The following is a selection of news and analysis of the debt crisis of the Greek government and people. The Syriza-led government has reluctantly accepted the austerity dictates of the European Union and international financial institutions.
1. News:
- Greece faces tough conditions under deal with euro zone, Reuters, July 13, 2015
- Greek Debt Crisis Deal Is Reached, but Long Road Remains, New York Times, July 13, 2015
- Greece bailout agreement: key points, The Guardian, July 13, 2015
2. Polls:
Overwhelming majority of Greeks want to keep euro, Reuters, Friday, July 10, 2015
A total of 84 percent of Greeks want to keep the euro, an opinion poll released on Friday showed, with just 12 percent favoring a return to the drachma, as the country races to clinch a cash-for-reforms deal with its creditors.
The poll by Metron Analysis for Parapolitika newspaper showed that although the overwhelming majority of those polled want to remain in the single currency, 55 percent said it was the right choice to vote ‘No’ in last weekend’s referendum on tough austerity measures. It was not immediately clear when the poll was conducted.
SYRIZA maintained a commanding lead over the opposition conservatives with 45.6 percent of Greeks saying they would vote for the leftist party of Prime Minister Alexis Tsipras were there to be parliamentary polls, up from the 36.3 percent the party garnered in January’s election. The center-right New Democracy has seen its support drop from 27.8 percent to 22.7 percent.
3. Analysis:
* “A hostage situation”: Greece yields to austerity demands just days after historic ‘No’ vote, interview on Democracy Now!, July 10, 2015 with Mark Weisbrot of the Center for Economic and Policy Research (Washington DC)
‘The proposal is similar to what they had rejected previously. This is kind of a hostage situation. They’ve had a number of deadlines and threats, what the prime minister called blackmail. But a week before the July 5 referendum in Greece, they [EU]really started bombing. It wasn’t threats anymore. I think that’s why the former finance minister, Yanis Varoufakis, called it terrorism.’
* What was the point of Tsipras referendum?, by Paul Mason, Channel Four, July 10, 2015
“Most importantly, this is not a done deal. If it gets through the Greek parliament and is then thrown back into the Greeks’ faces, it will solidify and prepare Greek society for Grexit.”
* Greece crisis: Europe turns the screws, by Paul Mason, Channel Four, July 12, 2015 (full text)
The Greeks arrived with a set of proposals widely scorned as “more austere than the ones they rejected”. The internet burst forth with catcalls – “they’ve caved in”. By doing so, however, the Greeks last night revealed the true dysfunctionality of the system they are trying to stay inside.
First, Germany put forward a proposal one could best describe as “back of envelope” for Greece to leave the Eurozone for five years. There is logic to it – because Germany was signalling that only outside the Eurozone could Greece’s debts be written off. But for the most powerful Eurozone nation to arrive with an unspecified, two-paragraph “suggestion” at this stage explains why the Italians, according to the Guardian, are about to blast them with both barrels for lack of leadership.
Then came the Finns. Their government is a coalition of centre right parties and the right-wing populist Finns Party. The latter threatened to collapse the new governing coalition if the Finns take part in a new bailout for Greece.
The demand is now that the Greeks pass all the laws they signed up to in advance of any new bailout deal. This is backed up by a threat to keep the Greek banks starved of liquidity from the ECB for another week.
In Greece, large numbers of people – on all sides of politics – believe the Europeans are trying to force the elected government to resign before a deal is concluded. If so there will be political chaos.
Syriza’s poll rating is currently 38 per cent and rising. Without a “moderate” split from Syriza the centrist parties have no chance of forming a new government, and without Tsipras’ tacit consent there can be no interim government of unelected technocrats.
On Friday, I reported, on the basis of intelligence being supplied to large corporations, that the key supply concerns are gas – because of the need for forward contracts – disposables in the healthcare system, and meat imports.
The screw Europe is turning on its own supposed member state now begins to resemble a sanctions regime. Without more liquidity the banks will run out of money some time this week.
To be clear, it is the Europe that is in charge of the Greek banking system, not Greece. Yet after last night, what many in Greece and elsewhere see is that Europe has no single understanding of what it’s trying to achieve through this enforced destruction of a modern economy.
Channel 4 is a publicly-owned, public-service television broadcaster in Britain. It began transmission on 2 November 1982.
* Commentary by G Ehrbar, on Marxmail listserve, July 11, 2015, (full text)
To me, Paul Mason [article above—RA] made sense. Here is my own take on it. I do understand why the Greeks want to stay in the Eurozone. The Euro has strong symbolic value for the unity of the European people. The possibility to travel without having to go through customs and without having to go to the currency exchange window is a great unifying experience for the ordinary person.
(1) What was the point of the referendum? I think the referendum should be taken at face value. Tsipras needed to know whether the Greek masses were willing to accept the conditions of the Institutions. This would make a difference for further negotiations. I don’t think he expected to lose, but he assumed that there was a good probability he might lose. He needed the referendum exactly because he did not know whether the answer would be yes or no. In case of a yes vote, others would continue the negotiations. I think the no vote was an expression of confidence, that the Greeks knew that their government was doing the best they could to fulfill their electoral mandate.
(2) Why did Varoufakis resign? Again I think the official story is basically correct. After the resounding no vote, Tsipras expected that the Institutions would see themselves forced to make more concessions. And as an ice breaker, Tsipras sacrificed Varoufakis in order to get the negotiations going again. Not because Varoufakis did something wrong, but because Varoufakis knew too much; he embarrassed the negotiators on the other side by being the better economist. Varoufakis showed to the whole world that the negotiaions were not about economics but about power. His latest Guardian op-ed http://www.theguardian.com/commentisfree/2015/jul/10/germany-greek-pain-debt-relief-grexit is another proof of a much more penetrating insight into the process and history than available from the other negotiators.
(3) Now the important thing is the reaction of the Institutions to the Referendum and to Tsipras’s good-will gesture of withdrawing Varoufakis. Their reaction was: nothing. Not a single conciliatory gesture, instead they insisted on the deadlock before the referendum and said “it is up to the Greeks.” This ultimate intransigence showed their disdain for democracy and also showed that they did not want Greece in the Euro zone any more. Perhaps Merkel had maneuvered herself into a position where she was not able to make concessions any more, or perhaps—Varoufakis is not the only one to say this about Schauble—Schauble had not been negotiating in good faith, he wanted the negotiations to fail.
(4) What did Tsipras do when he, and everybody else, saw the true position of the Institutions? He saw the expulsion of Greece coming and he did not want it blamed on Syriza. He did not have the mandate to leave the Euro, and I think it is also strategically wrong for socialists to voluntarily leave the Euro or the EU, they should push the envelope and do as much as they can do inside the Euro and EU. Therefore he made an offer giving the Institutions all they wanted, in order to see if under these conditions the Institutions would grant Greece a reduction or re-structuring of the debt in such a way that this austerity would have at least a chance of success.
(5) Did Tsipras’s gambit pay off? Der Spiegel, which until yesterday preached how the collapse of the Greek economy is the fault of the Greeks, who were demanding too much, is suddenly full of revelations how much pressure the US was exerting on Merkel to give the Greeks a break. This give Merkel a face-saving way out: she does not have to “cave” to the “lazy Greeks” but she has to respect the will of the US. So I think there is a good chance Greece will stay in the Euro, but this is not at all certain.
Here are the two possibilities as I see them:
- If Greece remains in the Eurozone at the cost of further austerity measures, then this is the loss of one skirmish but not of the war. Syriza tried to get the best outcome possible while respecting the will of the voters to stay within the Eurozone. Syriza did not betray the voters. They tried everything possible to carry out the mandate of the voters and were defeated because the enemy was stronger or more ruthless than they, and because their own mandate, eliminating austerity while staying in the Eurozone, was somewhat contradictory. And the struggle continues. Despite the fact that they were forced to accede to austerity demands in the end, their honorable and courageous battle and their respect for democracy will encourage the voters in Spain, Ireland and elsewhere to vote for their own left parties.
- If the Institutions do not accept Syriza’s offer, then it will be clear to all that Greece did not leave the Eurozone voluntarily but was kicked out. This will create unity in Greece for the trying times ahead, and it will make it easier for Syriza, if Greece is forced to go through such a painful adjustment process, to see to it that the new economy they are building will have elements of socialism in it. In my estimation, this will not happen this time, but the Greek experience will teach the left parties everywhere that it is not premature to make experiments and gain experiences in cooperative production, municipal energy utilities, etc.
4. Eyewitness:
* ‘We underestimated their power’: Greek government insider lifts the lid on five months of ‘humiliation’ and ‘blackmail’, published on Mediapart (France), July 8, 2015
In an interview with Mediapart, a senior advisor to the Greek government who has been at the heart of the past five months of negotiations between Athens and its international creditors reveals the details of what resembles a game of liar’s dice over the fate of a nation that has been brought to its economic and social knees.
His account gives a rare and disturbing insight into the process which has led up to this week’s make-or-break deadline for reaching a bailout deal between Greece and international lenders, without which the country faces crashing out of the euro and complete bankruptcy. He describes the extraordinary bullying of Greece’s radical-left government by the creditors, including Eurogroup president Jeroen Dijsselbloem’s direct threat to cause the collapse of the Hellenic banks if it failed to sign-up to a drastic austerity programme. “We went into a war thinking we had the same weapons as them”, he says. “We underestimated their power”.
* Interview with former Greek finance minister Yanis Varoufakis, New Statesman, July 12, 2015
In his first interview since resigning, Greece’s former Finance Minister says the Eurogroup is “completely and utterly” controlled by Germany, Greece was “set up” and last week’s referendum was wasted.
* Germany won’t spare Greek pain – it has an interest in breaking us, by Yanis Varoufakis, former Greek finance minister, in The Guardian, July 10, 2015
* Prime Minister Alexis Tsipras’ speech in the Greek Parliament concerning the mandate to conclude the negotiation, published on the website of the Prime Minister of Greece, July 11, 2015
5. From the historical archive:
Poland is granted large cut in debt, by Steven Greenhouse, The New York Times, March 16, 1991
Western governments have agreed to forgive about half the $33 billion that Poland owes them, the French Government announced today, with the creditor nations offering what they called “extraordinary terms” to help ease Poland’s transition to a market economy…
