a very stealthy program"?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Apr 6th, 2016 at 07:56:58 AM EST
[ Parent ]
It would have to be a 'classified' appointment - not made public, or more likely, a de facto appointment. But I doubt Tsipras has the fortitude for that or for an exit from the Euro. And I don't know of any military force in Greece that could stand against US interests and for a government trying to defend Greek interests were they to make even an economic alliance with China and Russia. Much of this would only be known if/when it was done.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Apr 6th, 2016 at 11:19:28 AM EST
[ Parent ]
Some day Greece will wise up, dump that stupid currency and tell the creditors to pound sand.  They'll go through a year and a half or two years of painful adjustment, and then begin growing again.

This is stupid.  It was stupid six damned years ago, and it's still stupid today.  For all the same reasons.  Every time we do this same damned thing every year or two, we say, "Alright, see y'all in another year or two when it fails again and Greece needs another bailout."

Some day the Greek government will quit screwing around and killing itself and its people.  I just hope all that happens before the fascists come to power and gain credibility off of it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Apr 4th, 2016 at 12:34:16 PM EST
They should absolutely leave the Euro. However they need to be willing to go full Cuba if it comes to that. I think long lasting hostility by the rest EU is almost guaranteed, in face of which you can forget about running a capitalist economy.

Nur der Euro bleibt stehen - von Berlin bis Athen - Georg Kreisler
by generic on Mon Apr 4th, 2016 at 07:14:12 PM EST
[ Parent ]
Is the definition of post-industrial capitalism 'getting others to work while you speculate on their labour'?

If so, maybe that's not what Greece (or Italy next) really wants or needs any more.

Citizens' income and coding taught like abc's, all powered by copious solar power should be the future of Europe, starting with the PIIGS.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Apr 5th, 2016 at 07:36:21 AM EST
[ Parent ]
If they leave the Euro Greece "can forget about running a capitalist economy" ?

They would certainly have to make an accommodation with China and Russia as well as navigate past the danger of a military coup, but I see no reason they could not have a considerable private sector. I think that both Russia and China are far beyond caring about any sort of pure communist government. The challenge would be having a government that was relatively free of corruption. That has been the failure mode for the last half century or more.

Provide the Generals with a screening of Peter Seller's The Mouse That Roared either with Greek sub-titles or dubbing if not all of them could follow the English script or it has not already been dubbed.


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Apr 12th, 2016 at 08:48:55 PM EST
[ Parent ]
I think it is less a question of capitalist economy as in private ownership of the means of production and more a matter of being a part of the international sphere of capitalist economies, ie the west.

And it is a good question. We know that non-compliance is punished with financial blockade. If a country like Greece leaves the euro, we don't know what actions will be taken. Blockade is illegal according to at least EU and WTO rules, but just as with the financial blockade the purpose is to topple the government or change its course so fast that there will be no time to sue.

So while Greece does not know if there will a blockade, color revolution etc, it does best in preparing for such options. Which boils down to going Cuba in self-reliance or making sure to have a lifeline in Russian support.

by fjallstrom on Wed Apr 13th, 2016 at 10:10:56 AM EST
[ Parent ]
And convincing their generals they will be exchanging their western weapons for new Russian weapons that are as good or better and also cheaper - true or not - and that the alternative is to be bled dry by a pack of cowards who are supposed to be your allies acting in the interest of Germany and other EMU surplus countries and being unable to defend yourself no matter how many shiny western weapons you have.


As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Apr 13th, 2016 at 10:49:00 PM EST
[ Parent ]
They should also be secretly continuing to explore the possibilities of an agreement with Russia and China. Greece could become the European terminus of the New Silk Road with further Chinese and possibly Russian development projects in Greece and, in any case, they need access to the payments system operated by China. This will prevent them from being cut off from foreign trade. They could buy Iranian oil via the Gulf and Suez canal or from a Russian Black Sea port pending construction of a pipeline under the black sea. They could settle through Hong Kong. And they should be able to maintain a mixed economy to whatever extent they desire.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Apr 4th, 2016 at 08:29:26 PM EST
[ Parent ]
My reaction to Varoufakis's Guardian piece was also that Greece does not have to leave the EU to go off the Euro. The benefits he discusses are from the EU, the damages are from the Euro. Every country other than the trade surplus nations should leave - now preferably.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Apr 6th, 2016 at 11:30:16 PM EST
[ Parent ]
Except that there is always thhe military, which would have US backing for a coup in a heartbeat.
by rifek on Tue Apr 5th, 2016 at 01:31:36 PM EST
[ Parent ]


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