Greece in 2015

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Greek Debt Crisis 2015
Live updates from Reuters on the debt crisis in Greece
The Guardian: Greece
Project Syndicate: Greece and the Fate of the Euro
The Conversation: Grexit

trojanhorse425Greeks apologise with huge horse
THE nation of Greece said sorry to the European Union with a present of an enormous wooden horse.
Left outside the European Central Bank in the dead of night, the horse has now been moved into the ECB’s central lobby where it is proudly on display.
A gift tag attached to the horse, which is surprisingly light for its size and has small holes along the length of its body, suggested that it should be placed in the bank’s vaults overnight to avoid it being targeted by thieves.
Mario Draghi, President of the ECB, said: “How nice of the Greeks to acknowledge the trouble we’ve been put to on their behalf with this wonderful horse, handmade and so large it could hold a dozen double-decker buses.
“The card with it, which had a teddy bear dressed as a hobo on the front, explained that Greece made us this because they don’t have enough money for a present, which brought a tear to my eye.
“However, unless they can somehow find billions overnight then austerity measures must continue.”
Oddly, Greek representatives in Brussels have hinted that they may soon be in a position to settle their debts and have puzzled the French and German banks that hold their loans by asking if there is any discount for cash.

Greece’s Alexis Tsipras Faces Major Challenges After Election Triumph
The clock is ticking for the government to institute radical reforms.
20 September
Syriza returns to power in Greek general election
Conservative rival New Democracy concedes defeat to leftwing party led by Alexis Tsipras
31 August
Massive Bronze-Age City Discovered Underwater in Greece
(History) In 2014, archaeologists from the University of Geneva were conducting dive-training exercises off Lambayanna Beach in Greece’s Kiladha Bay when they spotted some intriguing pottery fragments submerged near the shore. When they looked closer, they spotted what appeared to be architectural elements, suggesting the presence of an entire settlement underwater. Now, after conducting a full investigation of the site over the past two months, the researchers have uncovered what appears to be a sprawling, heavily defended city dating as far back as 2500 B.C.
28 August
Greece’s caretaker government sworn in with first female prime minister
Interim cabinet led by former supreme court chief Vassiliki Thanou will govern until early elections next month, the third time Greeks go to the polls this year
Vassiliki Thanou, a top judge and the country’s first female prime minister, will lead the country until the election, which is expected to take place on 20 September.
Her predecessor, Alexis Tsipras, stepped down last week following a rebellion by members of his leftwing Syriza party who objected to the conditions of Greece’s third international bailout.
The new cabinet may be in power for less than a month, but it will have to oversee the implementation of several austerity measures on which the new bailout depends.
Giorgos Houliarakis, an academic who was part of Greece’s negotiating team during the talks with its creditors, becomes finance minister, and the veteran diplomat Petros Moliviatis becomes foreign minister, a position he has held twice in the past.
24 August
Greece: The paradox of power
Why doesn’t Greece reform? Over the past few years the inability of successive Greek governments to deliver on the demands of international creditors has been a key feature of Greece’s bailout drama. Frustrated observers have pointed to various pathologies of the Greek political system to explain this underperformance: the lack of political will; entrenched sectoral interests resisting change; and the irrational allocation of resources skewed by clientelism and corruption. There is, of course, a significant element of truth in all these assertions. Yet, for many outsiders the real elephant in the room remains unnoticed. The endemic weaknesses of the Greek public administration are indeed crucial in understanding much of what has gone wrong over the past 5 years (and before). Back in 2010 the beleaguered Greek government had very little input into its own ‘rescue’. Lacking basic capabilities and running out of time, it almost entirely ‘sub-contracted’ the design of the bailout programme to the IMF, who, by its own admission, grossly overrestimated the capacity of the domestic system to deliver. – See more at:
21 August
Opinion: Germans begin the looting of Greece
Bailout paves the way for the fire-sale privatization of the public’s assets
By Darrell Delamaide, Politics columnist
(MarketWatch) The ink was not yet dry on the new European bailout accord for Greece before German companies started their plundering of Greek assets.
Per provisions of the “agreement” imposed on Greece, the Athens government awarded the German company that runs the Frankfurt Airport, Fraport, a concession to operate 14 regional airports, mostly on the islands like Mykonos and Santorini favored by tourists, for up to 50 years in the first privatization of government-owned assets demanded by the creditors.
The airport deal had been agreed upon last year by the previous Greek government and then suspended by Prime Minister Alexis Tsipras’s newly elected government this year as part of his pledge to prevent the fire sale of valuable public assets at bargain-basement prices.Fraport, which ironically is majority-owned by state and local governments in Germany, has cherry-picked among Greece’s network of regional airports to take over only those that make a profit. It is happy to leave the 30 other loss-making airports in the hands of a bankrupt state.Greek Infrastructure Minister Christos Spirtzis told German television that this deal to take away the profitable airports and leave the ailing government with only those requiring subsidies “is more fitting for a colony than for an EU member state.”The official memorandum of understanding approved this week specifically mentions the airport deal and that it must be made with the buyer already agreed upon, even though the bulk of the privatizations that Greece must make will be finalized only in March of next year.
20 August
Greek PM announces resignation to pave way for snap polls
Prime Minister Alexis Tsipras resigned on Thursday, hoping to strengthen his hold on power in snap elections after seven months in office in which he fought Greece’s creditors for a better bailout deal but had to cave in.
Government officials said the aim was to hold the election on Sept. 20, with Tsipras seeking to quell a rebellion in his leftist Syriza party and seal public support for the bailout programme, Greece’s third since 2010, that he negotiated.
13 August
The IMF is caught in a geopolitical tug-of-war between Germany and the US
(Quartz) The International Monetary Fund faces a stern test of its independence that could have repercussions far beyond the fate of the Greek economy, by far its biggest headache of the moment.
the IMF has made clear that Greece’s debt load, expected to balloon to more than twice its annual economic output in 2016, is not sustainable without some form of relief—that is, a meaningful reduction in what Athens owes. The IMF’s rules prohibit lending to countries with so much debt that they are not able to pay the fund back. That means even though the IMF endorses the reforms required by the new Greek bailout agreement, it likely won’t sign on to participate in this new loan program unless there is enough debt relief to make repayment a reasonable possibility.
“The IMF was strong-armed into lending to Greece at massive scale in 2010,” Brett House, a former IMF staffer who is now chief economist at Alignvest Investment Management, told Quartz. “The board overrode the IMF’s own rules against lending into unsustainable situations and, in a terrible governance move, rewrote the IMF’s policies in the midst of its lending decision to make the loan to Greece possible.”
Then-IMF director Dominique Strauss-Kahn recently wrote that he felt the IMF had no choice but to join the EU to rescue Greece the first time, when a weakened global financial system faced broader exposure to the country’s economic troubles. But even he expressed regret for misdiagnosing the problem and now urges Greece’s creditors to adopt a policy of debt relief.
12 August
Germany criticises Greek bailout agreement
Berlin raises objections hours before Greece’s parliament debates contentious reform plan
(FT) Germany criticised an outline deal between Athens and its bailout monitors as insufficient, upsetting eurozone attempts to smooth the way to a new €85bn rescue for Greece.
Germany’s finance ministry outlined its objections in a paper circulated to its eurozone counterparts just hours before the Greek parliament was due to debate on Wednesday the painful austerity and reform package that had been reluctantly accepted by the radical left government of prime minister Alexis Tsipras.
It also sets up a potentially difficult meeting of eurozone finance ministers on Friday who are due to decide whether to approve the deal — or grant Athens a bridging loan to give the negotiators time to rework the agreement. …
The German intervention revives memories of last month’s acrimonious summit, when Wolfgang Schäuble, Berlin’s hawkish finance minister, openly aired the possibility of a temporary Greek exit from the euro. It punctures the optimism that had been building in Brussels that a deal could be done in time for Athens to pay a €3.2bn debt to the European Central Bank on August 20.
11 August
FT still cautious Greece strikes outline of debt deal — Berlin still reluctant to rush ahead with €86bn bailout agreement
After Marathon Talks, Greece And International Lenders Clinch Multi-Billion Euro Bailout Deal
Doubts remain about whether a leftist government elected on a pledge to reverse austerity can implement the punishing terms of an agreement that critics say compromises the left’s basic principles.
(Reuters) Greece and its international lenders reached an 85 billion euro ($93.72 billion) bailout agreement on Tuesday after nailing down the terms of new loans needed to save the country from financial ruin.
The deal, which came after 23 hours of talks that continued through the night, must still be adopted by Greece’s parliament and by euro zone countries.
The currency bloc’s finance ministers are expected to give their approval on Friday in time for Greece to make a crucial 3.2 billion euro debt repayment that falls due next week.
5 August
Roberto Savio presents a cross section of opinion on Other News Greece, Germany and the Euro
31 July
Kimon Valaskakis: A problematic Greek deal
Contrary to popular narrative, Greece’s present mess occurred because it followed European doctors’ orders too closely. The recent deal might only make it worse
(Open Canada) In a recent commentary, economist Anatole Kaletsky argued that the July Greece-Europe Deal could indeed succeed. “Rather than marking the beginning of a new phase of the euro crisis, the agreement may be remembered as the culmination of a long series of political compromises that, by correcting some of the euro’s worst design flaws, created the conditions for a European economic recovery,” he wrote.
As a long-time supporter of the European Project, I wish I could share his optimism. Sadly, my analysis leads me to the opposite conclusion: The accord in its present form cannot work. At most it grants Greece and Europe a few months to come up with something better.
(Originally published on Project Syndicate as a comment/response to Anatole Kaletsky: Why the Greek Deal Will Work)
Mohamed A. El-Erian: In Defense of Varoufakis
Alexis Tsipras, appointed Varoufakis to lead the delicate negotiations with the country’s creditors. His mandate was to recast the relationship in two important ways: render its terms more amenable to economic growth and job creation; and restore balance and dignity to the treatment of Greece by its European partners and the International Monetary Fund.
These objectives reflected Greece’s frustrating and disappointing experience under two previous bailout packages administered by “the institutions” (the European Commission, the European Central Bank, and the IMF). In pursuing them, Varoufakis felt empowered by the scale of Syriza’s electoral win and compelled by economic logic to press three issues that many economists believe must be addressed if sustained growth is to be restored: less and more intelligent austerity; structural reforms that better meet social objectives; and debt reduction.
These issues remain as relevant today, with Varoufakis out of government, as they were when he was tirelessly advocating for them during visits to European capitals and in tense late-night negotiations in Brussels. Indeed, many observers view the agreement on a third bailout program that Greece reached with its creditors – barely a week after Varoufakis resigned – as simply more of the same. At best, the deal will bring a respite – one that is likely to prove both short and shallow.
24 July
Lessons in resilience from rural Greece
Alexis Adams
(WaPost) As the world watches to see whether new bailout talks will ultimately prevent a collapse of the Greek economy, my neighbors in rural Greece carry on with their lives as they have for centuries. Invisible to most economists, they subsist in ways that cannot be measured easily by typical economic yardsticks. Nonetheless, their economy is real, will help them survive the current crisis and in fact offers a lesson in resilience for all of us.
Here on the remote southeastern Peloponnese Peninsula, life is pared to the essentials: food, family and tradition. And whether the country’s currency is the euro, the drachma or, as it was in the days before Christ, the obol, this is the way it has always been. … The conventional analysis of Greece’s economic problems has overlooked this traditional economy, both its size — about 39 percent of the country’s population — and more important its time-tested ability to weather upheaval. We shouldn’t.
A Point of View: Why the row between Greece and Germany is like a lovers’ tiff
(BBC) Last summer, I had lunch in a beach-side taverna on the island of Ios, which I had last visited when it was a hippy haven in the 1970s. I asked the proprietor if he accepted credit cards, because I wanted to treat the family to the freshly-caught, and expensive, fish that was proudly displayed on the counter, but I was short of cash. Sorry, he said, he didn’t do credit cards. But I could pay him tomorrow. Tomorrow was no good, I replied, because I was leaving the island, and couldn’t return to the beach in time. No problem, he countered once more. If I left the money with a friend of his who ran the tobacconist opposite the port, that would be fine. But what if the ATM wasn’t working, I asked anxiously? He laughed, and shrugged his shoulders. “In that case, lunch will be on me!” Hospitality – xenophilia – is the most prized of attributes in Greece. And tax evasion is one of its most self-defeating. I have thought about that restaurant and its owner many times over the past few months. He didn’t seem to care very much about whether he received his cash from me, or not. In the event the ATM was working, and I found the tobacconist. But I couldn’t help wondering, as a dutiful northern European, if the money would ever be declared on any kind of tax return. Was it an act of generosity, or dishonesty? Or both? And where on earth do you put that on an accountant’s balance-sheet?
22 July
Anatole Kaletsky: Why the Greek Deal Will Work
(Project Syndicate) … the conventional wisdom is likely to be proved wrong. The deal between Greece and the European authorities is actually a good one for both sides. Rather than marking the beginning of a new phase of the euro crisis, the agreement may be remembered as the culmination of a long series of political compromises that, by correcting some of the euro’s worst design flaws, created the conditions for a European economic recovery.
To express guarded optimism about the Greek deal is not to condone the provocative arrogance of former Greek Finance Minister Yanis Varoufakis or the pointless vindictiveness of German Finance Minister Wolfgang Schäuble. Neither is it to deny the economic criticism of the bailout provisions presented by progressives like Joseph Stiglitz and conservatives like Hans-Werner Sinn.

21 July
Yanis Varoufakis: Europe’s Vindictive Privatization Plan for Greece
19 July
Top economist slams Greek handling of bailout showdown
(AFP) – Nobel prize winning economist Paul Krugman, a vocal supporter of Athens in their long-running bailout saga, said Sunday that he “may have overestimated the competence of the Greek government.”
Krugman suggested that the ruling radical Syriza party staged the showdown without having a Plan B — “at least something they could hold up, ‘this is what we will do if we can’t get any new cash.'”
“Amazingly,” Krugman said on “CNN’s Fareed Zakaria GPS,” “they thought they could simply demand better terms without having any backup plan.
Now a deal has been done, what lies ahead for the Greek economy?
Greece’s banks will reopen on Monday and the country will step back from the brink – but can the nation get back to normal or will it be permanently scarred?
On Monday, Greek banks will open after three weeks of closure. That, and the decision to grant Athens a €7bn emergency bridging loan – vital to averting a looming default in the form of a €3.1bn payment to the European Central Bank, also due on Monday – will help restore a semblance of normality to a country that has come perilously close to resembling a failed state.
The yearning for stability cannot be overestimated. Even by the standards of what has become an epic struggle to keep bankruptcy at bay, the last month has been high in drama. Emotions have swung back and forth as violently as events. From a determined defiance – embodied by the resounding rejection of further austerity in a referendum on 5 July – Greeks have been forced to eat humble pie, their first ever far-left leader, Alexis Tsipras, caving in days later to demands for tax rises, spending cuts and pension adjustments, under threat of ejection from the eurozone.
Disgraced ex-IMF chief Strauss-Kahn slams new Greek deal as ‘deadly blow’
(RT) “What happened last weekend was for me profoundly damaging, if not a deadly blow,” he wrote in the open letter entitled “To my German friends” published on Saturday.
Strauss-Kahn referred to the deal as a “diktat” and accused European leaders of putting ideology and political gains ahead of real problems, and thus risking the integrity of the European Union.
17 July
BCA Global Investment Strategy: Greece’s capitulation to the Troika’s demands may help buy the beleaguered country some time, but it is unlikely to be the final chapter in the ongoing crisis. The proposed program is completely unviable. Even if Greece tightens fiscal policy by another 2% of GDP, as the Troika is insisting, the resulting economic contraction will only further deepen the depression. This, in turn, will ensure that the country’s brightest workers continue to flee abroad, leaving the country even more destitute than before. Thus, the only question is when, not if, the program goes off track. Our best bet is six months, but it could be a lot earlier than that.
Ben S. Bernanke — Greece and Europe: Is Europe holding up its end of the bargain?
(Brookings) Germany could help restore balance within the euro zone and raise the currency area’s overall pace of growth by increasing spending at home, through measures like increasing investment in infrastructure, pushing for wage increases for German workers (to raise domestic consumption), and engaging in structural reforms to encourage more domestic demand. Such measures would entail little or no short-run sacrifice for Germans, and they would serve the country’s longer-term interests by reducing the risks of eventual euro breakup.
I’ll end with two concrete proposals. First, negotiations over Greece’s evidently unsustainable debt burden should be based on explicit assumptions about European growth. If European growth turns out to be weaker than projected, which in turn would make it tougher for Greece to grow, then Greece should be allowed greater leeway after the fact in meeting its fiscal targets.
Second, it’s time for the leaders of the euro zone to address the problem of large and sustained trade imbalances (either surpluses or deficits), which, in a fixed-exchange-rate system like the euro zone, impose significant costs and risks. For example, the Stability and Growth Pact, which imposes rules and penalties with the goal of limiting fiscal deficits, could be extended to reference trade imbalances as well. Simply recognizing officially that creditor as well as debtor countries have an obligation to adjust over time (through fiscal and structural measures, for example) would be an important step in the right direction.
16 July
Lee Jong-Wha: Asia’s View of the Greek Crisis
(Project Syndicate) … the IMF imposed even tougher conditions on Asia than it has on Greece, including fiscal austerity, monetary tightening, and financial restructuring. Some of these requirements were clearly unnecessary, as evidenced by Malaysia, which recovered quickly from the crisis without IMF assistance.
In any case, the actions were temporary. Once confidence began to recover and market conditions stabilized, the East Asian economies shifted their monetary and fiscal policies toward expansion and embraced large-scale exchange-rate depreciation – efforts that enhanced their export competitiveness. Structural reforms, including the immediate closing of financial institutions and the elimination of non-performing loans, also helped to bolster recovery.
Seumas Milne: The crucifixion of Greece is killing the European project
This attempt to turn Athens into a debt colony will fail – and open the way to the breakup of the eurozone
Europe Moves To Restore Funding To Greece After Bailout Vote
Europe moved to re-open funding to Greece’s stricken economy, hours after a fractious Greek parliament approved a tough bailout program in a vote that left the government without a majority and looking to new elections within months
Greece Austerity Bill Triggers Riots, Political Revolt
Greece’s troubled left-wing government was seeking urgent relief from European lenders Thursday, after it pushed a harsh austerity package through parliament, triggering a revolt in the governing party and violent demonstrations in central Athens.
Finance ministers from countries using the euro currency were planning a conference call to consider rescue financing for Greece, while the European Central Bank will mull a request from Athens to increase emergency assistance to troubled Greek banks that have been closed since June 29.
In a post-midnight vote, the country’s parliament voted 229-64 to implement more austerity measures that include pension reforms and sweeping sales tax hikes. Approval came thanks to pro-European opposition parties who voted in favour, and in spite of deepening dissent within Tsipras’ left-wing Syriza party. Thirty-eight party lawmakers defied Tsipras — nearly one-in-four — by voting against or abstaining. They included Tsipras’ powerful energy minister, the speaker of parliament, and Yanis Varoufakis, the former finance minister who headed Greece’s bailout strategy until his replacement 10 days ago.
12-15 JulyGreek debt crisis: Alexis Tsipras hopes to win bailout vote as protests turn violent
Embattled prime minister fights to outflank opposition to eurozone agreement as riot police use teargas on demonstrators outside Athens parliament
I.M.F. Demands Greece Debt Relief as Condition for Bailout
(NYT) The International Monetary Fund threatened to withdraw support for Greece’s bailout on Tuesday unless European leaders agree to substantial debt relief, an immediate challenge to the region’s plan to rescue the country.
The aggressive stance sets up a standoff with Germany and other eurozone creditors, which have been reluctant to provide additional debt relief. The I.M.F role is considered crucial for any bailout, not only to provide funding but also to supervise Greece’s compliance with the terms.
A new rescue program for Greece “would have to meet our criteria,” a senior I.M.F. official told reporters on Tuesday, speaking on the condition of anonymity. “One of those criteria is debt sustainability.”
Exclusive: Greece needs debt relief far beyond EU plans – Secret IMF report
Greece will need far bigger debt relief than euro zone partners have been prepared to envisage so far due to the devastation of its economy and banks in the last two weeks, a confidential study by the International Monetary Fund seen by Reuters shows.
The updated debt sustainability analysis (DSA) was sent to euro zone governments late on Monday, hours after Athens and its 18 partners agreed in principle to open negotiations on a third bailout program of up to 86 billion euros in return for tougher austerity measures and structural reforms.
“The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM,” the IMF said, referring to the European Stability Mechanism bailout fund.
European countries would have to give Greece a 30-year grace period on servicing all its European debt, including new loans, and a very dramatic maturity extension, or else make explicit annual fiscal transfers to the Greek budget or accept “deep upfront haircuts” on their loans to Athens, the report said.
Exclusive: Yanis Varoufakis opens up about his five month battle to save Greece
(New Statesman) 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.
Barry Eichengreen: Saving Greece, Saving Europeeuro _Greek flag
(Project Syndicate) Whatever one thinks about the tactics of Greek Prime Minister Alexis Tsipras’s government in negotiations with the country’s creditors, the Greek people deserve better than what they are being offered. Germany wants Greece to choose between economic collapse and leaving the eurozone. Both options would mean economic disaster; the first, if not both, would be politically disastrous as well.
German Finance Minister Wolfgang Schäuble’s idea of a temporary “time out” from the euro is ludicrous. Given Greece’s collapsing economy and growing humanitarian crisis, the government will have no choice, absent an agreement, but to print money to fund basic social services. It is inconceivable that a country in such deep distress could meet the conditions for euro adoption – inflation within 2% of the eurozone average and a stable exchange rate for two years – between now and the end of the decade. If Grexit occurs, it will not be a holiday; it will be a retirement.
Early Monday morning, European leaders agreed to remove the reference to this “time out” from the announcement of the latest bailout deal. But this door, having been opened, will not now be easily closed. The Eurosystem has been rendered more fragile and subject to destabilization. Other European finance ministers will have to answer for agreeing to forward to their leaders a provisional draft containing Schäuble’s destructive language. …
Greece deserves better. It deserves a program that respects its sovereignty and allows the government to establish its credibility over time. It deserves a program capable of stabilizing its economy rather than bleeding it to death. And it deserves support from the ECB to enable it to remain a eurozone member.
Europe deserves better, too. Other European countries should not in good conscience accede to this politically destructive, economically perverse program. They should remind themselves that Greece had plenty of help from its European partners in getting to this point. They must continue to push for a better deal.
So what was the point?
Greek PM Tspiras faces party revolt over bailout deal
(Reuters) Greece’s leftwing Prime Minister Alexis Tsipras faces a showdown with rebels in his own party on Tuesday furious at his capitulation to German demands for one of the most sweeping austerity packages ever demanded of a euro zone government.
Just hours after a deal that saw Greece surrender much of its sovereignty to outside supervision in return for agreeing to talks on an 86 billion euro ($95 billion) bailout, doubts were already emerging about whether Tsipras would be able to hold his government together.
The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Tsipras to abandon promises of ending austerity.
Instead he must pass legislation to cut pensions, increase value added tax, clamp down on collective bargaining agreements and put in place quasi-automatic spending constraints. In addition, he must set 50 billion euros of public sector assets aside to be sold off under the supervision of foreign lenders and get the whole package through parliament by Wednesday. (BBC) Greece debt crisis: Bailout deal at a glance
A Greek tragedy The sense of powerlessness, of being bossed around by bigger and richer neighbours has emboldened Greece’s far right.
(Al Jazeera) In debt-ridden Greece, government after government has tried to cut its way out of a brutal recession and balance its budget in the process. But the austerity experiment has been an unmitigated disaster; the country is now a symbol of economic insanity.
Consider just three numbers: 53, 20 and 40.
The first number refers to the youth unemployment rate: 53 per cent of 18 to 24 year olds in Greece are out of work.
The second refers to the loss of growth: the Greek economy has contracted by 20 per cent since 2008 – and continues to contract in 2012.
The third figure refers to the suicide rate: there has been an astonishing 40 per cent increase in the number of Greeks taking their own lives since the start of the crisis.
14 July
Did Wall Street enable the Greek debt crisis?
(Al Jazeera blogs) “People seem to forget,” wrote economist and former labor secretary Robert Reich in a column that was widely circulated in a variety of forms over the last few days, “that the Greek debt crisis … grew out of a deal with Goldman Sachs, engineered by Goldman’s Lloyd Blankfein.”
Perhaps, especially in the U.S., and paradoxically, especially in the last year or so, as the Greek financial crisis again churned its way into the news cycle, people forgot — but in Europe, and even in the U.S. press at various times over the last 14 years, the deep, dark connections between Greece’s debt and Wall Street derivatives markets have been, if not top-of-mind, always close at hand.
Under the rules governing the euro, the Greek economy was really carrying too much debt to join the European common currency (this was back in 2001, a couple of years after formal trading in euros began). But a team from Wall Street investment giant Goldman Sachs saw a way around that pesky Maastricht Treaty stuff, and the Greek government, excited by the prospect of reinvigorating their small, shaky economy, were eager to sign on.
10 July
Analysis Whether Greece stays or goes, the unstitching of Europe has begun
Europe is Greece and Greece is Europe was the way it used to be put. Not anymore
(CBC) Greek Prime Minister Alexis Tsipras’s shock referendum last weekend at least clarified the sense of injury and outrage that a large majority of Greeks feel over the prospect of more years of economy-draining austerity.
But it also exposed, quite clearly, the divisions within the EU itself, be it among the 28-nation political entity or the 19 eurozone countries that share a common currency.
Doors could be heard banging shut, and swinging open, from Germany and Spain to Finland and France, with very little evidence at harmony.
And the anger of EU latecomers like Latvia and Lithuania at being asked to again bail out Europe’s problem child seemed louder even than in bill-paying Germany.
“We have created in Europe a currency union without a political union,” tweeted the former Belgian prime minister Guy Verhofstadt this week. “This is simply not sustainable.”
No kidding. The added irony of course is that the Greek government seems now to be accepting demands made of it before the referendum gave a boost to Tsipras’s negotiating position.
Greece Seeks $59.2 Billion Bailout as Tsipras Bows to Demands
(Bloomberg) The package of spending cuts, pension savings and tax increases almost mirrored that from creditors on June 26, which was rejected by Greek voters in a July 5 referendum. It will face its first hurdle in the Greek Parliament on Friday.
Though Tsipras ceded ground, he insists long-term debt needs to be made more manageable to allow Greece to recover from a crisis that has erased a quarter of its economy. He has a growing support base that includes the U.S., European Union President Donald Tusk and the International Monetary Fund. (CBC) Tsipras is first seeking authorization from parliament to negotiate with the creditors based on the proposal in a vote Friday. He is essentially asking his Syriza party to sign off on the U-turn despite more than 60 per cent of voters opposing more austerity in the July 5 referendum.
Time to end Europe’s disgrace of holding Greek people hostage
(The Conversation) It is good for Greece, and it would be good and right for Europe to finally accept that the calamity that happened in Greece in recent years is one of shared responsibility, but not of Greece alone. It would be best if euro members remembered that their relationship was meant to be one of partnership: equal partners of a union with a common destiny.
The main problem is that governments in creditor countries, with Germany being the key one, have systematically misled their people. Their so-called bailout programs for Greece were never primarily a bailout of the Greek people. Instead, they were foremost a bailout of German and French banks, the masters of irresponsible lending in Europe and abroad. The German government had put German taxpayers on the hook for the banks’ colossal losses suffered in the context of the US “subprime crisis.”
8 July
Tsipras calls for fair deal for Greece in EU parliament
(Reuters) Greek Prime Minister Alexis Tsipras called in a speech to the European Parliament on Wednesday for a fair deal to keep his country in the euro zone, acknowledging Greece’s own responsibility for its plight (emphasis added), after EU leaders gave him five days to come up with convincing reforms.
The Greek government formally submitted a request for a three-year loan from the European Stability Mechanism bailout fund that would be used “to meet Greece’s debt obligations and to ensure stability of the financial system”.
With its banks closed, cash withdrawals rationed and the economy in freefall, Greece has never been closer to a state bankruptcy that would probably force it to print an alternative currency and leave the euro
Greek PM Alexis Tsipras’s path to power — Greece’s youngest prime minister in over a century, Tsipras has been politically active since age 14
7 July
Dani Rodrik: Greece’s Vote for Sovereignty
(Project Syndicate) The referendum is deeply important, but mostly as an act of political symbolism. What remains to be seen is whether the Greek public also has the stomach for the economic actions – in particular, an exit from the eurozone and the introduction of a national currency – that real sovereignty would entail. After all, the terms on offer from the country’s creditors are unlikely to change much. If the Greeks voted “no” based on unrealistic expectations that other eurozone democracies would be forced to bend to their wishes, they may be in for another deep disappointment – and their own lesson in democracy.
Eurozone tells Greece not to expect debt relief any time soon
Hopes fade for quick solution to thwart Grexit as Eurogroup finance chiefs stress they are waiting for Athens to accept further reforms
Elias Papaioannou: Before Greece becomes a failed state, here’s how to stop the slide
(Reuters) Europe needs Greece, and Greece needs Europe, regardless of the results of Sunday’s referendum. That reality must be the guiding principle in negotiations between Prime Minister Alexis Tsipras’ government and the European Union.
The priorities for building a better Greece are clear: reforming the dysfunctional public administration, improving the absurdly slow and inefficient court system, strengthening legal institutions, protecting investors and private property, liberalizing cartelized product markets and services markets burdened by over-regulation, reducing red tape, privatizing inefficient state firms and quickly starting key infrastructure projects.
Direct assistance to raise state capacity is urgent because Greece has clear symptoms of a failed state, unable to carry out its basic functions. This aid could include direct financing of key projects to help government run properly, for example, funding information and communications technology in the justice system, administration and in customs.
6 July
Yanis VaroufakisGreek Finance Minister Yanis Varoufakis resigns
(Al Jazeera) Minister makes announcement on personal blog as European creditors scramble to respond to “No” vote in debt referendum.
“Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my … ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement,” Varoufakis wrote on his blog. … “I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum. And I shall wear the creditors’ loathing with pride.”
Al Jazeera’s John Psaropoulos, reporting from Athens, said the decision to step down was expected and not a surprise. (WSJ) Euclid Tsakalotos, a 55-year-old Oxford-educated economist who has been heading the country’s negotiating team in talks with the country’s international creditors, was appointed to succeed Mr. Varoufakis as finance chief and was sworn in later Monday. (The Guardian) The controversial minister says he is standing down after pressure from Greece’s ‘assorted partners’
Profile: Yanis Varoufakis, Greek bailout foe
(BBC) The 54-year-old played a key role in convincing the nation to vote ‘No’, so he could persuade its creditors to end austerity and forgive part of its debt.
(Bloomberg) Varoufakis Quits as Greece’s Euro Showdown With Creditors Looms
5 July

Greeks defy Europe with overwhelming referendum ‘No’

(Reuters) First indications were that any joint European political response may take a couple of days. German Chancellor Angela Merkel and French President Francois Hollande will meet in Paris on Monday afternoon. The European Commission, the EU executive, meets in Strasbourg on Tuesday and will report to the European Parliament on the situation.


The deeper problem is that it is virtually impossible to have an effective monetary union without a functioning fiscal union. A fiscal union, however, stands at odds with the principle of national sovereignty. There is little that European policymakers can do to resolve this issue. –BCA Global Investment Strategy

The bigger question is whether a Grexit would fundamentally change the way in which the eurozone pools its sovereignty on fiscal matters, or whether Grexit would be merely the prelude to a further break-up. I think it is unlikely that anything will change in the eurozone’s architecture, meaning that it will create further problems, particularly if any larger economy experiences similar difficulties to Greece in future. —Greece in crisis: even if Grexit is averted, the eurozone needs a fundamental rethink

Revealed: Goldman Sachs’ mega-deal for Greece
With the help of Goldman Sachs, Greece has been using giant swaps deals to ensure its national debt ratios meet EU targets. But these deals are likely to prove controversial.
By Nicholas Dunbar
Italy has been joined by the Hellenic Republic of Greece, as evidence emerges of a remarkable deal between the public debt division of Greece’s finance ministry and the investment bank Goldman Sachs. The deal is not only likely to reopen an old debate on public accounting for derivatives, but also sheds light on the way banks charge clients for taking credit and market risk exposure. (Published 1 July 2003)

4 July
Greek referendum: Germany says it won’t leave Greece in the lurch
German finance minister, Wolfgang Schäuble, appears to bolster No vote in last-minute intervention on Saturday
Investors around the world held their breath on Saturday as 10 million Greeks prepared to vote in a referendum that presents the biggest challenge to the euro since its adoption.
After more than five months of eyeball-to-eyeball confrontation between Alexis Tsipras’s radical left-led government and Greece’s creditors, and with only hours to go before voting began, one of the most hawkish of the lenders appeared to blink. Germany’s finance minister, Wolfgang Schäuble, until now even more of a hardliner than his chancellor Angela Merkel, suddenly turned a more conciliatory face towards Athens.
And now for a different view – certainly not politically correct, but with more than a grain of truth?
Mimi Big T**s, buffoon leaders… and how we milked the EU, by Taki Theodoracopulos, veteran Greek commentator and spectator columnist
(Daily Mail UK) We brag about inventing democracy – however selective – and also about inventing tragedy, but don’t dwell at all on another word we invented: demagoguery.
Demagoguery is what brought Alexis Tsipras and his motley crew of corner-café pseudo-philosophers to power, and demagoguery continues to dominate Greek political discussions even today as we vote for or against the euro.
But let’s not forget comedy, yet another Greek invention.
Today’s referendum is truly Greek, a tragi-comedy of errors, a yes or no question drafted in cryptic, technocratic gobbledegook, worthy of the best Brussels newspeak.
Beyond ‘Yes’ or ‘No’
By Nikolas Katsimpras, lecturer at the negotiation and conflict resolution graduate program of Columbia University and a Senior Fellow at the Hellenic American Leadership Council.
( At this point, Greeks have been asked an impossible question. For some, this is about Greece remaining in or exiting the Eurozone. For others, it is about sticking it to Germany. Reality is so much more complex and when societies are called to solve such problems they become heavily dependent on the right leader guiding them through uncertainty. Unfortunately, the real pinnacle of the Euro-Greek drama is that when it comes to enlightened leadership, both Greece and Europe have been long broke. Like the protagonists in numerous Greek tragedies, they also seem to only learn from suffering before realizing that “too late, too late you see the path of wisdom.”
Opinion: Imposed ‘reforms’ in Greece have been counterproductive
Kimon writes in the Montreal Gazette:
In this piece I argue that the mantra of structural reform on everyone’s lips is both valid and misleading. Structural reforms are needed but only the good ones. Some so called ‘reforms’ such as pension roll-back, punitive taxes and massive unemployment induced by imposed austerity have been completely counterproductive. They have, if anything exacerbated the problem.
Steve Randy Waldman on Greece
(Interfluidity) “It is difficult to overstate how deeply Europe’s leaders betrayed the ideals of European integration in their handing of the Greek crisis. The first and most fundamental goal of European integration was to blur the lines of national feeling and interest through commerce and interdependence, in order to prevent the fractures along ethnonational lines that made a charnel house of the continent, twice. That is the first thing, the main rule, that anyone who claims to represent the European project must abide: We solve problems as Europeans together, not as nations in conflict. Note that in the tale as told so far, there really was no meaningful national dimension. Regulatory mistakes and agency issues within banks encouraged poor credit decisions. Spanish banks lent into overpriced real estate, and German banks lent to a state they knew to be weak. Current account imbalances within the Eurozone — persistent and unlikely to reverse without policy attention — implied as a matter of arithmetic that there would be loan flows on a scale that might encourage a certain indifference to credit quality. These were European problems, not national problems. But they were European problems that festered while the continent’s leaders gloated and took credit for a phantom prosperity. When the levee broke, instead of acknowledging errors and working to address them as a community, Europe’s elites — its politicians and civil servants, its bankers and financiers — deflected the blame in the worst possible way. They turned a systemic problem of financial architecture into a dispute between European nations. The brought back the very ghosts their predecessors spent half a century trying to dispell. Shame. Shame. Shame. Shame.”
3 July
Yes or no on bailout referendum, how should Greece vote?
(PBS Newshour) Judy Woodruff with Jacob Kirkegaard of the Peterson Institute for International Economics (defends the Yes vote) and Mark Weisbrot, co-director of the Center for Economic And Policy research (defends the No vote).
Greece Referendum: What Happens If They Vote ‘No’
And also if they say “Yes” (though that’s less complicated)
(Bloomberg) The 68-word ballot question namechecks four international institutions and asks voters for their opinion on two highly technical documents that weren’t made public before the referendum was called. Here it is, translated into English:
“Greek people are hereby asked to decide whether they accept a draft agreement document submitted by the European Commission, the European Central Bank and the International Monetary Fund, at the Eurogroup meeting held on on June 25 and which consists of two documents:
‘‘The first document is called Reforms for the Completion of the Current Program and Beyond and the second document is called Preliminary Debt Sustainability Analysis.
‘‘- Those citizens who reject the institutions’ proposal vote Not Approved / NO
‘‘- Those citizens who accept the institutions’ proposal vote Approved / YES.’’
Not everyone in Greece is finding the question easy to understand.
Exclusive: Europeans tried to block IMF debt report on Greece: sources
(Reuters) Euro zone countries tried in vain to stop the IMF publishing a gloomy analysis of Greece’s debt burden which the leftist government says vindicates its call to voters to reject bailout terms, sources familiar with the situation said on Friday.
The document released in Washington on Thursday said Greece’s public finances will not be sustainable without substantial debt relief, possibly including write-offs by European partners of loans guaranteed by taxpayers.
It also said Greece will need at least 50 billion euros in additional aid over the next three years to keep itself afloat.
Publication of the draft Debt Sustainability Analysis laid bare a dispute between Brussels and the Washington-based global lender that has been simmering behind closed doors for months.
Greek Prime Minister Alexis Tsipras cited the report in a televised appeal to voters on Friday to say ‘No’ to the proposed austerity terms, which have anyway expired since talks broke down and Athens defaulted on an IMF loan this week.
It was not clear whether an arcane IMF document would influence a cliffhanger poll in which Greece’s future in the euro zone is at stake with banks closed, cash withdrawals rationed and commerce seizing up.
2 July
IMF says Greece needs extra €60bn in funds and debt relief
International lender issues strong message to Europe by warning that Athens’ debts are unsustainable and it needs 20-year grace period on debt repayments
(The Guardian) The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs up to €60bn (£42bn) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.
With days to go before Sunday’s knife-edge referendum that the country’s creditors have cast as a vote on whether it wants to keep the euro, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”.
Fund officials said they would not be prepared to put a proposal for a third Greek bailout to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.
1 July
In Game Theory, the idea for the competitors is to be unpredictable. If the moves are predictable then counters can be easily devised. Unpredictable moves are, by definition, surprising and are designed to confuse the opponents.
The proposed Greek Referendum of July 5 may fall in that category. The question is unclear and complicated and, what is more significant, the answers can be interpreted in many contradictory ways. But its strategic usefulness is to alert the players as to the gravity of the situation and strike fear in everyone involved.
This being said, the next best move is to withdraw the referendum and return to the bargaining table. This in fact could well happen, thus opening the way for new, hopefully more fruitful negotiations.
30 June
Tsipras Under Pressure to Cede After Greece Misses IMF Payment
European leaders are waiting for signs that Greek Prime Minister Alexis Tsipras is ready to compromise as his country buckles under capital controls and fails to make its International Monetary Fund payment.
Eurogroup refuses to extend bailout program to Greece
The Greek government on Tuesday asked for a new bailout program from the European Stability Mechanism (ESM), that would cover all the country’s financial needs for the next two years, according to the government statement.
The request included a restructuring plan for Greek debt to the European Financial Stability Facility that accounts for about 63 percent of the Greece’s total debt.
Greece’s attitude towards the eurozone and its partners needs to change before a new bailout program can be agreed upon, said Eurogroup chairman Jeroen Dijsselbloem on Tuesday after an emergency conference call between the eurozone’s finance ministers.
Greek Debt Crisis Risks NATO Withdrawal, New Surge of Refugees
(Bloomberg) If Greece ultimately is pushed off the euro currency… it could seek revenge by pulling out of NATO, blocking European Union sanctions on Russia or forcing the U.S. from its naval base in Crete, said [U.S. Admiral James] Stavridis, a Greek-American who is dean of the Fletcher School of Law and Diplomacy at Tufts University in Massachusetts. … The Greek government may become unable to control the border, allowing migrants to “freely flow through Europe,” which already faces a refugee crisis, said Heather Conley, senior vice president for Europe and Eurasia at the Center for Strategic and International Studies in Washington.
The greater danger is a Greece that descends into chaos … , said Thomas Niles, a former U.S. ambassador to Greece under President Bill Clinton. Greece’s ruling coalition, which includes Communist party members, could be inclined to look to Russia for economic support, said Douglas Elliott, a fellow at the Brookings Institution in Washington who has studied the Greek crisis.
Greece in crisis: even if Grexit is averted, the eurozone needs a fundamental rethink
The irony is that, of course, Grexit would compel the creditor countries to renegotiate the unsustainable part of the Greek debt, and reach a more sustainable debt position in an attempt to recover some of that debt. One has to ask why that wasn’t the starting point of the negotiation between the parties during the current crisis, which instead has focused on short-term targets for Greece’s budget surplus.
The reason is that, undoubtedly, restructuring the debt would have had implications for wider eurozone politics. But that ignores the fact that the crisis has been caused by the fundamental design flaws of the eurozone in the first place
George Friedman: Beyond the Greek Impasse
(Stratfor) The terminal point is the juncture where neither the Greeks nor the Germans can make any more concessions. In Greece itself, the terminal point is long past. Unemployment is at 26 percent, and more than 50 percent of youths under 25 are unemployed. Slashed wages, particularly in the state sector, affecting professions including physicians and engineers, have led to massive underemployment. Meanwhile, most new economic activity is occurring in the untaxable illegal markets. The Greeks owe money to EU institutions and the International Monetary Fund, all of which acquired bad Greek debts from banks that initially lent funds to Greece in order to stabilize its banking sector. No one ever really thought the Greeks could pay back these loans.
The European creditors — specifically, the Germans, who have really been the ones controlling European negotiations with the Greeks — reached their own terminal point more recently. The Germans are powerful but fragile. They export about a quarter of their gross domestic product to the European free trade zone, and anything that threatens this trade threatens Germany’s economy and social stability. Their goal has been to keep intact not only the euro, but also the free trade zone and Brussels’ power over the European economy.
Germany has so far avoided an extreme crisis point by coming to an endless series of agreements with Greece that the Greeks couldn’t keep and that no one expected them to keep, but which allowed Berlin to claim that the Greeks were capitulating to German demands for austerity. This alleged capitulation helped Germany keep other indebted European countries in line, as financially vulnerable nations witnessed the apparent folly of contemplating default, demanding debt restructuring and confronting rather than accommodating the European Union.
28 June
Opinion: Greek referendum is superfluous
By holding a referendum, the Greek government wants to wash its hands of the responsibility for the looming chaos. That’s a rather obvious plan, says DW’s Bernd Riegert.
The Greeks will be able to vote in a referendum next Sunday – but about what? Are the people for or against the aid package offered by the international lenders, including the austerity and reform measures? That’s an absurd question, because you can’t very well vote on something that doesn’t exist anymore.
The finance ministers of the eurozone countries have taken their offer off the table after Greece abandoned negotiations. The country is now on its own and is approaching bankruptcy faster and faster.

It is irresistible to label the series of events a Greek tragedy, complete with people having good intentions, an unheard chorus uttering warnings, all headed for an unpleasant ending. The choice here was between bad and worse for Greece, and apparently worse was not as clearly defined and appeared more distant in time than bad. Antal Deutsch

I agree that all the ingredients of Greek tragedy are there.
The good intentions by all the actors who believe they are doing God’s work and are actually paving the road to hell ( both for Greece and for Europe).
The misperceptions by both parties obsessed by caricatures and unsubtle tabloid images : the nasty Germans and the lazy Greeks.
The misreading of the relative unimportance of the Greek debt by world standards and the huge burden it represents for the Greek people. The popular view is that it is huge for the world and small for Greece : an absurdity.
Finally the nonchalance of both parties racing towards the precipice and the mistaken belief, in my view, that unleashing the centrifugal forces in an already fragile Europe will not lead to the unravelling of the European Project. Why would Germany want that ? Why would anyone other than perhaps Putin and Isis ?
Perhaps we must now move on to Roman philosophy and look for a ‘deus ex machina’ to resolve this issue in one fell swoop, or an Alexandrian sword to cut that Gordian Knot once and for all. — 
Kimon Valaskakis

26 June
Greek PM Alexis Tsipras calls referendum on bailout terms
Prime minister returns from Brussels and tells Greece that terms offered by creditors ‘clearly violate the European rules’
In a dramatic move that will put Europe on tenterhooks, the Greek prime minister Alexis Tsipras told his fellow citizens last night he would call a referendum on the bailout accord that international creditors have proposed to keep the debt-stricken country afloat. … The referendum will take place on Sunday 5 July.
24 June
Greek PM Slams Creditors For Rejecting Reform Proposal As Debt Talks Enter Final Stretch
(AP) — Greece’s leader was trying to bridge differences with creditors Wednesday on a plan to make more reforms in Greece in exchange for bailout loans the country needs to avoid a potentially disastrous default next week. Before leaving for meetings in Brussels, the leftwing Prime Minister Alexis Tsipras criticized the International Monetary Fund as being needlessly picky about the reforms Greece had proposed.
The IMF reportedly finds that the budget savings reforms, which creditors are demanding in exchange for loans, are focused too much on tax increases that can hurt businesses, rather than spending cuts.
Greek debt crisis: Eurozone leaders hopeful of deal
(BBC) Eurozone leaders have broadly welcomed new proposals for Greek reforms amid hopes a deal can be struck within days to stop Greece defaulting on its debt.
Although no deal has been struck, key obstacles appear to have been cleared, the BBC’s Damian Grammaticas reports from Brussels.
Greek proposal may deliver a deal, but economists despair
(Financial Times) The Greek government’s latest proposal has raised confidence that a deal with the country’s creditors may soon be at hand after months of rancour, and that Athens will remain part of the eurozone.
But beyond the immediate relief, there are widespread doubts among analysts that the new measures will do much to address the deep-rooted problems of the Greek economy that have contributed to the crisis.
If anything, many Greece-watchers fear the heavy focus on fiscal consolidation and tax increases may trigger a repeat of what has happened over the past six years: a Greece that stumbles from one rescue programme to the next, rather than being able to stand on its own feet.
23 June
Europe is destroying Greece’s economy for no reason at all
(WaPost) A real question for many economists, however, is why Europe is forcing Greece to do any more austerity at all. It’s already done so much that, before this latest showdown, it actually had a budget surplus before interest payments. And, in this view, that’s all it should shoot for, really: the point at which it doesn’t need any more bailouts from Europe. Anything more than that, though, could just inflict unnecessary harm to the economy. When interest rates are zero, like they are now, budget cuts of 3 percent of gross domestic product would, by Paul Krugman’s calculation, make the economy shrink something like 7.5 percent. So even though you have less debt, your debt burden isn’t much better since you have less money to pay it back.
22 June
Greece woes show how the politics of debt failed Europe
(The Conversation) In the world of brinkmanship, endgames and last minute concessions that have come to define Greece’s relationship with Europe, we can see the blueprint of an abusive relationship.
In his book Governing by Debt, Maurizio Lazzarato argues that the creditor-debtor centred politics of contemporary capitalism is substantially different from the capital-labour centred politics of post-war capitalism. In fact, to understand what is at stake in contemporary Europe we need to approach debt in its totality – government, corporate, financial and household debt. We have to recognise that the debt relationship is not merely an economic relationship of money owed and collected, but a deeply political relationship of power exercised by one person or institution over another. [emphais added]
19 June
What Things Might Be Like If Greece Had Never Joined the Euro
(Bloomberg) The carnage has been massive
What if there had never been a euro? What if the request for a unifying currency had not occurred in 1929 within the League of Nations debate? What if Jacques Delors had not done his heavy lifting, one part of the path to the euro replacing the European Currency Unit in December 1995. What if …
What if Greece had not joined the party?
For a beleaguered Greece, it’s a profound question. With all that has gone wrong, there’s that nagging reality that a Greece with its own currency would have seen a devaluation that would’ve assisted Greek exports, even with offsetting wealth destruction.
17 June
James K. Galbraith: The IMF’s “Tough Choices” on Greece
The International Monetary Fund’s chief economist, Olivier Blanchard, recently asked a simple and important question: “How much of an adjustment has to be made by Greece, how much has to be made by its official creditors?” But that raises two more questions: How much of an adjustment has Greece already made? And have its creditors given anything at all?
Blanchard insists that now is the time for “tough choices, and tough commitments to be made on both sides.” Indeed it is. But the Greeks have already made tough choices. Now it is the IMF’s turn, beginning with the decision to admit that the policies it has imposed for five long years created a disaster. For the other creditors, the toughest choice is to admit – as the IMF knows – that their Greek debts must be restructured. New loans for failed policies – the current joint creditor proposal – is, for them, no adjustment at all.
15 June
Jeffrey Sachs: The Endgame in Greece
(Project Syndicate) After months of wrangling, the showdown between Greece and its European creditors has come down to a standoff over pensions and taxes. Greece is refusing to acquiesce to demands by its creditors that it cut payments to the elderly and raise the value-added tax on their medicine and electricity.
Europe’s demands – ostensibly aimed at ensuring that Greece can service its foreign debt – are petulant, naive, and fundamentally self-destructive. In rejecting them, the Greeks are not playing games; they are trying to stay alive
Whatever one might say about Greece’s past economic policies, its uncompetitive economy, its decision to join the eurozone, or the errors that European banks made when they provided its government with excessive credit, the country’s economic plight is stark. Unemployment stands at 25%. Youth unemployment is at 50%.Greece’s GDP, moreover, has shrunk by 25% since the start of the crisis in 2009. Its government is insolvent. Many of its citizens are hungry.
Conditions in Greece today are reminiscent of those in Germany in 1933. Of course, the European Union need not fear the rise of a Greek Hitler, not only because it could easily crush such a regime, but also – and more important – because Greece’s democracy has proved impressively mature throughout the crisis. But there is something that the EU should fear: destitution within its borders and the pernicious consequences for the continent’s politics and society.
Unfortunately, the continent remains split along tribal lines. Germans, Finns, Slovaks, and Dutch – among others – have no time for the suffering of Greeks. Their political leaders tend to their own, not to Europe in any true sense. Relief for Greece is an especially fraught issue in countries where far-right parties are on the rise or center-right governments face popular left-wing opposition.
Timothy Garton Ash: Greece must be saved for the sake of Europe
(Globe & Mail) Europe must save Greece. The consequences of keeping Greece within the euro zone will be bad, but those of its leaving would be worse. They would be not just economic, but human, geopolitical and historic. Europe would never be the same again.
14 June
Greece, creditors fail in ‘last attempt’ to reach deal
(Globe & Mail) European Union officials blamed the collapse on Athens, saying it had failed to offer anything new to secure the funding it needs to repay €1.6-billion ($2.2-billion Canadian) to the International Monetary Fund by the end of this month.
Greece retorted it was still ready to talk, but that EU and IMF officials had said they were not authorized to negotiate further. Athens insists it will never give in to demands for more pension and wage cuts.
13 June
The Quartz attempt to reduce the Greek crisis to a somewhat lighthearted simile has outraged our ‘Wednesday Night Greek caucus’. See Comments below.
The euro zone, it’s fair to say, is hardly a happy family. And looming largest are the antics of a single problem child.
(Quartz weekend brief) Greece has been a euro member for 15 years. As every parent knows, that’s around the time when things get difficult. The innocence of early youth, so full of promise and potential, gives way to sneering and sulking. Rebellious tendencies. Mood swings. Running with the wrong crowd. Wearing inappropriate clothing. Giving people the middle finger.
Greece has blown through its allowance, and then some. In search of more money, it is raising a stink, playing one relative off against the other. But after some bickering amongst themselves, the elders are now more or less united: The kid needs to learn to behave before they dip back into their wallets.
“I literally can’t even,” Greece says, slamming the bedroom door in a huff. “You brought me up this way, man. I’ve already suffered enough. What are you going to do about it? Throw me out?” And this week, for the first time, its European creditors said, “Yeah—we might.”
But therein lies Europe’s dilemma. If it doesn’t get tough on the wayward child, it might set a bad example for others with troublemaking tendencies. But what sort of message would it send to kick Greece out of the house—er, monetary union—altogether? Tough love is one thing, but this is heartless. Cowed and afraid, the bond between family members might never be the same. Some of them might storm off too. And what will the neighbors think?
For all the drama, most still expect the family to patch up its differences and make a deal. But maybe, as in so many households, they just need to grit their teeth and wait for the teenager to grow up.—Jason Karaian
11 June
Anatole Kaletsky: A Greek Suicide?
(Project Syndicate) The good news is that a Greek default, which has become more likely after Prime Minister Alexis Tsipras’ provocative rejection of what he described as the “absurd” bailout offer by Greece’s creditors, no longer poses a serious threat to the rest of Europe. The bad news is that Tsipras does not seem to understand this.
To judge by Tsipras’s belligerence, he firmly believes that Europe needs Greece as desperately as Greece needs Europe. This is the true “absurdity” in the present negotiations, and Tsipras’ misapprehension of his bargaining power now risks catastrophe for his country, humiliation for his Syriza party, or both.
10 June
Karl Whelan The FT Lets Itself Down Again: Francesco Giavazzi on Greece
(Bull Market) With regular opinion pieces from the likes of Hans-Werner Sinn and Niall Ferguson, the Financial Times op-ed page is developing an unfortunate reputation for publishing rubbish on economics. This new article on Greece from Italian professor, Francesco Giavazzi, (“Greeks chose poverty, let them have their way”) perhaps tops the lot with its combination of inaccuracy and unfortunate national stereotyping.
Giavazzi reckons that after “Five years of negotiations that have achieved virtually nothing” the EU would be better off without Greece. He argues that the EU’s focus on Greece has distracted from other issues.
5 June
IMF has betrayed its mission in Greece, captive to EMU creditors
The IMF’s Original Sin in Greece was to let Dominique Strauss-Kahn hijack the institution to save Europe’s banks and the euro when the crisis erupted, dooming Greece to disaster.
(The Telegraph) The International Monetary Fund is in very serious trouble. Events have reached a point in Greece where the Fund’s own credibility and long-term survival are at stake.
The Greeks are not withholding a €300m payment to the IMF because they have run out of money, though they soon will do.
Five key players in the radical-Left Syriza movement – meeting in the Maximus Mansion in Athens yesterday – took an ice-cold, calculated, and carefully-considered decision not to pay.
The Greeks accuse the IMF of colluding in an EMU-imposed austerity regime that breaches the Fund’s own rules and is in open contradiction with five years of analysis by its own excellent research department and chief economist, Olivier Blanchard.
Joseph E. Stiglitz: Europe’s Last Act?
(Project Syndicate) European Union leaders continue to play a game of brinkmanship with the Greek government. Greece has met its creditors’ demands far more than halfway. Yet Germany and Greece’s other creditors continue to demand that the country sign on to a program that has proven to be a failure, and that few economists ever thought could, would, or should be implemented.
The swing in Greece’s fiscal position from a large primary deficit to a surplus was almost unprecedented, but the demand that the country achieve a primary surplus of 4.5% of GDP was unconscionable. Unfortunately, at the time that the “troika” – the European Commission, the European Central Bank, and the International Monetary Fund – first included this irresponsible demand in the international financial program for Greece, the country’s authorities had no choice but to accede to it.
29 May
Varoufakis’s Great Game
Hans-Werner Sinn, Professor of Economics and Public Finance at the University of Munich
(Project Syndicate) Game theorists know that a Plan A is never enough. One must also develop and put forward a credible Plan B – the implied threat that drives forward negotiations on Plan A. Greece’s finance minister, Yanis Varoufakis, knows this very well. As the Greek government’s anointed “heavy,” he is working Plan B (a potential exit from the eurozone), while Prime Minister Alexis Tsipras makes himself available for Plan A (an extension on Greece’s loan agreement, and a renegotiation of the terms of its bailout). In a sense, they are playing the classic game of “good cop/bad cop” – and, so far, to great effect.
27 May
Greece Risk Timeline — Why July 20 Matters Most
(Bloomberg News) Greece probably has until late July to come to an agreement with its creditors before potentially being forced out of the monetary union. Possible delays in payments to the International Monetary Fund in June shouldn’t prompt the European Central Bank to shut off vital liquidity to Greek banks. By contrast, a default on marketable debt — specifically the failure of the Greek government to pay 3.5 billion euros due to the ECB on July 20 — would probably force the central bank’s hand. The Greek government and its creditors are still likely to reach a deal on a list of reforms before that crucial date.
12 May
Greek PM says time for action from lenders, IMF payment scrapes by
(Reuters) Greek Prime Minister Alexis Tsipras on Tuesday called on lenders to break an impasse in cash-for-reform talks after Athens had to resort to a temporary expedient to make a crucial payment to the IMF.
Greek officials told Reuters they had emptied an International Monetary Fund holding account to repay 750 million euros to the global lender on Monday, avoiding default but underscoring the dire state of the country’s finances.
At his second cabinet meeting in three days, Tsipras told ministers Athens was sticking to its “red lines” and that it was time to see lenders meet Greece halfway, according to a government official. The official said Greece is still expecting a deal by the end of the month.
9 May
Kimon Valaskakis: The myth of the lazy Greek
(Montreal Gazette) From an unimpeachable source, the OECD, a very different picture emerges. In measuring the average number of hours per year worked in the member countries, a counterintuitive conclusion emerges. Greeks are among the hardest-working labourers in the Western world, with 2,027 hours per worker in 2013. Italians worked 1,752, Spaniards 1,665 and Norwegians 1,408. Now what about the industrious Germans? A paltry 1,388! So much for laziness.
Ah, the wise observer will remark: the northern Europeans are much more productive. This is true. In the productivity stakes (best GDP output per hour worked), Germany is indeed first, followed, rather surprisingly by the pastis-drinking bon vivant French — another stereotype biting the dust.
Some of this productivity is due to better organization, but most of it is attributable to the use of more “capital,” that is, machines and technology. In fact, the long term trend for the Western World as a whole has for the last 200 years and until a couple of decades ago, has been quite straightforward: work less and earn more.
This may be Greece’s biggest brain drain since the death of Socrates
(Market Watch) Ancient Greece was once a magnet for the world’s intellectual elite. Scholarly work out of Athens contributed to everything from logic and philosophy to the politics that formed the basis of modern civilization.
But as the Hellenic Republic struggles to strike an agreement to repay more than €300 billion it owes international creditors, it is also facing the depletion of its most important asset: human capital.
A devastating brain drain is luring away the best and brightest of Greece’s workforce, several reports showed, with estimates varying between 180,000 and 200,000 well-educated citizens leaving the cash-strapped nation.
24 March
If this is what the penalties are for the elites, no wonder the average citizen is so frustrated.
Ex-finance minister guilty of doctoring Lagarde list, gets suspended term
(Ekathimerini) A special court set up to try former Finance Minister Giorgos Papaconstantinou handed the former PASOK official a one-year suspended jail sentence on Tuesday despite finding him guilty of tampering with the Lagarde list of Greeks with deposits at the Geneva branch of HSBC.
21 March
Nazi Extortion: Study Sheds New Light on Forced Greek Loans
(Spiegel) The central question in the report is that of forced loans the Nazi occupiers extorted from the Greek central bank beginning in 1941. Should requests for repayment of those loans be classified as reparation demands — demands that may have been forfeited with the Two-Plus-Four Treaty of 1990? Or is it a genuine loan that must be paid back? The expert commission analyzed contracts and agreements from the time of the occupation as well as receipts, remittance slips and bank statements.
They found that the forced loans do not fit into the category of classical war reparations. The commission calculated the outstanding German “debt” to the Greek central bank and came to a total sum of $12.8 billion as of December 2014, which would amount to about €11 billion.
As such, at issue between Germany and Greece is no longer just the question as to whether the 115 million deutsche marks paid to the Greek government from 1961 onwards for its peoples’ suffering during the occupation sufficed as legal compensation for the massacres like those in the villages of Distomo and Kalavrita. Now the key issue is whether the successor to the German Reich, the Federal Republic of Germany, is responsible for paying back loans extorted by the Nazi occupiers. There’s some evidence to indicate that this may be the case.

Kenneth Matziorinis comments:
Having examined this issue myself (I have accumulated a large file on this) it has been my long-standing opinion that the issue of the forced loans from Greece and that of war reparations are two entirely separate issues. Greece like every other country that was harmed by the Nazis and the war do not have a case in bringing up war reparations claims as this would open a Pandora’s box of warms that will do more harm than good. Let bygones be bygones. Except for limited cases were atrocities that contravened Geneva conventions are concerned, and there are a few such unsettled issues remaining, Germany can issue a formal apology and make a small material restitution to the descendants of the victims concerned.
The case of the forced loan from Greece on the other hand is a different case and remains a legitimate and valid issue that must be addressed. First, the Greek government should pursue this at a technical and legal level without linking it to the current Greek financial crisis or to war reparations. As the article says, a debt is a debt that should be repaid. As to the amount concerned in present value terms I do not have all the information to make a judgement. However, if Greece pursues it through proper channels without politicizing the issue, I am quite confident that it could convince Germany to make a settlement. I am happy that someone in Athens did set up a commission to examine the evidence, now what remains is that Greece formally present the evidence to German officials and initiate a dialogue that will lead to a settlement.

13 March
Endgame: Power Struggle in Brussels and Berlin over Fate of Greece
European Commission President Juncker wants to keep Greece in the euro zone, no matter what the price. Member states, though, are beginning to lose their patience. Who will ultimately have the final say?
(Spiegel) In Brussels, the endgame over Greece’s continued euro-zone membership has begun. Greek Prime Minister Alexis Tsipras is trapped between his campaign promise to put an end to EU-imposed austerity and his rapidly emptying state coffers. Meanwhile, his government’s tone has become increasingly shrill. Most recently, Justice Minister Nikos Paraskevopoulos threatened to auction off the Goethe Institute in Athens in accordance with his government’s demands for World War II reparations from Germany. And this Thursday, the Greek government lodged an official complaint with Berlin, accusing Finance Minister Wolfgang Schäuble of insulting his Greek counterpart. See also: French EU Commissioner Moscovici: ‘A Grexit Would Be a Catastrophe’
11 March
Could Europe lose Greece to Russia?
(BBC) Deepening ties between Greece’s new government and Russia have set off alarm bells across Europe, as the leaders in Athens wrangle with international creditors over reforms needed to avoid bankruptcy.
While Greece may be eyeing Moscow as a bargaining chip, some fear it is inexorably moving away from the West, towards a more benevolent ally, a potential investor and a creditor.
24 February
Eurozone Ministers Approve Greek Reform To Extend Bailout
Greece’s creditors in the 19-country eurozone have approved a list of reforms Athens proposed to get a 4-month extension to its bailout, which would keep the country afloat.
(AP) — Greece’s creditors in the 19-country eurozone on Tuesday approved a list of reforms Athens proposed to get a 4-month extension to its bailout, which should keep the country afloat over the coming months.
An encouraging reaction from the so-called institutions — the European Commission, European Central Bank and International Monetary Fund — to the reforms Greece proposed in a letter late Monday was backed by the eurozone nations.
Greece had to make the proposals in order to get the bailout extended. Without the financial lifeline over the coming few months, Greece faces the possibility of going bankrupt, imposing capital controls and ditching the euro.
23 February
Greece’s future is its past
By letting its focus continue to be on austerity, debt renegotiation, and structural reform, Syriza and now the Greek government, seem intent on playing by the same rules as the Troika, the ECB and Germany. For an economy that has shrunk by 25% since the beginning of the financial crisis, this is extraordinary. Instead it should be looking at debt re-payment over the longer term. If an economy is growing, then its debt is affordable; if the debt is extended for four months, then growth should be made central to subsequent discussions.
19 February
Paul Krugman: Insert German Curse Word Here
Greece appears to be seeking to buy some time to put together an economic strategy (remember, this is a new government without a deep bench of technocrats), and to negotiate terms later. Germany, on the other hand, is trying to force Syriza into complete abandonment of its election promises right now, today.
18 February
Yanis Varoufakis: How I became an erratic Marxist
Before he entered politics, Yanis Varoufakis, the iconoclastic Greek finance minister at the centre of the latest eurozone standoff, wrote this searing account of European capitalism and and how the left can learn from Marx’s mistakes
(The Guardian) I share the view that this European Union is typified by a large democratic deficit that, in combination with the denial of the faulty architecture of its monetary union, has put Europe’s peoples on a path to permanent recession. And I also bow to the criticism that I have campaigned on an agenda founded on the assumption that the left was, and remains, squarely defeated. I confess I would much rather be promoting a radical agenda, the raison d’être of which is to replace European capitalism with a different system.
Yet my aim here is to offer a window into my view of a repugnant European capitalism whose implosion, despite its many ills, should be avoided at all costs. It is a confession intended to convince radicals that we have a contradictory mission: to arrest the freefall of European capitalism in order to buy the time we need to formulate its alternative.
17 February
‘Grexit’ risks rise but compromise seen still possible
(Reuters) – The chances of Greece being forced out of the euro zone have risen but a compromise agreement between Athens and its European partners is still possible, Greek media and investment banks said on Tuesday. They said all eyes were now on the European Central Bank, which must decide on Wednesday whether to extend Emergency Liquidity Assistance (ELA) funds to Greek banks to keep them in cash while the crisis unfolds.
16 February
Greece bailout: Varoufakis ‘willing’ as talks collapse
Greece’s Finance Minister Yanis Varoufakis declared he was ready to do “whatever it takes” to reach agreement over its bailout after the collapse of talks with EU finance ministers.
Mr Varoufakis spoke after Greece rejected an EU offer to extend its current €240bn (£178bn) bailout, a plan he called “absurd” and “unacceptable”.
He said he was prepared to agree a deal but under different conditions. But the Dutch finance minister said there were just days left for talks.
11 February
Pavlos Eleftheriadis: The Dark Side of Syriza
(Project Syndicate) Over the last four decades, Greece’s leaders created a system of clientelism that transformed the country into the most unequal and socially unjust society in the European Union. Pasok, Greece’s traditional party of the left, is mired in scandal and seems to have reached the end of the line, receiving just 4.6% of the vote.
The trouble is that, in voting for change, Greek voters took a leap into the dark. The newly elected prime minister, Alexis Tsipras, advocates debt relief and the abandonment of austerity – goals that have broad popular support. And many on the European left are rejoicing at Tsipras’s outspoken rejection of German-imposed austerity as the only policy for Europe’s troubled economies. But, though Tsipras and his party may be new, the other ideas that they espouse are old – and far from ideal for Greece or Europe.
Neither Tsipras nor his party, Syriza, is tainted by their predecessors’ disastrous policies. This should be a good thing, as it could enable Europe’s leaders to understand at last that what is at stake in Greece is the fate of a people, not the survival of a failed political class. But Tsipras’s first decisions have antagonized the EU and created a climate of confrontation.
The problem is that Syriza is not truly an anti-austerity party. The true advocates of the end of austerity – including the economists Joseph Stiglitz, Paul Krugman, and Simon Wren-Lewis – do so from a European perspective.
10 February
Thomas Philippon — Fair debt relief for Greece: New calculations
Fairness is a loaded word, but, whether we like it or not, it is at the heart of the political economy of debt restructuring in Europe. Until we reach some understanding on this issue, the conversation will continue to run in circles. Clearly the odious debt argument does not apply to Greece (Beck 2015). Greece was and is a democracy. Greek citizens elected the governments that ran the reckless fiscal policy that drove Greece into a deep financial crisis.
With Philippe Martin we have estimated the proximate causes of the crisis in each Eurozone country. We find that Ireland was brought down by reckless bank lending, Spain by the sudden stop, and Greece by reckless government spending during the boom years. So there should be no question that Greece is first and foremost responsible for its own demise.
But we – governments, households, investors – all make mistakes, and this is why debt restructuring exists. The problem is that Greece’s debt restructuring was hampered by the risk of contagion.
9 February
Euro zone, Greece face off as markets take fright
(Reuters) – Greece and its euro zone partners engaged in brinkmanship on Monday, with leftist Prime Minister Alexis Tsipras insisting his country would not extend its reform-linked bailout and Germany saying it would get no more money without such a program.
European Commission President Jean-Claude Juncker warned Greeks not to expect the euro zone to bow to Tsipras’ demands in a growing confrontation which spooked financial markets and prompted U.S. and Canadian pleas for calm and compromise.
Escalating the rhetoric, Greece’s finance minister said the euro zone could collapse “like a house of cards” if Athens were forced out. …
Brett House: The world should listen to Greece’s big idea about debt
(Quartz) Relations between Greece and its euro-zone rescuers reached a new low on Feb. 5. Yanis Varoufakis, the Greek finance minister, announced that he and his German counterpart, Wolfgang Schäuble, could not even “agree to disagree” on how to solve Greece’s ongoing economic crisis.
Germany can be forgiven for dismissing much of what the new Syriza-led Greek government says as fantasy. But there’s at least one idea from Greece’s new government that Germany should take seriously.
The austerity and reform program imposed by Greece’s “troika” of lenders—the European Central Bank (ECB), European Commission (EC) and International Monetary Fund—obviously hasn’t been an unalloyed success. It has kept Greece current on its debts, but it hasn’t revived its economic growth. Varoufakis proposes that Greece’s future debt payments be tied to the country’s economic growth.
It’s a simple idea: if Greece grows quickly, its debt payments go up; if Greece doesn’t grow, its debt service falls, even as low as zero. There’s no incentive for the government in Athens to game the economy to avoid triggering debt payments: even a heterodox left-winger like Varoufakis knows that Greece needs to grow if he’s to hold on to his job.
5 February
Scholars’ Appeal for Greece
(Mediapart) We the undersigned call on the governments of Europe, the European Commission, the European Central Bank and the IMF to respect the decision of the Greek people to choose a new course and to engage the new government of Greece in good faith negotiations to resolve the Greek debt.
The government of Greece is correct to insist on new policies because the previous policies have failed. They have not brought economic recovery. They have not brought financial stability. They have not brought jobs or foreign investments. They have stressed and damaged Greek society and weakened Greek institutions. There is therefore no value in that approach and no progress to preserve. We urge Greece’s European partners to accept this reality, without which the new government would never have been elected.
Greece needs immediate humanitarian measures, a higher minimum wage, new jobs, new investments, and steps to restore and improve basic services such as education and health care. It needs a stronger and more progressive tax system, less dependent on VAT and better able to tax incomes and wealth. It needs to fight, punish and root out corruption. The new government needs fiscal space to implement these measures and to demonstrate their worth, and it needs continuing financial support from the European Central Bank to stabilize the financial sector meanwhile. We urge Greece’s European partners and institutions to provide that fiscal space and that support.
2 February
‘Europe’s interests come first’, says new Greek government
“Today, starting here in Paris, our freshly elected government had the first opportunity to convey to our partners our determination to turn the page in a manner that pursues Europe’s interests first, Greece’s second, France’s second, everybody else’s second.”
30 January
Merkel’s Unintended Creation: Could Tsipras’ Win Upset Balance of Power in Europe?
(Spiegel) Greek election victor Alexis Tsipras wants an entirely different Europe from the one envisioned by Angela Merkel. His success is likely to stoke anger over Germany’s EU dominance. Leaders in France and Italy are also hoping for an end to austerity.
Tsipras never tires of saying that he wants to “give the Greeks back their dignity.” And dignity is an important word for those who seek to understand what has happened in Greece. If so many Greeks didn’t feel humiliated by their own corrupt political class, by their dwindling prosperity — but also by the Germans and the other Europeans — Tsipras would have never been elected.
Fears of ‘Grexit’ Are Still Greatly Exaggerated
Quentin Peel, Mercator Senior Fellow, Europe Programme
(Chatham House) Syriza’s election victory is more likely to lead to bitter compromise than a showdown with Berlin and the troika.
The victory of the radical left-wing Syriza in the Greek general election has been widely interpreted in Europe as a popular backlash against the economic austerity imposed on the country from outside. Germany, as the dominant power in the eurozone, and the so-called troika of the European Commission, the European Central Bank and the International Monetary Fund, are seen as the losers. The reality is more complex, as the new government will inevitably have to temper populist policies with pragmatic accommodation of Greece’s creditors.
Alexis Tsipras, the new prime minister, has aroused great popular expectations − at home and abroad − but he will have his work cut out to unite his inexperienced government and meet the disparate demands of his supporters. This was not so much a vote against the eurozone, to which a large majority of Greeks still wish to belong, as a vote of no confidence in the Greek political and business establishment. It was a cry of frustration at the failure of the two dominant parties of the past four decades – Pasok on the left and New Democracy on the right – to root out corruption and nepotism, not least in their own ranks. (28 January 2015)
27 January
Greeks Vote Against Euro And European Union And For Home Rule And Democracy
(Forbes) It has been centuries since Greece mattered much in world affairs. But Syriza’s striking victory in the Greek parliamentary election Sunday could reshape Europe. In voting for the radical left-wing party the Greek people have reinvigorated home rule and democracy across the continent and challenged the “European project,” embodied by the European Union.
Greece has been in economic crisis seemingly for eternity. Always an economic laggard, the congenitally inefficient south European state manipulated statistics to meet the entry criteria for the Euro, or common currency. The other European governments knew they were being lied to but didn’t care. …
26 January
Greece turns, Europe wobbles
Across Europe, Syriza’s victory was welcomed (and deplored) as a blow to austerity
(The Economist) SYRIZA’S unequivocal victory in Sunday’s Greek elections reverberated all over Europe. It had been widely assumed that the left-wing populists and their charismatic young leader, Alexis Tsipras (pictured), would win a plurality of the votes, but the margin of victory was at the high end of expectations. In other European countries, Syriza’s win gave inspiration to populist anti-austerity parties on the left and right. European governments, meanwhile, issued diplomatic congratulations to the victors, while quietly worrying that the deals struck during years of negotiations, to rescue Greece from default and keep it in the euro zone, will now be torn open.
Greece’s Syriza To Form Government After Election Victory

(AP) — Radical left leader Alexis Tsipras was sworn in as Greece’s new prime minister Monday after forming a surprise alliance with a small right-wing nationalist party Independent Greeks, signaling possible confrontation over the country’s bailout.Tsipras has promised to renegotiate Greece’s massive bailout agreements, but has vowed not to take any unilateral action against lenders from other eurozone countries.

Greece election: Anti-austerity Syriza wins election
(BBC) Syriza’s result will send shockwaves through Europe.

23 January
Greece’s solidarity movement: ‘it’s a whole new model – and it’s working’
Citizen-run health clinics, food centres, kitchens and legal aid hubs have sprung up to fill the gaps left by austerity – and now look set to play a bigger role under a Syriza government

3 Comments on "Greece in 2015"

  1. Kimon Valaskakis June 14, 2015 at 4:27 am ·

    Comparing Greece to an unruly teenager in a family of wise European elders is quite absurd ! Greece, if anything is the PARENT not the OFFSPRING of Western Civilization. Toynbee described the latter as a mixture of Greek philosophy, Roman Law and the Judeo Christian tradition.
    Europe is the daughter of Greece and Rome, in an intellectual sense and not vice versa.
    A more apt metaphor would have been to depict Modern Greece as an aging grandparent, once wise, but now less able to adjust to the vicissitudes of contemporary life.
    Greece , wayward teenager with rebellious tendencies and mood swings vs a reasonable Europe ?
    A single problem child ? (what about Spain ?).Running with the wrong crowd (does he mean Goldman Sachs ?).
    Back to the history books, Mr.Jason Karaian. I think you’ve badly mixed your metaphors. KV

    Well said, Kimon. Once all is said and done, history will record that Greece was right to resist a monoculture of economic austerity imposed by one member (Germany) on the rest of the group (Eurozone) and that Germany was wrong in shirking it’s leadership role to pursue the next steps of European unification (i.e. fiscal union, pooling of debts, banking union and a form of transfer payments). As painful as the consequences on Greece will be, Greece will end up being on the ‘right side’ of History. Kenneth Matziorinis

  2. Kimon Valaskakis June 16, 2015 at 4:21 am ·

    In my own work I have characterized the Greece/Europe conundrum as a messy divorce with lose-lose outcomes in case of a definitive split and a win-win in case of a reconciliation. (Greece and Europe : The Real Choice is Win-Win or Lose-Lose in Huffington Post, March 2015)
    After two days in Athens and having received valuable INTEL from my favourite source of news and views – cab drivers, I am more and more convinced that the unreasonable partner in this ‘marriage crisis’ is Europe not Greece and I will explain why in my next Huff Post article due very soon.
    In essence, Europe is trying to impose on Greece hardship which it would never impose on itself. Imagine for example Brussels telling France to roll back pensions retroactively. There would be a new French Revolution, a new capture of the Bastille and reinstitution of the guillotine.
    And yet Hollande’s government is, via Europe, trying to dictate that hardship to an already hurting Greece. In spite of the fact, by the way, that the pensioners contributed some of the pensions money over the years and are not getting something for nothing. KV

  3. Kimon Valaskakis July 7, 2015 at 8:53 am ·

    I speak as an enthusiastic supporter of the European Union which, in my view is one of the most significant advances in the history of Humankind. Although, many observers see the outcome of the Greek Referendum as defeat for Europe, some of us see it, on the contrary, as a major opportunity.
    Here’s Why
    1. The Referendum was about what type of Europe, Europeans want. The question was not whether Greece wanted to stay in Europe or not. 80% of the Greeks have indicated, through many polls, that they want to stay in Europe and, at the same time, 60% said they were against austerity. No contradiction there. The questions was more as to whether a strictly financial and economic Europe should prevail or whether a ‘Social Europe’ is better. The same question exists in almost every European nation (including, Portugal, Spain, Italy, France the UK , the Scandinavian countries and even Germany itself).
    2. The Referendum focused the attention of Europe and indeed the world on these questions and in so doing elevated this debate to the global level. It raises questions as to the nature of the global economic system, the issue of inequality, unemployment etc.
    3. The Debt Issue is in the process of being reduced to its true proportions. There are many ways it can be resolved. Some of the solutions are relatively painless. For instance the IMF’s recent suggestion of a grace period of a number of years for debt repayment to allow Greece’s economy to restart may indeed be painless, if the ECB were to be allowed to centralize all the toxic loans and pay back the creditors via QE (quantitative easing). Thus the caricature of the Finnish worker subsidizing the Lazy Greek would no longer be valid, since neither the Finnish nor the German nor anyone else would give out subsidies. The operation would involve monetary creation which would not, repeat not be inflationary if it were to trigger Europe-wide growth
    4. Structural Reform is a very powerful concept. It should be used both to reform Greece (which badly needs reform) and Europe which, (surprise, surprise) also needs reform. Again I speak as a pro not an anti-European. Europe must reinvent itself to live up to its promise.
    Opportunities can of course be seized or missed. The parties could stick to their guns, shout invectives at each other, invoke caricatures and the whole temple could come crashing down. Its happened many times before. Just a century ago, in the summer of 2014, Europe engaged in a world war by accident. No one really wanted it. Austria just wanted to teach Serbia a lesson and Germany wanted to teach one to Russia. The result : over 10 million deaths.
    The reason for my optimism in the Greece-Europe case is the underlying converging objectives of both parties and their win-win character.
    The reason for my concern is that these converging objectives may be missed until it is too late.

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