Links 7/10/15

If you did not visit the site yesterday, please read our post on our site policy change.

Warming ‘squeezing out’ bumblebees BBC

Hold the Phone, It’s Patti LuPone New York Times (reslic)

Stiglitz Calls Climate Talks a ‘Charade,’ Pushes Plan C Bloomberg

The Secret Startup That Saved the Worst Website in AmericaPrestige of the Communist party tumbles in the Great Fall of China Financial Times

China’s Illness Is Contagious for Asia Bloomberg

The Non-independent ECB Social Europe Journal


New Greece bailout plan ‘thorouhg‘ BBC

Greece news live: Markets surge on news of Tsipras’s climbdown as Greeks propose much harsher austerity deal Telegraph. Mr Market is not a nice person.

Greece Proposes Deal Worse Than It Could Have Got Two Weeks Ago Forbes

Greek deal in sight as Germany bows to huge global pressure for debt relief Ambrose Evans-Prichard, Telegraph. Note that debt relief is nowhere to be found in the proposal submitted by Greece. It could conceivably be in a side document, but I have yet to see any media reports of that nature. Note however, that debt relief, via extensions of maturities, interest rate reductions, and payment deferrals, was always expected to happen. But the creditors insisted that Greece complete its “second bailout,” the deal signed in 2012, before it negotiated its “third bailout.” And the timetable envisaged in the February Eurogroup memo was that the “second bailout” negotiations over structural reforms would be completed by end of April, with the “third bailout” negotiations to start immediately thereafter.

Leaked: Greece’s new economic reform proposal Financial Times. “First, none of the documents mentions debt relief.”

Merkel ally says hard to trust latest Greek reform proposals Reuters

Schäuble told Greece: ‘How much money do you want to leave the euro?’ Business Insider

Greek debt writedown would be red line for me – Latvian PM Reuters

Europe will pay the price for Greece Financial Times. Yes, but the Eurocrats, whether they admit it to themselves or not, are in “IBG?YBG” (“I’ll be gone, you’ll be gone”) mode. This is actually not a very good piece, which in and of itself is telling (as in is everyone looking at this unable to get beyond tired tropes?)

With cash fast running out, Greek bank failures loom Financial Times

Fear Grows in Greece as Decisive Hour Nears Wall Street Journal

Greek Economy Under Siege, With Fears That the Worst Is Coming New York Times. We warned that a bank holiday alone was massively destructive. From the article:

As Greece hurtles toward a Sunday deadline for either reaching a bailout deal or risking a hasty exit from the eurozone, the one certainty is that its economy is already on the brink of collapse…

“Greece already has a humanitarian crisis, and we’ll have to prepare for a harder aftermath if a deal collapses,” Nikitas Kanakis, the president of the board of directors of the Athens chapter of Doctors of the World, a health care charity, said Wednesday. “I’m not sure how proud we should feel about letting social destruction return within Europe.”

Greece: pushing and shoving in ATM queues Telegraph. This is tame, but notice the policeman and the size of the crowd. The altercation probably would have escalated if he was not there.

If Syriza Blinks Ian Welsh

Tsipras has just destroyed Greece MacroBusiness


How Not to Measure the Iran Deal Bloomberg

Iran talks trigger sanctions delay BBC

ISIS Steps Up Recruiting in Georgia’s Pankisi Gorge Intercept (reslic)

Big Brother is Watching You Watch

Encryption Is As American As Apple Pie: The Founding Fathers Frequently Used It … And It Helped Win the Revolutionary War George Washington

22 Million Affected by OPM Hack, Officials Say ABC

Father says bomb scare was teen’s chemistry set WSB

July 4 Terror Plots Foiled by U.S. Agents, FBI Chief Comey Says Bloomberg. Reslic: “FBI is overjoyed that IS2 was formed. Always have to have a bad guy in order to get more budget. DOD/State/CIA can’t have it all with their new cold wars and all the other wars they gin up.”

Bernie Sanders Is Not the Left’s Ron Paul New Republic

Matt Taibbi: Eric Holder Back to Wall Street-Tied Law Firm After Years of Refusing to Jail Bankers Democracy Now

The Quiet War Squirrels Are Waging on U.S. Stock Exchanges Atlantic (reslic)

Colbert Shows How to React to a Market Collapse Big Picture

Calling Off the Credit-Card Debt Collectors New York Times (reslic)

Zombies stumble in June, but finally have something to be less ashamed about FT Alphaville

Class Warfare

SCOTUS Comes Calling on Public Sector Unions American Prospect

The Supreme Court, the Fair Housing Act and the Racism Debate Alan White, Credit Slips

Antidote du jour. Lance N: “‘Just give us the mice and nobody gets hurt.’ The three thugs are either “Russian Snow Cats” or “Norwegian Forest Cats”.” I think we might rename the The Troika.

RussianNorwegianSnowCats links

See yesterday’s Links and Antidote du Jour here.

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  1. Disturbed Voter

    Nothing Greece can agree too will change the arithmetic. Greece is a money laundering operation by European organized crime, enabled by criminal banks. Columbia on the Aegean. The Greeks should all migrate and let the Germans have it. Like Estonia and Ireland, if you shed enough unemployed people, your stats look better on paper.

    1. vidimi

      if you read of any richard smith’s exposés on this site, it’s pretty clear that it’s not greece that’s europe’s money laundering capital but britain and it’s affiliated secrecy jurisdictions (belize, caymans, etc)

      1. jgordon

        I was thinking that “money laundering” meant passing troika/ECB credit money through Greece onto the bankrupt German/French banking systems. The suffering of the Greek people is merely an incidental byproduct of the process, and not a byproduct worth worrying much overly much about, at least as far as the powers that be are concerned.

        1. vidimi

          i see what you mean. those billions end up recycled in private accounts.

          by that standard you can probably include tax havens, too. luxemburg and ireland are get-away vehicles for a lot of countries’ tax euros.

          1. Cugel

            This show ain’t remotely over. First the European parliaments have to be muscled into accepting a deal, which is far from certain despite the pressure from the U.S. and France. Second, Schäuble is only representative of a large faction of northern EU parliamentarians. They haven’t changed their views one bit – they don’t trust Tsipras and they want Grexit.

            So, all this does is exchange some pension and tax “reforms” for an extension of life-support for the Greek economy. Meanwhile everyone agrees that the primary surplus targets Greece has agreed to will never be met. Hence all the talk about “debt relief” or “debt restructuring.”

            Debt restructuring has not been agreed to and will be the subject of much further negotiation. Despite Yves saying that that was “always in the cards”, that WAS NOT always in the cards at all! In fact the entire push by the hard-liners for Grexit is completely designed to PREVENT Germany in particular from having to admit to their taxpayers that the debt cannot be repaid and must be written down.

            So, if they agree to keep Greece in the Eurozone, they have to somehow deal with this long-term problem. It’s not going away, and they still have no more incentive to admit the truth to the public than they did before. Even less in fact.

            It is much more convenient to avoid the problem, force Grexit, and then blame the lazy Greeks, than negotiate something that can be sustained in the long-term, even the most cruel program.

            And they know perfectly well that the Greek economy is going to continue to decline, and now they will be blamed for that as well because the “reforms” they wanted are all contractionary, the tax “reforms” will either be evaded by taxpayers, or else will generally not generate the revenues anticipated, etc.

            In short, Greece is still a house of cards. Schäuble and the hard-liners tried to short-sell the entire concern get rid of the entire mess, avoid admitting anything or having to deal with reality at all. Now instead they own the continuing crisis. This is not going to make Merkel or anybody on the EU side look good.

            1. Yves Smith Post author

              I agree that a Grexit is still way too likely, and the prospect makes me sick to my stomach. And at this point, it will be the refusal to call the ECB dogs off while they negotiate a deal.

              It will be an utter nightmare for Greece. It won’t hurt financial markets much immediately. Draghi has that well tamped down.

              It is a disaster for the Eurozone longer term, but I have no idea how long “longer term” will take to arrive.

          2. norm de plume

            What about Switzerland? Particularly in the Greek context. I recall an estimate somewhere (Hudson?) that 40 billion Greek Euros have made their way there without licit tax scrutiny, can’t recall the timeframe.

            Even aside from the nations (and state jurisdictions as Robert Dudek avers above) there are of course the offshores, which the Tax Justice Network estimates house at least 32 TRillion in assets likewise illegally spirited out of the reach of legitimate review. Add the offshores to the ‘legal’ juridictional havens and you have a multi-trillion dollar war chest for finance-capital.

            For me this is the great unexamined issue at the heart of our woes, the factor which most facilitates the growing 99%/1% divide and which sits behind Greece now, the rest of us later. We can worry the life out of system problems like banking practices, union decline and labour’s shrinking share of income, stimulus vs austerity, and even the solutions we come up with for these, like better regulation, more direct democracy, BIGs and JIGs… but if the wealth that is being ferried up from bottom to top has an escape outlet, a means by which to avoid paying its fair share, the gap widens further, the power differential increases, and the sort of gross venality we have witnessed recently in Europe becomes the new normal. All other issues in a way become partly moot, in that the elephant is being ignored.

            1. Yves Smith Post author

              I agree this is a huge problem and Greece could only begin to get at that money with considerable international help.

              But Greece has also long had a very weak tax collection regime, and a “clientlist” governments that refused to do anything about it.

              The current government lost credibility early on on the tax issue. One thing that had gotten the Troika unhappy with the Samaras government was its plan to go after tax arrearages. They wanted to allow people to pay in installments. In theory that’s a sound idea, but the Troika wanted to exempt the top 6500 candidates, each of whom owed over 1 million euros each. The Samaras government refused.

              The new government went to implement the same scheme. The Troika again asked that the top 6500 accounts not get any break. Syriza refused.

              Scroll down to the chart on uncollected tax receipts to see what a big deal this is:


            2. financial matters

              This is an excellent point and important but I think there is a much simpler short term solution.

              One of the important paradigms that MMT is trying to change is that taxes fund spending. Of course this is at the sovereign level and here the EZ would need to be considered the sovereign.

              But we see the same problem in most of the traditional sovereign governments.

              This is important because it is the driving force behind much of the austerity.

              MMT teaches us that taxes have their uses but one of the main ones is to damp inflation. In the current conditions there should be no VAT tax. The ECB as well as other central banks should be interested in increasing demand by focusing on an employment mandate. Money needs to be spent on the many worthwhile endeavors available and not siphoned out of the economy.

    2. armchair

      It better not be Colombia. Colombia has a major inequality problem, but its economy hums along. It didn’t even get caught up in the 80’s version of bank extortion. It also has a lot of non-illegal stuff to sell.

    1. IsabelPS

      Excellent. And the comments are just as good. Especially, in my view, the one by Leonard Lovallo.

    2. juliania

      Here is a quote from an article by Bill Black that takes game theory a bit further, into the dictator’s game rather than prisoner’s dilemma:

      “. . . Normal human beings care a great deal about fairness and are willing to suffer personal losses rather than give in to dictators like the troika.

      The language of the troika and of German politicians about the troika’s mode of dealing with the Greek government is strikingly similar to the dictator game. But there is a vital way in which the troika’s game theoretic approach is far worse than the dictator’s game. In the conventional dictator’s game the other party is made better off, albeit by only a penny. The troika insists on making Greece worse off by insisting on austerity and trying to block a cooperative TDR that would benefit the creditors and the debtors. The game that the troika is playing against the people of Greece and the EU embraces all the imperialism inherent in the dictator’s game – but it is a “negative sum” game that makes the peoples of Greece and the EU worse off. Cooperative games typically are “positive sum” games that make both parties better off. . .”

      Interesting that Mr. Black says ‘against the people of Greece and the EU’. Also interesting his first comment. It looks to me as if Tsipras has shown himself to be a very normal human being, kudos to him.

      1. MyLessThanPrimeBeef

        A standard victor’s game is to show magnanimity afterwards…after doing whatever it takes to win (all options on the table thing).

        It remains to be seen if they can do that.

        That would be easier for their historians to write their history.

        I think I read somewhere about allocating money for investing in Greece after a deal has bee agreed upon. Will it be ‘foreign aid – you get our money but you can only buy from our list of approved vendors?’

  2. timbers

    “Class Warfare – SCOTUS Comes Calling on Public Sector Unions American Prospect”

    Riddle me this, Supreme Court: If making people pay a part of union dues violates the First Amendment, then why is it not a violation of the First Amendment to make people pay health insurance given you’re ruled corporations have a right to spend money on politics and 20% of the premium set aside for the corporation?

    1. Oregoncharles

      Good point.

      But in fact, the Supremes ruled the Mandate constitutional ONLY because it is a tax (the penalty) – something Democrats denied vociferously in defending it.

  3. NotTimothyGeithner

    I think the new “troika” are the Russian variety. The Norwegian forest cat is the sire of the Maine coon cat, and I’m pretty certain the ears are the wrong shape from that picture. Their ears need to be taller or lynx like. Needless to say, all three types are especially social.

    1. OIFVet

      I am pretty sure these are Siberians. You are wrong about the ears though, my friend’s Siberian has those tufts just like a lynx. Cute little attention hog, that one.

    2. EmilianoZ

      This is a Troika worth following. They’re gorgeous the 3 of them, 3 Siberian princesses.

  4. norm de plume

    The Pope hearts Syriza (at least what they say, if not what they do…)

    I’ll bet he wouldn’t lay the blame for destroying Greece at the feet of Tspiras. Maybe for ‘being hopelessly outmanoeuvred and in the end weak, and so unable to prevent the rape and pillage’ but the rape and pillage itself, that would be down to the ‘unbridled capitalism’

    Someone was making the comparison between Tsipras cheerleaders and Obama-bots the other day, with the inference that they too were similar, but Tsipras is a failure who tried, a David who had his ass predictably handed to him by Goliath. Obama would never have stepped into the ring with money power unless the fight was rigged so that he could end up supping with Goliaths. He would regard his kabuki ‘failure’ as success, as being ‘savvy’, with being ‘right’ not ever entering calculations. Tspiras, at least for a time, took them on. Obama (or to be fair Clinton, or Holder, or Breuer or White) would never take them on. Only Sanders and Paul and Warren go close to that sort of willingness in the US.

    Ilargi voices my own thoughts here:

    ‘From where I’m sitting, Yanis Varoufakis has been the sole sane voice in this whole 5 month long B-movie. I think Yanis also conceded that it was no use trying to negotiate anything with the troika, and that that’s to a large extent why he left. Yanis will be badly, badly needed for Greece going forward. They need someone to figure out where to go from here.

    Just like Europe needs someone to figure out how to deconstruct Brussels without the use of heavy explosives. Because there are just two options here: either the EU will -more or less- peacefully fall apart, or it will violently blow apart.’

    1. Yves Smith Post author

      I could not disagree with you more.

      You do not put your citizens at risk without understanding the downside.

      I suggest you read the links today on conditions NOW in Greece. Businesses are failing and insulin in running out. People have lost saving, their business, their jobs, and if insulin supplies aren’t restored soon people will die. I suggest you read our post today on Tsipras’ capitulation and worse, how the referendum was a cynical ploy to get him and his party out of the mess they’d created. That was not only cowardly and dishonest but it has cost the Greek people dearly. As I said at the time, it would be seen by the creditors as a stunt too far. It provided justification for letting the ECB drop the boom on the Greek economy and for the hardliners to force a Grexit.

      Tsprias chose to lead Greece. He did not have the responsibility for his country dropped in his lap. Yes, the creditors have put Greece on the rack, but Tsipras has managed the astonishing feat of making conditions vastly worse for them over the last six months. The deal he has put forward is MUCH worse than if he had rolled over in January and signed the memorandum! And a Grexit is even more destructive than that. It will blow back to Germany and the creditors eventually, but short term it would wreck devastation on Greece and strengthen the neoliberals’ hand.

      1. Robert Dudek

        I wonder if you have any immediate thoughts about the ways in which the Greek government might “blunt” the austerity measures in practice, if there are any ways. Assuming a deal gets approved.

        1. David

          Syriza still needs to show that they can implement the proposal. Considering that they have yet to show that they can manage the country, I wouldn’t be surprised if the targets are missed. This would effectively “blunt” the austerity measures, void the deal, and send everyone back to the table. I think this is what happened in 2012 after the 2010 deal flopped.

          Does anyone know how the implementation will be monitored?

          1. MyLessThanPrimeBeef

            If you have a weak hand, it’s good to gain the other side’s trust*.

            They will ask twice more if they think you can only deliver 50% of what you promise.

            The more you lead them to distrust you, as the months of negotiations passed, the more they will move ‘the goal post.’

            Then they will ask 4 times more if your dishonesty or outward appearance of dishonesty lead them to believe you can only delivery 25% of your promise.

            At the end, it just get ugly for everyone, both sides.

            *In fact, a good strategy all the time. If you want to take advantage of your adversary, it’s also good to make him/her trust you. Furthermore, if you want to lie, at least be a good liar.

      2. Bill Smith

        I don’t see how this deal actually solves the basic problems a shared currency like the Euro has. Greece is just an example of that. All it does is kick the can a little down the road a bit.

        Given that, I think Greece should drop out of the Euro (and declare bankruptcy). No matter what people say about that also means they leave the EU… I think – given that all this is being made up as they go along – that could be worked out.

      3. aletheia33

        re: grexit

        yves, thank you for the extraordinary work you have done to inform the world of the realities of syriza v. the entrenched eurozone neoliberal establishment. no other source i know of has called the unfolding of the situation so early, clearly, or unequivocally.

        thanks to you, the lessons of syriza’s fiasco will be harder to ignore. your work will help emerging movements avoid the mistake of underestimating the forces arrayed against them and the long-term time and effort required if they hope to make any headway. a mistake in this case, as you have pointed out, that has contributed to the further entrenchment of TPTB.

        it seems to me that syriza’s rise, though inspiring at the new year, in hindsight was too quick and, perhaps, easy, and was not solidly grounded, in thought or action.

      4. juliania

        “Now it is action, not speech, now truly
        The earth does tremble; loud resounds the thunder
        In her depths; lightning flashes upward
        Fiery forks, and whirling winds transport
        The clouding dust, while all those winds
        Do savage dance the one against the other.

        This is that storm now Zeus is shown
        Hurling upon me down in shock and awe.
        O sacred my mother,
        O Sky o’er arching, light-bringer to all,
        You see me, that I suffer – that
        This is not justice.

        Prometheus Bound – Aeschylus (my translation)

        1. MyLessThanPrimeBeef

          Lots of speeches last weekend before the referendum, by all sides.

          And the people acted by voting.

          What action now, now it is action, confronted with ‘this is not justice?’

          Maybe a new honest leader?

      5. Jerry Denim

        Does anyone actually have any information concerning the odds of this current proposal being approved by Greek parliament? I know the latest proposal was submitted by Syriza, but Tsprias was reportedly having trouble keeping hardliners inside his party on board for concessions and austerity before the massive “no” vote. Now the hard-line anti-austerity parliament members have plenty of democratic ground cover to wage a full-on insurgency against any Tsprias capitulation to the Troika. It doesn’t really matter if the yes/no referendum was a failed PR stunt or intended outcome for Tsprias and Co. I can’t imagine the massive “No” vote not undermining Tsprias’s ability to ink an odious bailout deal with the Troika.

        1. Oregoncharles

          Somewhere I just saw a headline about a riot in Syntagma Square (now), but didn’t mark it and now I can’t find it. Did anyone else see that?

          My thought during the earlier large demostrations against austerity was that there was an element of theatre; those crowds could have stormed the parliament building, essentially overthrowing the government, but chose not to.

          Now, after the vote? The street wages the ultimate politics.

    1. Robert Dudek

      What does it say about Europe when Marine
      Le Pen is the “voice of reason”. I think the negative reaction to her is overblown: I doubt she is any more nationalist than Charles De Gaulle was.

      1. NotTimothyGeithner

        France doesn’t have primaries*, and replacing the party elders is difficult. The current center-right power replaced the Gallists as a challenging party. Sarkozy is leading his party again. At what point do people clamor for new blood? Changing parties is more practical. Marie Le Pen may recognize this and reacting accordingly which would explain her popularity versus her party’s regional performance. Her local party figures might still be too close to her old man.

        *The Socialists held a primary for President in 2011. Mitterand was still running in 2002 as the Communists and the elder LePen received protest votes.

      2. Inverness

        Marine Le Pen is very shrewd. She’s convinced many that she’s rational, because she’s distanced herself with her father and also revealed herself to not be homophobic, so her brand of far-right politics comes off as palatable. However her alliance with Dutch politician and Geert Wilders, who is both gay and islamophobic, is telling. I also remember her comparing Muslims who pray in French streets to Nazi occupiers

        There is a documentary on the Far Right in Europe which explores this, with a portion of the film dedicated to Marine Le Pen’s National Front (Arte, in French) which explores populism in Europe, and how the Far Right is coopting anti-European sentiment (Golden Dawn, le Front National, etc).

      3. Jerry Denim

        She’s a bigoted racist just like her father but she is PC savvy enough to play nice while courting moderate voters who may agree with some of her talking points. She’s a true right wing nationalist and if she were to win power in France I’m sure her ugly, authoritarian, anti-democratic, anti-humanist side will show itself once she’s holding the reigns.

        1. CB

          Concur. A friend who lives in Fra but is still an Am citizen would vote for her in a skinny second if she could bc friend is terrifed of, and angry beyond reason about, the Muslims. It’s interesting what people will support when they’re frightened.

        2. Inverness

          In 2013 Marine Le Pen said Muslims in the street reminded her of occupying Nazis. A nasty bigot, indeed. And she’s distanced herself from her father to seem more reasonable, because she’s a shrewd woman who is decent at PR. She also has made friends with Dutch politician Geert Wilders, a known islamophobe who has led intimidation tours around Muslim neibourhoods in Amsterdam.

      1. MyLessThanPrimeBeef

        I believe it’s easier to be magnanimous as a victor, and yet many have failed at that easy task.

        March to Atlanta and reconstruct.

        Rape Berlin and adopt the Marshall Plan.

        Also, history is written by the victor.

        Here is a chance to ‘preserve the union.’ Put down the Rebels without mercy. “Let’s remember those who died so we may live as one.” – the victor’s history, given by Merkle. “She preserved the Union.” More victor’s history.

        Fortunately, or unfortunately for the dead, but fortunately for the generations to come, nations rise from ashes – losers in war, Pyrrhic victors or colonial victims – to become powers all the time.

      2. craazyman

        I don’t know if your from Scotland or if you just like Edward Green shoes, but either way is OK with me.

        I had a very very weird thought today. But the first uestion is (just to set it up) why do all you peanut gallery mofos care about Greece?

        That’s weird. Why should you care? Why not care about all the people getting killed in Syria, or Afirca (there must have been 1000 people killed somewhere in Africa today) or Asiia. God know there must have been hundreds killed there. Or anywhere. Why care?

        That’s not a simple question. It occurred to me there may be a mathematical perspective, centering around the emergence of order from chaos, or alternatively the emergence of form from a point of pure potential and the transmission of the potential for form outside of time on to that singularity (if that sounds suspiciously like the Big Bang it’s purely coincidental since I don’t believe in the Big Bang0. I’m too lazy to type it out here, but think about that, and ask yourself about primal universal forces and why in the hell you crae about Greece? Do they care about you? In the abstract, I think so, based on my new theory. If anybody figures it out please post it and I will certainly be impressed.

        1. ambrit

          We care about Greece because they are going through what will be happening to the rest of us in the not too distant future.
          You, impressed? I’m gobsmacked.

          1. craazyman

            that sounds like a business transaction! do you have to make a profit to care?

            here’s another deep thought Ithis is only a “Deep Thought-Lite”, it’s actually a Dietary Deep Thought, a low thought calorie deep though. If Budwiser is a deep thought this is like Michelobe Ultra: if there’s a tribe or a nation even, say in Polynesia or in pre columban America living without a medium of exchange, is unemployment 100%?

            by modern economcc standards it would be! since there’s no “economy” and no “jobs” you can meausre

            1. Lambert Strether

              Are those the frontal Michelobes? [rimshot, laughter].

              Actually, I think you’re right. In other words, if we have food forests everywhere, like Amazonia in Charles Mann’s 1491, “unemployment” could be a good deal “higher” than it is.

    1. Yves Smith Post author


      The creditors are lunatics addicted to really stupid and destructive policies and I hate taking issue with Syriza accounts since that is assumed, mistakenly, to be pro creditor, whereas in sports if you critique a losing team, no one would see you as siding with the winner. But this shows Syriza was just refusing to hear clear and consistent messages from the creditors:

      So, through these discussions it was the government that was coming, coming – coming close to the Troika, without them making any move towards us, and never discussing the debt: debt restructuring, debt sustainability, and also, you know, financing.

      The creditor said there would be no discussion of debt as part of the “second bailout”, the deal over the release of 7.2 billion euros in funds that expired at the end of June. And Greece can’t pretend they didn’t get that. The agreement they signed in February with the Eurogroup was VERY clear: Greece would submit structural reforms, they’d be negotiated and approved, and then it would get its 7.2 billion euros. Dijsselbloem even said more than once they might agree on a partial list of reforms to get some of the bailout money.

      There was always an expectation on the creditor side that they would also provide debt relief, but that would come in the “third bailout” which was to be negotiated ASAP after the second bailout was concluded.

      Greece kept ignoring the creditors’ clear “no” on dealing with the debt relief issue as part of the second bailout. They were never going to give that and yet Greece seemed to think, bizarrely, that they could get them to relent.

      1. Jim Haygood

        Ambrose E-P reports in The Telegraph on Germany’s ‘subtle shift in position’ on debt relief.

        German Chancellor Angela Merkel said “a classic haircut” is out of the question, but tacitly opened the door to other forms debt restructuring.

        Debt relief is the conditio sine que non without which a Bailout III is a complete waste of time just like Bailouts I and II. If Greece could cut its 175% debt-to-GDP ratio in half, it might have a chance. And it might be worth making painful concessions to obtain.

        Equally, though, if ‘classic haircuts’ are off the table, then it comes down to playing NPV (net present value) games with interest rates and maturities. Fifty-year, zero interest bullet loans, anyone? Unfortunately, such concessions would raise the fatal “me too” issue in countries such as Ireland and Portugal, shouldering the burden of bailout loans at near market rates.

        Anything less than a real, substantial haircut is no solution at all for Greece, but is likely to be equally unpalatable to the parliaments of Germany, Finland [true believers in hair shirts and flagellation], Slovenia, Portugal, and Estonia.

        What’s it spell? Clusterf**k. Some movies don’t have a happy ending, no matter how many times we watch them.

        1. vidimi

          the thing is, greece could have a 500% debt to GDP ratio and be fine if only it were allowed to run deficits and grow its economy. austerity is just class warfare.

        2. John Smith

          Anything less than a real, substantial haircut is no solution at all for Greece, but is likely to be equally unpalatable to the parliaments of Germany, Finland [true believers in hair shirts and flagellation], Slovenia, Portugal, and Estonia. Jim Haygood

          And that’s why Steve Keen’s “A Modern Jubilee” is a brilliant solution; it helps everyone from the bottom up in nominal terms including the banks and need not cause price inflation if combined with new credit restrictions on the banks.

          Who can possibly object? It’s only inexpensive fiat. Or should expensive blood and real wealth be destroyed to avoid setting the precedent of fiat creation for the sake of the bottom instead of the top?

          1. norm de plume

            For those who make the decisions, the answer is ‘yes’.

            It is brilliant – debtors clear debts, creditors get paid, savers get extra dough to spend into the economy to stimulate aggregate demand, firms make profits and employ more people and they pay taxes into national treasuries, which are less attractive as a target for speculators…

            ‘Who can possibly object?’

            Those who make the decisions, who exercise control. And also those who buy their propaganda.

        3. IsabelPS

          I don’t know. I wonder if this “moral hazard” thing is being overplayed by casual commenters. Portugal and Ireland have, at the moment, worse conditions than Greece, that is true. But they have already donned the hair shirt and I would not be too surprised if the creditors accepted to be a bit more lenient now, especially the Europeans for political reasons. Come to think of it, it could very well be one of the reasons Portugal has been paying back the IMF in advance (also Ireland, I think), not just a question of less higher interest rates: their interest might very well lay in letting the Greek drama unfold and then, quietly, ask for their due (which might not be impossible for the others too accept).

          1. Robert Dudek

            Um wasn’t Greece a model prisoner as well for five years? Europe is increasingly a contest of how much pain you can take and ask for more pain afterwards. Depopulated Latvia has the gold star so far.

            1. MyLessThanPrimeBeef

              That’s a worldwide tragedy, not just in Europe.

              Human trafficking…Myanmar, Malaysia, Africa, South and Central America, Southeast Asia, etc.

            2. IsabelPS

              I mean, 2 years ago the problem (from the point of view of the creditors) of “moral hazard” was real, as everybody expected that a second bailout would be necessary, at least for Portugal. Right now, I expect debt relief in various forms, as they need “success stories”.

        4. JTMcPhee

          Who are the “creditors,” again? and if they are compelled to write off “debt,” which I understand is just a lot of what used to be “paper” which represents “investments,” not so much real stuff, will the ordinary people of Greece, and the rest of Europe, be further harmed? And looking to the future, is there some knock-on to a big erasure of a bunch of this financially manufactured stuff?

          It’s not like a lot of serious people have not thought through the necessities, process and problems, see the IMF’s “Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative,” Though of course “we the people” still have the fundamental problems of our own MOREism and the greed and corruption of our own local Elites and power players.

          People react strongly to that word “Jubilee,” though from so many directions, even the “realists” and even a number of increasingly scared rich folks who see the control rods melting out of the reactor core, there are lots of calls for “debt reduction.” Time for a whole lot more of a clean start, getting rid of toxic and odious and opprobrious and oppressive and demolition debt, by telling the people who have generated it to have a seat in the barber’s chair? And more than “just a little off the sides,” in exchange for not trying to apply “the law,” what’s left of it, to criminal prosecutions? Or will the placid or active indifference of those who have mastered the game of TAKING EVERYTHING find their intransigence or idiocy forcing a resort to those old implements of destruction that so quickly start diverting efforts at restitution with an admixture of retribution into just another round of More Of The Same

          1. Yves Smith Post author

            The creditors here are the taxpayers in 19 Eurozone countries (ironically including Greece) that provide guarantees to the vehicles to the funds that made loans to Greece (this is a simplification but accurate enough for this discussion).

            If there is a reduction in the principal amount (as in a writedown) the losses hit state budgets immediately. That means under Eurozone rules (as in Maastrict), most would choose to and some would be required to increase taxes to make up for the loss.

            So the effect is to transfer sharp austerity in Greece to some austerity for everyone else.

            Moreover, as we have discussed repeatedly, the reporting on this has been horrible.

            1. Greece was ALWAYS going to get debt relief, but in the “third bailout,” which was to be negotiated IMMEDIATELY after the negotiations on the parts of the “second bailout,” the 2012 deal where Greece wanted to renegotiate the structural reforms, was concluded.

            2. Greece has gotten a great deal of debt relief in past restructurings. The press constantly discusses how its debt to GDP ratio is 175% of GDP. That is narrowly true but in many ways misleading. Greece has had interest rate reduction, maturity extensions, any payment deferrals to the degree that the economic value of its debt is more like 70% of GDP. That would be manageable if Greece were not in a depression.

            3. That means the real problem is the austerity, not the debt burden per se. But with the Eurozone’s rules (and even fiat currency issuers’s antipathy to running large, sustained fiscal deficits), Greece can’t run the 10% of GDP or so deficits it needs to run for quite a few years to get its economy back in gear again. And the Eurozone is unwilling and unable to move to the fiscal integration that would allow for Federal level spending to supplement Greek demand.

      2. ChrisFromGeorgia

        I get your point about criticizing the team you are rooting for vs. rooting for the opponent. It’s a good analogy and I’m glad you made it, because I think it helps me understand some of your frustration with the commentators.

        There is certainly plenty of reason to criticize Syriza. I was rooting for them as well. But they’ve apparently wasted 6 months and squandered all their political capital for essentially nothing, or as you say made a bad situation worse. Greek GDP will probably contract for the remainder of the summer and into the fall, possibly making their debt-GDP ratio grow to the point where payments are going to be impossible to meet as soon as later this year. Do you think anyone is paying taxes in Greece now?

        Tsipras has to understand this at some level, but apparently he lacks the courage to fully internalize and make decisions accordingly. He should have never accepted Varoufakis’ resignation – that guy was perhaps the only intelligent adult in the room. Maybe it’s simpler to just call this rank incompetence, but since the spirit around here is for nuance I would think there is more to it than that.

        In order to win you must define what winning looks like and come up with a plan. If Tsipras wanted debt relief, he should have made that a condition back in February as you say. Also I would say that his refusal to seriously entertain going back to the drachma was a fatal mistake. Without that threat, the creditors could exploit their leverage and Greece had nothing to counter with.

        The creditors are indeed lunatics, or perhaps sociopaths. They’ve essentially doomed a Western country, the cradle of democracy, to becoming a failed state, in the name of keeping their banks alive for a few more years at best. Blowing up some German and French banks would have accomplished some necessary chastening, but alas we don’t seem to have the kind of leaders that are willing to make tough decisions and sell sacrifice to their people.

        BTW thanks for what you do, at least I can get a honest analysis here and your blog is essential reading.

        1. Robert Dudek

          If Tsipras had threatened euro exit without the willingness to follow it through it would have been a waste of time. Schauble was even taunting Varoufakis- how much money do you want to leave the Euro?

          1. ChrisFromGeorgia

            Yes, that’s what I meant – you don’t bluff on something like that. You start printing drachmas, or at least getting the machinery in place. I’ve heard no reports of this happening.

      3. Jerry Denim

        I think it was a simple case of Greece overestimating their own importance to the EU and the Eurocrats deciding their fate. It seemed that the decision makers inside of Syriza decided early on that the consequence for the EU would be unjustifiably bad if the Troika torched Greece, mistakenly believing this outcome was off the table Syriza concluded the Troika would blink at the last moment. It was a simple game of chicken where one or both sides misread each other. Unfortunately Syriza was driving a 1960’s Attica and the Troika was in an Abrams tank. Given that disparity in mass and power Syriza should have paused and asked themselves; “What if the Troika does see us as expendable? Maybe we should have a backup plan for Grexit, just in case.” Apparently the “just in case” planning never happened or was deemed too difficult so here they are, seven months later, royally screwed.

      4. P Walker

        Does anyone believe the creditors would ever entertain debt relief? I’m going out on a limb here to predict they would always be saying “next time.”

  5. jgordon

    I’m thinking particularly of Greece here at the moment (though probably applicable everywhere), but it seems that the power elites mainly see the populations of their various states merely as tools to rubber-stamp whatever policies they happen to want to do at any given moment. And if the people don’t fulfill their rubber-stamping obligations, then the elites will feel righteous and indignant justification to go ahead and do whatever they want anyway–and in the meantime enact a host of police state surveillance and repression measures to teach the uppity population a lesson.

    Is this a paradigm that can last? Who knows? But holding a referendum on a deal that was soundly rejected by a landslide and then coming back a few days later with a much worse deal… Well in a “democracy” the elites have to put on at least a facade of caring about what people think, even if it’s not an especially deep or sturdy facade. I guess they no longer see value in maintaining that facade.

  6. Roquentin

    This news out of Greece is straight-up depressing. The Greek people deserve better and it only serves to show that Greece and the EU are only a “democracy” in scare quotes. That’s where we’re headed, folks, sham democracies which are only that way in a nominal sense where policy is de facto dictated by organizations like the ECB.

    1. vidimi

      let’s see if this turdblossom passes through parliament. i can’t make sense whether syriza are insane or just crazy.

      1. Jerry Denim

        Exactly what I was thinking. Supposedly Tsipras was having trouble with hardliners in his party before the big “No” vote. What kind of a mandate does he have for an odious deal now? This latest proposal seems doomed.

        1. MyLessThanPrimeBeef

          It’s tragic because people’s lives are at stake here, but we have heard about the ‘who is to blame’ game all along.

          If the Greek parliament rejects their own PM’s proposal, and that results in a Grexit, it seems to me it’s apparent who the loser is in that tragic, meaningless really, game

          And in fact, that may be moot, as suffering will surely intensify.

      2. Andrew Watts

        @vidimi & Jerry Denim

        Prepare to be disillusioned. Tsipras is soliciting support from other parties in part to outflank the left wing of his own party. The Left Platform has deluded itself into thinking that it was going to dictate the outcome when far too many people are mired in the contradiction of wanting the euro and an end to austerity. The idealists like Yanis were hoping the European Union would be something other than a neoliberal project.

        Whenever socialists ally themselves with bourgeois liberals it almost always leads to the marginalization of the socialists. This betrayal was inevitable.


        1. vidimi

          well, the turdblossom did pass early this morning, so it’s a complete betrayal of the greek people. in my lifetime i have never seen such an amateurish display of politicking as we have witnessed in greece over the past six months.

    2. Jim Haygood

      ‘That’s where we are folks, sham democracies …’

      Fixed it for you.

      ‘Tormentocracy’ is the new model being test-driven in Greece.

  7. HoarseWhisperer

    The deal which Tzipras is begging to make is awful.

    But the real travesty is the path he took to arrive at this deal.

    The way Tzipras conducted himself and the harm he did to his people during his short tenure at the helm further strengthens the ascendant political narrative of our time – that the Left is: a) incompetent; b) weak; c) corrupt. The best propaganda is the one which has some basis in reality, because the purveyors of this propaganda can build their credibility on this basis. Couple this with the disenchantment of the electorate (especially the young) from the blatant disregard of the referendum results and the moderate Left will be relegated to the back bench for the foreseeable future.

  8. Adam Eran

    One wonders about whether Syriza’s betrayal of its stated principles isn’t inevitable with democracy. Yes, democracy, the system that actually encourages betrayal. Think of Nixon, the anti-commie, making nice with Mao. Or FDR (the traitor to his class), or LBJ and civil rights. Jerry Brown, the “liberal” governor of California vetoes even a study of public banking…

    After all, politicians are put in the un-enviable position of trying to be all things to all voters, and reaching out to the ones that didn’t vote for a politician is part of the game….which inevitably leads to betrayal.

    …just sayin’

    1. CSTH

      Yves and Lambert, endless thanks for tireless work.

      The farce now unfolding in Athens is (among some many others layers of historical significance) the latest reminder that the West has, in the quarter-century since 1989, forgotten everything it ever new about democracy, with increasingly tragic consequences. This is as true of the progressive left as it is of the neoliberal right, and as a phenomenon it seems to transcend either simple cynicism or naievete – it feels like evidence of accelerating senescence on a civilizational scale.

      In an item published on Tuesday, , Bernard Henri-Levi observed that: “Greek voters’ rejection on Sunday of the latest bailout offer from their country’s creditors did not represent a “victory for democracy.” For democracy, as the Greeks know better than anyone, is a matter of mediation, representation, and orderly delegation of power.

      We are reminded again that it takes more than a vote to create real power and achieve real results. But this is not – or not only – because the EU is such a kafkaesque web of rules, committees, and paperwork. It may be a fiasco, but it also just the latest in a series of failed rituals for the civic religion of the West. The ‘oxi’ sign will rapidly take its place alongside the ‘purple fingers’ of baghdad and kabul, the ‘Hope poster’ hagiography of 2008, the hanging chads of 2000….all the way back to Yeltsin on that tank, the ‘Goddess of Democracy’ profaned in the chaos of Tiananmen, and the hubristic triumphalism of the ‘end of history’ era.

      … “No trimphalism” indeed…

      We keep waving at the clouds, but the cargo is no longer being delivered. “We” collectively have forgotten what the work of a democractic polity actually entails …and the disappointments and contradictions are accumulating rapidly.

      In other words, The Greeks have offered another reminder of what is right in front of our noses. Don’t believe anyone who tells you ‘you vote is your voice’. In fact, its not your voice that matters in your first place. What matters is your work: organizing, coalition-building, horse-trading, leadership, followership.

      In contrast to the genuine democratic movements that built the world we now enjoy, a referendum like what we saw last week is just – i.e. just another – a glorified flashmob.

      The results – in Athens today but also throughout the West on a longer time frame – are squandered institutional legitimacy, rapidly expanding power vacuums, and accumulating frustration. At least some of us still remember how dangerous a combination this can become.

    2. hunkerdown

      With respect, are you somehow invested in portraying office politics as self-rule? What quaint romance compels you to refer to a plutocratic, authoritarian republic as a “democracy”? (Customer-service) representative government has nothing to do with final rule by, of and for all the people, and telling yourself and others that is a Gresham’s dynamic I wish we would avoid.

      How many of the problems of “democracy” are actually problems caused by hallucinating that “democracy” is, in fact, democracy, and trying (with predictably poor success) to grapple against phantoms and holograms?

  9. Ché Pasa

    Businesses are failing and insulin in running out. People have lost saving, their business, their jobs, and if insulin supplies aren’t restored soon people will die.

    This has been going on for years. It isn’t just now starting; it is the reality the Greek people have been living — and dying — for half a decade now.

    The situation is no doubt worsening, but would it not be worsening in any event? These conditions have been Eurozone policy for Greece since the outset of the crisis, no?

    Athens has repeatedly capitulated to Berlin and Brussels, capitulation which Brussels and Berlin have refused to accept. So why not take a calculated risk and expose the creditor fraud, since no amount of capitulation will be acceptable?

    The pressure is now on Brussels and Berlin to desist before the whole Euro-Project explodes in their faces. That pressure intensifies by the hour.

    1. Bill Smith

      In your view what is the “Euro-Project”? It’s goals? It’s members obligations?

      1. juliania

        You will find the answer in Tsipras’ speech and rebuttal to the European Parliament set side by side with the latest proffer, given under extreme duress.

        Che Pasa is right. The ball is in the Troika’s court, where it has been all along. The ball, or maybe the Hot Potato.

        1. Ché Pasa

          Tsipras with Zizek in 2013, before Syriza’s election, stating the problem clearly and what is to be done about it:

          He doesn’t talk about leaving the euro (says Greece can’t), he talks about changing Europe, because Europe, under the thrall of Germany and Merkel, is the problem, not Greece.

          It’s startling to see that Syriza had a plan of action worked out that long ago and they’ve been sticking with it to the extent possible since their election.

            1. Ché Pasa

              This video dialogue between Zizek and Tsipras is quite long, 2 hours, and of course they go off on tangents, so it takes a bit of concentration to follow and figure out what they are saying, but it’s clear enough that Tsipras and SYRIA did in fact have a plan and a strategy for implementing it as far back as 2013, which plan and some of the strategy is stated in the video. Most of what they were talking about then is what they have tried to do since being elected.

              Leaving the euro was not an option for Greece, and that was stated clearly and repeatedly by Tsipras.

              Repudiating the 2012 MoU, revising the terms of any future “bailout” and changing Europe very much are part of the plan Tsipras discusses with Zizek and the audience.

              “Changing Europe” is the most important part of it.

              Germany and Merkel, Tsipras says, are Europe’s problem, not Greece.

              This is the dynamic they have been working from.

              Their critics seem to be oblivious and that’s part of why the actions of Tsipras and his government seem to be inexplicable to critics and many observers alike.

    2. German native speaker

      A differentiated view is not your thing, is it?

      At the height of the years of Greece being flush with credit, the Greek state owed a major manufacturer of insulin 36 million Euros. At the time Greece had already run a 10 plus billion deficit for years – but paying 36 million to ensure the health of their people was not worth it, it seems. But you and others see this state as the poor victim. Here is the article from 2010. Why did Greece not pay this pharmaceutical manufacturer? I hope you notice, this was about an insulin delivery system, the pen, and not insulin itself: “Novo Nordisk says it will continue to supply insulin in vials at the reduced price.”

      Fast forward to today: Fresenius, a German drug company, will continue to supply medicine to Greece, except the ones that Greece itself can manufacture (question that I am asking myself: if they are able to make some drugs themselves, why were they even imported?)
      More from this article of a few days ago:

      “Die deutschen Pharmakonzerne Merck, Boehringer Ingelheim und Bayer liefern ebenfalls weiter Medikamente nach Griechenland,.”

      Translation: “The German pharma companies Merck, Boehringer Ingelheim and Bayer also continue to supply medicine to Greece”. Even though they lost a lot of money in Greece from the first bailout. Fresenius said that currently it takes about nine months to get paid from Greece.

      In addition, the above article says that Fresenium now only delivers to one Greek distribution center. May I remind you of the article in Ekathimerini in April, where Greek pharmacists complain that their very own Greek wholesalers sell the drugs to foreign countries instead of to Greek pharmacies, because they thus get a higher profit !

  10. PQS

    Re: Greece. So what will happen when the “deal” (whatever it looks like, it doesn’t look good….) goes through and Greece’s economy fails to recover (as it has for these many years) under these neoliberal policies of tax hikes and slashing of budgets?

    I fear Ian Welsh’s piece is all too prescient. (Loved the quote the other day from the article about how “extremists ALWAYS have ideas” about what to do….)

    But do the technocrats know this? They have shown zero evidence so far that they understand the implications of their actions, beyond mere balance sheets.

    It’s like “1984” with accountants and bankers.

    1. John Smith

      It’s like “1984” with accountants and bankers.

      Except the accounting is bogus because of explicit and implicit* subsidies for the banking cartel to the effect that the liabilities they create (as a whole) are mostly only virtual ones.

      * Such as leaving the payment system for fiat in the hands of the banks instead of allowing all Euro users to have risk-free accounts at the ECB.

  11. IsabelPS

    Excellent summary of the state of play in “Tsipras has just destroyed Greece”, Yves. But I wonder if your last paragraph is unduly ominous. I like this bit of a comment on Daniel Gros’ article, that commenter Leonard Lovallo writes after explaining the reason why he thinks that Germany need the eurozone more than the eurozone needs Germany:

    “Thus it is an imperative for Germany to keep the common currency from unraveling, and if necessary as a last resort in the emergencies to effectively write the checks to do so. Likely Angela understands this. Tsip’ and Var’ likely counted on this (would explain their expressions of confidence throughout the process). What the dynamic duo overlooked was that inasmuch as Angela had not explained this narrative to the German public it would not be politically possible to do so. The second likely miscalculation by the dynamic duo was their failure to realize that a good day for Angela is one that ends with no one pointing the fingers of blame at her and thus her strategy would be one to insure this outcome. Reason Greece now finds itself in a position of either having to work within the confines of political reality in Germany or drive itself off of the cliff.”

    1. Sally

      And this is why the Greek politicians of all political colours need to start campaigning to leave the Euro currency like the UK. The same apples to Spain and Portugal and Italy, and Ireland. They need to get back control of their currency. Then they can devalue against the Euro, and print money if they have to.

      This is the best way of getting back at Germany because it makes the Euro much more expensive, hurting Germans exporters. The Greek Prime Minister says he has no mandate to leave the Euro currency. Well he needs to start campaigning for one, because otherwise he is committing his country to decades of austerity and poverty.

      The full straight jacket of the EU currency has now been laid bare. It is time for this banking delight to be destroyed all over Europe. The country’s of Europe can not stand the same exchange rate over the whole continent. There is,and never will be the political unity of a United States. The US Fed can realign resources to particular areas of the country. The euro States are too diverse and too economically, politically, and culturally different to foster the same unity of nationhood and currency as the US. The EU parliament is seen as unrepresentative ,and increasing sinister. The EU project is doomed to failure if not now quickly or instead over years and years of decline.

      1. windsock

        The UK has never used the Euro. There will shortly be a referendum to decide whether the UK will leave the European Union, dependent upon the renogotiated terms of membership that Prime Minister David Cameron has said he will seek.

        1. Oregoncharles

          And how will the torture and murder of Greece play in London? Aren’t the Troika essentially insuring that Britain will leave the EU?

          Certainly they’re confirming the wisdom of Iceland’s refusal to join the Euro.

      2. juliania

        Don’t be so sure about the United States. When you trash the Constitution you begin the process of destroying the union. It might just be a question of time. I’m sorry to be pessimistic, but as such unions built merely on fraudulent laws and fraudulent oligarchy persist, the same thing is promised to happen. Especially if those who attempt to reverse course are as maligned as Tsipras has been. Who would be brave enough to subject him or herself to that? (Well, maybe Jill Stein, bless her heart, will give it another try.)

        1. Jerry Denim

          Ha! Jill Stein. As much as I love the Green party platform and the idea of a viable third party Jill Stein would have probably fared far worse than Tsipras and company had she been thrown into a tough negotiating situation with experienced technocrats and bankers. Even Sarah Palin could brag she had experience as a Mayor and a Governor. Stein’s sole elected office was a meager 539 total vote victory for a “Town Meeting Seat” in Lexington Massachusetts. Apparently Town Meeting seats in Massachusetts frequently go unfilled for a lack of candidates. The Greens need someone with a national profile and a little stronger resume, like Ralph Nader or Bernie Sanders, if they want to be taken seriously. Obviously Sanders is pursuing a different course to the White House and Nader is a embittered pariah and retired. Liz Warren has the popularity, the name recognition and national experience but she seems more of an anti-banking, pro-consumer populist with otherwise conservative values. Probably not a good fit for the Greens. I don’t exactly know who but there has to be someone more eligible than Stein for the Greens to have a shot. Perhaps she could be Bernie’s VP on the Green Ticket if he goes down in flames in the primaries, but apparently Bernie has already promised the DNC to play nice and not go that route if they let him keep his committee seats and Veteran Affairs chairmanship. If the Greens had any kind of a movement with more than one or two percent of the electorate maybe he would consider double-crossing the DNC and bringing his supporters over to a Green ticket but I certainly don’t see that scenario playing out with Stein at the helm of a weak disorganized Green Party again.

  12. craazyboy

    “So what will happen when the “deal” (whatever it looks like, it doesn’t look good….) goes through and Greece’s economy fails to recover (as it has for these many years) ”

    As far as I can tell, the DOW goes back down 200 points. hahahaha.

    “under these neoliberal policies of tax hikes and slashing of budgets? ”

    Let’s be more precise. …neoliberal policies of regressive tax hikes, excluding corporations and rich people, and slashing of budgets, except for the defense equipment budget – which for Greece is all imports. Tho they are laying off some Greek soldiers.

    We shouldn’t inadvertently put lipstick on the neoliberal pig.

    This was supposed to reply to
    PQS – July 10, 2015 at 10:44 am

    1. ChrisFromGeorgia

      With the present debt load and lack of hope among the people, Greece is in a terminal state. Demographically the young are fleeing to other places, leaving the old and vulnerable behind. The neo-liberals seem not to care much, although I suspect they acknowledge internally that their policies have failed, but being the worst of humanity they are probably hoping just to slide off into retirement on some safe haven island protected by private guards before it all collapses.

      There is also the little of detail of the IMF recognizing that Greece needs real debt restructuring. The fact that it isn’t in the proposal means this could still be an ugly weekend.

      And yes the exclusion of the military from austerity cuts is particularly disgusting.

      1. vidimi

        i think the exclusion of the military is pragmatic. it’s what i would do too if i were worried about the possibility of a coup.

        worrying about a coup, however, would imply longer-term thinking and i’m not sure there has been too much evidence to support that.

        1. ChrisFromGeorgia

          Well, your assuming that the coup won’t come from inside the military itself. A lot of times the last bastion of national pride is inside the military.

          1. vidimi

            no, i’m assuming it would come from the military but that, if you keep paying them, they’ll leave well enough alone.

            1. ChrisFromGeorgia

              OK, good point. And doesn’t that just sum up the whole mentality of morally decaying western civilization – just pay me and I’ll pretend there is nothing wrong.

          2. JTMcPhee

            Also inside the military are the durable bastions of self-serving greed and violence, and often sectarian, evangelical idiocy. See, e.g., the US Air Force, Greece, Africa where first the General coups, then the Colonel, then the Captain, the Lieutenant, all the way eventually down to the noncommissioned ranks, like Master Sergeant Samuel K. Doe,, and of course Egypt and most of the rest of the Middle East, Pakistan, Japan, Central and South America– who did I miss?

            Too bad the organizing principles of all this don’t include comity and decency and stability and respect and sustainability… but then MOREism triumphs so easily over most of our scruples…

      2. craazyboy

        Maybe someday a filmmaker will do a short artsy type film, or even a documentary, where diabetics don’t get their insulin and progress to the amputation of limbs stage. Then they cut to the military parade and airshow with fifty German Leopard tanks, five French Exocet missile launchers and one US F-35 flying overhead?

        1. Jim Haygood

          Here is the movie poster for ‘Greece Is a Troika Cabaret’:

          Greek PM Alex Tsipras emcees; German finance minister Wolfgang Schaeuble peeks out from behind the stage lights; Uncle Adolf applauds from the orchestra.

          And a good time was had by all …

    2. PQS

      Thanks for the clarification. You’re right that we should not, even inadvertently, make the pile look less like the garbage that it is!

  13. RabidGandhi

    Dean Baker is calling BS on all the “Great Fall of China” stories:

    “[One] might wonder how the regime managed to survive a stock market crash between October of 2007 and October of 2008 in which the market lost over 60 percent of its value. This is more than twice as large a decline as the market has experienced in the current downturn. In spite of this plunge, China’s economy grew more than 9.0 percent in 2009, although it did require a substantial government stimulus program.”

    Is Baker missing something or is this just another case of NYT et al letting their cold war dept do their economic reporting?

    1. vidimi

      baker might be missing leverage. you can survive a 100% decline if you have no debt hinging on your investments; but if you have a 95% debt ratio, you can be screwed if the drop is a few percent. i don’t know the numbers, but i would guess that chinese debt has gone through the roof since 2008.

    2. MyLessThanPrimeBeef

      If the Chinese government is taking it seriously this time, why shouldn’t the rest of us?

      Maybe Mr. Baker can say to Beijing that it’s over-reacting.

      1. RabidGandhi

        No one said it is not serious. Baker’s point is that the Chinese gov’t took it seriously last time when it was over twice as big and implemented a stimulus package that worked, so no reason to go full chicken little.

        The issue is how this translates into a “Regime in Crisis! “or a “Chinese Black Tuesday!“.

        Vidimi might be right that things are much more leveraged this time around, but until I see evidence to the contrary I’m going to hold off on hitting the panic button. Also I’d say from experience that many in the press love to attribute anything that can be interpreted as negative noise as evidence of the imminent fall of their enemies’ governments (eg: Venezuela, Syria, Argentina, Russia…)

  14. JohnnyGL


    Just wanted to make a brief comment. Sorry to hear about the new comment policy, but I do understand the time-suck involved. I wonder if a lot of the hyper-ventilating revolves around Greece and may die down as the topic fades from the headlines (or will it)?

    Anyway, I spotted your note of triumphalism this morning on the Greece post and agree for the most part with minor quibbles. I think it’s been a bit shocking at just how naive and unprepared they were to deal with the Troika, especially since they had quite a few smart people involved (Galbraith, Varoufakis, Lapavitsas). Obviously, that’s become more clear in recent days/weeks.

    I think a lot of what frustrates people regarding your commentary on Greece is a little bit of shooting the messenger, but the message is a really tough one to stomach. To use a crude analogy, what people want is to see a movie like Braveheart unfold before their eyes so they can cheer for Tsipras and Syriza as bravely defiant, crafty, innovative operators. In the end, it’s been nothing like that.

    It’s very hard to swallow the idea that what is actually unfolding is just a long drawn out torture scene like the original Texas Chainsaw Massacre. It’s been fairly soul-crushing to watch and I (still) keep hoping you’re wrong or being overly harsh on them and I keep getting disappointed.

    I think I’m pretty jaded and tried to keep my expectations low when Syriza got elected, but this whole episode has been really hard to stomach. The torture just keeps getting more brutal. I’m having trouble coming to grips with you being right, I can only imagine others are having similar troubles and hurl abuse at you because you’re more right than they are mentally prepared to handle.

    Overall, you’ve been excellent on the topic. Good work. But I still hope you end up being too pessimistic….somehow!!!

  15. Sally

    With regard to young Greeks leaving the country, am I right in thinking that hidden in some of these terrible trade treaty’s that are being negotiated are measures to stop the movement of people?

    The neo liberals want capital to be free to move anywhere they choose ,and to extract all wealth and resources from a particular place, but now want the people left behind to have to suffer after the capital has left. In future the people left behind will not be allowed to escape the hell that has been created by the bankers. This is pure evil and a form of FEUDALISM.

    1. Robert Dudek

      Without the right to live and work anywhere, the European Union ceases to exist in any real sense. The quickest way to break up the euro would be to start reconstituting border crossings.

      Besides, neo-liberals love free movement of people – it’s an effective way to undermine the earning power of the local worker.

    2. craazyboy

      Part of the plan is that aging neo-libs need young slave immigrants. So no, pro-migration policy is a feature.

    3. vidimi

      free movement of people is one of the core tenets of the EU. even countries that haven’t ratified the schengen accord are bound by this principle. i suspect all hell would break loose if this were reversed and national antipathies would turn into enmities pretty quickly.

    4. MyLessThanPrimeBeef

      Not ‘capital to be free to move anywhere they choose.’

      More precisely, they want the ‘global reserve currency to move anywhere they choose.’

      Surely, the North Korean Won is not welcome in France to buy French fighter jets. “Stay in the hermit kingdom.”

    5. John Smith

      Well Germany probably does want talented young Greeks (and Lativians, etc.) just like the US wants new young wage slaves – to suppress wages (which is why we need asset reform so that domestic workers do not resent foreign workers or immigrants).

    6. Windsock

      I’d like to see them try to restrict freedom of movement – the Eastern Europeans would go barmy and the UK would announce it has taken over the EU. And where would Germany get its gastarbeiter from?

    7. andyb

      I have always maintained that the end game of the corporatist/bankster mob does not end well for them. After they have debt enslaved everyone of the 99% and left them with a sub-subsistence standard of living, who will be left, especially after the great depopulation genocide, to pay for all of the products or services they produce?

  16. Sally

    Max Keiser just tweeted the following…..

    Max Keiser ‏@maxkeiser
    “What I should have said: Alexis Tsipras didn’t want to become Europe’s JFK. (he sold-out instead of succumbing to brain splatter) #coward”

    While this is probably rather harsh I think there is a lot of truth in it. What did Victoria Nuland tell him he was allowed to do? Certainly not leave NATO or do deals with Russia. But did she stop Greece from leaving the EURO?

    1. MyLessThanPrimeBeef

      The Victor History book has Angela Merkle as the preserver of the Union, as money poured in, after the rebels were ruthlessly suppressed.

      Future students will read it in “Lies My Teacher Told Me, Book II.”

      1. Sally

        From zero hedge…..

        “Following Varoufakis’ resignation as Greek finmin on Monday, the first official casualty of the Greferendum which in retrospect was completely irrelevant, he has been put in a tough position of still having to be physically present in parliament of which he remains a member. But not today: moments ago Yanis tweeted that he will not be present to cast the critical vote supporting Syriza’s backtracked proposal, as he will be detained for “family reasons.”

        He claims he supports the prime minister but he won’t be there to vote for the deal. Hmm

        1. susan the other

          He did say he’d rather cut off his arm than sign that thing. And everybody with any sense agrees with him. Tsipras is a brave and tragic figure so Varoufakis doesn’t trash him. But Varoufakis is totally fed up.

          1. susan the other

            And Simon Wren-Lewis above on “The Non-independent ECB” makes me sick. The ECB is just another mobster.

          2. MyLessThanPrimeBeef

            Casting a negative vote is not trashing Tripras.

            If he believes that is the right thing to do…nothing personal.

            And if he wants to go beyond mere objectivity, he’s loyalty is not to a person, but to his constituents.

      2. Jim Haygood

        ‘The Victor History book has Angela Merkle as the preserver of the Union, as money poured in, after the rebels were ruthlessly suppressed.’ — MLTPB

        That’s pretty funny! And Schaeuble was her General Sherman, putting Athens to the torch so the rebels could never rise again.

        A hundred years from now, they may have to ban the Greek flag as a hateful secessionist symbol.

  17. CSTH

    Yves and Lambert, endless thanks your for tireless work.

    The farce now unfolding in Athens is (among so many others layers of historical significance) just the latest reminder that the West has, in the quarter-century since 1989, forgotten everything it ever knew about democracy, with increasingly tragic consequences. This is as true of the progressive left as it is of the neoliberal right, and as a phenomenon it seems to transcend either simple cynicism or naievete – it feels like evidence of accelerating senescence on a civilizational scale.

    In an item published on Tuesday, , Bernard Henri-Levi observed that: “Greek voters’ rejection on Sunday of the latest bailout offer from their country’s creditors did not represent a “victory for democracy.” For democracy, as the Greeks know better than anyone, is a matter of mediation, representation, and orderly delegation of power.

    We are reminded again that it takes more than a vote to create real power and achieve real results. But this is not – or not only – because the EU is such a kafkaesque web of rules, committees, and paperwork. It may be a fiasco, but it also just the latest in a series of failed rituals for the civic religion of the West. The ‘oxi’ sign will rapidly take its place alongside the ‘purple fingers’ of baghdad and kabul, the ‘Hope poster’ hagiography of 2008, the hanging chads of 2000….all the way back to Yeltsin on that tank, the ‘Goddess of Democracy’ profaned in the chaos of Tiananmen, and the hubristic triumphalism of the ‘end of history’ era.

    … “No trimphalism” indeed…

    We keep waving at the clouds, but the cargo is no longer being delivered. “We” collectively have forgotten what the work of a democractic polity actually entails …and the disappointments and contradictions are accumulating rapidly.

    In other words, The Greeks have offered another reminder of what is right in front of our noses. Don’t believe anyone who tells you ‘you vote is your voice’. In fact, its not your voice that matters in your first place. What matters is your work: organizing, coalition-building, horse-trading, leadership, followership.

    In contrast to the genuine democratic movements that built the world we now enjoy, a referendum like what we saw last week is just – i.e. just another – a glorified flashmob.

    The results – in Athens today but also throughout the West on a longer time frame – are squandered institutional legitimacy, rapidly expanding power vacuums, and accumulating frustration.

    At least – or at least I hope that – some of us still remember how dangerous a combination this can become….

  18. rich

    Tsipras has just destroyed Greece

    This smells like just another can-kick to me. E.

    Tsipras turned out to be a sellout:

    Read more:
    pictures talk louder than words

    July 10, 2015
    “Guerrilla Warfare Against a Hegemonic Power”: the Challenge and Promise of Greece

    by Ellen Brown
    Another alternative would be to run the euro printing press at the Bank of Greece, something that is apparently being done quietly already. As precedent, Ireland’s central bank quietly printed €51 billion in 2011.

    Another much-discussed alternative would be for Greece to leave the EU and simply issue drachmas. But as of this writing, it looks as if the creditors have strong-armed Greek leaders into accepting their harsh austerity measures in order to stay in the EU.

    Greece blazed the trail globally for political democracy, but modeling a sustainable economic democracy may have to wait for another day.

  19. susan the other

    It’s a standoff between Schaeuble and Greece. He’s taking such a hard line it makes me wonder if he wasn’t the very genius that fudged a rescue for Deutsche Bank. The very culprit who made German taxpayers responsible for all the money Germany has given to Greece to give back to the banksters. That’s German dedication to solving a problem non matter how irrational. And Schaeuble is clever too – he just made a big deal of passing laws protecting taxpayers from situations (“blackmail”) like this. Right. We do know who the real extortionist has been. Where was that sentiment in 2012 when they needed Greece to help them fake it? In a crisis even the staunchest conservative becomes a flaky liberal? And who exactly wanted the IMF in on this? First we hear it was Schaeuble, then no, no, it was Merkel’s mistake. And etc. But all their little fudges for the press releases are going un-commented on. And that reform package they just gave Greece to submit back to them – how is Greece going to afford all that pointless bureaucracy and devastated tax base when they could barely afford to do the referendum? Especially with restricted funds from the ECB (illegally restricted). Austerity is making Europe insane. It’s hard to watch this.

  20. Chauncey Gardiner

    IMO this total capitulation and abject submission by the Greek government to the Troika, with its continued imposition of severe austerity on the Greek people and the accompanying asset stripping of their nation through the sale and privatization of Greece’s public assets to foreign entities, represents a moral and economic theory failure of German leadership as much as the failure of the current political leadership of Greece.

    It is noteworthy that this week economist Thomas Piketty co-signed a letter to German Chancellor Merkel opposing continued austerity and pointing out the obvious failure of this policy.

    My takeaway from this is that those who control a nation’s money control that nation. In this regard it behooves both us Americans and citizens of other nations to pay close attention not only to what is occurring in the EU, but to the precise terms of the secret international agreements that have been deliberately and intentionally mislabeled as “trade” agreements under the TISA, TPP and TTIP acronyms if those documents are ever made public.

  21. susan the other

    Stiglitz. We need to make carbon much more expensive. Rock and a hard place. I think we can’t do that now because the global economy is already so devastated. We need to do the exact opposite. We need to make carbon either useless or illegal. Make it useless by allowing only green industry, because otherwise all countries will fudge their books. Or make it illegal to even produce. But first we need a reasonable replacement of green energy. Where is the replacement? Natural gas for coal is only marginally better for CO2. All sorts of solar and wind and geothermal are what we need. And conservation.

    1. hunkerdown

      “Burning oil for fuel is like burning a Picasso for heat.” Fuels aren’t the only use for hydrocarbons, and the technology exists to capture and use other forms of energy to heat and move things more or less well, if rather more slowly.

      But humans need green material feedstocks too — pitch for roofs, mineral oil for all sorts of things, and you can’t even make steel without coke (unless something very interesting I haven’t heard of happened recently). We need to use a lot less of almost all material, to be sure, but I fear greatly for the forests come the time when we try.

  22. susan the other

    Intercept. ISIS recruiters are busy signing up young Georgians from the Pankisi Gorge. The article is artful. It describes the geography and the historic conflict with Russia and the backward economy. It mentions most of the young men are seeking adventure and volunteer to go to Syria. It mentions the same thing is happening all along the Caspian; it mentions Dagestan. First mention of Dagestan since the Tsarnaev brothers. It’s disconcerting. Because they will soon be returning to their homelands and stir up a rebellion against Russia to the immediate north. Disconcerting because Russia will not hesitate to defend its oil and gas interests and the long awaited war will be on. Funny this info pops up just when negotiations with Iran are breaking down.

    1. vidimi

      the few times the intercept published articles by marcin mamon they have been very good. seems like a very good freelance reporter. as opposed to, say, someone like ashkold krushelnicky who has also appeared on the intercept shilling pro-maidan stories.

  23. kj1313

    In theory freedom of movement is a good idea but Neo liberalism and Neo cons has devastated every country one way or another. We need to extract them from public policy before can move forward.

    1. MyLessThanPrimeBeef

      More ‘you are free to do what I tell you to do.’

      People are free to go where they want (meaning to leave their homes) because under neoliberalism conquerors continue to destroy their homes and communities.

      People may want to vacation and travel, but most prefer to live in a place (as large as a country, not necessarily a town or just a village) they are familiar with culturally and socially, while still being curious about other peoples and cultures. The most adventurous are also free to live abroad.

  24. cirsium

    Yves – thank you for your coverage and analysis of the Greek crisis.

    When I read the AEP article you linked to, I queried what I was reading because the contrast between the actions of the Greek electorate and the actions of the Greek government was too great. Then, I caught sight of Tsipras at the European Parliament on this clip of Nigel Farage’s speech – He looks haunted.

  25. willf

    Regarding this article:

    It is interesting to read this story having just completed this excellent post here at NC by Gaius Publius: The Clinton Campaign Notices the Sanders Campaign, or How to Read the Media.

    Almost every example of bias given by Gaius Publius in his post can be found in the New Republic article.

    It purports to be analysis but subtly supports the Clinton’s candidacy, (among other strange instances of bias, such as labeling the conservative blue dogs as “moderate”) and it tries to fluff up Clinton’s record (labeling her push for mandated insurance during her husband’s administration by pronouncing her to be “the face of the universal healthcare fight during Bill Clinton’s first term“, when the policy for which Bill Clinton advocated could not be called universal by any reasonable observer.

    It also tries to conflate their voting records in the Senate and dismiss any policy differences through textual hand-waving.

    Thanks to Gaius Publius for giving NC readers a new tool set which we can use to analyze such biased pieces.

  26. HoarseWhisperer

    The deal which Tzipras is begging to make is awful.

    But the real travesty is the path he took to arrive at this deal.

    The way Tzipras conducted himself and the harm he did to his people during his short tenure at the helm further strengthens the ascendant political narrative of our time – that the Left is: a) incompetent; b) weak; c) corrupt. The best propaganda is the one which has some basis in reality, because the purveyors of this propaganda can build their credibility on this basis. Couple this with the disenchantment of the electorate (especially the young) from the blatant disregard of the referendum results and the moderate Left (Syriza can be considered “radical” only in the world that Ann Coulter lives in) will be relegated to the back bench for the foreseeable future.

    1. MyLessThanPrimeBeef

      Tsipras came into power promising the impossible – keeping the Euro, fighting austerity and seeking debt relief.

      Naturally, people assumed he was not going to get that through either

      1) sheer raw negotiation strength (not much on his side, realistically),
      2) kindness of strangers who are the creditors (probably a bit wishful thinking here)
      3) intelligence, academic excellence or some magic tricks or dazzling discoveries Science and Technology displays all too often these days – thus the much celebrated ‘Game Theory’ expertise.

      “Here is a way to do the impossible” – people eagerly anticipated, buying 100% into the 11th dimensional marketing.

      We have empathize with the swindled, as we ourselves are not better, believing in saviors or wonder-weapon-like technology to reduce global warming, but never a moment for the unpleasant fact that we must reduce consumption, co-existing at a lower standard of living.

  27. hardWorkingBee

    The conservative pundits are having a good laugh at Syriza’s expense. For example, the former string theorist who posts at The Reference Frame, one of the sanest voices coming out from the loony right: “It is not hard to see that the document envisions deeper reforms – harsher “austerity”, if I translate it to the negativist jargon of far leftists – than the proposals that the Greeks rejected in the referendum. Why did they reject those proposals? Because the reforms were not deep enough!”

    1. HoarseWhisperer

      Tsipras and his party leadership do not seem to realise that they are the ones who hold the winning cards, not the discredited Brussels elite. By threatening to leave the euro system on the principled stand of repudiating austerity and defaulting on unethical debts, the Tsipras government wields enormous power against the banker oligarchs and their politician-puppets.

      Except that you sacrifice some Greek diabetics.

      There was a very slim chance that the “principled stand” could have been turned into leverage several months ago. This would have required credible threat to quit the Eurozone (preparations towards this goal under way) and become recalcitrant (drag everyone through the courts). You couple this with full engagement with the other side at the negotiating table AND you go to the European press and stress the economic side of your argument incessantly. (And no – a Paris Match full page of your splendid feast table does not count).

      I will repeat – a very SLIM chance that this could have worked.

      Now, the “principled stand” just sacrifices some Greek diabetics.

  28. financial matters

    The Left Platform submits its alternative plan. It would seem that this plan for Grexit has at least as much of a mandate as the proposed agreement and according to Varoufakis may be what the troika is pushing for also.

    alternative to austerity, jacobin

  29. ewmayer

    So, while I understand the rationale behind the decision to block comments on most articles going forward, it seems that all of the comments which would normally have gone into the “Tsipras Has Just Destroyed Greece” thread have simply migrated over here.

    Yves, I hope that once the dust finally settles over the coming months on whatever happens the Greek/Troika situation and you catch up on some much-needed sleep, you will at least consider the possibility of delegating some comment-related authority to a trusted group of longtime NCers who will act in a capacity of moderators. I have been doing such work for a Math-and-computation-related online forum for years, and the system works very well. I have always valued the reader comments here as an incredibly valuable ‘meta’ aspect of the site, though since I am strictly a guest perhaps it makes it easier for me to simply skip over the ‘more noise than signal’ ones.


    1. Mark P.

      Oh, I think it’ll work just fine to cordon the comments off in the Links and the 2:00 Water Cooler daily posts.

      To tell the truth, it was already getting so “the worst are full of passionate intensity” that I’d stopped looking at NC so much. With the 2016 election coming, the mob and robot commenters’ noise would become overwhelming.

  30. Lambert Strether

    Tsipras before the Greek Parliament:

    Greek Prime Minister Alexis Tsipras has asked parliament to approve his reform proposals to creditors as a “national responsibility” that would keep the struggling nation inside the European Union.

    Assuming the austerity package passes, the only political actors to come out untainted are those who never signed on to the project in the first place: The KKE (Communists), Anarchists, and IIRC Golden Dawn (and even if they supported austerity, fascism makes no demands of internal consistency). And of course the military and the Orthodox church.

    That doesn’t look like a recipe for stability to me, unless and until Tsipras chooses to play Adolphe Thiers.

  31. zapster

    All I can say is Tsipras did not destroy Greece. The EU destroyed Greece. And made it abundantly clear that it will pillage and loot every country in the zone eventually, because that’s all this is. They will strip their assets, murder their old and young and disabled, and leave them a mangled husk–and then move on to the next.

    All of Europe should be up in arms at this disgusting display of vicious dictatorship.

  32. Oguk

    Late comment, but I wanted to say that personally I’ve seen larger numbers of bumblebees in Southern New England this year. My lavender plants are full of them. On the downside, the gypsy moth caterpillars are wreaking havoc this year. Wouldn’t you know it, they were introduced by a guy trying to breed silkworms in the US, and they have been steadily moving south and west since escaping the labs. Like African honeybees aka “killer bees”.

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