Greece Told to Submit Proposal By Thursday, Complete Deal By Sunday, or ECB Shoots Its Banks and Forces Grexit (Updated: Greece Requests Three Year Bailout)

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In case you managed to miss the dramatic events of yesterday: Greece has been given a maximum of five days to come up with a proposal acceptable to its lenders. And “acceptable” would be more stringent than if it had agreed to the memorandum when Syriza assumed office in January. As Helena Smith of the Guardian writes:

Over in Athens the political opposition is demanding that party leaders reconvene for an emergency meeting to discuss the ultimatum the Greek government now faces…

Anxiety in Athens this morning is almost palpable. Among a political elite who would have played the game very differently, there is mounting concern that one wrong move and Greece will not only be headed for euro exit but years of purgatory on the periphery of Europe…

Truth is, back in Athens very few have any idea what the proposed agreement now involves. After five months of bungled handling of negotiations under Tsipras, all they know is that any deal is going to be much, much tougher than originally thought given the Greek economy’s freefall following the closure of Greek banks.

Greece was expected to submit a new set of proposals on Tuesday, but its new finance minister Euclid Tsakalotos merely read out Greece’s last proposal, so he was summarily sent packing.

The creditors view the Greek “no” vote as a rejection of a possible deal and say they already have detailed plans for a Grexit, which are likely to become even more detailed over the coming days. Ambrose Evans-Pritchard of the Telegraph reports that:

….15 of the 18 governments now sitting in judgment on Greece either back Germany’s uncompromising stand, or are leaning towards Grexit in one form or another. The Germans are already thinking beyond Grexit, discussing plans for humanitarian aide and balance of payments support for the drachma.

Remember that it takes unanimous approval for a new bailout or bridge program, so Germany has plenty of political cover for its aggressive stance.

As the Guardian describes, the lenders have two paths in mind. If Greece defies expectations and capitulates, um, submits a workable deal, no one actually expects it to be done on Sunday, but that both sides would have agreed to key terms:

Athens is expected to ask for a new bailout programme worth up to €60bn over two to four years as well as measures to reduce its ballooning debt.

The chances of securing a deal hinge on the levels of cuts, austerity, and fundamental reforms of economic and fiscal systems that the Greek government is prepared to endure after Tsipras stonewalled for five months and then called his snap referendum.

Merkel ruled out any flat writedowns of Greek debt, but there is likely to be scope for debt restructuring.

Eurozone officials said that if things went well, a new bailout could be ready by mid-August. In the meantime, with capital controls in place and Greek banks running out of money, Tsipras made clear his country would also need immediate “bridging” support to prevent a banking collapse that would force a return to the drachma. That would also come with tight strings attached and up-front action through the Greek parliament to persuade eurozone leaders that Tsipras was committed.

And the Guardian also describes one way to finesse the €3.5 billion payment due to the ECB on July 20:

They said that when Greece’s second bailout expired last Tuesday, €3.3bn in ECB profits from its securities markets programme due to Greece also vanished.

Ministers from the Eurogroup could decide to release the profits from 2014, which amount to €1.85bn, and top them up with an additional €1.5bn currently held by eurozone governments in order to facilitate payments due to the European Central Bank in less than a fortnight.

A eurozone source said: “It’s not an easy solution, but probably the only solution.”

The advantage for Greece would be that the money could be released without the delays caused by getting agreement through the parliaments of euro zone members. The potential downside is that the cash would need to be authorised by the Eurogroup unanimously.

The current plan is that there will be a summit on Sunday no matter what. If a deal with Greece is coming together, it will be among the leaders of the 19 Eurozone nations. But if the two sides remain at loggerheads, it will be a meeting of all 28 EU members to prepare for a Grexit.

Attentive readers may wonder why the drop dead date now appears to be July 11, when the ECB default date is July 20. The rationale, as reported in Reuters:

A crisis meeting of EU leaders on Sunday is “really the final deadline” for Greece to reach a deal with creditors or face economic collapse, ECB Governing Council member Christian Noyer said on Wednesday.

Noyer said the ECB had already interpreted its own rules “to the maximum” to help Greece and would be obliged to cut off liquidity as soon as there was no prospect of a deal.

“The Greek economy is on the verge of catastrophe, we absolutely need a deal on Sunday. It is the final deadline, afterwards it is too late,” he said.

“In the last six months we maintained the lifeline set up for Greek banks and put enormous sums of money on the table … Our rules oblige us to stop immediately at the point when there is no prospect of a political accord on a program, or at the point when the Greek banking system crumbles – which would happen if it enters generalized default on all its debts.”

The fact that Noyer is delivering this message is yet another “not good” sign. While French government officials are generally more friendly to Greece than others of the Eurozone, Noyer had made some of the most retrograde remarks about Greece of any ECB leader.

And there are still no signs that Greece is making meaningful preparations for a Grexit. For instance, it failed to seek a European Court of Justice injunction against the ECB’s failure to increase the ELA last week. Instead, Greek sources merely mentioned it to the Telegraph as a possible idea. Similarly, the Greek government denied vigorously that it was considering the mild step of issuing IOUs:

“The report is totally baseless. Such reports are directed against the country and considered dangerous at a time when negotiations with creditors partners are at a crucial point,” the finance ministry said in a statement.

This is a brutal power play, but one that was not hard to foresee. We warned that the creditors were likely to regard the referendum as a stunt too far. Yet even in referendum campaigning, Varoufakis and Tsipras told voters that there would be no tough choice, that they could hold their ground on austerity and still remain in the Eurozone. Yet Eurozone leaders told Greek voters that they would regard a “no” vote as a vote against the Euro membership. They are now stubbornly, sadistically, and recklessly delivering on their threat. And we’ve repeatedly described why the Greek governemnt’s rejection of a Grexit is based on an understanding of how disastrous the results would be. As we wrote:

Mohamed El-Erain, no hysteric, placed the odds of Grexit at 85%, and gives a flavor of how deep the downside would be:

Greece is heading for a “massive economic contraction” and is likely to be forced out of the euro zone, according to Mohamed El-Erian, the former chief executive at Pacific Investment Management Co…

“What we are seeing here is what economists call the sudden stop, when the payment system stops. The logic of a sudden stop is a massive economic contraction, social unrest and it’s going to make continued membership of the euro zone very difficult for Greece….

“This is a tragic situation — we must not forget that there are Greek citizens that have already been suffering for five years,” El Erian said. “They’ve seen their living standards cut, unemployment is running at 26 percent, youth unemployment is over 50 percent and they’re about to face an even bigger depression.”

This is the biggest reason we have been so hard on the conduct of the Greek government. Varoufakis had concluded in his pre-Greek government writings that a Grexit would be a disaster for Greece. Yet his and his colleagues’ game of chicken approach to the negotiations meant that that was a very realistic outcome that they cavalierly assumed wouldn’t happen. As terrible as austerity is, a Grexit will be vastly worse, and not for six months or even a year. Aw we and others have stressed, Greece could well become a failed state, with human and social costs that would put any effort to assign mere economic damage to shame.

And now the worst case scenario for the Greek people and Europe looks like a virtual certainty. History will judge all the major actors harshly, Merkel most of all.

Update 8:00 AM: This will be short due to the hour (I’ve been up all night yet again). I hope readers will add more details in comments from other sources. From the Wall Street Journal:

Greece formally requested a three-year bailout from the eurozone’s rescue fund Wednesday and pledged to start implementing some of the overhauls demanded by creditors by early next week, according to a copy of the request seen by The Wall Street Journal.

Crucially for Greece’s creditors, the letter says the government would start implementing some measures, including on taxation and pensions, by the beginning of next week, though it doesn’t go into details.

The letter is a first step toward fulfilling a demand by international creditors, who have given Athens until Sunday to come up with tougher measures they would impose in return for desperately needed financing that could keep the country from bankruptcy and even worse economic turmoil…

Prime Minister Alexis Tsipras said earlier Wednesday that his government would present concrete and detailed overhaul measures in the coming days.

The full list of overhauls and budget cuts is what will determine whether the application for a new rescue program will be approved by the rest of the eurozone. The currency union’s leaders said Tuesday they would assess whether it makes sense to start formal negotiations on a bailout program at an emergency summit on Sunday.

Update 6:00 PM: To clarify a point that was muffed by the some financial media and therefore I picked up on their lack of precision, Greece is due to submit its detailed proposal before the beginning of business Friday (defined by Jean-Claude Juncker as 8:30 AM, presumably Brussels time), so the “Thursday” deadline includes all night. The letter submitted does not constitute a detailed proposal but is a step towards generating one.

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  1. Chris in Paris

    So if they really have a plan to force Greece out of the euro, that would mean a change to the treaties, requiring a unanimous vote, no? Perhaps they would go through a Commission-Counsel procedure? This seems very much out of line.

        1. craazyman

          We’re caught in a trap
          I can’t walk out
          Because I love you too much, baby

          Why can’t you see
          What you’re doing to me
          When you don’t believe a word I say?

          We can’t go on together
          With suspicious minds (suspicious minds)
          And we can’t build our dreams
          On suspicious minds

          -Elllll-Vissssssssa whoa!

          1. Cugel

            Here’s a question that nobody has answered: If Tsipras and Syriza really wanted to lose the referendum, as Yves suggested, why didn’t they openly tell the Greek people that “no” would mean an open break with the Troika and a flat rejection of creditor demands, probably resulting in Grexit?

            Why not then openly prepare for Grexit by giving signs they were preparing an alternative strategy as Varoufakis suggested?

            Since the people remain committed to the EU, that open admission would have insured that the “yes” vote would have won, Tsipras could have resigned, and Syriza would then have gone into opposition with a clearly identified position of rejection of Austerity and no acceptance of the Memorandum. They could then have let the Center-Right parties take all the blame for continued economic collapse and national humiliation.

            He didn’t do that. Instead he insisted that “no” would strengthen Greece’s negotiating position and help them remain in the EU. In short, he lied to the Greek people which only makes sense if he wanted to stay in power and negotiate, not if he wanted to resign and avoid blame for implementing creditor demands.

            In fact the only thing that would explain his actions is that Tsipras really believed, however naively, that a “no” vote would somehow strengthen his negotiating position and that he was all along trying to win the referendum, not lose it.

            1. Yves Smith Post author

              Syriza is deeply divided and there is considerable evidence that one of the problems Tsipras has is barely being in control of his own party. A few of many examples: Tsipras would regularly meet with Eurocrats, make commitments and cooperative statements in public, and then walk them back in part or in full as soon as he got home, usually in the form of a fiery speech. The most logical explanation is that he got beaten up by fellow party members for what he’d just done. Similarly, Varoufakis wanted one of his loyalists to be the new liaison to the IMF (this was recent, the the last two months). His choice was overridden by an outcry by other party members, that she was too Eurozone friendly. Similarly, when the Left Platform went up against Tsipras, again about six-eight weeks ago with its own plan, the vote in the party ws 95 for Tsipras, 75 for the Left Platform. That’s a higher percentage than the membership of the Left Platform in the party, and further proof that Tsirpas was losing control.

              We’ve said REPEATEDLY that Tsipras has been constrained in dealing with the Troika by the left wing of his own party. Given how partial his control of his own party is, it’s not hard to imagine the hard core left using the party apparatus (particularly getting the vote out) to keep Tsipras boxed in. They’d have pushed hard for a “No” vote regardless of whether or not many knew that Tsipras wanted a “Yes” vote or such a thin margin on a “No” that it could not be seen as a mandate. As observers also said, the media scaremongering about shortage also looks to have played into this. It was seen as over the top and false, when in fact it will prove to have been five to ten days ahead of reality. But saying things are terrible when people aren’t seeing it yet will seriously undermine credibility.

          2. Jim Haygood

            Germany to Greece:

            You ain’t nothin’ but a hound dog
            Cryin’ all the time
            Well, you ain’t never caught a rabbit
            And you ain’t no friend of mine

    1. JohnB

      The plan, so far as I can see, is to just give the ECB enough political cover to implode the Greek banking system and economy, while trying to maintain the pretence/lie, that it is a non-political and independent organization – this de facto kicks Greece out of the Euro/EU, without any legal mechanism in place for officially doing that.

      They (other EU nations) don’t need any treaty provisions to kick Greece (or any other country) out of the Euro, they just need something the ECB can use as an excuse to cut off ELA, and enough political cover to allow the ECB to get away with that (cover which, to me, looks extremely easy to provide if any country steps outside of austerity policies – I’m starting to suspect that even TAN’s might get used as an excuse here, as all this makes me very cynical of many peoples motives).

      Personally, I don’t see how the EU can survive this. To me anyway, this obliterates the last shred of credibility the ECB has of being a non-political or independent organization, and shows that the future course of the EU is going to be deeply undemocratic, and that the economic dysfunction is now almost certainly ‘a feature, not a bug’.

      I don’t think many other people have been following this, as closely as I (and many other NC readers) have been, but despite that I still think many people will be coming to similar conclusions about the EU.

      1. Unorthodoxmarxist

        You have answered your question by mentioning the deeply undemocratic nature of the EU now, and more so going forward. The ruling class within each of the EU nations knows very well that the EU itself is an undemocratic superstructure ruled by Germany with the help of the European capitalist class. There may be more de-facto exits in the future as the Southern European deficit nations, i.e. the export zone for German and Northern European producers (surplus nations) are picked off here and there, but this will only solidify the rule of the bureaucrats and business class in the remaining states. I can’t imagine the EU does more than contract a bit in the short term and the suspicions of many that it is simply an undemocratic superstructure are confirmed.

        Now more than ever the fight over EU membership and Syriza gyrations highlight the deeply split desires of class segments within Greece. Syriza itself is largely made up of Euro-communists, who occupy the space ideologically that Social Democrats did half a century ago and have no desire for revolution but rather a more “just” welfare state. Their class base seems to be skilled workers, petty-bourgeois intellectuals and was expanded to include everyone else in Greece sick of austerity. There is a hard core though that is far more committed to a radical transformation and I believe these support the left platform (poorer segments of the working class and committed communists).

        It seems though there are many in Europe and the EU who see the ability, at least in theory, to move for work and emigrate freely as enough of a reason to stay within the European project (besides ideological dimensions) to cause Syriza to gyrate one way and the next.

        1. financial matters

          I think this is a key point

          “Syriza itself is largely made up of Euro-communists, who occupy the space ideologically that Social Democrats did half a century ago and have no desire for revolution but rather a more “just” welfare state. Their class base seems to be skilled workers, petty-bourgeois intellectuals and was expanded to include everyone else in Greece sick of austerity”

          With most conventional political parties subscribing to neoliberal ideals it’s hard to find a group that is putting up resistance and it’s hard to put up resistance (ie ECB cutting off ELA while ‘negotiating’ with Greece)

          Provide the liquidity to stop the suffering and have real negotiations on labor reform and investment for stronger economies.

          1. digi_owl

            And that is the basic problem.

            Where once the workers left and the social left was united under the concept of socialdemocracy, the social left has largely sold out the workers left under the belief that the EU project will bring peace and understanding across Europe.

            End result is that the workers left has ended up in a questionable (enemy of my enemy is my friend) partnership with the social (xenophobic?) right.

            This while the “workers” (financial) right is riding the EU project into the ground, to the rhythm of the social left’s hand wringing.

          2. JTMcPhee

            “Provide the liquidity to stop the suffering and have real negotiations on labor reform and investment for stronger economies.”

            So, slave labor and more “investment.” THAT sounds like a solution.

            Especially when the real bankruptcy to fear is the moral bankruptcy of the “investor class” (that fraud of a term) and its knock-on consequences. I’m just a dilettante and a “failure” as an “investor,” getting fleeced by serial 401killings over two generations. But it seems a whole lot of people across a very broad spectrum are finally noticing that the water in the pot they’ve been floating in has gotten uncomfortably hot… And the “invisible hand” has lost so much of its transparency that it is very visible, as it reaches out to turn up the heat…

            And “investors” are lusting after the volatility and fire sales that seem on the near horizon, what a surprise:

            Is the wailing and dead-silence that goes along with the bleeding of the ordinary people becoming distressing, “investors”? I’m sure your “people” can put up some screens to spare you… Meantime, there’s still lots of blood left in the body, it would seem. Carry (interest) On!

            1. financial matters

              I’m talking more in the public banking sense such as the German Sparkassen, the Japanese Post Bank, the central banks of the Asian Tigers, early central banks of Canada, Australia and New Zealand.

              Mainly where countries realized they could leverage their own sovereignty (labor) and not have to rely on foreign banks or a private banking system for funding.

              And living wage jobs. Would like to see Greece roll out its employment program.


              “funding for a job protection program that is currently being devised by the Greek Ministry of Labor.”

        2. Jerry Denim

          “It seems though there are many in Europe and the EU who see the ability, at least in theory, to move for work and emigrate freely as enough of a reason to stay within the European project”

          So in the event of a full Grexit from the European Union what would happen to Greek passport holders working abroad in other Eurozone countries? Would they be ejected or shown some sort of grandfather entry clause amnesty? Anyone?

          1. C

            That will probably be in the “detailed plan” that the ECB has. Given how unpopular the internal immigrants are in Western Europe, and how little interest the ECB seems to have in alleviating human suffering, I would be shocked if they were allowed to stay.

      2. Oregoncharles

        The implication is that crashing the Eurozone, if not the EU itself, is a good thing – with Greece cast as the sacrificial lamb. Tragically ironic, considering the Greeks literally invented Europe (which isn’t a geographic thing – look at the map).

        My understanding of the legalities is that Greece can be forced, de facto, out of the Euro, but not out of the EU – which leaves them with a veto. A very, very angry veto. Should be interesting, in a grim sort of way.

        1. Yves Smith Post author

          EU membership can be suspended. It’s a high but not insurmountable bar. One of the bases is violating the rule of law. If Greece were to try to seize the Bank of Greece, which is effectively an ECB operation, or even print drachma, which is a violation of the Eurozone treaties (it’s described as “irrevocable”), that would seem to be adequate justification. Put it another way, as Lambert says, if Merkel is half the politician he thinks she is, she ought to be able to make something stick.

    2. Yves Smith Post author

      As we’ve said, there is no de jure mechanism, but resorting to drachma or even IOUs in enough volume is a de facto Grexit. I agree the talk has gotten sloppy all over the MSM and I should have clarified that issue as I have in older posts.

      1. Chris in Paris

        Thanks. I’m just wondering what the point of this Sunday Council meeting is if there is no law to frame a decision. I vote that they walk over to Maison Antoine for a cone of frites mayo. At least that would make sense.

    3. Lexington

      This seems very much out of line.

      Only to people who have uncritically accepted the specious reasoning of the EU’s many critics.

      As a de facto rather than de jure matter Greece is already out of the Eurozone, in that it is effectively insolvent, it’s just that this reality has been concealed for months by the ECB continuing to pump liquidity in the Greek banking system. If the ECB takes the banking system off life support the fiction will collapse and the Greek government will be forced to introduce some other medium of exchange (whether a new drachma, an interim IOU, or whatever).

      At that point Greece might still formally be in the Euro zone, in that its change in status hasn’t been formally acknowledged in any treaty, but that won’t make an iota of difference to either the EU or to Greece.

    4. Generalfeldmarschall Von Hindenburg

      Look at the way they rammed Maastricht through. When the elites want something, the rules don’t mean jack.

      1. James Levy

        Agreed. That’s one point where I think Yves harping on the EU rules is misplaced. And Greece has an army and a government. She can always leave the EU so long as there is no EU Lincoln prepared to force them back in at gunpoint. I’m sure she’s right about how rotten that leaving will be, but no rules can prevent a people from revolting against a central authority they have had enough of. The American colonists had it better than the Greeks do and left anyway just because the tie to London didn’t make sense any more and elites here were sure they could run things better, given their proximity to things, and more profitably for themselves, than could be done while maintaining the tie to Westminster.

        1. Nathan Tankus

          EU rules matter. you don’t think with persistent violations of the “rule of law” they wouldn’t start inflicting direct pain in an attempt to force compliance to an ECJ rule? Desperate people attempting to preserve their confederation do some pretty incredible things.

          1. Carla

            Did you ever say “Grace” before a meal? I suggest repeating the following, three times a day, every day, without fail. No meal required. Let it become the Hail Mary. Let it replace every oath ever uttered; it’s truer than any of them:

            “When the elites want something, the rules don’t mean jack.”

            Thank you, Generalfeldmarschall Von Hindenburg. You nailed it.

  2. ambrit

    The Greek ‘rulers’ seem to be living in Cloud Cuckoo Land.
    What is most troubling about the Greek Debacle is that it is a harbinger for the rest of us. The elites running the Eurozone are intimately tied into the elites here in North America and in Asia. Globalization guarantees that contagions off in one corner of the world will eventually infect the rest of the world.
    Painful as it is going to get, the Greek peoples response to the rules controlling their economic lives demanded by the Eurocrats is rational. That the No vote was so large among the young is worthy of note. This may not be a sign of unsophistication on their part, but rather a visceral decision to suffer through the consequences of both a failed economic model and a failed political model in hopes of better times to come.
    As I mentioned above, I fully expect this dynamic to be played out here in America eventually simply because of human inertia and institutional laziness.
    I had a friend in High School who used to say, “God bless the Mark” whenever he wanted to highlight some absurdity. (A reference to the long gone German Ancien Regime.) I fear that one day my grandchildren will say “God bless the Dollar” in a similar way.

    1. gardener1

      You ain’t seen nuthin yet.

      Wait until the TPP, TTIP, and TiSA get passed. Citizen shakedown is far from over. If they’re lucky the Greeks will be booted from the system before the banker’s junkyard dogs, the international corporations, sweep in legislation to enslave and steal everything left that isn’t nailed down.

      1. Pookah Harvey

        Is it possible they are wanting to be booted? in an article by Ambrose Evans-Pritchard,

        For Mr Tsakalotos, EMU membership is a cost-benefit calculus. His own academic work has explored the issue of “first-mover advantage” after the rupture of currency pegs.

      2. jrs

        Of course as for Grexit, Greece being self-reliant in food, getting agreements for adequate energy imports, and earning enough in exports to support even minimal imports beyond those two necessities… no matter how possible it is now, it becomes all the harder with all these trade agreements, for any country to be semi self-reliant, doesn’t it? When the amount of exports needed to pay even ever increasing medicine costs, keeps increasing? (because of ever increasing patent rents baked into the agreements) When ransom is held on such necessities? Greece can’t afford medicines as is. But this will be most countries fates ever more so under the trade regimes. The necessity of increased export reliance to pay rents.

    2. Spring Texan

      Yes, this is EXACTLY what they want and plan to do everywhere, drive ordinary people into a desperate penury with mass unemployment making those who are employed desperate slaves.

  3. Sam Adams

    Why does Merkle and Germany’s stance so remind me of Brunhilde with the ring in the immolation scene in Gutterdamrung?

    1. EmilianoZ

      The key to understanding the German psyche was provided by an interview of Emmanuel Todd which a distinguished member of the commentariat linked to a few months ago. Emmanuel Todd called the German psyche fundamentally “hierarchical and irrational”.

      I think it is very difficult for us to understand because most of us are not like that. It would seem that the Germans are deeply offended when supposed inferiors are defying their supposed superiors. It’s like their world doesn’t make sense anymore when it happens. They do not understand why Varoufakis and Tsipras are not flattened to the ground begging for mercy but are instead peacocking like alpha males. To them this is a deeply insulting behavior that must be punished at all cost, even at the price of burning down their own house or even the world. Unfortunately history has shown that they are very capable of doing it, they have already done it a few times.

      1. Yves Smith Post author

        That may be true, but now 15 of 18 Eurozone states are opposed to Greece. The pushback can no longer be attributed to authoritarian German culture. The poor states like Slovakia who have supported Greece in the past can’t justify a bailout that puts their citizens on the hook to preserve Greek pensions when Greeks get better pension than they do!

        This now has much more to do with the bad structure of the Eurozone and the refusal of Germany to allow more federal fiscal spending, which would allow for states with disparate economies to live together better. So Germany is indeed the root of the problem but the authoritarian reaction is a symptom, and not the cause. It’s that Germany is persisting with sticking with inconsistent demands: wanting to continue to run trade surpluses but not fund its trade parters, and not allow more federal spending to buffer the impact of economic disparities that result.

  4. Ned Ludd

    The Telegraph has posted a scan of Greece’s ESM application:

    Within the framework of the Programme, we propose to immediately implement a set of measures as early as the beginning of next week including:

    • Tax reform related measures
    • Pension related measures

    We will also include additional actions that the Republic will undertake to further strengthen and modernize its economy. The Greece government will on Thursday 9 July at the latest set out in detail its proposals for a comprehensive and specific reform agenda for assessment by the three Institutions to be presented to the Euro Group.

    Greece’s Minister of Finance ends by noting: “this letter supersedes our previous request letter dated 30 June 2015.” Scroll down their live feed to see the last ESM request letter, which was rejected on June 30th.

  5. Robert Dudek

    The key question is, does Tsipras have the domestic cover to capitulate, as he surely wishes to do. If not then I see no alternative to him stepping down, a new coalition forming, civil unrest, and some form of martial law.

    Yves, again baffling that you still think capitulation is the lesser of the evil on offer. Try to think of what the country will be like in 10 years, not in 1.

    1. Yves Smith Post author

      This is an economy that is already in depression with a government that was better at clientelism than delivering services even in its good days. For instance, its court system is widely described by legal scholars as dreadful.

      A Grexit means it loses its tourist sector in almost its entirety for a couple of years. That’s 18% of GDP. The bank holiday is already leading not just to difficult conditions for importers but is pushing them to the brink of failure. A Grexit means many will fail.

      The only economies that have suffered a depression worse than Greece were ones at war. Another 20-40% down from here destroys not just economic infrastructure (businesses and jobs) but the social fabric. Argentina saw a couple of month of serious violence. Greece will fall farther from a much lower base, and there won’t be any sort of recovery for many years. This isn’t the “six months to a year of pain and we get a good recovery” like Argentina. There is FAR more dislocation with a Grexit than a mere currency depreciation. And Argentina was also self sufficient in food (Greece is not) and got a strong tailwind due to the commodities boom of the early-mid 2000s (Argentina is a big commodities exporter).

      1. Robert Dudek

        All correct. But what you are advocating is worse. You must realize that capitulation leaves Greece completed destroyed in the medium to long term. I would love if you could sketch out a realistic roadmap to prosperity for Greece given everything we know about the euro sociopaths pulling the strings.

        Better yet, why not use your considerable skills and sketch out the best way forward for Greece in the event of a total shut off of liquidity by the ECB.

        1. Mbuna

          I agree. Clearly a Grexit is worse in the short term but is capitulation really better in the long term? I think this is a case scenario where it is so easy to quantify the Grexit downside that everyone becomes horrified by it thus giving the impression that capitulation is the better choice. Its kind of like saying being shot by firing squad is worse than 20 years of non-stop torture. I wholly disagree with this assessment because, in reality, capitulation is just kicking the can down the road and will ultimately solve nothing and will only exacerbate the existing problems.

          1. Jeff S

            They’ll never get out of the austerity straightjacket as long as they stay in the EU. It will sentence them to at least another decade of double digit unemployment, and greater economic inequality and poverty. A decade from now they will have a much stronger economy if they leave the euro.

          2. Nathan Tankus

            but that’s not the choice. the choice was between trying to exit in a few months with no planning or try to exit in 6 months or longer with a detailed plan and all sorts of real politik analysis both to protect from assassinations and find allies elsewhere.

            1. MaroonBulldog

              Sadly, it looks like they took the 6 months and wasted them, with still no plan.

          3. Jabawocky

            I think its human nature. Private Eye ran a nice cartoon describing the referendum:

            ‘Greeks face momentous decision:

            Go bust now, or go bust later.’

        2. rusti

          I hope people will pardon the naiveté of the inquirer here, but have countries like Portugal and Ireland reached a sort of unfortunate equilibrium in a way that isn’t an option for Greece if they were to capitulate entirely? Far from prosperity, but with a smaller humanitarian crisis than a Grexit would entail?

          1. IsabelPS

            The problem, I think, is that for Greece to be pulled up to that “sort of unfortunate equilibrium” it would require massive amounts of money at this point in time.

            I have a question that I hope someone can answer: I have read that Greek debt has been restructured a couple of times (even more than the Portuguese debt and, I think, the Irish one) and, therefore the real debt is a lot lower than the nominal one. I have also read that the Greeks request a substantial lowering of the nominal debt, which is a “red line” for various countries. My question is: is this just a question of perception, or is it important in terms of some kind of triggers?

        3. alex morfesis

          it won’t happen but…

          the key question is will the disruption dislodge the existing oligarchy or will it just replace the existing ones with a wrestling tag team hand off by high five to german interests…

          if the oligarchs are dethroned and there is no interest in the northern europeans stepping into the void of this “slave”….i meant slav…country…then within 36 months there will be use of underutilized resources in greece…

          agriculturally, greece could be self sufficient…there are many olive trees that go unharvested in greece…certainly on the islands that used to hold 10-15 thousand and now hold less than 4 thousand…on ithaki, the hills historically were steeped and there was always a surplus…

          but it takes woyk…

          the property records system could be fixed in 45 days…but…it might expose who owns what…my sense is that if greece is going to get out of its mess, it will need to have some type of a truth commission and amnesty…

          let us just say, the junta may have left direct power…but they kept a lot of the goodies and a full and open property system would expose how much the old junta crew has been milking the old cow…and how they “took” those assets…maybe with not really paying for them…

          but it has been 30 years…time to let it go…

          on ithaki, where my family is from…we had been gone for many years…some properties were…cough cough hack…borrowed in a permanent way by various parties…mostly by phony adverse possession actions aided by mystery affiants (greek version of mers robosigning) and an envelope to the favorite charity of the kefalonian jurist (the favorite charity being the left pants pocket)…

          I had a few interesting conversations with some and had convinced most it was probably not a good idea to annoy me as I knew how to find other phony affiants and we can all figure out which pants pocket to place the “fakelaki” for the jurist…

          but there was this one woman…I was sitting on the bench that overlooks the harbor in the main city of Vathi, on the outskirt, just past the gas station before the road which leads to the cave of the nymphs…if you look right towards that road, there are two broken down windmills…one is my grandfathers…but between the road and the windmill, there has been carved out(actually carved out) of the hill/mountain, a now large chunk of land, which this fairly hefty woman had turned into her little farmette, with goats, and chickens and some other items she could sell along the way…

          I was sitting on the bench looking down at the harbor contemplating the last argument I had had with my attorney/professor muse and wondered if it was time to let it all go and head back to florida…

          the hefty woman had gotten off the bus with a bag of groceries…she obviously knew who I was, I had a vague thought of who she might be…she asked me if I might help her get her bags of grocery home, up the hill…no problem…I expected her to go around…she had a little billy goat path straight up a muddy slope…she knew which rocks to step on…I almost fell down 20 feet three times before I got enough footing to make it all the way up…

          when we got up, I saw a basic hippy operation…pieces of discarded industrial matter turned into quite an impressive operation…I love big dogs, so when her pack came charging at me, I did my best “Cesar” and they all sat at attention…not sure if she was hoping they might scare me, but the ice was broken…while she tried to gauge if I might argue with her like I had others who were attempting to “shoo” me away from my great grandfathers claims…I was amazed at how much of the mountain she had been able to chip away…as I looked around me I say years of scratching and clawing…all the hard work she had put in to take a useless side of a hill and turn it in to something she could use to send her children and grandchildren money…there was no way I was ever going to think about taking it away from her…all we had left behind was a side of a hill…she had turned it into a multi generational financial faucet…and I told her so…she was a bit shocked as I had been rather ugly with others on the island…but as I explained to her (and had explained to one other person who was also nervous about the house next to city hall), she was not like the annoying clowns sitting at the coffee houses in the center of town, looking up and seeing which chunk of land they were going to claim next…many of them were KKE members who thought it was their right to reclaim the land for the people (the people sitting around the coffee table)…but unlike them, she made something of what was there…instead of stealing some land and trying to sell it to some british or german tourist…she created a life for her family while she stayed behind and kept doing the hard work…we both laughed a bit and she tried to offer me some fresh eggs and goats milk to take back with me down the hill to town…I only asked her to do as my grandmothers brothers did during the war and try to help people when you can…she agreed…and we went out separate ways…

          There is too much discooperationalism to expect the human capital needed to work together and get things working beyond the immediate needs of the ones in power to come together for the benefit of hellas…there are too many oligarchs who buttered their bread with the german royal family that europe imposed on hellas…that blue and white thing most greeks wave is a german principality flag…it is not a historical greek flag…

          but greeks have fought and survived for two million sunsets…and tourists will keep coming as long as there are no “staged” riots…

          maybe mister panos was right after all…

          (yannis pappas doesn’t really do that schtick anymore…turns out he was making fun of his lawyer mom who is from crete and when she found out…well…no more pastitsio for yannis if he kept it up…so he quit)

          1. Norm de plume

            Great story Alex.

            Don’t the Scots have some analogue of that property register thingy? I seem to recall the English being resistant to any suggestion they do the same, a similar species of apprehension to what the Greek ‘legacy elites’ would exhibit if the idea was seriously suggested there.

            1. Pied de terre

              The Scots also have limited partnerships which are heavily used as anonymisers in financial fraud cases.

          2. fresno dan

            thanks for that.
            I was stationed on Crete when I was in the Air Force back in 75. I remember how poor the country was, and how hard people worked (donkeys were a real means of transportation – the well off had manoli* carts)
            Yet, you could see 75 year old farmers in the cafes at the beginning of the social time – midnight.

            One thinks of all the loans made.
            Yet I don’t think those farmers got one drachma – oops – Euro out of all the financialization that happened
            Who made all those loans? Why were all those loans made Who got all that money? Who BENEFITED from all that loaned money????

            Yet the solution to all those bad loans is more blood from turnips….
            I can’t help but think about our housing “boom” – who made the money, who lost the money, and who suffered….


            1. Carla

              “When the elites want something, the rules don’t mean jack.” Generalfeldmarschall Von Hindenburg (above)

        4. Nathan Tankus

          A) don’t give us assignments

          B) We’ve written the most detailed “best way forward for Greece in the event of a total shut off of liquidity by the ECB” anywhere in public. We’ve done more than all the pom pom waivers combined on this front. Don’t troll us on this

      2. Ulysses

        I don’t question at all the accuracy of this dire prognostication. Yet I fear that the “social fabric” has already unravelled to the point where people will lose more, psychologically, from continuing to endure the slings and arrows of outrageous austerity than from anything else.

        The analogy would be to a battered spouse leaving a well-appointed house, where table scraps are occasionally flung by the abuser at the abused, thus preventing starvation. To leave this house will certainly be tough– and perhaps even fatal, if the abused dies in the street from exposure and starvation. Yet to remain as a prisoner in this house of horrors will destroy the soul, no question. The recent no vote was akin to stealing the sleeping drunk abuser’s keys, and unlocking the backdoor. Now the Greeks must choose– whether to flee down the alley, with nothing more than the clothes on their back; or go back inside, slip the keys into the snoring abuser’s pocket, forego any hope of self-respect, and pray that the next beating doesn’t break any bones.

        1. James Levy

          I can’t tell if Yves is right or wrong at this point. She’s very smart and well-informed and could be absolutely correct. But what I think lies beneath much of the bad blood around here is a disagreement over whether or not Grexit is an ethical/normative choice, and what criteria should be used in assessing that choice. I certainly dislike Lenin, but his statement, it is better to die on your feet than live on your knees, resonates with many of us here. It may be stupid, it may be pointless, but I see no way out for the Greeks other than living on their knees if they don’t jump ship on the EU now. Perhaps that’s OK. Perhaps most peoples, most of the time, are doomed to exist as supplicants or flunkies. I don’t know. I’ve gotten so upset about all this it isn’t funny. But if the time to fight is not now, when will that time come?

          1. fresno dan

            I agree.

            You know, I said at the beginning of all the posts about the banks and the housing boom, that I was willing to believe the bankers were just stupid. But as more, and more, and more….evidence came out, it was pretty obvious that they were evil. That the housing bust was entirely foreseeable, but making money for the creditors was all important, and the government accommodated, enabled, and protected them – and in doing so, screwed everyone else.

            I just don’t think you can look upon the European Union now as a benign but incompetent organization. It seems to me they are actively on the side of creditors who pursued actions that are detrimental to the vast majority of people. And that the European Union will continue to do so.

            Greece was poor before the Euro. But I don’t think it was nearly as bad off as it is under current circumstances. How many years is recovery suppose to take? I think as designed, it will never occur – but the creditors don’t care.

          2. Greg T

            Great point. To most Greeks, what the Troika is imposing on them is slow death by strangulation, the way an anaconda wraps itself around its prey and slowly squeezes the life out of it. It’s understandable why Greece wouldn’t trust any deal made with the EU, the ECB or the IMF. How can you deal with entities that want to kill you? At heart, this is an existential matter for Greece and its people. Finance happens to be battlefield here, but this is war just the same. The accumulated wrongs inflicted on Greece over these past five years has given it the moral authority to reject its membership in the Eurozone. This is the essence of revolution. Revolution repudiates existing laws/rules/customs as inherently unjust, with no option for redress of grievances. Syriza may not be prepared for exit, ( a major failing on its part ) but the dynamics of the situation are speeding in that direction.

          3. Rosario

            Very true, you put it succinctly. How the problem is framed is key. If the conflict is over the ideological bearings of European and global economics the resulting messiness was inevitable. SYRIZA could never get an A on the exam, they couldn’t even pass. I just don’t think it is appropriate to keep discussing the situation in terms of protocols, mandates, and numbers when there is a fundamental disagreement over the protocols, mandates, and numbers in the first place. As I have stated earlier, how can two parties negotiate if they aren’t on the same page? Whose fault is that? I will not and cannot blame SYRIZA which by the reality of democratic politics is blaming Greek citizens for asserting an ethical position aligned with long term human interests. SYRIZA aside, the referendum (however meaningless it has been portrayed) was a powerful affront to EU ideology and I believe Greeks knew exactly what they were voting against, business as usual, and the Troika runs the business. SYRIZA’s task from the outset was to hold on to a bare minimum of social stability that the Troika was more than happy to take away if no resistance was given. That was not a good sign if they were hoping for a reasonable negotiation.

            1. Yves Smith Post author


              The Eurozone is a club governed by treaties. Treaties more rigid than club rules.

              I hate to sound unsymapthetic but the Eurozone is a club that is very clearly deeply dedicated to austerity. Its rules allow for only small deficits and its central bank considers only financial stability, meaning low inflation, and not growth in its targets. It has been obvious for the past five years that not just Germany but other members embrace austerity. That means that to the extent that there is any ambiguity or gaps in the rules, they will be deployed in a way that reinforces price stability. It is also regularly described among economists of the leftist persuasion that the Eurozone was hostile to labor bargaining power.

              Greece wants relief from austerity and it wants to remain in the club. Those are contradictory. The club members before the fight got ugly actually were willing to give Greece some relief (for instance, debt relief was always expected to happen, but after the two sides settled how much austerity patent medicine Greece continued to take).

              Greece as one member of 19 member group where it takes unanimous decisions to make any serious changes, which includes getting bailouts, really is out of line trying to push for rule changes. They’ve been told “no” repeatedly, even to the degree of it becoming a bureaucratic version of “What about ‘no’ don’t you understand?”

              You can correctly say the Eurocrats are stupid and their policies are vicious and destructive but it’s their club, their rules.

              Syriza from the beginning promised the impossible: an end to austerity and staying in the Eurozone. As Syriza MP Costas Lapavistas said in March, it was worth a try, but it was clear after the Eurogroup memo negotiations in February that that plan had failed. Time for a new plan. Tsipras and Varoufakis failed to develop one. They continued to press their original plan, which is the Einstein definition of insanity, doing the same thing over and over and expecting different results. Tsipas AGAIN refused to resolve the contradiction in his strategy by telling voters that if they gave him a mandate, he could negotiate a better deal and stay in the Eurozonee! During the week before the referendum, Syriza officials went ballistic when Eurozone officials said a no vote meant Greece wanted out of the Eurozone. That was a reaffirmation of their position: we have rules, like them or not, but you need to follow our rules to stay in the Eurozone.

              Greece is not the only democracy in Europe and the rights of its citizens do not trump the rights of the citizens in the 18 other countries that are being asked to fund Greece. Again, you may not like hearing that but that is how it works. The US Senate is designed to protect smaller states from the tyranny of the majority. The European Commission sees its role as the defender of smaller states. But as in the US, big states like California and Texas have more influence over national policy than Wyoming.

          4. Carla

            “If I am not for myself, who will be? If I am only for myself, what am I? If not now, when?” – Hillel

            “When the elites want something, the rules don’t mean jack.” –
            Generalfeldmarschall Von Hindenburg

          5. Lambert Strether

            You write:

            There is a disagreement over whether or not Grexit is an ethical/normative choice, and what criteria should be used in assessing that choice. I certainly dislike Lenin, but his statement, it is better to die on your feet than live on your knees, resonates with many of us here.

            There’s a copy editing problem. Let me fix it for you.

            There is a disagreement over whether or not Grexit is an ethical/normative choice, and what criteria should be used in assessing that choice. I certainly dislike Lenin, but his statement, it is better for others to die on your their feet than live on your their knees, resonates with many of us here.

            Fixed it for ya.

            Yes, I think a political worldview that treats other people as experimental test subjects when they don’t have informed consent because that “resonates” is pretty vile, and yes, Lenin (masses, meet vanguard) would have been fully in agreement with it, Syriza is, and yes, that’s a moral judgment.

        2. MyLessThanPrimeBeef

          (Adding to James Levy’s comment, misplaced here by mistake)

          How to fight?

          Let them occupy the place and fight a guerrilla war by living another day, after capitulation?

          Confront them openly by throwing another reserve division of pensioner-soldiers at the Wehrmacht?

          Their WWII heroes did the former.

          Beat them at their own game – become an export juggernaut, even if it takes a century, or more (the Chinese model – to be revised, to be sure).

      3. Link

        But, Yves, isn’t a Grexit inevitable anyway? I see no universe that the Grexit can be avoided.

        That simply means that Greece GDP will collapse more under austerity policies inside euro and will be a much worse catastrophe e.g. Grexit in 5 years from now than a Grexit and catastrophe now.

        A bit of meta-thinking.

        1. Yves Smith Post author

          Syriza actually is trying very hard to do a deal even as the creditors raise the bar, allegedly due to the deterioration of the economy (as in the numbers all need to be redone) but in reality due to the anger at what they regard as Greek game-playing (as in Tsirpas agreeing to things when he met Eurocrats and then renouncing them, partially or fully, when he got home, often angrily). And they don’t think they can trust the government, as in even if it makes commitments, it won’t live up to them.

          Bizarrely, the ruling coalition conceivably could get a deal done by relying on the “Yes” parties for the vote plus a rump of moderate Syriza MPs. So it’s not impossible but I agree the odds are really low, like 10%. The most likely way this might get done is if the creditors allow detailed negotiations to go past Sunday and conditions get bad in Greece quickly enough that there are legitimate (as opposed to anecdotes ferreted out by the oligarch-run media) signs that some Oxi voters are having second thoughts. But I can’t see the creditors letting this go beyond the ECB payment date of July 20 at the very outside.

          1. Percy

            Sorry to be (or sound) dense, but to which “creditors,” specifically, l do you refer? Doesn’t each one, or each set, have its own grace period after Greece becomes “in arrears” in “required” payments to that particular creditor or set of them — and don’t those grace periods determine the “real” timetable for “default” and the triggering of cross default provisions?

      4. Jeff S

        Why would they lose their tourism industry for a couple of years? With the drachma, it will be the cheapest vacation in Europe.

        1. Skippy

          “Why would they lose their tourism industry for a couple of years? With the drachma, it will be the cheapest vacation in Europe.”

          Skippy… aka also know as walmartifiction

        2. CB

          Tourists love rustic Mediterranean beaches, it’s true. But they also love amenities. They love taxis and shuttles and transportation that runs on time, they love hot showers and air-conditioned rooms, they love free wifi and cell phone reception, they love medical care if they break a bone while hiking or step on a stingray while swimming, they love infrastructure like well-maintained roads and buildings that don’t fall down with roofs that don’t leak. They also love credit cards.

          All of this will be very expensive and difficult to maintain in a post-Grexit Greece.

          Also, tourists don’t like dangerous places. If the local populace is so desperate due to austerity and starvation that they’ll rob or cheat tourists for their valuable foreign currency, then tourists won’t come. If you want to maintain a security force that protects tourists so they can vacation in their little tourist bubble, that again costs money, whether public or private. And it engenders ill will if you’re hiring locals to beat on other locals just so a few rich foreigners can enjoy their dream vacation.

          This is why the “they can live off tourism!” nonsense is nonsense. There is no way the tourism industry won’t suffer and suffer badly from a Grexit.

      5. ProNewerDeal

        Yves, is EU membership eviction a possibility in a Grexit from using the Euro currency, including the ability of Greeks to freely move to other EU nations?

        If yes, it seems this would be a big risk to Greece’s future. Many Greeks, even those with FT employment in a professional occupation, may decide that emigrating (more emigrants than the substantial amount that have already emigrated) is worthwhile, and will rush to do so before they perceive the “door will be closed”.

        IIRC, Latvia had 33% of its population emigrate to other EU nations. What proportion of Greeks have already emigrated?

        IIRC, 1 of the NC articles contained an anecdote of a Greek physician woman taking a second job as a prostitute. Perhaps many Greeks will view possibly working a PT McJob, dealing with probable xenophobia discrimination, and possibly having to learn another language, in a nation like France or Germany as a LOTE to the worsening Greek situation.

        1. Nathan Tankus

          Removal of voting rights (a suspension) and taking away of Greek benefits is certainly a possibility that “serious risk” to the “rule of law” would cause.

      6. Gio Bruno

        … but a Grexit provides Putin/China the opportunity to provide food/resources to the Greeks and gain enormous political capital. (That’s why Merkel is offering future “aid” with one hand while twising the dagger with the other; limit the political damage.)

        I have no doubt that the next few years (in or out of the Euro) will be difficult for Greek citizens. But I’m very grateful that they have had the courage to vote their conviction and display to the rest of US what it takes to create a more equitable society.

        1. Nathan Tankus

          I don’t believe a bunch of aging pensioners and other people who just want to live lives that number in a few million should have to be the vanguard for the rest of the west because we haven’t organized much or enough. Nor do I think they’re prepared to be in the way you’re describing.

        2. MyLessThanPrimeBeef

          You have to be careful whom you invite…they won’t be there to help just to for political capital.

          “Sometimes, perhaps even often, the lords on the other side are not always nicer.”

        3. MaroonBulldog

          Have you ever read the short story, “To Serve Man”, by Damon Knight? Or seen the episode of the “Twilight Zone” that dramatized it?

  6. Sam Adams

    I think Germany’s made its choice. The Greeks must die for thier moral failures so a new world can be born. They may delay the inevitable, but they cannot escape thier fate.
    La plus que ca change….

  7. Percy

    The timetable seems phony. Doesn’t the ECB really have until August 20 to pull the plug because of the 30-day grace period? I see that by the affirmative vote of 2/3 the members can dissolve the Greek ELA, but who calls a meeting to do that (presumably Draghi, and if he doesn’t do that how can there be such a vote)?

  8. Skippy

    For thousands of years humanity has been guided by accountancy in both language and deed [contracts]… it is now broken…. and no force can put it back together again…

    Skippy… next~

    1. ambrit

      Punctuated equilibrium.
      As for accountancy, well, an account is also the story of something. Good storytellers take apart old tales and rearrange them into new versions. Also, I would hazard the guess that language is a force unto itself.

    1. John Zelnicker

      If the refinancing is euro for euro with no new money included, the total amount borrowed would not increase and the ELA would not need to be increased.

  9. jgordon

    Wait a minute–this is all very confusing to me. Didn’t Greece just hold a referendum wherein the people decided to reject creditor demands? And now Tsipras is crawling to the creditors, begging to be allowed to implement creditor demands?

    I now realize the whole referendum thing was a farce that was meant to give Tsipras cover for caving to the troika–and that it backfired badly on him. However if he now decides to sweep it under the rug and pretend it never happened, wouldn’t a lot of people in Greece suddenly see a lot of moral justification for a coup d’etat? Considering the hitherto lavish military budget of an otherwise bankrupt state, and Golden Dawn’s continuing rise (and current exclusion from the–compromised/tainted–Greek government) I’m just saying. Looks like there’s a lot of potential for extreme volatility here!

    1. Jeff S

      A specific creditor proposal. Not any and all proposals. If there is an agreement, then it can be determined how different it is from the one put to a referendum.

      1. jgordon

        I suppose they’ll need a new referendum every time they change a comma or alter a title heading or something since the first one was rejected so resoundingly. Do you think these referendums will be a weekly, or biweekly, event? And probably the Germans will be funding them I guess, since no one else can afford to.

        1. James Levy

          jgordon, we don’t agree all that much, but you are right here: the people obviously voted to say “screw austerity and those who would force it on us” and the government is not prepared to follow their lead with a Grexit (which is the only way forward out of austerity, because membership in the EU is de facto austerity and debt peonage forever). The Greek political class lack a combination of ability and will to see this thing through, but that’s true of almost every government I can think of (with the less than noble exception of the Putin government, which has both will and capacity but lacks any significant democratic control or interest in constitutionalism or the rule of law).

          1. HotFlash

            The only country I can think of which has been in similar circumstances was Cuba, cast onto their own resources between the Soviet collapse and the US embargo. They managed, but they were small, isolated, fairly cohesive and had a more-or-less benevolent more-or-less dictator calling the game plan. Oh, and Fidel & Co were fairly competent, too. Greece does not seem to have any better leaders than, say, we have. They may be doomed.

            This totally won’t be pretty.

            1. PeonInChief

              I noted the comparison with Cuba in a blog post yesterday. In Cuba the government was honest with the people about what was going to happen, moved to share the pain equally and protect the most vulnerable (children, for instance, were given their meals at school). In Greece, it appears that the government didn’t make any plans to figure out how to cope with the crisis and is bumbling about without any plan.

              1. MyLessThanPrimeBeef

                I was thinking the same.

                They need a new, honest government more than a new deal.

                ‘Know yourself and your adversary.’

            2. NotTimothyGeithner

              The U.S. was/is an out and out villain upset because the mob lost its money laundering haven in the Cuban scenario. Castro overthrew an awful regime. In the case of Greece, older people 35+ anyway cheered the growth of the EU with a fix-it later attitude or ignore the problems attitude in exchange for easier vacations. Mitterand didn’t invade with armed troops. Fidel and friends were liberators regardless of U.S. propaganda. They might not be enlightened, but Reagan would opened the old plantations if he thought he could do it.

              Even during the hey day of the USSR, Cuba was off the beaten path of global trade routes. Their natural trading partner is the U.S., so they already knew the score when the USSR collapsed.

  10. Walter K

    I suspect that by Sunday the EU will find a way to keep the money flowing to Greece, notwithstanding lack of serious commitment to reform by the majority of the Greek people (my reading of the referendum results).
    If Greece exits from the Euro, Greek citizens will be able to relocate anywhere in the EU to escape the resulting crisis (recall the recent discussions in the UK of “benefits tourism”?). A crisis that provokes a mass emigration to other EU member states will be a disaster for the EU, creating fertile grounds for a Brexit and the eventual demise of the EU project.

  11. ChrisFromGeorgia

    So far Mr. Market is not exactly signalling that this latest Greek gambit is going to be accepted by the E.U.

    1. Carla

      Perhaps Mr. Market is/was/will be more focused on China, with a population more than 100 times that of Greece and many times that of Europe.

  12. Ché Pasa

    The European Project is shuddering. When Italy’s Matteo Renzi said yesterday that Europe itself must be reformed, it was as clear a sign as we could ask for that the cruel mess that is today’s “Europe” is floundering and will be rent asunder. Without a resort to open Fascism and suppression of dissent such as Rajoy has imposed in Spain, the Project will likely not survive much longer.

    It is the inability of Finance and the European Project to deal with — or even honestly acknowledge — the humanitarian consequences of their rigid and self-righteous policies toward the weak and the purposely impoverished that is the Achilles Heel (so to speak) of the Titans of Europe. Their deliberate obliviousness to the suffering they have imposed will ultimately shatter their enterprise — just as their rigidity and lies have already destroyed their credibility.

    The only tool they have left is the imposition of more suffering, but that suffering is already so widespread, their application of more cruelty cannot have the desired effect of more compliance and submission. It won’t work.

    No doubt Tsipras and SYRIZA have made many mistakes along their road to reach this point, but it fell to them to challenge and expose the Titans of Europe for the hypocrites, frauds and cruel masters they are — and to cause Europe-as-Project to fundamentally change. That was a stated objective which they have adhered to from the get-go.

    Greece may be a sacrifice in the end, but it won’t be for nothing. The Europe Project cannot be sustained as it is, and the sooner it falls apart, the better for all.

    In that regard, Tsipras and SYRIZA are heroes.

    1. Synoia

      that the cruel mess that is today’s “Europe”

      So you’d ask the Germans or the European Oligarchs for mercy?

      Good Luck with that.

      1. Ché Pasa

        Who is asking them for mercy? They’re being asked to be rational and humane. And they cannot do it. Mercy is something else altogether.

    2. MyLessThanPrimeBeef

      If Tsipras eventuates a Grexit, he’d be a hero to some.

      If he capitulates and signs a deal with the creditors, he’s also be a hero to others.

  13. gemini33

    No mention of debt writedown?

    Seems like this hints of a deal in which Tsipras agrees to get on his knees and accept a harsher deal than the pre-referendum deal, so the EU megalo-overlords can save face and send a message to other vassal states that if you try to escape the straitjacket things just get worse for you

    Meanwhile somebody, somehow, arranges a debt writedown (with US working on that in the background), which may have been Syriza’s top priority after all, as part of a multi-step plan to some kind of escape/recovery or later Eurozone exit when they’re temporarily stabilized and more importantly have proper time to prepare for it.

    Wild-arsed guess.

  14. thom

    The Fourth German Reich, headed by Queen of Europe Angela Merkel, is making non-negotiable demands of Greece? It is Frau Merkel who should be backing off and standing down.

    Like canceling about 70% of Greece’s UNSUSTAINABLE DEBT FORCED ON IT BY GERMAN BANKS.

    It is CLEAR that Frau Merkel and Obama/Hillary/Kerry/Golman-Sachs wants REGIME CHANGE in GREECE and, failing that, to throw Greece out of the European Union and the Euro.

    Reverse anschluss? Reverse Sudetenland? Reverse invasion of Poland? Reverse invasion of Russia?

    Same objective?

    Total European Domination by the Fourth German Reich and the Queen of Europe, The East German Soviet-educated Frau Merkel.


    Ecclesiates is right! There IS nothing new under the sun!

    1. James Levy

      Steady, man, steady. Merkel barely controls her own political party. She is far from Queen in the pejorative sense you use the term.

      Germany is way too insular and foolish for your imaginings. They want nothing but the maintenance of the status quo since the worst of the economic problems brought about by unification and the introduction of the Euro subsided. The do not want imperium. They want their stupid economic advantages locked in place for as long as is humanly possible (just as the USA does with TPP et al.). And although I am a strong supporter of Greece in all this (as can be seen by any perusal of my posts) the idea that the German banks forced the money on the Greeks is just ridiculous.

      1. different clue

        James Levy,

        Why do so many smart people keep confusing the International Free Trade Conspiracy with the US? What advantages does the US gain from TPP? And by “US”, I mean you and me and the other 99 per centers and the country at large. What advantages does the US gain from TPP?

        Now . . . what advantages do the International Free Trade Conspirators gain from TPP? The “who”? The “what”? The Great Lords of Money . . . the people who owned and operated President Clinton and who own and operate President Obama today. What advantages do THEY get out of TPP?

        Now . . . after all the advantages are added up and balanced out, which group gets the more net advantage? The “US” or the “IFTC”?

  15. Roquentin

    This is practically a non-sequitor, but back in college I worked in gas station managed by a Norwegian immigrant with an MA in anthropology. It was a college town, so everyone was way overeducated for what they did. Anyhow, at some point the conversation turned towards the EU and why Norway wasn’t a member. I thought it was bizarre that they didn’t join and he was equally shocked by my understanding of the situation. I don’t remember his exact words, but he said something like “it’ll be a disaster.”

    At the time I suspected him of being some kind of isolationist crank. Boy, was I wrong. Time has proven him very, very right. I often think back to that moment when I read stories about the crisis.

  16. participant-observer-observed

    The USA newspapers are all on fire with the “Washinton Post-Tribune” stringer univoice “blame the victim” memes with locals all on-cue writing indignant “I pay MY debts-I cannot believe those lazy Greeks” letters to editor.

    I wish NC would write some pieces to help the public understand the difference between household and national debt and the relation of the Grexit to the GFC. I am sure Truth-Out and others would re-publish them!

    1. Sally

      I wish somone would point out to these people that the U.S. banks didn’t pay off their debts. They just rang up their friendly politicians who got the FED to print trillions and trillins of $ and hey presto, a miracle of financial trickery and the debts have all gone.

      One thing to always bare in mind about the reporting of Greece in the Daily Telegraph is they are very conflicted on the Greece story. The average Tory voter in England views the Greeks as lazy scrounges. However, they hate the European currency even more. Hence why the UK has never joined. Many on the right in England hope the Greece Crisis will blow up the Euro and the EU.

  17. drb48

    Yves –

    I hesitate to even weigh in here – since events will soon make moot any speculation – but I’m confused as to why you appear to continue to favor capitulation by the Greek government to the creditors demands over a Grexit. Didn’t the IMF report last week indicate that the creditors demands – the previous ones, which were LESS harsh than what they currently seem to be asking for – were unsustainable? In fact, following this mess here it seems to me that the creditors and the ECB have been steadily moving the goalposts – i.e. there doesn’t seem to have ever been any deal that the Greeks could have made. And I’m frankly at a loss to understand what game Merkel the ECB et al are playing at. Nominally, Greece is part of the EU. They appear to have been on a mission now for years to efectively destroy one of their own members – war in fact by other means. Why? You seem to indicate that it’s some sort of demonstration of power to discourage others from refusing to play the austerity game – and/or continuing to be Germany’s bitch. Isn’t the lesson to be learned by other member states now something else? As in it’s extremely dangerous to be locked into this association and the sooner they GTF out the better? Rather than blame the ineffectual Greek leadership, how about putting the blame where it properly seems to belong – on the sociopaths driving this train?

    1. Nathan Tankus

      Because they have no plan for a Grexit. an unplanned Grexit will be the best case scenario for the creditors at this point and a disaster for Greece. We’re in the weird position right now where a bunch of anglophone cheerleaders believe that a Grexit will somehow create freedom for Greeks where the Syriza leadership knows that it would be a disaster and continental Europe’s policy elites are talking in terms of a Grexit and humanitarian relief (a political disaster for the Greek government).

      The Greek government has capitulated to the Troika repeatedly. If these bailout agreements are reversible they can rip them up and go towards a Grexit when they have a credible plan to. If they aren’t then this door closed a long time ago. You can’t have it both ways.

  18. Phil Snead, Charleston SC

    Old school financial interests + nationalism => Greece 2015. Eurozone fragmenting bc it perceives no common enemy. See US history 1820-1860.

  19. Hk

    It was the small Serbia in 1914 that has been used to start the dissolution of Europe powers.

    This is again a war against Europe that use as a mean a stupid micro state. To dissolve Eu. Qui prodest? Not a difficult answer for NC readers.

    1. different clue

      Well . . . the Great EU Leaders should be smart enough to see that. They must be smart or they wouldn’t be Leaders, right? So if they choose not to see it, whose fault is that but their own?

      Maybe this is Eurostan’s rendezvous with Darwin.

      1. fajensen

        Incompetence is normally distributed.

        The thing that makes leaders noticeably different form “people” is that the consequences of their competence- or in-competence scales in proportion to their influence.

        When we see leadership stupidity and pigheadedness we think it is a special case, in reality our exalted leadership are sometimes like those red-neck neighbors down the street who are well into their 8’th year fighting over how garbage bins should be positioned on the pavement. Scary to think that these people have nukes, isn’t it?

  20. Phil Snead, Charleston SC

    Once this is patched back together, will the EU fly the Syriza flag in Brussels for 54 years?

  21. OttoGrotewohl

    Struck by the unprincipled flavor of many of the comments, that capitulation and how much better Greece might fare financially with capitulation are absolutized. Greece’s voters seem to be doing a whole lot better grasping the need for self-respect than many of their erstwhile counselors. But, then again, that’s the fundamental flaw with reformist logic, isn’t it: that there is really nothing more to the human being than his stomach? Exit and the creation of a workers’ state are and have been the only self-preserving choices for Greece. One eventually confronts the extortionist.

    1. Yves Smith Post author

      A workers’ state may be what you want and as Mondragon shows, it probably would be better for Greece if the Grexit costs were not so catastrophically high.

      But you are wanting Greece to be something it is not. There is no evidence that there is much support for your idea. Greece is a country where many people aspire to be civil servants because they perceive it to be a nice life. And as happened in Ireland and Latvia in austerity, the people with the most energy and education left the country to find work elsewhere rather than build or lead ventures at home.

    2. different clue

      Sounds like ” let’s him and them fight”.

      Will you hold Greece’s coat?

  22. juliania

    I hope it will be permitted here that I post what to me is a concise understanding by poster Copeland at (along with my probably naive response):

    “‘ Tsipras has said that he is going to the European High Court, which is his chosen way to challenge an expulsion of Greece by bureaucratic fiat. And If the German government really is committed to Grexit now; then there has to be a negotiation that signifies some kind of legal structure, if that is to happen. Tsipras has neither disrespected Varoufakis, nor does he disrespect the mandate, the “OXI”. He has simply brought someone, the new FinMin, Euclid T. in whom he trusts to close the deal. The new man is the right person for the next phase in this struggle. . .’

    Thanks, Copeland – this makes perfect sense in line with the latest proffer Tsipras has made. The letter he’s written has no specifics but in very general terms speaks to the legal foundation of the eurozone. Junker and co. are making threats of a non-legal nature, and the implications are that it is they that are out of order, not Tsipras, which will be for a court to decide. And since the Troika are dragging their heels on immediate aid to Greece in the interim, it is they who are on shaky grounds.”

    I ought to have said “which should be.” I really don’t know if it will.

  23. Robert Dudek

    Just for fun. Suppose FinMin presents a new plan tomorrow along the lines of raising age of pension eligibility, going after tax dodging oligarchs, and running a huge Keynesian fiscal deficit to get the economy going. How many blood vessels on the creditor side would burst?

  24. JMarco

    Can someone explain how United Kingdom uses “pound” as its currency and is a member of European Union. ergo couldn’t Greece use “drachma” and still be member of EU?

    1. Robert dudek

      It’s simple. The eu came before the euro. Greece joined euro, UK didn’t and others.

      There is no legal way to leave the euro. New rules will have to be worked out in the coming years if de facto Grexit continues indefinitely.

    2. Nathan Tankus

      It specifically has a derogation granted in the treaty. There is no process for granting current countries a derogation. More importantly it’s the process of getting there that likely burns that bridge (at least suspension wise). Taking over the Bank of Greece, violating all sorts of contracts etc etc enough to get them suspended from membership voting rights and for them to start cutting off various benefits.

  25. Sally

    The UK only got into the EU many years after the founding of it. They stayed out because they saw it as losing their national Sovereignty. Then it was called The Common Market, and was seen as a sort of NAFTA job of free States in a free trade zone. Most on the far left and far right never bought this. As the EU grew, so did the political control of Brussels.

    This argument in Greece about political control has been raging in the UK for 30 odd years. With each treaty creating ever more anger as more sovereignty is given away. When the Euro was introduced the UK stayed out. Much to the annoyance of many in the Europe zone who saw the UK as cheating. Only wanting the benefits of free trade, but not the regulation and loss of political control.

    what is happening in Greece is vindication of all those on the far left and right who warned of the danger of losing control of your currency and your ability as a country to devalue and print money. In theory Greece should be allowed to leave the single currency. But it seems as if the Greeks don’t want to. That is the Greek govts biggest problem. They have no control, no control over their currency. Can’t devalue and can’t print money. That is exactly how the creators of the system wanted it. They wanted the removal of political control from the people.

    1. Norm de plume

      Yes, you know things have changed, changed utterly, when the extreme fringes prove correct and the enemy of democracy is the great, grey middle.

    2. Jeff S

      I’ve never understood the political impetus for the EU and the euro. It wasn’t like there was a groundswell and popular demand for it. It’s like these so-called trade agreements. It’s the corporate and financial elites, who fund neo-liberal economists and the business media, that have pushed for it. The public and democracy be damned.

      1. Jabawocky

        Try two world wars and genocide. The original idea was noble until it was corrupted by the bankers and their allies.

      2. NotTimothyGeithner

        Mitterand wanted to lock in a system before West and East Germany reunited reducing France to a junior partner, and basically, the other leaders agreed. Germany agreed in exchange for certain advantages, and everyone rushed to join before reunification was fully integrated and a country might be left out. The Euro country not in the EU has a problem. Now there is a coalition of equals, but in practice, they follow a strong man or behave like cats.

    3. different clue

      When the Common Market was still young, and then middle-aged . . . in what sense was it Europe’s NAFTA? Was one of the countries a vastly lower-wage lower-standards country used to drive down wages and standards in every other country? In other words, who was Common Market’s “Mexico”?
      If Common Market did not have a “Mexico”, then how NAFTAzoidal was the Common Market really?

      1. fajensen

        It was the “Inverse NAFTA” – the political goal then was to lift the poorer “peripheral” countries up to the higher standards of the “core” countries. This was possible because there was “friction” in the form of exchange rates between the countries. This was a political goal, supported by political “structure funds”

        That all changes with the Euro because the Euro removes exchange controls between different zones.

        The “lifting up the periphery”-project now becomes “A Market Thing”: If capital for whatever reason is attracted to low-cost areas, then in principle they should improve their economic performance which should even out the differences, meaning that wages will rise and taxation becomes efficient, so, “imbalances even out with time”. Maybe. We never tested that.

        Without exchange controls in some form, “capital” flows where it is treated the best, so, in order to attract capital from a Germany who is good at making a return on it, others have to be competitive in a different ways, basically “the game” becomes to have low taxation and “low costs”, which is a game of reducing all (other than Germany) to the lowest living standards and the slackest tax regime of the very worst EU state.

        The Germans of course see this as a feature and natural justice even – the virtuous are rewarded, the frivolous are punished and kept in their place – automatically, no need to drive Tigers across Belgium and all that.

        But, of course we can make this dubious situation a lot worse.

        We add a layer of Neo-liberalism on top: “Investors” and “businesses” *like* lax tax regimes and lots of working-poor labour with no safety-net a lot, but, if “Markets” really “lift up the periphery” that slowly goes away. The solution is to keep Expanding the Eurozone – every time a low-performing area improves, we can include an even worse country and the activity will flow there instead – unless others “suck down” to the lower standards, thus keeping a lid on things and starting a race to the bottom.

    4. John Smith

      That is exactly how the creators of the system wanted it. They wanted the removal of political control from the people.

      Hypocritically it seems, if it is the taxation authority and power of government that drives the value of fiat, at least to jump start it.

  26. Paul Hirschman

    Can Neoliberal elites govern the “core” of the world economy under any circumstances other than clear sailing? I doubt it. Their legitimacy rests solely on the belief among tens of millions of “folks” that washing machines will never disappear from stores and that there will be loans available–always– to buy them. Any serious social unrest in Greece will puncture this basic feeling of middle class existence in Europe and North America. I don’t believe people like Hillary Clinton, or Obama, or Cuomo, or Cruz, or Congress or any other Neoliberal can govern if there are real shortages of anything.

    If millions of people in Europe begin to feel serious pain because production and distribution chains fall apart, who knows what will happen. In such a situation, politics will trump economics; brute force will trump everything else.

    Living in metropolitan New York, I know that middle class folks will bring out their guns–and they have a lot of them–if they can’t get gas or basic food after a very short period of time. And there’s no organization large enough, including the police or National Guard (most of which is abroad anyway), that could handle such a situation without a great deal of chaos. The math is not good for Neoliberals if they let this thing get out of hand. (Or for the rest of us, for that matter.) Hence the political need to keep Greece “whole.”

    1. different clue

      Hmmm . . . . you have a good point there. Do you think all the organs of Law Enforcement and Order Maintainance agree with you? What did Homeland Security buy all those billion rounds of ammo for? What are they expecting?

    2. fajensen

      Neoliberalism is – in my opinion – Beige Fascism; The subsuming of democracy and the resources of the state into exclusively serving the “needs of business” – only without the parades. Therefore, I think, it is just a small step for the neoliberals to go all in with the real thing. The security state is already in place and well equipped for fascism to work.

      The problem in Greece, with the tax reforms, land ownership and such is primarily that the old cronies (and their descendants) from the Junta do not like their stolen property enumerated. It is a bit hard to raise a case against the local land-owner for the stolen property of your “disappeared” grandfather when said land-owner is also the head of police, et cetera. Greece was never “de-Nazified”.

      I think that those reforms that everyone demands can in fact only come from the outside, from the EU. Problem is that the Eurozone is not a proper federal structure, it has no mechanisms for harmonizing taxation, property registration, et cetera, and the prevailing neoliberal agenda is absolutely dead against this.

      1. Ulysses

        “Beige Fascism–” that is brilliant! Today’s kleptocrats emphatically don’t want energized, enthusiastic throngs of people following charismatic leaders into a brave new world, like the fascists of the 20th century.

        Transnational kleptocracy seeks to limit nationalist impulses to supporting sporting teams, or paying taxes for bloated military budgets. The desired future is one where most of us either die off, or cling dejectedly to life in vast, unhealthy “pleeblands” (thanks Margaret Atwood!). Survivors compete to better serve their masters, eagerly awaiting whatever meager offerings of bread and circuses trickle down from the almighty “job creators,” enjoying the good life in their wealthy enclaves.

  27. Pookah Harvey

    Maybe Tsipras should take Schaeuble’s advise:

    Schaeuble, one of the Greece’s biggest creditors and toughest critics, made the remarks on the eve of a Greek referendum that will decide if there should be further austerity measures.

    The German Minister said: “Greece is a member of the Eurozone. There is no doubt about that. Whether with the euro or temporarily without it: only the Greeks can answer this question.”

    Tsipras should tell the Troika we wish to leave the Euro TEMPORARILY with help from the EU and then see what they say.

  28. Sy Krass

    Ive thought about this for a very long time. I still can’t quite wrap my head around why I think there is ultimatley no happy ending, not just for Greece, but for the world at large. Continuing along this path can best be described as a slow motion deflation where all good money flow stops and eventually the world payment system just seizes. Doesn’t this current paradigm have to end with all currencies zooming toward infinity? With that deflation turning into inflation because they just keep adding money?

    1. MaroonBulldog

      There is no happy ending for Greece because there is no happy ending for the Euro. The Euro project is an idealistically conceived, legalistically contrived, rationally planned disaster-waiting-to-happen. Now the waiting part is over: Greece was the weakest link in chain, so it failed first, not because of the special faults and foibles of the Greeks, but because the project was bound to fail, and one country had to be the weakest link.

  29. Paul Hirschman

    Here’s Keynes in Economic Consequences of Peace, 1920:

    “The essential facts of the situation, as I see them, are expressed simply. Europe consists of the densest aggregation of population in the history of the world. This population is accustomed to a relatively high standard of life, in which, even now, some sections of it anticipate improvement rather than deterioration. In relation to other continents Europe is not self-sufficient; in particular it cannot feed itself. Internally the population is not evenly distributed, but much of it is crowded into a relatively small number of dense industrial centers. This population secured for itself a livelihood before the war, without much margin of surplus, by means of a delicate and immensely complicated organization, of which the foundations were supported by coal, iron, transport, and an unbroken supply of imported food and raw materials from other continents. By the destruction of this organization and the interruption of the stream of supplies, a part of this population is deprived of its means of livelihood. Emigration is not open to the redundant surplus. For it would take years to transport them overseas, even, which is not the case, if countries could be found which were ready to receive them. The danger confronting us, therefore, is the rapid depression of the standard of life of the European populations to a point which will mean actual starvation for some (a point already reached in Russia and approximately reached in Austria). Men will not always die quietly. For starvation, which brings to some lethargy and a helpless despair, drives other temperaments to the nervous instability of hysteria and to a mad despair. And these in their distress may overturn the remnants of organization, and submerge civilization itself in their attempts to satisfy desperately the overwhelming needs of the individual. This is the danger against which all our resources and courage and idealism must now co-operate.”

    As he pointed out, “Men will not always die quietly” when modern urban society cannot function, leaving millions of people without the means of surviving–traditional war was the cause in 1920; here the cause of the collapse of modern, complex, urban society may be a result of a sort of financial/class war. Either way, “Men will not always die quietly.”

  30. normansdog

    just two points:
    Yves and others claim tourism will be wiped out – this is not true Holidays in Greece and Spain are a part of european culture and will not go away – Germany and the UK + Sweeden probably own half of the property on beeches in those countries. I know Germans who are at this very moment in Crete buying property to build hioliday homes.
    Yves again claims the EU is an austerity club ad members should lknow what clubs they are joimning. Not true!
    The EU is now an austerity club but was not so at the start, the Neoliberaly have taken over and changed the way the club works. The rules were always there, they wwere just never enforced. Ireland, Portugal, Greece Spain – they were all practicall rebuilt using EU development funds, anyone who remembers driving from Dublin to Cork on the donkey tracks they called roads in the in the 1970’s may be surprised to see the brand new motorways that now connect those cities.
    So, there were many incentives for poor countries to join the club and the club spent freely on such projects. The club is now in the hands of a new committee – the neoliberal right that has takenover european parliaments one by one over the last 10 years – and the old EU growth poroject is dead.

    1. Nathan Tankus

      “Yves and others claim tourism will be wiped out – this is not true Holidays in Greece and Spain are a part of european culture and will not go away – Germany and the UK + Sweeden probably own half of the property on beeches in those countries. I know Germans who are at this very moment in Crete buying property to build hioliday homes.”

      straw man. please take that kind of argumentation elsewhere. we never said tourism would be “wiped out” we said that in the event of a grexit and a takeover of the Bank of Greece international payments would likely stop working which means Tourists would have difficulty paying for things in anything but cash they brought from outside the country. If you don’t think that is and would devastate tourism in Greece I have a bridge I’d like to sell you.

      1. normansdog

        Hi Nathan, straw man???
        Huh? as Yves would say

        Yves and Clive and Lambert have consistently stated that tourism will not help in the future because it will be very badly damaged by a grexit or whatever occurs. If you dispute this then I will just go back through the posts and find references.
        I claim that this is irrelevant for tourism – so please tell me where this straw man is ?

        1. Nathan Tankus

          Yet more strawmanning. You refused to engage with the substance of my response to a comment that in itself was a strawman. I suggest you check out the recent site announcement. your intellectual dishonesty is not worth our time.

  31. IsabelPS

    From the Guardian Livefeed (I am hopeful for the first time in months, too, although the cost of fixing it now instead of then will be horrendous):

    Our correspondent Helena Smith reports.
    Officials here are saying that all hope now rests with the French connection. Paris has dispatched a team of technocrats to help finance minister Euclid Tsakalotos draft the new proposal in an effort to ensure it is as convincing as can possibly be.
    One insider says:
    “It is being done all over again, measure by measure. They are offering invaluable assistance.”
    Tsakalotos, who returned to Athens last night, will convene with prime minister Alexis Tsipras and other senior officials to discuss the new measures – a mix of biting taxes, swingeing cuts and administrative reforms.
    At this point in time, the third bailout will allegedly be in the range of €52bn with Greece asking for the emergency aid to be disbursed over three years. The media here is also reporting that the IMF is pressing for the package to be higher, in the range of €60-€70bn, though.
    Events have happened so fast, that Greeks have almost not had the opportunity to digest the news that after nearly six months of drama-filled negotiations they could soon be hit with a heavier austerity package than at any other time.
    But for the first time in several days there is hope that a way can be found out.
    I spoke with Greece’s pre-eminent sociologist, professor Konstantinos Tsoukalas, who also sits as a state MP with the governing Syriza party this morning, and he said:
    “I am very optimistic for the first time in days.”

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