Greece

[Simple Minded]

in the russian post we have claims of gold as a wise hedge against the stupidity of politics driven paper money and on this post we have desires for more political intervention into paper money that makes it worthless.

an amusing dichotomy wot wot.

where some see dichotomy, others see balance!

where others see balance some see aesops wolf boy

sometimes the sky really is fallin though.......

[Endovelico]

Prime Minister Alexis Tsipras’ article in Le Monde newspaper: Europe at crossroads
http://www.keeptalkinggreece.com/2015/0 ... ell-tolls/

On 25th of last January, the Greek people made a courageous decision. They dared to challenge the one-way street of the Memorandum’s tough austerity, and to seek a new agreement. A new agreement that will keep the country in the Euro, with a viable economic program, without the mistakes of the past.The Greek people paid a high price for these mistakes; over the past five years the unemployment rate climbed to 28% (60% for young people), average income decreased by 40%, while according to Eurostat’s data, Greece became the EU country with the highest index of social inequality.

And the worst result: Despite badly damaging the social fabric, this Program failed to invigorate the competitiveness of the Greek economy. Public debt soared from 124% to 180% of GDP, and despite the heavy sacrifices of the people, the Greek economy remains trapped in continuous uncertainty caused by unattainable fiscal balance targets that further the vicious cycle of austerity and recession.

The new Greek government’s main goal during these last four months has been to put an end to this vicious cycle, an end to this uncertainty.

Doing so requires a mutually beneficial agreement that will set realistic goals regarding surpluses, while also reinstating an agenda of growth and investment. A final solution to the Greek problem is now more mature and more necessary than ever.

Such an agreement will also spell the end of the European economic crisis that began 7 years ago, by putting an end to the cycle of uncertainty in the Eurozone.

Today, Europe has the opportunity to make decisions that will trigger a rapid recovery of the Greek and European economy by ending Grexit scenarios, scenarios that prevent the long-term stabilization of the European economy and may, at any given time, weaken the confidence of both citizens and investors in our common currency.

Many, however, claim that the Greek side is not cooperating to reach an agreement because it comes to the negotiations intransigent and without proposals.

Is this really the case?

Because these times are critical, perhaps historic–not only for the future of Greece but also for the future of Europe–I would like to take this opportunity to present the truth, and to responsibly inform the world’s public opinion about the real intentions and positions of Greece.

The Greek government, on the basis of the Eurogroup’s decision on February 20th, has submitted a broad package of reform proposals, with the intent to reach an agreement that will combine respect for the mandate of the Greek people with respect for the rules and decisions governing the Eurozone.

One of the key aspects of our proposals is the commitment to lower – and hence make feasible – primary surpluses for 2015 and 2016, and to allow for higher primary surpluses for the following years, as we expect a proportional increase in the growth rates of the Greek economy.

Another equally fundamental aspect of our proposals is the commitment to increase public revenues through a redistribution of the burden from lower and middle classes to the higher ones that have effectively avoided paying their fair share to help tackle the crisis, since they were for all accounts protected by both the political elite and the Troika who turned “a blind eye”.

From the very start, our government has clearly demonstrated its intention and determination to address these matters by legislating a specific bill to deal with fraud caused by triangular transactions, and by intensifying customs and tax controls to reduce smuggling and tax evasion.

While, for the first time in years, we charged media owners for their outstanding debts owed to the Greek public sector.

These actions are changing things in Greece, as evidenced the speeding up of work in the courts to administer justice in cases of substantial tax evasion. In other words, the oligarchs who were used to being protected by the political system now have many reasons to lose sleep.

In addition to these overarching goals that define our proposals, we have also offered highly detailed and specific plans during the course of our discussions with the institutions that have bridged the distance between our respective positions that separated us a few months ago.

Specifically, the Greek side has accepted to implement a series of institutional reforms, such as strengthening the independence of the General Secretariat for Public Revenues and of the Hellenic Statistical Authority (ELSTAT), interventions to accelerate the administration of justice, as well as interventions in the product markets to eliminate distortions and privileges.

Also, despite our clear opposition to the privatization model promoted by the institutions that neither creates growth perspectives nor transfers funds to the real economy and the unsustainable debt, we accepted to move forward, with some minor modifications, on privatizations to prove our intention of taking steps towards approaching the other side.

We also agreed to implement a major VAT reform by simplifying the system and reinforcing the redistributive dimension of the tax in order to achieve an increase in both collection and revenues.

We have submitted specific proposals concerning measures that will result in a further increase in revenues. These include a special contribution tax on very high profits, a tax on e-betting, the intensification of checks of bank account holders with large sums – tax evaders, measures for the collection of public sector arrears, a special luxury tax, and a tendering process for broadcasting and other licenses, which the Troika coincidentally forgot about for the past five years.

These measures will increase revenues, and will do so without having recessionary effects since they do not further reduce active demand or place more burdens on the low and middle social strata.

Furthermore, we agreed to implement a major reform of the social security system that entails integrating pension funds and repealing provisions that wrongly allow for early retirement, which increases the real retirement age.

These reforms will be put into place despite the fact that the losses endured by the pension funds, which have created the medium-term problem of their sustainability, are mainly due to political choices of both the previous Greek governments and especially the Troika, who share the responsibility for these losses: the pension funds’ reserves have been reduced by 25 billion through the PSI and from very high unemployment, which is almost exclusively due to the extreme austerity program that has been implemented in Greece since 2010.

Finally–and despite our commitment to the workforce to immediately restore European legitimacy to the labor market that has been fully dismantled during the last five years under the pretext of competitiveness–we have accepted to implement labor reforms after our consultation with the ILO, which has already expressed a positive opinion about the Greek government’s proposals.

Given the above, it is only reasonable to wonder why there is such insistence by Institutional officials that Greece is not submitting proposals.

What end is served by this prolonged liquidity moratorium towards the Greek economy? Especially in light of the fact that Greece has shown that it wants to meet its external obligations, having paid more than 17 billion in interest and amortizations (about 10% of its GDP) since August 2014 without any external funding.

And finally, what is the purpose of the coordinated leaks that claim that we are not close to an agreement that will put an end to the European and global economic and political uncertainty fueled by the Greek issue?

The informal response that some are making is that we are not close to an agreement because the Greek side insists on its positions to restore collective bargaining and refuses to implement a further reduction of pensions.

Here, too, I must make some clarifications:

Regarding the issue of collective bargaining, the position of the Greek side is that it is impossible for the legislation protecting employees in Greece to not meet European standards or, even worse, to flagrantly violate European labor legislation. What we are asking for is nothing more than what is common practice in all Eurozone countries. This is the reason why I recently made a joint declaration on the issue with President Juncker.

Concerning the issue on pensions, the position of the Greek government is completely substantiated and reasonable. In Greece, pensions have cumulatively declined from 20% to 48% during the Memorandum years; currently 44.5% of pensioners receive a pension under the fixed threshold of relative poverty while approximately 23.1% of pensioners, according to data from Eurostat, live in danger of poverty and social exclusion.

It is therefore obvious that these numbers, which are the result of Memorandum policy, cannot be tolerated–not simply in Greece but in any civilized country.

So, let’s be clear:

The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance.

It is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people, despite the public admission of the three Institutions that necessary flexibility will be provided in order to respect the popular verdict.

What is driving this insistence?

An initial thought would be that this insistence is due to the desire of some to not admit their mistakes and instead, to reaffirm their choices by ignoring their failures.

Moreover, we must not forget the public admission made a few years ago by the IMF that they erred in calculating the depth of the recession that would be caused by the Memorandum.

I consider this, however, to be a shallow approach. I simply cannot believe that the future of Europe depends on the stubbornness or the insistence of some individuals.

My conclusion, therefore, is that the issue of Greece does not only concern Greece; rather, it is the very epicenter of conflict between two diametrically opposing strategies concerning the future of European unification.

The first strategy aims to deepen European unification in the context of equality and solidarity between its people and citizens.

The proponents of this strategy begin with the assumption that it is not possible to demand that the new Greek government follows the course of the previous one – which, we must not forget, failed miserably. This assumption is the starting point, because otherwise, elections would need to be abolished in those countries that are in a Program. Namely, we would have to accept that the institutions should appoint the Ministers and Prime Ministers, and that citizens should be deprived of the right to vote until the completion of the Program.

In other words, this means the complete abolition of democracy in Europe, the end of every pretext of democracy, and the beginning of disintegration and of an unacceptable division of United Europe.

This means the beginning of the creation of a technocratic monstrosity that will lead to a Europe entirely alien to its founding principles.

The second strategy seeks precisely this: The split and the division of the Eurozone, and consequently of the EU.

The first step to accomplishing this is to create a two-speed Eurozone where the “core” will set tough rules regarding austerity and adaptation and will appoint a “super” Finance Minister of the EZ with unlimited power, and with the ability to even reject budgets of sovereign states that are not aligned with the doctrines of extreme neoliberalism.

For those countries that refuse to bow to the new authority, the solution will be simple: Harsh punishment. Mandatory austerity. And even worse, more restrictions on the movement of capital, disciplinary sanctions, fines and even a parallel currency.

Judging from the present circumstances, it appears that this new European power is being constructed, with Greece being the first victim. To some, this represents a golden opportunity to make an example out of Greece for other countries that might be thinking of not following this new line of discipline.

What is not being taken into account is the high amount of risk and the enormous dangers involved in this second strategy. This strategy not only risks the beginning of the end for the European unification project by shifting the Eurozone from a monetary union to an exchange rate zone, but it also triggers economic and political uncertainty, which is likely to entirely transform the economic and political balances throughout the West.

Europe, therefore, is at a crossroads. Following the serious concessions made by the Greek government, the decision is now not in the hands of the institutions, which in any case – with the exception of the European Commission- are not elected and are not accountable to the people, but rather in the hands of Europe’s leaders.

Which strategy will prevail? The one that calls for a Europe of solidarity, equality and democracy, or the one that calls for rupture and division?

If some, however, think or want to believe that this decision concerns only Greece, they are making a grave mistake. I would suggest that they re-read Hemingway’s masterpiece, “For Whom the Bell Tolls”.

[PM Alexis Tsipras had a 45-minute long teleconference with German Chancellor Angela Merkel and French President Francois Hollande late afternoon Sunday.

Greek government sources told media, that the three leaders agreed that a deal should be finalized really soon.

That is before June 5th, I suppose.]

European leaders are killing the European Union. Hopefully the Southern European countries will be able to pick it up from where we now stand and succeed in building a real solidary Mediterranean Union, without the northern vultures...

[Alexis]

European leaders are killing the European Union. Hopefully the Southern European countries will be able to pick it up from where we now stand and succeed in building a real solidary Mediterranean Union, without the northern vultures...

A very clear and telling summary of the Greek government objectives.

Tsipras is probably the only national leader in the whole EU worth his salt. Also, the one with the largest support among his country's population.

[Endovelico]

Tsipras – Putin talk BRICS & Energy, as a US-Greek “war” rages over Turkish Stream
Posted by keeptalkinggreece in Politics
http://www.keeptalkinggreece.com/2015/0 ... sh-stream/

Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin had a telephone conservation Friday noon. The two leader reportedly talked about the Greek participation in the BRICS Development Bank and the Turkish Stream, a joint natural gas pipeline between Russia and Turkey. According to Greek government sources, Tsipras and Putin talked about “the business and energy cooperation between the two countries” and the upcoming visit of the Greek PM to St Petersburg to participate in the International Economic Forum (18-20 June).

The phone call last one hour (translation incl.) and took place after Tsipras’ request.

The phone call comes a couple of days after the U.S.A. expressed for one more time a very clear disapproval to the Greek participation in the Turkish Stream pipeline project that will bring natural gas from Russia to Europe via Turkey and Greece.

US angry at Greek Turkish Stream participation

Amos Hochstein, Special Envoy and Coordinator for International Energy Affairs leading the Bureau of Energy Resources (ENR) of the US state Department, told the New York Times beginning of May that:

“The United States wants Greece to focus on the Western-backed TAP pipeline project rather than the rival Gazprom-favoured project Turkish Stream.”

The Trans-Adriatic Pipeline (TAP) that is set to bring gas from Azerbaijan by crossing through Turkey, Greece, Albania and under the Adriatic Sea to Italy.

Hochstein, who spoke to the press after a meeting with Greek Energy Minister Panagiotis Lafazanis, had stressed that while Russia was a major gas supplier for Europe, it was important for Greece and Europe to ensure diverse suppliers.

“Diversification is ultimately the best way to create security of supply. And that means that you should be allowed to bring in other sources of gas that are non-Russian, just to have competition,” so Hochstein.

Amos Hochstein repeated the US’s objections two days ago during the annual conference of Cypriot organizations in the USA.

“We are facing an energy crisis in Europe and if the Turkish pipeline project that will transport Russian gas to Europe proceeds, Greece will become part of the problem rather than of the solution.”

On Friday, Greek Energy Minister Panagiotis Lafazanis described Hochstein’s remarks as “provocative” and “almost threatening.“

“Greece is not a ‘land plot’, it cannot be blackmailed and it is not part of any problem,” Papangiotis Lafazanis said.

Beginning of June Lafazanis said during a visit to Moscow that Greece was ready to invest €2 billion to the Turkish Stream pipeline. and sign a support memorandum as soon as possible. According to the Greek Energy Minister, the project would create 20,000 jobs and its construction can be finished by 2019.

Greece’s new government had approached Russia right from the start of assuming power last January not only due to “traditional relations between the two countries” but also as political pressure tool towards its creditors IMF, EU and ECB.

Some Greek media claimed that the news “Tsipras – Putin talk on the phone” had caused the Athens Stock Exchange to plunge 5%.

Despite the US “threats” Greece remains defiant and will continue to do so especially now that the broke country is also at odds with its creditors and negotiations on further Austerity Reforms have reached a dangerous deadlock.

US tries to lure Greece with IMF-candies if it withdraws from TS?

According to Turkish media, a US Energy Expert, Gal Luft, claimed that the U.S.A. would influcen the IMF to reward Greece if it would withdraw from the Turkish Stream.

Speaking to Turkish News Agency Anadolu, Gal Luft, “a senior adviser to the United States Energy Security Council,” said

“If Greece withdraws from the Turkish Stream project the U.S. will expect the International Monetary Fund (IMF) to reward Greece.

The U.S. has not showed its influence on the IMF for Greece in terms of its own energy policies.”

I don’t know what kind of authorization Gal Luft has to make such “promises” as executive director of Washing-based non-profit Institute for the Analysis of Global Security (IAGS) that formed also the think-tank Energy Security Council in 2011. But, nevertheless, Luft’s “candies” made the headlines in Turkish newspaper.
US expert: IMF to reward Greece if it withdraws from Turkish Stream

Yes, what is also interesting is that according to Sabah daily, another four EU members Slovakia, Hungary, Romania and Bulgaria have announced that they have offered a common project to Russia regarding the Turkish Stream. At the same time, Iran is also interested in participating in the Turkish Stream with Iranian National Gas Company International Affairs Manager Azizullah Ramezani to have announced that, after the international sanctions applied to Iran are nullified, Iran might consider delivering its natural gas to Europe through the Turkish Stream.

Lots of things can still happen around the Greek issues. Greece's main problem is balancing its trade. If it succeeds in balancing it most other problems could have an easy solution, including a deliberate and complete default on the sovereign debt.

[Heracleum Persicum]

2331686_pic_970x641.jpg (102.38 KiB) Viewed 1232 times

[Endovelico]

2331686_pic_970x641.jpg

I guess this would have been more appropriate...

[Endovelico]

Greece's Position


The Greek government is absolutely right. Those four points are the only possible way out from this devilish crisis. And I draw the attention to point d) which is the only way to make the economy more competitive, boost employment, boost government revenues, promote growth. If the vultures refuse this, Greece should simply default on all payments.

[Endovelico]

Syriza's support stronger than ever

[Nonc Hilaire]

Greece will never be officially considered a default because it would reveal the fact that all world debt is unsecured. Tspiras can do whatever he wants, and the EU will continue to extend and pretend.

Russia and China will be happy to provide dollars or euros to aquire Greek assets, but the EU and the US have no taste for their own excrement. This is a geopolitical issue, not a financial one.

[Endovelico]

(...)

The IMF spiked an attempt by Juncker to broker a compromise allowing Greece to defer 400 million euros ($451 million) of cuts in small pensions if it reduced military spending by the same amount, Frankfurter Allgemeine Sonntagszeitung reported, citing unidentified people with knowledge of the negotiations. The EU declined to comment on the report.

(...)

http://www.bloomberg.com/news/articles/ ... ore-monday

Can you believe it? Cutting poor people's pensions is fine with the IMF, but not any military spending!!!... Have people gone completely bonkers???...

[Heracleum Persicum]

(...)

The IMF spiked an attempt by Juncker to broker a compromise allowing Greece to defer 400 million euros ($451 million) of cuts in small pensions if it reduced military spending by the same amount, Frankfurter Allgemeine Sonntagszeitung reported, citing unidentified people with knowledge of the negotiations. The EU declined to comment on the report.

(...)

http://www.bloomberg.com/news/articles/ ... ore-monday

Can you believe it? Cutting poor people's pensions is fine with the IMF, but not any military spending!!!... Have people gone completely bonkers ??? ...

.

Greece should issue an ultimatum to NATO

Either NATO pays all Greece owing, or Greece exits NATO

.

[Endovelico]

Executive Summary of the report from the Debt Truth Committee
17 June by Debt Truth Committee
http://cadtm.org/Executive-Summary-of-the-report

In June 2015 Greece stands at a crossroad of choosing between furthering the failed macroeconomic adjustment programmes imposed by the creditors or making a real change to break the chains of debt. Five years since the economic adjustment programmes began, the country remains deeply cemented in an economic, social, democratic and ecological crisis. The black box of debt has remained closed, and until now no authority, Greek or international, has sought to bring to light the truth about how and why Greece was subjected to the Troika regime. The debt, in whose name nothing has been spared, remains the rule through which neoliberal adjustment is imposed, and the deepest and longest recession experienced in Europe during peacetime.

There is an immediate need and social responsibility to address a range of legal, social and economic issues that demand proper consideration. In response, the Hellenic Parliament established the Truth Committee on Public Debt in April 2015, mandating the investigation into the creation and growth of public debt, the way and reasons for which debt was contracted, and the impact that the conditionalities attached to the loans have had on the economy and the population. The Truth Committee has a mandate to raise awareness of issues pertaining to the Greek debt, both domestically and internationally, and to formulate arguments and options concerning the cancellation of the debt.

The research of the Committee presented in this preliminary report sheds light on the fact that the entire adjustment programme, to which Greece has been subjugated, was and remains a politically orientated programme. The technical exercise surrounding macroeconomic variables and debt projections, figures directly relating to people’s lives and livelihoods, has enabled discussions around the debt to remain at a technical level mainly revolving around the argument that the policies imposed on Greece will improve its capacity to pay the debt back. The facts presented in this report challenge this argument.

All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.

It has also come to the understanding of the Committee that the unsustainability of the Greek public debt was evident from the outset to the international creditors, the Greek authorities, and the corporate media. Yet, the Greek authorities, together with some other governments in the EU, conspired against the restructuring of public debt in 2010 in order to protect financial institutions. The corporate media hid the truth from the public by depicting a situation in which the bailout was argued to benefit Greece, whilst spinning a narrative intended to portray the population as deservers of their own wrongdoings.

Bailout funds provided in both programmes of 2010 and 2012 have been externally managed through complicated schemes, preventing any fiscal autonomy. The use of the bailout money is strictly dictated by the creditors, and so, it is revealing that less than 10% of these funds have been destined to the government’s current expenditure.

This preliminary report presents a primary mapping out of the key problems and issues associated with the public debt, and notes key legal violations associated with the contracting of the debt; it also traces out the legal foundations, on which unilateral suspension of the debt payments can be based. The findings are presented in nine chapters structured as follows:


Chapter 1, Debt before the Troika, analyses the growth of the Greek public debt since the 1980s. It concludes that the increase in debt was not due to excessive public spending, which in fact remained lower than the public spending of other Eurozone countries, but rather due to the payment of extremely high rates of interest to creditors, excessive and unjustified military spending, loss of tax revenues due to illicit capital outflows, state recapitalization of private banks, and the international imbalances created via the flaws in the design of the Monetary Union itself.

Adopting the euro led to a drastic increase of private debt in Greece to which major European private banks as well as the Greek banks were exposed. A growing banking crisis contributed to the Greek sovereign debt crisis. George Papandreou’s government helped to present the elements of a banking crisis as a sovereign debt crisis in 2009 by emphasizing and boosting the public deficit and debt.


Chapter 2, Evolution of Greek public debt during 2010-2015, concludes that the first loan agreement of 2010, aimed primarily to rescue the Greek and other European private banks, and to allow the banks to reduce their exposure to Greek government bonds.


Chapter 3, Greek public debt by creditor in 2015, presents the contentious nature of Greece’s current debt, delineating the loans’ key characteristics, which are further analysed in Chapter 8.


Chapter 4, Debt System Mechanism in Greece reveals the mechanisms devised by the agreements that were implemented since May 2010. They created a substantial amount of new debt to bilateral creditors and the European Financial Stability Fund (EFSF), whilst generating abusive costs thus deepening the crisis further. The mechanisms disclose how the majority of borrowed funds were transferred directly to financial institutions. Rather than benefitting Greece, they have accelerated the privatization process, through the use of financial instruments.


Chapter 5, Conditionalities against sustainability, presents how the creditors imposed intrusive conditionalities attached to the loan agreements, which led directly to the economic unviability and unsustainability of debt. These conditionalities, on which the creditors still insist, have not only contributed to lower GDP as well as higher public borrowing, hence a higher public debt/GDP making Greece’s debt more unsustainable, but also engineered dramatic changes in the society, and caused a humanitarian crisis. The Greek public debt can be considered as totally unsustainable at present.


Chapter 6, Impact of the “bailout programmes” on human rights, concludes that the measures implemented under the “bailout programmes” have directly affected living conditions of the people and violated human rights, which Greece and its partners are obliged to respect, protect and promote under domestic, regional and international law. The drastic adjustments, imposed on the Greek economy and society as a whole, have brought about a rapid deterioration of living standards, and remain incompatible with social justice, social cohesion, democracy and human rights.


Chapter 7, Legal issues surrounding the MOU and Loan Agreements, argues there has been a breach of human rights obligations on the part of Greece itself and the lenders, that is the Euro Area (Lender) Member States, the European Commission, the European Central Bank, and the International Monetary Fund, who imposed these measures on Greece. All these actors failed to assess the human rights violations as an outcome of the policies they obliged Greece to pursue, and also directly violated the Greek constitution by effectively stripping Greece of most of its sovereign rights. The agreements contain abusive clauses, effectively coercing Greece to surrender significant aspects of its sovereignty. This is imprinted in the choice of the English law as governing law for those agreements, which facilitated the circumvention of the Greek Constitution and international human rights obligations. Conflicts with human rights and customary obligations, several indications of contracting parties acting in bad faith, which together with the unconscionable character of the agreements, render these agreements invalid.


Chapter 8, Assessment of the Debts as regards illegtimacy, odiousness, illegality, and unsustainability, provides an assessment of the Greek public debt according to the definitions regarding illegitimate, odious, illegal, and unsustainable debt adopted by the Committee.

Chapter 8 concludes that the Greek public debt as of June 2015 is unsustainable, since Greece is currently unable to service its debt without seriously impairing its capacity to fulfill its basic human rights obligations. Furthermore, for each creditor, the report provides evidence of indicative cases of illegal, illegitimate and odious debts.


Debt to the IMF should be considered illegal since its concession breached the IMF’s own statutes, and its conditions breached the Greek Constitution, international customary law, and treaties to which Greece is a party. It is also illegitimate, since conditions included policy prescriptions that infringed human rights obligations. Finally, it is odious since the IMF knew that the imposed measures were undemocratic, ineffective, and would lead to serious violations of socio-economic rights.


E.Toussaint presenting an IMF document proving that the fund knew that its measures would increase the Greek debt


Debts to the ECB should be considered illegal since the ECB over-stepped its mandate by imposing the application of macroeconomic adjustment programs (e.g. labour market deregulation) via its participation in the Troïka. Debts to the ECB are also illegitimate and odious, since the principal raison d’etre of the Securities Market Programme (SMP) was to serve the interests of the financial institutions, allowing the major European and Greek private banks to dispose of their Greek bonds.


The EFSF engages in cash-less loans which should be considered illegal because Article 122(2) of the Treaty on the Functioning of the European Union (TFEU) was violated, and further they breach several socio-economic rights and civil liberties. Moreover, the EFSF Framework Agreement 2010 and the Master Financial Assistance Agreement of 2012 contain several abusive clauses revealing clear misconduct on the part of the lender. The EFSF also acts against democratic principles, rendering these particular debts illegitimate and odious.


The bilateral loans should be considered illegal since they violate the procedure provided by the Greek constitution. The loans involved clear misconduct by the lenders, and had conditions that contravened law or public policy. Both EU law and international law were breached in order to sideline human rights in the design of the macroeconomic programmes. The bilateral loans are furthermore illegitimate, since they were not used for the benefit of the population, but merely enabled the private creditors of Greece to be bailed out. Finally, the bilateral loans are odious since the lender states and the European Commission knew of potential violations, but in 2010 and 2012 avoided to assess the human rights impacts of the macroeconomic adjustment and fiscal consolidation that were the conditions for the loans.


The debt to private creditors should be considered illegal because private banks conducted themselves irresponsibly before the Troika came into being, failing to observe due diligence, while some private creditors such as hedge funds also acted in bad faith. Parts of the debts to private banks and hedge funds are illegitimate for the same reasons that they are illegal; furthermore, Greek banks were illegitimately recapitalized by tax-payers. Debts to private banks and hedge funds are odious, since major private creditors were aware that these debts were not incurred in the best interests of the population but rather for their own benefit.

The report comes to a close with some practical considerations.

Chapter 9, Legal foundations for repudiation and suspension of the Greek sovereign debt, presents the options concerning the cancellation of debt, and especially the conditions under which a sovereign state can exercise the right to unilateral act of repudiation or suspension of the payment of debt under international law.

Several legal arguments permit a State to unilaterally repudiate its illegal, odious, and illegitimate debt. In the Greek case, such a unilateral act may be based on the following arguments: the bad faith of the creditors that pushed Greece to violate national law and international obligations related to human rights; preeminence of human rights over agreements such as those signed by previous governments with creditors or the Troika; coercion; unfair terms flagrantly violating Greek sovereignty and violating the Constitution; and finally, the right recognized in international law for a State to take countermeasures against illegal acts by its creditors , which purposefully damage its fiscal sovereignty, oblige it to assume odious, illegal and illegitimate debt, violate economic self-determination and fundamental human rights. As far as unsustainable debt is concerned, every state is legally entitled to invoke necessity in exceptional situations in order to safeguard those essential interests threatened by a grave and imminent peril. In such a situation, the State may be dispensed from the fulfilment of those international obligations that augment the peril, as is the case with outstanding loan contracts. Finally, states have the right to declare themselves unilaterally insolvent where the servicing of their debt is unsustainable, in which case they commit no wrongful act and hence bear no liability.


People’s dignity is worth more than illegal, illegitimate, odious and unsustainable debt

Having concluded a preliminary investigation, the Committee considers that Greece has been and still is the victim of an attack premeditated and organized by the International Monetary Fund, the European Central Bank, and the European Commission. This violent, illegal, and immoral mission aimed exclusively at shifting private debt onto the public sector.

Making this preliminary report available to the Greek authorities and the Greek people, the Committee considers to have fulfilled the first part of its mission as defined in the decision of the President of Parliament of 4 April 2015. The Committee hopes that the report will be a useful tool for those who want to exit the destructive logic of austerity and stand up for what is endangered today: human rights, democracy, peoples’ dignity, and the future of generations to come.

In response to those who impose unjust measures, the Greek people might invoke what Thucydides mentioned about the constitution of the Athenian people: "As for the name, it is called a democracy, for the administration is run with a view to the interests of the many, not of the few” (Pericles’ Funeral Oration, in the speech from Thucydides’ History of the Peloponnesian War).

This is why Greece is entitled to not paying most of its sovereign debt to the IMF, the ECB and the European Commission.

[Nonc Hilaire]

From https://market-ticker.org/akcs-www?singlepost=3380804

Greek Parliament Calls It: Now Act On It

This is about as clean as it gets, when you boil it all down.

It has also come to the understanding of the Committee that the unsustainability of the Greek public debt was evident from the outset to the international creditors, the Greek authorities, and the corporate media. Yet, the Greek authorities, together with some other governments in the EU, conspired against the restructuring of public debt in 2010 in order to protect financial institutions. The corporate media hid the truth from the public by depicting a situation in which the bailout was argued to benefit Greece, whilst spinning a narrative intended to portray the population as deservers of their own wrongdoings.

And......

Chapter 7, Legal issues surrounding the MOU and Loan Agreements, argues there has been a breach of human rights obligations on the part of Greece itself and the lenders, that is the Euro Area (Lender) Member States, the European Commission, the European Central Bank, and the International Monetary Fund, who imposed these measures on Greece. All these actors failed to assess the human rights violations as an outcome of the policies they obliged Greece to pursue, and also directly violated the Greek constitution by effectively stripping Greece of most of its sovereign rights. The agreements contain abusive clauses, effectively coercing Greece to surrender significant aspects of its sovereignty. This is imprinted in the choice of the English law as governing law for those agreements, which facilitated the circumvention of the Greek Constitution and international human rights obligations. Conflicts with human rights and customary obligations, several indications of contracting parties acting in bad faith, which together with the unconscionable character of the agreements, render these agreements invalid.

It gets better; the document argues that the alleged "debts" are in fact illegal and this voidable because, among other things, the IMF breached it's own statutes, the EFSF violated clause 122(2) of the European Union treaty (TFEU), bilateral loans are illegal since they contravened the Greek Constitution and were entered into with entities that committed clear misconduct and private creditor debt is illegal as many of them (e.g. hedge funds) acted in bad faith and, in addition, these served to recapitalize private banks on the back of taxpayers.

In conclusion, from the summary:

Several legal arguments permit a State to unilaterally repudiate its illegal, odious, and illegitimate debt. In the Greek case, such a unilateral act may be based on the following arguments: the bad faith of the creditors that pushed Greece to violate national law and international obligations related to human rights; preeminence of human rights over agreements such as those signed by previous governments with creditors or the Troika; coercion; unfair terms flagrantly violating Greek sovereignty and violating the Constitution; and finally, the right recognized in international law for a State to take countermeasures against illegal acts by its creditors , which purposefully damage its fiscal sovereignty, oblige it to assume odious, illegal and illegitimate debt, violate economic self-determination and fundamental human rights.

Now let's see if the Greeks act on it.

[YMix]

It gets better; the document argues that the alleged "debts" are in fact illegal and this voidable because, among other things, the IMF breached it's own statutes, the EFSF violated clause 122(2) of the European Union treaty (TFEU), bilateral loans are illegal since they contravened the Greek Constitution and were entered into with entities that committed clear misconduct and private creditor debt is illegal as many of them (e.g. hedge funds) acted in bad faith and, in addition, these served to recapitalize private banks on the back of taxpayers.

Hell, yeah. Make it happen!

[Nonc Hilaire]

I doubt it will happen. Too many consequences for everybody. Another marvelous stalling tactic though. Tspiras keeps twisting and tightening that tendon which appears to connect Herr Schnauble's smile to his sphincter. If a Siemens engineer just designed a simple anal transmission Schnauble's wheelchair could be self-propelled like a rubber-band airplane.

But the EU will let things slide. After 'Grexit' would come 'Portu-gone' and then 'The Drain from Spain Stops Flowing to Louvain'. Ain't nobody got enough Euros for that!

[Endovelico]

Greece’s Proposals to End the Crisis: My intervention at today’s Eurogroup
Posted on June 18, 2015 by Yanis Varoufakis
http://yanisvaroufakis.eu/2015/06/18/gr ... #more-8055

The only antidote to propaganda and malicious ‘leaks’ is transparency. After so much disinformation on my presentation at the Eurogroup of the Greek government’s position, the only response is to post the precise words uttered within. Read them and judge for yourselves whether the Greek government’s proposals constitute a basis for agreement.

Colleagues,

Five months ago, in my very first Eurogroup intervention, I put it to you that the new Greek government faced a dual task:

We had to earn a precious currency without depleting an important capital good.

The precious currency we had to earn was a sense of trust, here, amongst our European partners and within the institutions. To mint that precious currency would necessitate a meaningful reform package and a credible fiscal consolidation plan.

As for the important capital we could not afford to deplete, that was the trust of the Greek people who would have to swing behind any agreed reform program that will end the Greek crisis. The prerequisite for that capital not to be depleted was, and remains, one: tangible hope that the agreement we bring back with us to Athens:

- is the last to be hammered out under conditions of crisis;
- comprises a reform package which ends the 6-year-long uninterrupted recession;
- does not hit the poor savagely like the previous reforms did;
- renders our debt sustainable thus creating genuine prospects of Greece’s return to the money markets, ending our undignified reliance on our partners to repay the loans we have received from them.

Five months have gone by, the end of the road is nigh, but this finely balancing act has failed to materialise. Yes, at the Brussels Group we have come close. How close? On the fiscal side the positions are truly close, especially for 2015. For 2016 the remaining gap amounts to 0.5% of GDP. We have proposed parametric measures of 2% versus the 2.5% that the institutions insist upon. This 0.5% gap we propose to bridge over by administrative measures. It would be, I submit to you, a major error to allow such a minuscule difference to cause massive damage to the Eurozone’s integrity. Convergence had also been achieved on a wide range of issues.

Nevertheless, I will not deny that our proposals have not instilled in you the trust that you need. And, at the same time, the institutions’ proposals that Mr Juncker conveyed to PM Tsipras cannot engender the hope that our citizens need. Thus, we have come close to an impasse.

At this, the 11th hour, stage of the negotiations, before uncontrollable events take over, we have a moral duty, let alone a political and an economic one, to overcome this impasse. This is no time for recriminations and accusations. European citizens will hold collectively responsible all those of us who failed to strike a viable solution.

Even if some, misguided by rumours that a Greek exit may not be so terrible or that it may even benefit the rest of the Eurozone, are resigned to such an event, it is an event that will unleash destructive powers no one can tame. Citizens from all over Europe will target not the institutions but their elected finance ministers, their Prime Ministers and Presidents. After all, they elected us to promote Europe’s shared prosperity and to avoid pitfalls that may harm Europe.

Our political mandate is to find an honourable, workable compromise. Is it so difficult to do so? We do not think so. A few days ago Olivier Blanchard, the IMF’s Chief Economist published a piece entitled ‘Greece: A Credible Deal Will Require Difficult Decisions by All Sides.’ He is right, the three operative words being ‘by all sides’. Dr Blanchard added that: “At the core of the negotiations is a simple question. How much of an adjustment has to be made by Greece, how much has to be made by its official creditors?”

That Greece needs to adjust there is no doubt. The question, however, is not how much adjustment Greece needs to make. It is, rather, what kind of adjustment. If by ‘adjustment’ we mean fiscal consolidation, wage and pension cuts, and tax rate increases, it is clear we have done more of that than any other country in peacetime.

- The public sector’s structural, or cyclically adjusted, fiscal deficit turned into a surplus on the back of a ‘world record beating’ 20% adjustment
- Wages fell by 37%
- Pensions were reduced by up to 48%
- State employment diminished by 30%
- Consumer spending was curtailed by 33%
- Even the nation’s chronic current account deficit dropped by 16%.

No one can say that Greece has not adjusted to its new, post-2008, circumstances. But what we can say is that gigantic adjustment, whether necessary or not, has produced more problems than it solved:

- Aggregate real GDP fell by 27% while nominal GDP continued to fall quarter-in-quarter-out for 18 quarters non-stop to this day
- Unemployment skyrocketed to 27%
- Undeclared labour reached 34%
- Banks are labouring under non-performing loans that exceed 40% in value
- Public debt has exceeded 180% of GDP
- Young well-qualified people are abandoning Greece in droves
- Poverty, hunger and energy deprivation have registered increases usually associated with a state at war
- Investment in productive capacity has evaporated.

So, the first part of Dr Blanchard’s question “how much of an adjustment has to be made by Greece?” needs to be answered: Greece needs a great deal of adjustment. But not of the same kind that we have had in the past. We need more reforms not more cutbacks. For instance,

- We need to adjust to a new culture of paying taxes, not to higher VAT rates that strengthen the incentive to cheat and drive law-abiding citizens into greater poverty
- We need to make the pension system sustainable by eradicating unpaid labour, minimising early retirements, eliminating pension fund fraud, boosting employment – not by eradicating the solidarity tranche from the lowest of the low of pensions, as the institutions have demanded, thus pushing the poorest of the poor into greater poverty and conjuring up massive popular hostility against another set of so called reforms

In our proposals to the institutions we have offered:

- An extensive (but optimised) privatisation agenda spanning the period 2015-2025
- The creation of a fully independent Tax and Customs Authority (under the aegis and supervision of Parliament)
- A Fiscal Council that oversees the state budget
- A short-term program for limiting foreclosures and managing non-performing loans
- Judicial and civil procedure code reforms
- Liberalising several product markets and services (with protections for middle class values and professions that are part and parcel of society’s fabric)
- Elimination of many nuisance charges
- Public administration reforms (introducing proper staff evaluation systems, reducing non-wage costs, modernising and unifying public sector payrolls).

In addition to these reforms the Greek Authorities have engaged the Organisation of Economic Cooperation and Development (OECD) to help Athens design, implement and monitor a second series of reforms. Yesterday I met with the OECD’s Secretary General Mr Angel Gurria and his team to announce this joint reform agenda, complete with a specific roadmap:

- A major Anti-corruption Drive and relevant institutions to support it – especially in the area of procurement
- Liberalising the construction sector, including the market and standards of construction materials
- Wholesale trade liberalisation
- Media – electronic and press code of practice
- One-Stop Business Centres that eradicate the bureaucratic impediments to doing business in Greece
- Pension System Reform – where the emphasis is on a proper, long-term, actuarial study, the phasing out of early retirements, the reduction in the operating costs of the pensions funds, pension fund consolidation – rather than mere pension cuts.

Yes, colleagues, Greeks need to adjust further. We desperately need deep reforms. But, I urge you to take seriously under consideration this important difference between:

- reforms that attack parasitic, rent-seeking behaviour or inefficiencies, and
- parametric changes that jack up tax rates and reduce benefits to the weakest.

We need a lot more of the real reforms and a lot less of the parametric type.

Much has been said and written about our ‘backtracking’ on labour market reform and our determination to re-introduce protection for waged workers through collective bargaining agreements. Is this some left-wing fixation of ours that jeopardises efficiency? No, colleagues, it is not. Take for example the plight of young workers in several chain stores who get fired as they approach their 24th birthday so that the employer hires younger workers in their place to avoid paying them the normal minimum wage which is lower for employees under the age of 24. Or take the case of employees who are hired part time for 300 euros a month, made to work full time and threatened with dismissal if they complain. Without collective bargaining, these abuses abound with ill effects on competition (as decent employers compete at a disadvantage with unscrupulous ones) but also with ill effects on pension funds and public revenues. Does anyone seriously think that the introduction of well-thought out collective bargaining, in collaboration with the ILO and the OECD, constitutes ‘reform reversal’, an example of ‘backtracking’?

Turning briefly to pensions again, much has been made of the fact that pensions account for more than they did in the past; as much as 16% of GDP. But consider this: Pensions have shrunk by 40% and the number of pensioners is stable. So, expenditure on pensions has fallen, not risen. That 16% of GDP is due not to spending more on pensions but, instead, to the dramatic drop in GDP which brought with it a similarly dramatic reduction in contributions due to the fall in employment and the rise of undeclared labour.

Our alleged backtracking on ‘pension reforms’ is that we have suspended the further reduction in pensions that have already lost 40% of their value when the prices of the goods and services that pensioners need, e.g. pharmaceuticals, have hardly moved. Consider this relatively unknown fact: Around 1 million families survive today on the meagre pension of a grandfather or a grandmother as the rest of the family members are unemployed in a country where only 9% of the unemployed receive any unemployment benefit. Cutting that one, solitary pension is tantamount to turning a family into the streets.

This is why we keep telling the institutions that, yes, we need pension reform but, no, you cannot just lob off 1% of GDP from pensions without causing massive, fresh misery and a fresh recessionary round as this 1.8 billion multiplied by a large fiscal multiplier (up to 1.5) is withdrawn from the circular flow of income. If large pensions still existed, whose curtailment would make a fiscal difference, we would do it. But the distribution of pensions is so compressed that savings of such a magnitude would have to eat into the pensions of the poorest. It is for this reason, I suppose, that the institutions are asking us to eliminate the solidarity pensions supplement to the poorest of the poor. And it is for this reason that we counter-propose proper reforms: a drastic reduction, almost elimination, of early retirements, consolidation of pension funds and interventions in the labour market that reduce undeclared labour.

Structural reforms promote growth potential. But mere cutbacks in an economy like Greece’s promote recession. Greece must adjust by introducing genuine reforms. But at the same time, going back to Dr Blanchard’s answer, the institutions need to adjust their definition of growth-enhancing reforms – to acknowledge that parametric cuts and tax hikes are not reforms and that, at least in the case of Greece, they have undermined growth.

Colleagues have remarked in the past, and may do so again, that our pensions are too high compared to their older people and that it is unacceptable for the Greek government to expect them to foot our pension bill. Let me be clear on this: We are never going to ask you to subsidise our state, our wages, our pensions, our public expenditure. The Greek state lives within its means. Over the past five months we have even managed, despite zero market access and zero disbursements, to repay our creditors. We intend to keep doing so.

I understand that there are concerns that our government may slip into a primary deficit again and that this is the reason the institutions are pressing us to accept large VAT rises and large pension cuts. While it is our view that the announcement of a viable agreement will suffice to boost economic activity sufficiently to produce a healthy primary surplus, I understand perfectly well that our creditors and partners may have cause to be sceptical to want safeguards; an insurance policy against our government’s possible slide into profligacy. This is what lies behind Dr Blanchard’s call for the Greek government to offer “truly credible measures.” So here comes an idea. A “truly credible measure”.

Instead of arguing over half a percentage point of measures (or on whether these tax measures will have to all of the parametric type or not), how about a deeper, more comprehensive, permanent reform? An automated hard deficit brake that is legislated and monitored by the independent Fiscal Council we and the institutions have already agreed upon. The Fiscal Council would monitor the state budget’s execution on a weekly basis, issue warnings if a minimum primary surplus target looks like being violated and, at some point, trigger automated across the board, horizontal, reductions in all outlays in order to prevent the slide below the pre-agreed threshold. That way a failsafe system is in place that ensures the solvency of the Greek state while the Greek government retains the policy space it needs in order to remain sovereign and able to govern within a democratic context. Consider this to be a firm proposal that our government will implement immediately after an agreement.

Given that our government will never again need to borrow from your taxpayers or from the taxpayers standing behind the IMF, there is no sense in a debate between member-states that compete on whose pensioners are poorer, instigating a race-to-the-bottom. Instead, the debate moves on to debt repayments. How large should our primary surpluses be? Does anyone seriously believe that the growth rate is independent of the primary target set? The IMF understands fully that the two numbers are linked endogenously and that this is the reason why Greece’s public debt must be looked at at once.

Our large debt overhang should be thought of as a large unfunded tax liability. While it is true that the EFSF and GLF slices of our debt are long-dated and the interest rate is not large, the Greek state’s unfunded tax liability, our debt, features a lumpy component that impedes investment and recovery today. I am referring here to the 27 billion of SMP bonds still held by the ECB. This is a short-dated unfunded liability that potential investors in Greece take a look at it and turn back because they can see the funding gap this part of the debt creates instantly and because they recognise that this lump of 27 billion on the ECB books stop Greece from taking advantage of the ECB’s quantitative easing at the very moment when this program is unfolding and is reaching its maximum capacity to come to the aid of countries buffeted by deflation. It is a cruel irony that the country most afflicted by deflation is the one that is excluded from the ECB’s anti-deflation remedy. And it is excluded because of this 27 billion lump.

Our proposal on this front is simple, efficient and mutually beneficial. We propose no new monies, not one fresh euro, for our state. Imagine the following three-part agreement to be announced in the next few days:

Part 1: Deep reforms, including the automated hard deficit brake that I mentioned.

Part 2: A rationalisation of Greece’s debt repayment schedule along the following lines. First, to effect an SMP BUY-BACK Greece acquires a new loan from the ESM, then purchases the SMP bonds back from the ECB and retires them. To underpin this loan, we agree that the deep reform agenda is the common conditionality for successfully completing the current program and for securing the new ESM arrangement that comes into operation immediately afterwards and runs concurrently with the continuing IMF program until the end of March 2016. Short-term funding relies on the outstanding disbursement from the current program and medium to long term funding is completed by the return of the SMP profits, coming up to 9 billion out of the 27 remaining billions, which go into an escrow account to be used in order to meet Greece’s repayments to the IMF.

Part 3: An investment program for kick-starting the Greek economy funded by the Juncker Plan, the European Investment Bank – with which we are in talks already – the EBRD and other partners who will be invited to participate also in conjunction with our privatization program and the establishment of a development bank that aims at developing, reforming and collateralizing public assets, including real estate.

Does anyone truly doubt that this three-part announcement would dramatically change the mood, inspire Greeks to work hard on hope of a better future, invite investors to a country whose asset prices have fallen so dramatically, and give confidence to Europeans that Europe can, even at the 11th hour, do the right thing?

Colleagues, at this juncture it is dangerously easy to think that nothing can be done. Let us not fall prey to this state of mind. We can forge a good agreement. Our government is standing by, with ideas and with the determination to cultivate the two forms of trust necessary to end the Greek drama: Your trust in us and the trust of our people in Europe’s capacity to produce policies that work for, and not against, them.

Present day Greeks may not be genetically the descendants of the Old Greeks, but they are still a lot more intelligent than Germans and other Northern Europeans... This piece by the Greek Finance Minister is proof of that. Only idiots will fail to see he is right and the "institutions" are wrong...

[noddy]

blink.

it reads like a anglogermanic treatise on whats wrong with the greeks to me.

words are easy, implementing is the bit others are cynical about.

[Simple Minded]

blink.

it reads like a anglogermanic treatise on whats wrong with the greeks to me.

words are easy, implementing is the bit others are cynical about.

I think the only proper, acceptable response to those leaders who wish to change culture is Seig Heil!

[Endovelico]

blink.

it reads like a anglogermanic treatise on whats wrong with the greeks to me.

words are easy, implementing is the bit others are cynical about.

I think the only proper, acceptable response to those leaders who wish to change culture is Seig Heil!

To change culture???!!!... That's going back to colonial times, when the "civilized" peoples tried to civilize the "savages"... The issue here is Greece being capable of finding a way to meet its responsibilities towards both its people and its creditors. The way to achieve that must be left to Greece, and not to the creditors. We have already seen how disastrous the creditors ways are to the Greek people, so let's give Greece a chance to prove they can do better. But the trouble is that the creditors are worried about Greece being able to find an alternative way which will undercut the creditors pillage of the debtor countries. Sieg Heil! is indeed a proper comment on the creditors' actions...

[Heracleum Persicum]

.


Europe shouldn’t view itself as a “hub of the universe” and it has to understand that
the center of world economic development is shifting to other regions,
said Greek Prime Minister Alexis Tsipras, speaking at St. Petersburg International Economic Forum.

“The world differs from what it was before. We in Europe had an illusion for a long time of literally being a hub of the universe, as a center of the world and continued to see and rely only on our direct surroundings,"

Greece likely to exit euro and EU without deal

.

[YMix]

.Europe shouldn’t view itself as a “hub of the universe” and it has to understand that
the center of world economic development is shifting to other regions,
said Greek Prime Minister Alexis Tsipras, speaking at St. Petersburg International Economic Forum..

It's shifting to Eurasia, much to Washington's chagrin.

[Simple Minded]

blink.

it reads like a anglogermanic treatise on whats wrong with the greeks to me.

words are easy, implementing is the bit others are cynical about.

I think the only proper, acceptable response to those leaders who wish to change culture is Seig Heil!

To change culture???!!!... That's going back to colonial times, when the "civilized" peoples tried to civilize the "savages"... The issue here is Greece being capable of finding a way to meet its responsibilities towards both its people and its creditors. The way to achieve that must be left to Greece, and not to the creditors. We have already seen how disastrous the creditors ways are to the Greek people, so let's give Greece a chance to prove they can do better. But the trouble is that the creditors are worried about Greece being able to find an alternative way which will undercut the creditors pillage of the debtor countries. Sieg Heil! is indeed a proper comment on the creditors' actions...

Endo,

I was tongue-in-cheek referring to a hypothetical response of the Greek people to the request of their government, that the way to rebuild the lack of trust other Europeans seem to have for the Greek people is for the Greeks to act more like Germans........

[Endovelico]

And don't forget to free Portugal too...

[Alexis]

No matter what one thinks of The Economist, their latest cover page is a good one.

[YMix]