Behind Germany’s refusal to grant Greece debt relief – Op-Ed in The Guardian

Yanis Varoufakis

Tomorrow’s EU Summit will seal Greece’s fate in the Eurozone. As these lines are being written, Euclid Tsakalotos, my great friend, comrade and successor as Greece’s Finance Ministry is heading for a Eurogroup meeting that will determine whether a last ditch agreement between Greece and our creditors is reached and whether this agreement contains the degree of debt relief that could render the Greek economy viable within the Euro Area. Euclid is taking with him a moderate, well-thought out debt restructuring plan that is undoubtedly in the interests both of Greece and its creditors. (Details of it I intend to publish here on Monday, once the dust has settled.) If these modest debt restructuring proposals are turned down, as the German finance minister has foreshadowed, Sunday’s EU Summit will be deciding between kicking Greece out of the Eurozone now or keeping it in for a little while longer, in a state of…

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  1. Sorry for my language use. But Syriza just betrayed the Greek people and crushed the Left image in the whole of Europe.
    “”
    Then we get to the referendum. The former Finance Minister called it a “majestic, big YES to a democratic, rational Europe!” and that the victory of the NO vote meant that “dignity was restored to the people of Greece”.

    Syriza Member of Parliament Costas Lapavitsas wrote earlier this week (July 7, 2015) in the article – Syriza’s Next Steps – that:

    The Greek people’s rejection of austerity in Sunday’s referendum was an enormous victory.

    Be reminded that the NO vote was a “rejection of austerity” and if that was translated into positive policy action then one might conclude that the “dignity was restored to the people of Greece”.

    No dignity is restored by the act of ticking a box with OXI next to it and cheering in a city square, if the government of your nation then heads to Brussels and agrees to austerity measures that are worse than the ones it rejected no less than 14 odd days before.

    That would amount to a capitulation or surrender to the Recession Cult. That would amount to jettisoning the peoples’ interests.

    EU finance ministers, presidents etc came out on script and said if they vote NO then it was equivalent to voting to leave the Eurozone (it should have been) and the “bridges were being burned”. The last comment came from the German SDP leader. His abandonment of any notion of social democracy is a disgrace.

    But come Sunday night in Europe, the threats of exit were gone and Brussels was assembling the bullies to resume business as usual.

    Those pitiful Greeks had had their day in the sun, god bless them. They played ‘Democracy’, that curious game that really ends up meaning nothing, for a day and now the Eurogroup had to get back down to work. It was a Monday after all and the markets were getting busy to shuffle some more wealth and so the little Greek game had to stop.

    It seems that it did.

    The ECB started the Troika noose tightening by changing collateral rules relating to the on-going ELA, which is keeping the commercial banks in Greece on a drip-feed while the Government is brought to heel. In threatening to bankrupt the Greece financial system, the ECB is acting wildly outside its charter as a central bank who carries a (legistlated) responsibility to maintain financial stability.

    The ECB is a political machine in the Eurozone now and that tells us, if nothing else is taken into account, that the monetary system has failed – categorically and irretrievably under the current institutional structure and leadership.

    Then there was a disturbing article in the British Telegraph this week (July 7, 2015) – Europe is blowing itself apart over Greece – and nobody seems able to stop it – which was apparently the result of briefing by the outgoing Finance Minister of Greece.

    The article relates that:

    Greek premier Alexis Tsipras never expected to win Sunday’s referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control.

    He called the snap vote with the expectation – and intention – of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 “ultimatum” and suffer the opprobrium.

    Which if true, is a shocking reality.

    That “majestic, big YES to a democratic, rational Europe” was just a great con job all the time to save a few political skins and fuck the people. The little game of play ‘Democracy’ for a day.

    The article claims that the Greek leader, before calling the referendum, “had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors’ cartel of southern EMU states and had seriously misjudged the mood across the eurozone”.

    But when the bullies went in for some more punches (higher VAT increases, larger cuts to pensions and other income support measures for the poor, and deeper fiscal cuts) without any debt relief, it was clear according to the outgoing Finance Minister that “They just didn’t want us to sign. They had already decided to push us out”.

    That motivated the referendum which to “their consternation, they won”.

    The options were clear:

    maintain the dignity of the Greek people, respect the democratic sentiment (not only in the referendum but also in the January national election outcome, and reject austerity and tell the Eurogroup to jump.

    Next day, exit and restore growth; OR
    Surrender like surrender monkeys, scrap the finance minister who the spivs from the north hated, and sell the Greek people down the drain.

    Apparently, there had been planning whereby the Bank of Greece would issue vouchers (in euros) to keep the system afloat while the Greeks defaulted on their debts to the ECB (next tranche to be due) and fought it out with the Eurogroup.

    That option was rejected as being “too dangerous”.

    So now we know what has transpired. The simple and easily interpreted story is contained in the documents that the Greek government has now submitted for approval.

    You can read them – HERE.

    They read like some twisted Baltic-state dreamworld. Vicious, penal, capricious austerity and privatisation as far as the eyes can read.

    Dirty, neo-liberal austerity that will attack the most disadvantaged and drive the nation back into a deep recession.

    Filthy austerity that is the exact opposite to what the Syriza politicians said to the Greek people they would do when they went for their ‘job interviews’. They are now all earning their salaries on the basis of a treacherous deception. They should resign.

    Syriza will say that as of today it looks like Germany is backing down on debt relief. But debt relief is somewhat of a side issue. The damage is not being done by the outstanding debt but the spending flows that should be occuring that are not as a result of the austerity.

    The latest Eurostat figures released this week (July 7, 2015) – Government expenditure accounted for 48.1% of GDP in the EU in 2014 – show that of all the European nations, the cuts in Greek public spending have been the largest between 2013 and 2014.

    They have cut their general government spending by 10.7 per cent. Only Slovenia is close at 9.9 per cent cuts and it is a basket case to as a result.

    Greece’s public spending is at 49.3 per cent of GDP whereas the Euro area average is 49.0 per cent.

    Yet the Recession Cult wants more.

    It all looks like surrender to me. There is some consistency in this interpretation. They are so scared of leaving the Euro that anything is acceptable – irrespective of what the people of Greece have on two occasions rejected.

    But then that might be too simple.

    I continue to study the tea leaves to see if I can find any other less obvious interpretations of what has been going on.””

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