I can't even talk about it. Just read Yves' article.
This is basically the same proposal as that was just rejected by the Greek people in the referendum…This makes absolutely no sense. The Tsipras Government has just:
- renegotiated itself into the same position it was in two months ago;
- set massively false expectations with the Greek public;
- destroyed the Greek banking system, and
If this deal gets through the Greek Parliament, and it could given everyone other than the ruling party and Golden Dawn are in favour of austerity, then Greece has just destroyed itself to no purpose.
- destroyed what was left of Greek political capital in EU.
"Tsipras has just destroyed Greece."
18 comments:
varoufakis isn't even there for the vote. went on vacation.
http://www.theguardian.com/business/live/2015/jul/10/greek-crisis-deal-hopes-mps-vote-tsipras-live#block-55a05e2ce4b07fc6a121f9a5
Varoufakis's analysis.
http://www.theguardian.com/commentisfree/2015/jul/10/germany-greek-pain-debt-relief-grexit
Selise,
From what I am reading, the plan sent was better than the Juncker plan, but barely. The plan has been accepted by the technocrats (it well should be, as it was drafted with the Help of the French.) So it now goes to the EuroGroup, where it has to be accepted by all 19 Finance Ministers. This will only happen if the US has twisted arms hard enough. I do not see any signs of that. So my guess is that the EuroGroup will nix the plan. Then it is either go back to the negotiating table, or Grexit. If back to the negotiating table, then at the very least, the ELA will be raised. Otherwise, it is Grexit, but an orderly Grexit with aid from EU and possibly the IMF.
It was critical that Greece not be seen as the obstacle to the deal. And with the passage through the Greek Parliament (Just passed 250/32/8) that is now certain. From what I hear, Schauble wants a Grexit. So it may yet happen, but on terms more favorable to Greece than with a unilateral Grexi. If however, the deal is accepted by the EuroGroup, the can is kicked further down the road, and the slow bleed continues until the next crisis, but Greek pain is now out in the open for all to see. Greece will get Eur 35B in Juncker investment - maybe that will reduce the pain (hard to say with ordoliberal ideology.
Varoufakis's piece doesn't really add much but this.
Suddenly, a permanently unsustainable Greek public debt, without which the risk of Grexit would fade, has acquired a new usefulness for Schauble.
What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.
Yanis is aware that the French economy is starting to buckle under the rules and he also knows that the fault line in Europe runs between France and Germany. He is setting traditional rivals against each other, as everyone in Europe who reads this will realize immediately.
The other big news has been Nigel Farage's rousing speech to Tsipras, picturing the left as a bunch of pansies.
These things will be missed in the US but not across the pond.
Dr. Schauble:
http://www.eyetique.com/media/wysiwyg/3GuysBlog/dr_strangelove-in-his-wheel-chair_1073.jpg
sorry
Unknown: So my guess is that the EuroGroup will nix the plan. Hope you're right. The answer is Unknown to me! Greece may be saved by its enemies. Eisenhower wrote that he wanted Hitler to stay in towards the end of WWII, not be assassinated, as his irrational decisions were shortening the war by months.
Farage is a UKIPper. Of course he wants Greece to leave the euro! The radical right all over Europe hates the European project. He's also a global warming denialist, a chauvinist and bigot. What those clowns offer by way of advice about what the European left should do is of little interest.
Varoufakis shows he understands the Grexit issues much better than most:
Greeks, rightly, shiver at the thought of amputation from monetary union. Exiting a common currency is nothing like severing a peg, as Britain did in 1992, when Norman Lamont famously sang in the shower the morning sterling quit the European exchange rate mechanism (ERM). Alas, Greece does not have a currency whose peg with the euro can be cut. It has the euro – a foreign currency fully administered by a creditor inimical to restructuring our nation’s unsustainable debt.
To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military’s might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available.
Dear Unknown, you are a true believer, aren't you? Like Varoufakis and Tsipras… Wow
Not happy about the latest turn of events, of course, but one should remember that Yves Smith is fanatic about Grexit being a disaster, and that is the primary path by which she thinks that Tsipras's latest has destroyed Greece.
Varoufakis's comparison to Iraq is silly. It is sad that he probably believes it. One should remember that like Katrina & New Orleans, it took a lot of hard work to make the occupation of Iraq the disaster it was. Only the USA has achieved this level of stupidity-technology. USA! USA! USA!
A currency system is not as big a deal as redoing a whole nation's bombed out electricity grid. But the Iraqis, with bad ole Saddam "leading" them, managed to do a much better and quicker job of restoring it after the first Gulf War, under sanctions, than the omni-impotent USA did after the second. I remember looking at photos at a blog that an Iraqi electrical engineer, proud of his own work, posted, while he compared them to the complete, interminable screwup the US did / pretended to do.
"What those clowns offer by way of advice about what the European left should do is of little interest."
It's of very great interest to ordinary people. Which is why lots and lots of them voted for UKIP in the last election.
It is only of 'little interest' to the Latte Set who have nice comfortable jobs and only get invited to parties if they wear they European Nationalist swastika with pride.
Farage is right for the wrong reasons.
Have you now joined the Greek ruling class in dismissing the message of democracy because you don't like what it says?
"Have you now joined the Greek ruling class in dismissing the message of democracy because you don't like what it says?"
Farage's message is not the same as the message the Greek public sent Europe and Tsipras. Farage has a different agenda.
I was far too charitable in my assessment of Varoufakis. My view was that even if he wanted to leave the euro, he needed to talk the way he did in order to cover up preparations for euro exit. But he actually believed the nonsense he was spouting.
Yes, moving to a new currency would be inconvenient. So are the capital controls and the bank holiday they ended up with. They needed to rip off the bandaid quickly and get it over with once they realized that there was no chance of a re-negotiation of the programme. They should have figured that out with a few weeks of negotiations.
"Farage's message is not the same as the message the Greek public sent Europe and Tsipras. Farage has a different agenda."
The Greeks want an impossible combo of no austerity yet desire to remain in the euro. Parliament is giving the people the latter, which is only half of the bargain. If the EZ accepts the Greek proposal (which is no slam dunk) then Greece's economic downward spiral is certain to continue and Greece will be back at the table for a fourth bailout in due course. At some point an honest Greek politician will hopefully come forward and explain to the Greek electorate that no austerity and remaining in the euro are mutually exclusive propositions. Then again the Greek parliament basically already laid out this hard truth last evening.
Troika Says Greek Proposal Not Enough To Meet Targets, Serves As "Basis For Negotiations"
http://www.zerohedge.com/news/2015-07-11/troika-says-greek-proposal-not-enough-meet-targets-serves-basis-negotiations
There goes the slam dunk. This is what happens when one deals with sociopaths. Pathetic
Probably means that TPTB have reached an agreement with the US to the effect that the EZ gets to shed Greece and the US picks it up to prevent Greece from joining BRICS and tilting toward Russia and China, which knocks Greece out of NATO.
varoufakis isn't even there for the vote. went on vacation.
V's reason from his twitter,
Ευτυχώς υπάρχουν άνθρωποι που σέβονται τι σημαίνει να θέλω να περάσω το ΣΚ με την μικρή μου κόρη πριν επιστρέψει στην Αυστραλία όπου ζει...
Rough translation: He's spending the weekend with his young daughter (IIRC, 10 or 11 y-o) before she returns to Australia (where she lives with her mother).
I can respect that :)
At least Farage and his brand of politics offer a means to an end. Time for the left to exit the stage, and not return until they have learned some macroeconomics, MMT style.
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