Source: www.nytimes.com - Friday, July 03, 2015 Economic failure extends far beyond Greece.
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How the world sees Greece
Saturday, July 4, 2015
Greek Bailout Referendum Campaigns Adopt Dramatic Tones to Win Over Voters
ATHENS—The “yes” and “no” campaigns in Greece's bailout referendum rested on Saturday after a short, sharp fight this week aimed at winning over ...
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EU rules bent again: Bankrupt Greece looks set to get 'payment holiday'
After a week in which Greece defaulted, closed its banks and began rationing cash, Greeks vote on Sunday on whether to accept or reject tough ...
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Greece's referendum shows you can have too much democracy
“Either you give in to ultimatums or you opt for democracy.” With that, Greek prime minister Alexis Tsipras encouraged citizens to pass judgment on the ...
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Greeks mull consequences of crucial bailout referendum
ATHENS, Greece (AP) — With the crucial austerity referendum a day away, Greeks contemplated Saturday how their vote will shape their future and the impact a "yes" or "no" will have on the country's youth.
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Tsipras both hero and villain ahead of Greece bailout referendum
A warrior for the "No" supporters, an "emperor with no clothes" for the "Yes" camp - thousands of people demonstrated at rival rallies in Athens where Prime Minister Alexis Tsipras was both hero and villain.
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Greece crisis live: Referendum 'no' vote would trigger Armageddon
… — New Democracy, To Potami and Pasok — collectively won more votes in … view. Greece's Ethnos: "The Greeks choose Europe" #Greece front pages Ethnos: "The Greeks choose …
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Voting starts at 7:00 on Sunday, first 'safe' estimates at 21:00
The first safe estimate on the results of Sunday's referendum will be known two hours after the ballots close, at about 21.00 Greek time, Singular Logic - the company responsible for handling and transmitting the results - said on Friday. Mihalis ...
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ND’s Samaras: Government Wants to Lead Greece Out of the Eurozone
ATHENS- New Democracy leader Antonis Samaras accused on Friday Prime Minister Alexis Tsipras of lying to Greeks and of misinterpreting the IMF’s debt sustainability analysis published yesterday, while he argued that the government wants to get the country out of the euro. “The same report blames his [Tsipras’] government for the deterioration of Greece’s economy […] The post ND’s Samaras: Government Wants to Lead Greece Out of the Eurozone appeared first on The National Herald.
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Greece's Prime Minister Tsipras Faces Uncertain Political Future
ATHENS, Greece (AP) — Whether Greeks decide in Sunday's referendum to accept their lenders' bailout deal or reject it, the government's hold on power may be shakier than its brash prime minister has calculated, analysts say. Prime Minister Alexis Tsipras is banking on fellow Greeks to deliver a resounding "no" in the popular vote that he believes will give him strong leverage in his negotiations with creditors to swing a softer bailout deal for a country ravaged by years of harsh austerity, deep recession and crushing poverty. A win for the No campaign, the reasoning goes, could also furnish Tsipras with an endorsement for his five-month rule and allow his government to consolidate — and extend — its grip on power. That may not be the case, analysts say, since a "no" vote could still plunge Tsipras' position into uncertainty if negotiations drag on with lenders who see such the outcome as a Greek snub of the euro. Without a quick deal, banks could stay shuttered to keep their reserves from running dry. "A deteriorating import-dependent economy will provoke a rapid decline in public support for the government and fresh elections may become inevitable, but this will take time," said Dimitri Sotiropoulos, political science professor at the University of Athens. A win for the Yes campaign could cast Tsipras' public mandate in doubt and force him to broaden his coalition government, political analyst George Sefertzis said. The new government may have Tsipras' radical left Syriza party at its core, but the cabinet's composition could change to include "respected personalities who can be recruited to fill that role." Syriza emerged from the political fringes in January as Greek voters sought an alternative to what they saw as a bankrupt political establishment they blame for opening the door to half a decade of punishing salary and pension rollbacks, steep job cuts and hefty taxes. Just a few years ago, the country's two main political forces, the right-wing New Democracy and the socialist PASOK parties, commanded some 80 percent of the vote between them. Now, with many Greeks seeing them as kowtowing to the lenders' diktats, their support was dwindled. Tsipras' youth, unorthodox style and pledges to fight the good fight for the country's poorest endeared him to many and persuaded some that he could take on the institutional behemoths that decide the economic fate of entire nations. But months of talks without real results have eroded the Syriza-led government's credibility in the eyes of Europe's power circles. "This government doesn't trust the institutions of the EU and the IMF, and those institutions trust the Greek government even less," said Sotiropoulos. Tsipras's gambit appears to rest on whether he can clinch a deal quickly so that banks can reopen and get money flowing to businesses again. Tsipras told private TV station Antenna Thursday that he sees a deal with creditors emerging "within 48 hours" after the referendum. His finance minister, Yianis Varoufakis, told Ireland's RTE radio Friday that an agreement with creditors "is more or less done" and that European officials had put forward "very decent proposals" this week. But Greece's creditors — the European Union and the International Monetary Fund — are unlikely to cave in on demands for tough austerity measures, said Sotiropoulos. The creditors may offer a vague pledge to consider restructuring Greece's crushing debt, but that probably won't happen until the government faithfully implements the terms of the deal for at least 12 to 18 months, said Sotiropoulos. "A 'no' win would be a Pyrrhic victory for the Greek government. You can't survive on Pyrrhic victories because you need funds to keep the country running," he said. Sefertzis said Tsipras' political decline may come much faster even with a referendum "no" in his pocket as he would have little time to get to keep the country from economic collapse. With an economy in tatters, Tsipras' hold on power would be a "matter of days rather than weeks," said Sefertzis. The latest opinion polls put the No and Yes camps in a dead heat as divisions have emerged even within the Greek government. A lawmaker from its right-wing junior coalition partner was kicked out for backing a "yes" vote. Writing in the liberal daily "Ta Nea," pollster Elias Nikolakopoulos said any predictions about the outcome on Sunday "are exceedingly precarious" because party allegiances in this vote are fluid. Speaking on Ireland's RTE radio, Varoufakis even suggested that a "yes" win is possible, albeit by a narrow margin. But even then, he insisted his party would come out "stronger and united." "Syriza will remain the only credible party in the parliament, our young leader will remain the only credible leader of this nation," Varoufakis said. There may be credence to that. Sotiropoulos said in case of a "yes" win, Syriza could remain part of any new national unity government given its large support. He said it would make sense for Greece's creditors to compensate the country if a "yes" vote prevails by easing austerity, earmarking more developments funds and finding ways to alleviate the debt burden without necessarily resorting to write-offs -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
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Euro ‘Allies’ tried to block IMF’s Greek Debt Report but US pushed it through
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 […]
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EP Schulz threatens Greeks with Armageddon – Can we sue him for “moral damage” & “breach of public office”?
“Without new money, salaries won’t be paid, the health system will stop functioning, the power network and public transport will break down and they won’t be able to import vital goods because nobody can pay” President of European Parliament Martin Schulz warned Greek voters one day before the crucial Referendum […]
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Pro-Greece rallies STORYMAP: How the world is expressing solidarity with anti-austerity campaign
The worldwide protests expressing solidarity with the Greek people ahead of Sunday’s referendum on a cash-for-reform deal with its Troika of creditors, have all been gathered in Ruptly’s interactive map.Read Full Article at RT.com
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This Greek Tragedy Could Be Europe's As Well
However the Greeks vote on Sunday, they are likely to be in for another round of suffering. If they support their government by voting "no" (probably the wiser vote), it is likely to force Greece to abandon the euro for its own currency. The cost of living and inflation will spike, although a cheaper currency will eventually allow the country to become more competitive. If they support Angela Merkel with a "yes" vote, they will be capitulating to even more austerity, high unemployment and poverty in virtual perpetuity. Like the chorus of a drama played out in some ancient Athenian amphitheater, Europe's politicians and pundits chant that the Greeks deserve their fate; they violated the sacred dictum of the Gods of Finance that countries must not live beyond their means. Therefore, they must be punished. But the act of hubris that brought the wrath of Merkel and the bankers down upon Greek heads was not that they borrowed too much money. Greece is hardly the only country having trouble paying its bills. And these same bankers have been refinancing Greece's debt for the past five years, knowing quite well that it could not pay it back. The arrangement was part of a sweetheart deal between the Greek elites and the country's creditors. In essence, the European bankers lent money to the Greek government to pay the debts, plus interest, that it owned -- to the bankers. The refinancing was conditioned on dramatic cutbacks in domestic social spending and the sell-off of public property to private investors. And despite the bankers' talk of "reform," they were content to allow the Greek elite to continue evading taxes - which is a major reason why the Greek public sector is chronically short of money. The financial oracles foretold that hard times would drive down Greek wages, which would attract more investment and restart economic growth. But as economic science, as opposed to free-market idolatry, predicted, the spending cuts hobbled growth and drove the country deeper into the red. The bankers' answer: more austerity. Economy is a word derived from the Greek. As is democracy. And by January 2015, a fed-up Greek demos elected Alex Tsipras of the leftist Syriza party to be prime minister. Tsipras does not deny Greece's' responsibility for its debt, but he argues that those who lent to Greece knowing that it could not pay back the loans were also responsible. Therefore, they should share Greece's punishment by forgiving some of the debt. This of course is the doctrine behind private sector bankruptcy settlements throughout the developed world. But Tsipras' proposal that investors as well as workers share the pain is a blasphemy that Merkel and the others who represent the Gods of Finance can not tolerate. As the history of the negotiations between Syriza and Greece's creditors over the last few months makes clear, Merkel's real objective is to destroy Syriza, setting an example to others in Spain, Portugal, and other weaker economies who might be tempted to make a similar challenge to the divine right of multinational finance to dictate their lives. But the triumph of the European financial elites over the continent's left may be shorter lived than they think. Their hard line against Syriza may be seeding something far more threatening to the dream of a united Europe -- the return of the old Gods of Nationalism. Mobilizing public opinion against the Greeks has produced some ugly sentiments, e.g., workers and taxpayers in Germany expressing contempt for "lazy, profligate" Greeks. And as Merkel has now become the de factor leader of Europe, there is growing resentment around the continent against the "selfish, arrogant" Germans. There is a limit to the people's pain. The bloody history of Europe tells us if they cannot find relief from the center or the left, they will go elsewhere. In Greece, the fascist Golden Dawn Party is waiting in the wings to divert popular frustration to their reactionary anti-immigrant agenda. Further off-stage -- in France, Britain, Italy, and Germany itself -- one can hear nationalist rumblings that the institutions of a united Europe were created to stifle with widely shared prosperity. The ancient Greeks were polytheistic -- they had many jealous gods. It may be time for Europe's leaders to give less attention to the gods of Finance, and more to the gods of History. Otherwise, they may find themselves having revived a nasty old drama that we've all seen before. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
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Foreign Journalists Flood Athens to Cover Greek Referendum
Greece is under the spotlight, receiving global interest in light of tomorrow’s referendum. As expected tomorrow’s vote will be covered by hundreds of foreign news agencies. Foreign journalists flooded the Greek capital, most of them currently located in facilities set up at Zappeion, where they will be able to get informed about the referendum developments at all times. According to the General Secretariat, 700 journalists have been accredited so far, among them representatives of international media from China, Brazil, Iran and Mexico, 21 international agencies, 81 TV stations, 58 newspapers and 17 radio stations. The General Secretariat has created a website where people can watch the continuous flow of information regarding the referendum process and official statements. The site also includes some historical data about the referendum institution in Greece and other European countries. State Minister Nikos Pappas visited the Zappeion facilities, along with the General Secretary of Information, Lefteris Kretsos. Pappas made the following statement: “These facilities are a way for the Greek government to stress that it is available to the media to allow them to do their job. I would like to thank the employees and the Secretary General of Information and Communication who have made great efforts over the last days. I would like to stress the media’s importance in informing citizens on time and their contribution to the smooth conduct of the referendum process.”
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A family divided: Emotions run high ahead of Greek vote
ATHENS, Greece (AP) — Dimitris is voting "yes" because he fears Greece would be in danger if it leaves the European Union. His daughter Alexandra is voting "no" because she is tired of richer European nations bossing Greece around.
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Overspending, austerity, euro flaws have pushed Greece to brink despite bailouts
After two bailouts totaling 240 billion euros ($266 billion) and six years of depression, spending cuts and lost jobs, Greece teeters on the edge of collapse.
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A family divided: Emotions run high ahead of Greek vote
ATHENS, Greece (AP) — Dimitris is voting "yes" because he fears Greece would be in danger if it leaves the European Union. His daughter Alexandra is voting "no" because she is tired of richer European nations bossing Greece around.
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A 29-year-old has crowdsourced $2 million to save Greece
In what is being hailed one of the most successful Indiegogo campaigns of all time, 29-year-old Thom Feeney has raised nearly €1.8 million to save Greece, (almost $2 million). Within the first 3 days, over 72,000 backers chipped in to help – the most in Indiegogo history, according to Indiegogo. The campaign is now 7 days old, and that count is up to over 101,000 people. He's trying to raise cash to help the Greek people make the €1.6 billion payment (or about $1.8 billion) that Greece owed the IMF. Greece missed that payment and is in arrears. Feeney explained his motivations on the Indiegogo campaign page: "All this dithering over Greece is getting boring ... The European Union is home to 503 million people, if we all just chip in a few Euro then we can get Greece sorted and hopefully get them back on track soon. Easy." Well, maybe not that easy. Even though the campaign has gotten 100,000 people to make a pledge, none of them will be on the hook to pay anything unless the campaign reaches its goal of €1.6 billion. Indiegogo says that the campaign is officially "0% funded with 61 hours left." Anything can happen in a couple of days but it's not looking good for this to become the winning idea for Greece, even though, as we previously reported, Feeney was offering some enticing goodies to backers if the campaign was a success: Pledge €3 and get a postcard sent from Greece of Alex Tsipras, the Greek Prime Minister. We'll get them made and posted in Greece and give a boost to some local printers and post offices. Pledge €6 and get a Greek Feta and Olive salad. Pledge €10 and get a small bottle of Ouzo sent to you. Pledge €25 and get a bottle of Greek wine. Pledge €3 and get a postcard sent from Greece of Alex Tsipras, the Greek Prime Minister. We'll get them made and posted in Greece and give a boost to some local printers and post offices. Pledge €6 and get a Greek Feta and Olive salad. Pledge €10 and get a small bottle of Ouzo sent to you. Pledge €25 and get a bottle of Greek wine. SEE ALSO: Back in 2000, the CIA made 8 predictions on what life would be like in 2015 Join the conversation about this story » NOW WATCH: Forget the Apple Watch — here's the new watch everyone on Wall Street wants
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Greek-Americans visit ancestral homeland despite crisis
Her travels included a visit to the Greek island of Meganisi, about 250 miles from Athens, to celebrate her sister's wedding. As she said goodbye to the ...
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Greek referendum voters unclear on question, potential aftermath
The acting Greek foreign minister at the time, the larger-than-life Theodoros Pangalos, would step into the haze of a smoky press centre close to a ...
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Varoufakis: Partners will not abandon Greece
Schauble: Greece could stay without Euro for a short period if it wants
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Greece Is One Of Four Risk Confronting The Market This Week
Greece is attracting much of the attention, and deservedly so, with the referendum looming for this Sunday, but Greece is by no means the only risk facing the market. In fact, Greece may not even make the top three in terms of biggest risks to the market. The four risks facing [...]
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Greek referendum: Germany says it won’t leave Greece in the lurch
German finance minister, Wolfgang Schäuble, appears to back No vote in last-minute intervention on SaturdayInvestors around the world held their breath on Saturday as 10 million Greeks prepared to vote in a referendum that presents the biggest challenge to the euro since its adoption.After more than five months of eyeball-to-eyeball confrontation between Alexis Tsipras’s radical left-led government and Greece’s creditors, and with only hours to go before voting began, one of the most hawkish of the lenders appeared to blink. Germany’s finance minister, Wolfgang Schäuble, until now even more of a hardliner than his chancellor Angela Merkel, suddenly turned a more conciliatory face towards Athens. Continue reading...
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The streets are calm but Greece is haunted by fear of civil strife
The referendum debate has entered every family and every home – and there is a growing alarm that, no matter what the result, the divisions will not healFearful, angry, divided. This is Greece on the eve of a referendum that could define the country for generations to come. After five years at the centre of Europe’s eviscerating debt crisis, Greeks will have their rendezvous with history on Sunday – and many fear that they will live with the bitter legacy of the vote for decades.“We have a government in panic, people being called traitors and German collaborators, and a vote of despair,” said the prominent sociologist Aliki Mouriki. “I worry that if things go wrong, if more shortages of food and medicines appear, we’ll soon be looking at a situation where primitive instincts come to the fore.” Related: Greek referendum: Germany says it won’t leave Greece in the lurch Continue reading...
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Protesters in Britain urge cancellation of Greece's debts on eve of referendum
Rallies held in Bristol, Edinburgh, Leeds, Liverpool and London in support of Greek people who are preparing to vote on whether to accept austerity packageProtesters in Britain have urged the cancellation of Greece’s debts as the country’s voters prepared to vote in its referendum. Events took place around the UK in support of the Greek people as they decide whether to accept an austerity package put forward by international lenders in return for a further bailout from the eurozone rescue fund. Related: Greek crisis: Yanis Varoufakis accuses Europe of terrorism - as it happened Continue reading...
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With their nation on the brink, Greek voters get a chance to pull back
ATHENS — After five months of bitter backroom talks and poisonous public smack-downs between officials in Greece and Europe, the fate of this nation-on-the-brink will shift into the hands of the Greek people on Sunday.Read full article
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Varoufakis: Yes or no, debt deal will be made Monday
Athens will seal a debt deal regardless of the referendum's results, Greek Finance Minister Yanis Varoufakis has told a German newspaper. He accused his German counterpart of wanting a Grexit over two years ago.
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Printing the drachma: what awaits a post-Euro Greece
Introducing a new currency is no small feat. Recent cases - East Germany's adoption of the deutsche mark, the Czech-Slovak divorce of 1993, and the creation of the euro itself - benefited from years of careful planning and broad popular support. If ...
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Greece on the brink ahead of crucial referendum today
Greek Prime Minister Alexis Tsipras has told supporters a 'no' vote is the ticket out
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Myths about Greece's expensive referendum
What if the expensive referendum on Sunday ends up being largely irrelevant to the issues that have caused such ugly divisions between Greece and Europe?
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‘Greek referendum is about two visions of Europe,’ Syriza minister tells France 24
On the eve of a critical referendum, Greek minister and senior Syriza party member Giorgos Katrougalos tells FRANCE 24 that Europe’s elites are “allergic” to popular votes and are seeking regime change in Greece.
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Greeks fly home to vote in knife-edge referendum
With the stakes so high for Greece in Sunday's knife-edge referendum, some Greeks living abroad have flown home to cast their votes in hopes of tipping the outcome one way or the other.
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Box Office: 'Jurassic World' Tops 'The Dark Knight,' 'Inside Out' Tops Friday
We'll find out tomorrow whether Inside Out or Jurassic World ends up topping the July 4th holiday weekend frame. They are both going to do over/under $30 million for the frame and they will both drop around 45% from last weekend. The only reason rank matters is this: If Inside Out tops the box office in its third weekend, it will lose what would have been an easy record for the biggest-grossing movie ever to not top the box office over a given weekend. The current record holder is My Big Fat Greek Wedding at $242m, a number that Inside Out will flirt with tomorrow or Monday. Obviously I'm sure Walt Disney cares as much about this record as they did about whether Inside Out topped its debut weekend back in mid June. But as a student of this kind of weird box office trivia, I was looking forward to crowning a new victor early next week.
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WRAPUP 3-Europe won't let Athens go under, says Greek minister
The left-wing government is urging a 'No' vote, saying Greece's European partners are bluffing when they warn that would mean a Greek departure ...
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Greek voters struggle to understand fallout of bailout referendum
In the space of a week Greece has slid from difficult negotiations with its creditors into full-on crisis mode with banks on life support and a seminal referendum just a heartbeat away — one that could start to unravel the country's cherished place in the heart of the EU.
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Finance minister accuses creditors of trying to 'terrorise' Greeks
Greece's finance minister accused creditors of trying to "terrorise" Greeks into accepting austerity, warning Europe stood to lose as much as Athens if the country was forced from the euro after a referendum today on bailout terms.
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Merkel shuts down Greek protesters
… "Oxi" - the Greek for "No" - … ; vote in Sunday's Greek referendum on whether to accept … means 'Yes' in Greek". The German Chancellor then … response. Greek Prime Minister Alexis Tsipras is banking on fellow Greeks to …
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Flawed bailouts, political missteps brought Greece to brink
FRANKFURT, Germany (AP) — After two bailouts totaling 240 billion euros ($266 billion) and six years of depression, spending cuts and lost jobs, Greece teeters on the edge of collapse.
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FOCUS interview: ND MP proposed to creditors “to reject Tsipras’ Reform List” & “impose capital controls”
Do Greece’s creditors follow and apply advises proposed by conservative New Democracy? It is highly interesting that ND parliamentary group leader and former Health Minister Adonis Gerogriadis had already “advised” creditors to not adopt Tsipras’ plan and instead economically drain the country and impose capital controls. Georgiadis’ proposal came after […]
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EBA chief dismisses rumours over haircuts to Greek deposits
The chairman of the European Banking Authority (EBA) Andrea Enria said on Saturday he was unaware of any planned haircuts to deposits held in Greek banks due to the country's debt crisis. "I am not aware of any plans to introduce haircuts to retail depositors of Greek banks, as reported in the media this morning," Enria said in a statement. Britain's Financial Times, citing bankers and people with knowledge of the measures, said on Saturday that Greek banks were preparing contingency plans for a possible "bail-in" of depositors amid fears Greece was heading for collapse.
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Bailout Referendum Lays Bare Deep Schisms Among Beleaguered Greeks
While nobody knows what the vote’s outcome will bring, one thing is certain: Prime Minister Alexis Tsipras’s gambit has deepened rifts.
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The Final Mistake of a Bad Negotiation
The decision to hold a referendum on the creditors' proposal is the final act in a drama that started five months ago, when the new Greek government initiated a new round of negotiations with the country's creditors. Although the negotiation may have not come to an end yet, the rapid and dramatic developments of the past days, which have already caused significant changes, some of which might not be easily reversible, makes it imperative to take a stand on the current state of affairs. In my view, the decision to hold a referendum is a mistake, maybe the last one, in an overall bad negotiation. The Greek government made three key negotiating mistakes. Someone with basic knowledge of the history and theory of international relations can easily identify them. More specifically: The government delayed for too long the conclusion of the negotiations. It is common knowledge that time always runs in favor of the more powerful party in a negotiation. This is even truer when the position of the weaker party is weakened day by day, thus reducing the prospects of achieving a good deal. Obviously, the weak party in this negotiation is Greece. Given that throughout the negotiation period there has been increased uncertainty as to its outcome, the real economy has stalled, as investment and consumption decisions have been suspended, while Greek citizens began to withdraw their deposits from the banks effectively causing a "slow" bank run. Under these circumstances, the Greek banks started to depend on the emergency liquidity assistance mechanism (ELA) for their liquidity and ultimately for their survival, whereas the Greek government became increasingly dependent on the disbursement of funding by the creditors. In other words, with every additional day of delay the Greek government was becoming more dependent on those it was negotiating with! The fact that the first months of negotiations were wasted on purely symbolic issues (such as the new name of the Troika or the place of meeting of the technocrats) resulted in a prolongation of negotiations, which undermined the Greek side's bargaining power, while at the same time increased the cost of any agreement, due to the increasing recession, uncertainty and the resulting decline in government revenue. The government adopted the strategy of "creative ambiguity." Again, it is well-known that ambiguity always favors the more powerful party in a negotiation, while explicit and stringent rules favor less powerful parties. After all, this is the reason why the poorest countries are always trying to resolve their problems in international fora rather than through bilateral agreements with developed countries when the power asymmetry is maximized. For several months, the Greek side refrained from submitting concrete proposals in the negotiation and pursued a "political" solution to the problem. Even the much debated agreement of February 20, contained so many ambiguities that led to totally different interpretations by the creditors and the Greek side; as a result, negotiations from that day onwards have largely turned into a dialogue of the deaf. As already mentioned, specific commitments at the very beginning of the negotiation, by a government with a fresh popular mandate for renegotiation, could have been the basis of a fair agreement, especially since external conditions (QE program, Juncker investment plan and economic recovery in the Eurozone) left considerable room for optimism that the implementation of the agreement would be more easily achieved in the medium term, since the above conditions would facilitate a return to growth. The Greek government lost its credibility. Traditionally, and especially after the onset of the crisis and the revelation of the "creative ambiguity" of Greek statistics, the credibility of Greek governments has been low. Nevertheless, the new Greek government was given the benefit of the doubt, due to the fact that it had not exercised power in the past, which was taken as evidence of its independence from vested interests, and its distance from the practices of ruling parties of the past, which had undermined the country's credibility. This "stock" of credibility was quickly depleted, however, as a series of actions gave rise to doubts about the intentions of the Greek government: declarations by leading ministers who expressed their opposition -- often with harsh wording -- to the content and direction of ongoing negotiations, at the same time that the finance minister and the prime minister himself, were declaring progress in the negotiations and an imminent agreement; double-talk, with statements of utterly different content and style when addressed to domestic audiences and when abroad; implementation of unilateral actions, such as the reinstatement of civil servants, although the government had committed to abandon such plans based on the agreement of February 20; delay in the submission of specific proposals as described above, and so on. All these actions have undermined the government's credibility in the context of the negotiations. It seems that this attitude has not been accidental -- after all, since the very beginning of the negotiations the Greek side has conceived the negotiation as a "game of chicken," i.e. a negotiation where both sides appear unyielding until someone succumbs. However, this approach is highly problematic. First, even assuming that this particular game correctly reflects the dynamics of the negotiation, according to what has been said above, it is obvious that the one to succumb first could not be any other than the Greek side. Moreover, it is not at all certain that we should view the negotiation in this way. Negotiations like these, which take place between the Greek government and its European partners, are "repeated games," where ex-ante knowledge that the same parties will have to negotiate again in the future makes the issue of credibility a top priority, as well as a requirement to achieve better results for everyone. The adoption of tactics that reduce credibility inexorably leads to negative results. As a result of these negotiation practices, we have been led to an impasse in the negotiation and hence the decision to hold a referendum. One could reasonably wonder, however: Is it only the Greek side to blame for this conclusion? We ought to remember that the institutions had already demonstrated substantial flexibility, by having accepted a significant reduction of the primary surplus, not only for 2015 but also for the years to come, a success that should be attributed to the government. Nevertheless, it is obvious that the European partners did not demonstrate the necessary adaptability and flexibility during the past week, when the government tabled a substantial proposal with measures approximately worth €8 bn. Despite the significant inadequacies of the Greek proposal (some of its provisions were not particularly realistic as to their performance, whereas the proposed mix of measures was highly recessionary), the reaction of the other side was unexpected and did not facilitate a quick and unimpeded agreement. According to available sources, however, until the evening of June 27 the negotiation was continuing and a more favorable proposal was on the table -- the remaining differences were very small. Why, then, was the decision to hold a referendum made? Several government officials have already admitted that this was a move of negotiation tactics, in an attempt to elicit a better agreement from the creditors. The decision to hold a referendum cannot be easily understood. The decision is problematic because it entails all three negotiating mistakes: it is unclear, it came at the wrong time and exhausted completely the credibility of the government. As far as ambiguity is concerned, it is not clear what the referendum would offer the government from a bargaining perspective, given that the problem of the government does not lie in its democratic legitimacy as it has a fresh mandate. In fact, in view of the very problematic referendum question, which relates to a draft proposal (not even the final one), and the government's unwillingness to clarify what each answer ("Yes" or "No") would exactly mean for the day after (thus the citizens are literally asked to vote blindfolded), the response to the referendum would not offer a definite solution to the impasse. Even a "No" answer -- which is promoted by the government would have an unclear impact, as it concerns a specific proposal. If the creditors table a slightly better proposal, changing for example two or three paragraphs, will it be accepted? In other words, did we walk into this unprecedented adventure for a few hundred million? If this is the case, the referendum process, which constitutes a quintessential democratic procedure, has been completely abused. Moreover, contrary to the government's intentions, the reactions of the European partners reveal that a "No" answer would minimize the chances of a new agreement. In addition, the timing of the referendum is totally incorrect. If it is part of the negotiation tactics, then why did it come at the last moment, when it is known in advance that the program is coming to an end and that the banking system of Greece will have no access to liquidity from the European Central Bank? In other words, why is the referendum held at a time when both the Greek state (which failed to repay the IMF on June 30th) and the banking system are on the verge of collapse? Does this situation enhance the bargaining power of the country? Why did the referendum not take place earlier, without the country being in such a state of vulnerability? Finally, this development has exhausted the remaining "stock" of credibility of the government. The complete loss of trust, which is now reflected in the latest statements of foreign officials, was sealed with the decision to hold a referendum, which surprised the creditors as it was announced a few hours before the convening of a Eurogroup programmed to work out at the final agreement. In my opinion, this latest negotiating maneuver can only yield worse results. After the closure of banks, the economy is now in a dramatic situation. Transactions have been frozen de facto, whereas uncertainty hinders both investment and consumption decisions, since everyone wants to hold their euros in cash as a safeguard against unforeseen developments in the near future. The deterioration of the economic situation is bound to further raise the cost of any agreement, which will in turn make a new compromise even more difficult. The more this situation continues, the more the economy will be immersed in uncertainty and a complete standstill, thus resulting in a further increase in unemployment and the collapse of the living standards of Greek citizens. On the other hand, the dangers that stem from a possible discontinuation of ELA funding, given that the country is no longer in a program, are incalculable for the banking system and have extremely unpleasant potential effects -- even more unpleasant than the ones we are faced with today. Moreover, those who respond to all these developments with lightheartedness, saying that our possible return to the drachma would not be a big deal, I would say that such a stance reveals a complete ignorance of history and economics. Greece is not the first country to undergo such a crisis; we have several examples of countries that went through similar crises in the past and thus we know the consequences -- disastrous in the short-term and at best uncertain and risky in the medium-term, since Greece would be deprived of its strategic European orientation with incalculable consequences at both the economic and geopolitical level. Unfortunately, we have reached the point -- admittedly with the responsibility of all governments following the regime change in Greece in 1974 (Metapolitefsi) -- where our options are extremely limited: either a bad agreement that keeps us alive and offers hope for a better future in Europe, or a certain economic disaster in the short-term, combined with an extremely uncertain, dangerous and definitely poorer future for the coming generations. _________________ Dimitris Katsikas is a Lecturer in the Department of Political Science and Public Administration, National and Kapodistrian University of Athens. He is the Head of CRISIS OBSERVATORY/ ELIAMEP. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
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German FinMin Schaeuble: Greece Could Leave the Euro ‘Temporarily’
German Finance Minister Wolfgang Schaeuble has suggested Greece could leave the Eurozone “temporarily.” Schaeuble, one of the Greece’s biggest creditors and toughest critics, made the remarks on the eve of a Greek referendum that will decide if there should be further austerity measures. The German Minister said: “Greece is a member of the Eurozone. There is no doubt about that. Whether with the euro or temporarily without it: only the Greeks can answer this question.” He added that while some individual banks might collapse, the risk of spreading to other parts of the Eurozone is small. “The markets have reacted with restraint in the last few days. That shows the problem is manageable,” he said. (source: dailymail)
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Greek bailout loan vote likely to be close
Meanwhile, police said about 17,000 people gathered outside the nearby Panathenian stadium for the “yes” rally, waving Greek and European Union ...
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The Economist explains
After months of negotiations between Greece and its creditors over a deal to extend its bail-out programme, on June 26th Alexis Tsipras, the prime ...
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Greece's pro-EU forces must win more than referendum
What happens if Greece votes Yes in Sunday's referendum? Will the country's future in the eurozone be secure? Unfortunately not, in part because ...
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Democracy in Greece operates in strange ways, like the media
At the end of the day, there were ways for all sides to be heard
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Switching to the drachma will be a nightmare for Greece (GREK, EUR)
Switching back to the drachma would be chaotic if Greece has to ditch euros. The country will hold a crucial referendum on Sunday. Millions of citizens will vote "Yes" or "No" on whether their government should accept a set of conditions that would unlock a fresh bailout program from euro-area creditors, and inject cash into the economy. A "No" vote would leave Greece without emergency funding, the inability to continue to pay pensions, and could lead to further defaults down the road. It could also mean ditching the euro as a currency and going back to the drachma. A Bloomberg report on Saturday notes that recent instances where countries adopted new currencies (like the launch of physical euros in 2002) took several years of planning, and the support of the majority of citizens. These two things aren't guaranteed for Greece. The government has said it would retain the euro in the event of a "No" vote. But as Bloomberg notes, Greece's banking system relies on support from the European Central Bank that could be removed if the country votes "No." And so, if Greece votes to reject creditors' proposals, it may be forced to revert to its old currency. In an interview on Australian public radio Thursday, Greek finance minister Yanis Varoufakis said the country "smashed the printing presses" when it joined the euro. This was to demonstrate that the newly formed monetary union was permanent and not an experiment. Bloomberg reports that the government still has a press in Athens that prints euros. But switching to a new currency could take anywhere between six months and two years. Apart from the logistical challenges, the drachma would likely start out very weak against the euro and other major currencies. A report by Greece's Kathimerini newspaper on Saturday indicates that interest in Bitcoin has surged to hedge against a weak drachma in the event of a switch. And so, while the government is advocating a "No" vote with Greece remaining in the euro, the economic realities of that decision may mean the drachma makes a painful comeback. Head over to Bloomberg for the full story »SEE ALSO: Yanis Varoufakis: Europe can't afford to let Athens go under AND DON'T MISS: Here are the markets most exposed to the crisis in Greece Join the conversation about this story » NOW WATCH: 13 'all-American' foods that foreigners find completely gross
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The cultural relevance of Greece in Europe
Greek words and the crisis
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