Posts
It seems to me that western media are divided. You have, on the one hand, "official" media like DW and BBC that spout the malicious, anti-democratic EU line. You also have, on the other hand, the Guardian with its Athens correspondent, Helena Smith, reporting in a fair manner - to be contrasted with its coverage of Ukraine and Russia.
There is a very important story carried by Reuters (and relayed by Zero Hedge) that the US pressured the release (against the objection of the Europeans) of an internal IMF report backing up Greek contention that the debt is unpayable. This has been reported by the Guardian, but ignored by pro-EU media like the BBC.
In the meantime things are getting very dire for Greece as it moves towards Sunday's referendum.
Greek
economy close to collapse as food and medicine run short
Alexis
Tsipras urges people to vote no in Sunday’s referendum as capital
controls bite and vital tourism industry sees tens of thousands
cancel holidays in Greece
3 July, 2015
Greece’s
economy is on the brink of collapse after the capital controls
imposed ahead of Sunday’s referendum left the country with
shortages of food and drugs, the tourist industry facing a wave of
cancellations and banks with barely enough money to survive the
weekend.
Banks
said they had a €1bn cash buffer to see them through the weekend –
equal to just €90 (£64) a head for the 11 million-strong
population – and would require immediate help from the European
Central Bank on
Monday whatever the result of the referendum, in which the two sides
are running neck and neck.
Alexis
Tsipras,
Greece’s prime minister, was fighting for his political life on
Friday night, using a rally to say that a no vote would enable him to
negotiate a reform-for-debt-relief deal with the country’s credдtors.
The
survival of the Syriza coalition,
formed just over five months ago to repudiate five years of austerity
programmes, was in doubt as Greece started to suffer shortages of
basic provisions, including the sale of vital drugs in pharmacies
nationwide.
Food
staples, such as sugar and flour, were also fast running out on
Friday as consumers started to feel the effect of the restrictions.
“We
have shortages,” said Mary Papadopoulou, who runs a pharmacy in the
picturesque district of Plaka beneath the ancient Acropolis. “We’ve
run out of thyroxine [thyroid treatment] and unless things change
dramatically we’ll be having a lot more shortages next week.”
Greek
islands, where thousands of holidaymakers headed this week, have also
been hit, with popular Cycladic destinations such as Mykonos and
Santorini reporting shortages of basic foodstuffs. More than half of
Greece’s food supplies – and the vast majority of pharmaceuticals
– are imported, but with bank transfers now banned, companies are
unable to pay suppliers.
Queues
were reported at every cash machine in Athens on Friday night and
business groups warned that the economic shutdown in the week since
Tsipras called the referendum had already caused lasting damage to
the economy.
“Imports,
exports, factories, firms, transport – everything is frozen,”
said Vasilis Korkidis, who heads the national Confederation of
Hellenic Commerce. “The only sectors in demand are food and fuel.”
Korkidis
said the economy had suffered losses worth €1.2bn in the past week
and that the cost would have to be added to any fresh bailout deal.
“Even in the best-case scenario, it is going to take months to
recover from the shock of closed banks and capital controls,”
Korkidis said. “Now that they are in place, capital controls may
last for a year.”
Tourism,
the mainstay of the Greek economy and its main export earner, has
seen an estimated 50,000 holidaymakers cancelling bookings every day
since Tsipras walked out of talks in Brussels a week ago. The Greek
Tourism Confederation (SETE) announced that bookings were down by 40%
in the past few days.
The
ECB will meet on Monday to decide whether to step up its help
to Greeceunder
its emergency liquidity assistance scheme. The head of Greece’s
banking association, Louka Katseli, told reporters: “Liquidity is
assured until Monday, thereafter it will depend on the ECB decision.”
Despite
rumours, the Greek government kept the daily limit on cash
withdrawals at €60 (£42) on Friday, gambling that the banks would
have just enough money to cope with demand until the referendum,
which was ruled lawful by Greece’s top administrative court.
Analysts
warned that the yes side – which would be prepared to accept the
terms demanded by the European commission, the ECB and the
International Monetary Fund – would comfortably win if the banks
ran out of cash altogether. Yiannis Dragasakis, the government’s
vice-president, said ATMs were fully supplied with cash before the
weekend.
Wolfang Schäuble, the German finance minister, is depicted on a no poster outside the Bank of Greece in central Athens. Photograph: Alexandros Vlachos/EPA
On
Friday, Tsipras urged Greeks to give him the mandate to negotiate a
better deal, saying that his argument was supported by an IMF
study showing that his country’s debts were unsustainable even on
the rosiest economic assumptions.
“I urge you to say no to ultimatums, blackmail and fear. To say no
to being divided,” Tsipras said. It has emerged that the eurozone
tried to stop the IMF publishing its study.
Huge
crowds – from young students to pensioners with grandchildren in
tow – packed Athens’ Syntagma square, jamming the nearby metro
station and surrounding streets to hear Tsipras address a mammoth no
rally on Friday night.
“I’m
here to shout no at the top of my voice,” said Panos Stathopoulos,
a recently retired dentist. “No to austerity; no to this European
Union that
seems to have no sentiment, nothing.”
Sporting
a red-and-white OXI sticker, Stathopoulos said that after five years
of austerity, “They know the situation very well, and still they
keep trying to impose these measures on the weakest of us – I’m
sorry for the founding fathers of the EU, I don’t think they ever
envisaged a Europe like
this.”
Friends
and colleagues Eri, Constantina and Marta – all psychologists –
said they had come because “we want to have hope.” They would
vote no on Sunday because “we want to be able to express our own
opinions, and to decide for ourselves, in our own country,” said
Eri.
The
yes campaign turned the centre of the open-air – and open-ended –
Panathenaic Stadium in central Athens into a sea of Greek flags
dotted with some EU ones. They also spilled out for about 50 yards
down the avenue that runs across the stadium’s open side.
It
was an altogether more rumbustious – and better-attended –
demonstration than the one on Tuesday in Syntagma Square, which was
marred by rain.
On
Friday night, toting a big EU flag, Dimitris Tsaoussis, a financial
analyst, said he was there to “tell my European family that we
belong in Europe and we will stay in Europe”. Zacharias Sachinis, a
marketing manager with a chemicals firms, who was at the rally with
his wife and son, said he was going to vote yes on Sunday because
“the euro is good for Greece”, even though he didn’t like “the
dictatorship of Schэauble.”
As
on Tuesday, the atmosphere was good-natured. But below the surface
calm there is deep concern – and some trepidation. With the
approach of the referendum, growing numbers of Greeks are becoming
reluctant to give their names to reporters.
“I
came because we can’t be indifferent,” said one young woman
emphatically. But she balked at identifying herself. So did her
friend, who said: “We can’t predict the consequences of anything.
That’s why we’re nervous.”
Polls
have tightened in recent days following warnings from the commission
and Greece’s eurozone partners that a no vote would mean its exit
from the single currency. Support for the yes side is coming
primarily from voters over 55, with all other age groups backing
Tsipras.
An
already tense atmosphere was heightened on Friday after it emerged
that the country’s defence minister had said that the military
could ensure internal security if necessary.
Greece’s
post-war history of military dictatorship meant Panos Kammenos, who
also heads the nationalist, rightwing Independent Greeks party,
caused controversy when he said: “The country’s armed forces
guarantee stability internally, the national sovereignty and the
country’s territorial integrity [and] stability in relation with
the country’s alliances.”
Vicky
Pryce, the Greek-born chief economic adviser at the Centre
for Economics and Business Research,
said: “There has been too much austerity, but a no vote would make
things worse. It would almost certainly mean banks becoming
insolvent, an exit from the euro and a much faster decline in
economic activity with hyperinflation following as the drachma that
is introduced instantly devalues.
“A
yes vote would keep banks open and give a mandate for a deal to be
struck that recognises the new Greek realities and includes, as the
IMF now says, restructuring of the debt which every economist knows
is unsustainable. This would offer some light at the end of the
tunnel. A no vote would make that almost impossible to accomplish and
could plunge Greece into years of economic turmoil.”
The BBC perpetuates the lie that this is a struggle between those who want to stay in the EU and those that don't.
Finance Minister Yanis Varoufakis has dismissed reports of a bank "haircut" on some deposits
Tens of thousands of Greeks have attended rival rallies in Athens ahead of a crucial referendum on Sunday....
The BBC's Chris Morris in Athens says this has become a choice about whether to stay in the eurozone. With so much at stake, he says, the rhetoric is getting nasty - no-one can even be sure whether Greek banks will be able to reopen next week as the government has promised
From RT.
Just have a look at the video footage below, from the 'no' rally in Athens. It is hard to believe from that there is going to be a 'yes' vote - but then the media barons will all be pushing the EU line.
Two rival rallies took place in Athens on Friday. Police estimate that 25,000 came out to support the ‘No’ camp, which calls for the rejection of a new bailout deal with creditors in Sunday’s referendum, while 20,000 gathered to back the “Yes” vote.
US
Pushed For IMF Greek Haircut Study Release After Euro 'Allies' Tried
To Block
3
July, 2015
The
timing of the
release of The IMF's 'Greece needs a debt haircut no matter what'
report this
week was odd to say the least.
Being as it confirmed everything the Greek government has been saying
and provided the perfect ammunition for Tsipras to spin
Sunday's Greferendum as
a Yes/No to debt haircuts - something everyone can understand (and
get behind). It is understandable then that, as
Reuters reports, Greece's
eurozone allies tried to block the release of the damning report this
week but the
Europeans were heavily outnumbered and the United States, the
strongest voice in the IMF, was in favor of publication,
sources said. While The IMF concluded, "Facts are stubborn. You
can't hide the facts because they may be exploited," one wonders
if this move merely reinforces
Goldman's concpiracy theory.
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. As
Reuters reports,
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
At a meeting on the International Monetary Fund's board on Wednesday, European members questioned the timing of the report which IMF management proposed at short notice releasing three days before Sunday's crucial referendum that may determine the country's future in the euro zone, the sources said.There was no vote but the Europeans were heavily outnumbered and the United States, the strongest voice in the IMF, was in favor of publication, the sources said.The Europeans were also concerned that the report could distract attention from a view they share with the IMF that the Tsipras government, in the five months since it was elected, has wrecked a fragile economy that was just starting to recover."It wasn't an easy decision," an IMF source involved in the debate over publication said. "We are not living in an ivory tower here. But the EU has to understand that not everything can be decided based on their own imperatives."The board had considered all arguments, including the risk that the document would be politicized, but the prevailing view was that all the evidence and figures should be laid out transparently before the referendum.
"Facts are stubborn. You can't hide the facts because they may be exploited," the IMF source said.
*
* *
Quite
simply this should be horrifying to not just The Greeks (who
just discovered their supposed 'allies' tried to hide the truth from
them and in fact negotiated in bad faith) but
to all Europeans who by now must realize the union is not for them,
it is for the few ruling elite and their corporate and banking
overlords.
Isn't
it time to Just Say No, if not to anything else than to being
controlled by an unelected cabal of oligarchs whose only interest is
making sure the wealthy get wealthier?
Of
course, taking a step back from the table, it is clear that a forced
decision by Washington against the interests of its European allies -
that is likely to engender more chaos and strengthen Greece's ability
to destabilize Europe - must have been done for 'another reason'.
Perhaps after all is said and done, the powers that beneed chaos,
need instability, need panic in
order to ensure the public gratefully accept
the all-in QE-fest that they want.
Here is the original Reuters report
And a short piece from Yanis Varoufakis. Please listen to the interview with Yanis below with Bloomberg
IMF backs (ever so peculiarly) the SYRIZA government’s
Yanis
Varoufakis
Debt
relief ought to be at the centre of negotiations over a New Deal for
Greece. That has been our government’s mantra from 26th of
January, our first day on the job. Exactly five months later, on
26th of June, the IMF has conceded the point (as
evidenced earlier today by the NYT) – on the very day Prime
Minister Alexis Tsipras called for a referendum so that the Greek
people could reject an IMF-led proposal that offered no… debt
relief.
The IMF’s
latest debt sustainability analysis (DSA) is a fascinating
read:
For
the first time, the IMF recognised that, in its fifth review
assessment, there was a low probability that Greece’s public debt
would prove sustainable.
Here
is an extract from the IMF’s own report confessing that, to portray
Greek public debt as sustainable (without substantial debt relief),
its researchers had to make the assumption that “…Greece would go
from having the lowest average total factor productivity (TFP) growth
in the euro area since it joined the EU in 1981 to having among the
highest TFP growth, and that it would go to the highest labor force
participation rates and to German employment rates.” Pigs would, of
course, sooner fly!
When
asked how productivity growth would do the ‘pole vault’ from the
euro area’s lowest to the euro area’s highest levels, with
employment recovering fully (and in the absence of credit and
investment), the IMF’s standard answer is: “To achieve TFP growth
that is similar to what has been achieved in other euro area
countries, implementation of structural reforms is therefore
critical.” But, Chapter
3 of the IMF’s April 2015 World Economic Outlook report
tears this assumption to pieces. Indeed, the IMF’s own research
shows that labour market reforms have a negative impact on total
factor productivity while product market reform has a neutral one.
Returning
to Greek public debt sustainability, this latest DSA (debt
sustainability analysis) by the IMF could not be blunter. In fact, it
is even ‘ruder’ to official Europe, that remains in denial of the
need for any debt relief, than we – the SYRIZA government – would
imagine being: Without a haircut, the IMF claims, not even fifty
years of austerity (i.e. a primary surplus of 2.5%) would suffice to
reduce debt to sustainable levels – see graph.
“It
is simply not reasonable”, also argues the IMF’s document “to
expect the large official sector held debt to migrate back onto the
balance sheets of the private sector at rates consistent with debt
sustainability”. Of course it is not![1]
EPILOGUE
Puzzlingly,
all this fine research by the good people at the IMF suddenly
evaporates when IMF functionaries coalesce with their ECB and the
European Commission colleagues in order to impose upon our government
their chosen policies. On 25th June we were presented with their
ultimatum that centred upon zero debt relief, gigantic austerity
(3.5% in the medium term), and more of the same labour and product
markets’ ‘reforms’.
- Never before has a veritable institution advocated policies that clashed so mercilessly with its own research.
- Never before has the IMF agreed, on economic analysis, with a government it sought to devastate.
[1] One
wonders why it migrated to the public sector balance sheet in the
first place. Could it be that this was accomplished by the failed
IMF-driven programs of 2010 and 2012?
This is based on a report from FT that Yanis Varoufakis has dismissed as a "malicious rumour"
Greek
Banks Considering 30% Haircut On Deposits Over €8,000: FT
3 July, 2015
Last
week in "For
Greeks, The Nightmare Is Just Beginning: Here Come The Depositor
Haircuts,"
we warned that a Cyprus-style bail-in of Greek depositors may be
imminent given the acute cash crunch that has brought the Greek
banking sector to its knees and forced the Greek government to
implement capital controls in a futile attempt to stem the flow.
The
depositor "haircut" would be a function of the staggered
ELA haircut that the ECB could impose to escalate the rhetoric
between the two sides, and could take place with as little as a 10%
increase in the ELA collateral haircut from its current 50% level.
Unfortunately for Greeks, the ECB has frozen the ELA cap, meaning that as of last Sunday, Greek banks were no longer able to meet deposit outflows by tapping emergency liquidity from the Bank of Greece.
Now,
with ATM liquidity expected to run out by Monday and with the
country's future in the Eurozone still undecided, it appears as
though Alexis Tsipras' promisethat
"deposits are safe" may be proven wrong.
According
to FT, Greek
banks are considering a
depositor bail-in that could see deposits above €8,000 haircut by
"at least" 30%.
Via FT:
Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears
The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.
A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.
It would be implemented as part of a recapitalisation of Greek banks that would be agreed with the country’s creditors — the European Commission, International Monetary Fund and European Central Bank.
“It [the haircut] would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme,” said one person following the issue. “This is not something that is going to happen immediately.”
Greek deposits are guaranteed up to €100,000, in line with EU banking directives, but the country’s deposit insurance fund amounts to only €3bn, which would not be enough to cover demand in case of a bank collapse.
With few deposits over €100,000 left in the banks after six months of capital flight, “it makes sense for the banks to consider imposing a haircut on small depositors as part of a recapitalisation. . . It could even be flagged as a one-off tax,” said one analyst.
Earlier,
via Bloomberg:
Liquidity for Greek bank ATMs after Monday will depend on the ECB decision, National Bank of Greece Chair Louka Katseli tells reporters in Athens.
Meanwhile,
Yanis Varoufakis swears this is nothing but a "malicious rumor":
FT report of a Gk Bank Bail In is a malicious rumour that the Head of the Greek Banks Association denied this morning http://t.co/3xtnQvpS7R
— Yanis Varoufakis (@yanisvaroufakis) July 3, 2015
And
moments ago Bloomberg reported that according to an emailed statement
by the Greek finance ministry, the "FT report on deposits bail
in is outright lie, provocative, and targets undermining July 5
referendum" and as a resultt the "finance
ministry demands Financial Tines to retract report."
The following was a surprisingly good article that appeared in the NZ Herald
The following was a surprisingly good article that appeared in the NZ Herald
Forgiving
debt, if done right, can get an economy back on its feet.
The
International Monetary Fund certainly thinks so, according to a new
report in which it argues Greece should get help.
But
Germany, another major creditor to Greece, is resisting, even though
it should know better than most what debt relief can achieve. After
the hell of World War II, the Federal Republic of Germany "
commonly known as West Germany " got massive help with its debt
from former foes.
Among
its creditors then? Greece.
The
1953 agreement, in which Greece and about 20 other countries
effectively wrote off a large chunk of Germany's loans and
restructured the rest, is a landmark case that shows how effective
debt relief can be. It helped spark what became known as the German
economic miracle.
So
it's perhaps ironic that Germany is now among the countries resisting
Greece's requests for debt relief.....
And for some more recent historical perspective - from 2011
November
01, 2011
Despite
causing turmoil on world markets and the shocked reaction from other
European states, George Papandreou has won the support of the cabinet
after an emergency meeting in which he said the move would pave the
way for Greece staying in the euro.
The
Greek prime minister is now expected to hold talks with President
Nicolas Sarkozy and Chancellor Angela Merkel on Wednesday. But while
the Greek PM has found political support for the highly unpopular
deal, critics argue he is putting both his country’s and Europe’s
futures on the line.
A
Greek deputy’s defection from the ruling party is only the latest
consequence of Prime Minister George Papandreou’s decision to hold
a surprise referendum on last week’s Greek bailout package
And from the author of "Confessions of an Economic Hitman", John Perkins
And from the author of "Confessions of an Economic Hitman", John Perkins
“Greece
is being ‘hit’, there’s no doubt about it,” - John Perkins
“Greece
is being ‘hit’, there’s no doubt about it,” exclaims John
Perkins, author of Confessions of an Economic Hit Man, noting that
“[Indebted countries] become servants to what I call the
corporatocracy … today we have a global empire, and it’s not an
American empire. It’s not a national empire… It’s a corporate
empire, and the big corporations rule.”
John
Perkins, author of Confessions of an Economic Hit Man, discusses how
Greece and other eurozone countries have become the new victims of
“economic hit men.”
No comments:
Post a Comment
Note: only a member of this blog may post a comment.