Category: Syriza

Greece rejects Creditor proposals as irrational

6/6/2015

Greek flag

After earlier expressing optimism that a deal was near, Greek Prime Minister Alexis Tsipras told an emergency session of the Greek parliament that the government could not accept the "irrational" proposal given to it last week by its creditors. Tsipras said that any deal must include lightening of Greece's crushing debt load. This appears to be a new emphasis since Greece has claimed continuously that it will meet all its debt obligations.

Tsipras said:"There is no question of our accepting an agreement that does not contain the prospect of debt restructuring" The latest proposals from creditors do not address this issue. Greece does face a huge debt burden of almost 180 per cent of GDP.

Tsipras appears caught between the demands of creditors and demands from within his own party, many of whom think that the government should not give up any more of its anti-austerity policies at the command of its creditors. The Troika or "institutions" have been demanding further pension reforms including reductions and greater labor market flexibility as well as changes to the tax system. The renewed conflict over bailout terms sent the Athens stock market down 5 percent on Friday and interest rate on two years bonds to a huge 24.5 per cent.

The downward movement in stocks may also have been partly due to the decision of the Greek government to make payment to the IMF for June all in one lump sum rather than four payments one of which was due yesterday. Economy Minister George Stathakis said that Greece would do everything possible to remain in the Eurozone. However, at the same time he too rejected the latest proposals from creditors. which included bigger budget surplus targets, tough cuts to pensions, and reforms to the labor market, the latter two issues being red lines that so far the Greek government has refused to give up.

He nevertheless insisted that Greece should not exit the Eurozone as many leftists in the Syriza party are now demanding. Stathakis said: “We have a mandate from the Greek people to go on, to try to change the terms of the agreement. Greece has to remain in the euro, otherwise we do not have any mandate to take action.” Given that creditors have shown no sign of giving up the demand for more pension cuts and changes to the labor market, critics with Syriza are demanding that the government develop a Plan B which would set out how the government would proceed should a deal fail and the government defaults on loan payments.

Among the disastrous results of the prolonged Greek debt crisis has been flight not just of capital and deposits from Greek banks but also the most talented people in Greece are leaving for other countries where job prospects are far better. Greece is probably the greatest net loser of talent in Europe although Portugal, Italy, and Spain are experiencing the same problem to a lesser degree.

Sources:
http://www.nytimes.com/aponline/2015/06/04/world/europe/ap-eu-greece-bailout.html?_r=0
http://www.theguardian.com/business/2015/jun/05/greece-determined-to-stay-in-eurozone-economy-minister-george-stathakis
http://www.bbc.com/news/world-europe-33020420
http://www.bloomberg.com/news/articles/2015-06-05/greece-is-hemorrhaging-its-most-talented-workers#media-1

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Greek Prime Minister optimistic about deal

4/6/2015

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Returning to his usual optimistic view, Greek Prime Minister Alexis Tsipras claimed that talks in Brussels on the Greek debt crisis had been "constructive" and said that "an agreement is in sight".

Nevertheless, Tsipras also said that Greece had rejected some of the proposals put forward by its creditors. Even head of the Eurogroup of finance ministers, Jeroen Dijsselbloem and chief of the European Commission Jean-Claude Juncker termed the talks "very good".

However, there is still no agreement.

Greece had hoped to have an agreement and funds released to pay for a 300 million euro payment due to the International Monetary Fund(IMF) this Friday June 5. Prime Minister Tsipras promised that Greece would make the payment.

French President Francois Hollande also expressed optimism about a deal telling reporters “It is a matter of a few days or even hours from a possible settlement." Yet talks are set to resume in a few days with no deal as yet. By that time, Greece will be even shorter of cash and more desperate as it will have made the IMF payment. Labour Minister Panos Skouletis maintained that there was no more room for Greece to compromise further. However, it may be forced to do so as it runs out of means to pay the remainder of it debts and other obligations to the end of this month when the loan agreement runs out. A deal is needed to release the final funds from the loan.

Not everyone was optimistic, Deputy Shipping Minister, Thodoris Dritsas said that proposals by Juncker during the recent meetings fell "beneath expectations in every way". There may be strong opposition within the ruling Syriza party to any further concessions and even to those already granted. Many leftists are upset that the government refuses to discuss any Plan B that would develop policies to face a situation where no deal was possible. Alexis Mitropoulos, a senior official within Syriza said: "[Juncker] took on the dirty work and conveyed the most vulgar, most murderous, toughest plan when everyone hoped that the deal was closing. And that at a time when we were finally moving towards an agreement we all want because we rule out a rift leading to tragedy.”

One important issue, that of budget surpluses appears to be on the verge of being solved. Greece will be asked to target a budget surplus of 1 per cent this year and 2 per cent next. Greece has proposed a 0.8 per cent surplus this year and 1.5 per cent next.

The Greek government has so far resisted pension cuts demanded by creditors and also labor market reforms. Taxation issues also appear divisive. A deal still appears to be at least a number of days ahead. A deal must be reached by about the middle of June to allow time for it to pass through various legislatures.

Sources:
http://www.euronews.com/2015/06/02/eurogroup-head-dampens-greece-s-enthusiasm-over-debt-deal/
http://www.euronews.com/2015/06/02/greek-debt-crisis-no-room-for-more-compromises-says-athens-minister/
http://www.nytimes.com/2015/06/04/business/international/greek-debt-tsipras-juncker-imf-european-commission.html?_r=0

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Noam chomsky on Greek debt crisis

29/4/2015

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Noam Chomsky (Duncan Rawlinson)

Noam Chomsky is a famous American linguist, philosopher and cognitive scientist but is also known for his political commentaries and activism for social justice. Most of his career was spent at the Massachusetts Institute of Technology (MIT). Chomsky is now 87 but still regularly comments on recent events. In a 2005 poll, Chomsky was voted the "world's top public intellectual".

Chomsky sees hopeful signs in the rise of such parties as Podemos in Spain, Syriza in Greece but also in independence movements in Latin America that are all fighting against disastrous economic policies saying: “Hopefully there is finally an uprising of the people against the devastating economic and social policies deriving from the bureaucracy and the banks, and this is promising. It must be." In an earlier interview on Democracy Now, described the EU reaction to the election of Syriza as "extremely savage". Given that control of events so far has been in the hands of the banks and EU bureaucracy it seems unlikely that any debt will be written off.

In an interview with Euronews, Chomsky argued that Greek debt should be written off just as happened with German debt in 1953, eight years after World War II. He also claimed that EU austerity policies inflicted on Greece were ruining the country. Chomsky is hardly alone in the belief that EU policies hurt Greece. Many liberal economists such as Paul Krugman have expressed similar views.

Chomsky noted that the Syriza-led government had an election mandate to change policies that led to 50 per cent of young people being unemployed and almost 40 per cent of Greeks living below the poverty line. When asked about other countries also facing huge debt loads such as Spain and Portugal, Chomsky maintained that their debt too should be written off.

Related reading
EU FInance Ministers make plans for greek default

Sources:
Greek Reporter
Noam Chomsky

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Greece rejects Creditor proposals as irrational

Greek Prime Minister optimistic about deal

Noam chomsky on Greek debt crisis

Ken Hanly

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Greece rejects Creditor proposals as irrational

Greek Prime Minister optimistic about deal

Noa﻿m chomsky on Greek debt crisis

Ken Hanly

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Noam chomsky on Greek debt crisis