Posts Tagged ‘OXI the morning after the night before’

OXI the morning after the night before

July 6, 2015
lemmings

lemmings

The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage. — Yanis Varoufakis

I shall wear the creditors’ loathing with pride. — Yanis Varoufakis

Last night, Greeks gave a resounding NO to EU-imposed austerity, joy on the streets, partying in Athens. This morning, the morning after the night before, stark reality. Germany has said no to the Greek no, has refused to negotiate, a view echoed across Europe. ECB has so far refused to turn the cash flow on, denying the Greek banks money to solve the liquidity crisis. Economic terrorism continues.  And just when it could get no worse, modern-day folk hero Greek Finance Minister Yanis Varoufakis has resigned.

The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage.

Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore, essential that the great capital bestowed upon our government by the splendid NO vote be invested immediately into a YES to a proper resolution – to an agreement that involves debt restructuring, less austerity, redistribution in favour of the needy, and real reforms.

Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.

I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.

And I shall wear the creditors’ loathing with pride.

We of the Left know how to act collectively with no care for the privileges of office. I shall support fully Prime Minister Tsipras, the new Minister of Finance, and our government.

The superhuman effort to honour the brave people of Greece, and the famous OXI (NO) that they granted to democrats the world over, is just beginning.

An honourable and capable man.

Should it not be those euro zone ministers, who called a private meeting without Greece, our European participants and assorted partners step down instead, as their absence from the meetings would no doubt be extremely helpful in reaching an agreement?

BBC, mouthpiece of the Establishment, carried on the anti-Greece propaganda today on Wato, of almost half an hour devoted to Greece, is was almost entirely filled with anti-Greece, anti-austerity voices, no proper analysis, no mention of the eminently sensible proposals put forward by Yanis Varoufakis in the early hours of this morning. All we heard was the Greeks the bad guys, refusing to negotiate, brinkmanship, and when are they leaving the euro.

The one exception, a breath of fresh air, who said all sides have to compromise, ECB has to to turn back on the cash flow, that unlike Irish and Cypriot banks (he could also have added British banks), the problem for the banks is not one of solvency, but liquidity, they are literally running out of cash. He hit the nail on the head when he said, a strong NO vote in Greece, anti-austerity across Europe, fear of change.

Then in a summing up a voice of reason and balance from Robert Preston, who said IMF has already accepted, at least 30% of the debt must has to be written off, the creditors must negotiate, the alternative default and they lose everything.

On PM the news headlines included the gem divisive Greek Finance Minister Yanis Varoufakis has been removed from office. No evidence to support this statement. Then later on a slight variant controversial Yanis Varoufakis had resigned or been removed, introduced a little under fifteen minute discussion with three so-called experts, waffle and all three  were clueless as to the situation in Greece. Far better that the slot could have been used for a discussion on what has been proposed as a way forward by Yanis Varoufakis.

Throughout the day, BBC peddling the line Greece to be expelled from the euro and trawling to find anyone who would agree with that line.

The exception to the dreadful BBC coverage, was The World Tonight, but then it had Tim Franks reporting from Greece not the useless journo Mark Mardell, and the studio discussion was balanced and far better informed.

The role of a Central Bank in a crisis is lender of last resort. That is the role of the European Central Bank within the euro zone. It is failing in that role towards Greece.

Today ECB tightened the screws by demanding more collateral from the Greek banks, which will push at least one, maybe more into insolvency.

If Greece was an independent country, in control of its own currency, its Central Bank would come to the aid of its banks. Were Greece to leave the euro zone, it could create its own currency. The problem it would face is that it would not hold any reserves as these were all handed over to the ECB.

Greece could even now, create its own currency, a parallel currency to the euro. Only this is not allowed under the euro zone rules. But then the same rules do not allow a country to leave.

What maybe Greece should do is create a number of local currencies, for example Athena drachma with an image of The Acropolis.

Had Greece said yes, EU would be falling over backwards to accommodate a puppet government.

EU exists to create a Europe wide market for Big Business. Austerity is used to transfer wealth into corporate coffers. Greece has dared to offer an alternative vision, one in which the people and the environment are more important. A vision that appeals to ordinary people across Europe, and that is why Greece has to be crushed.

It is not even about debt. Trillions of dollars have been spent bailing out the banks.

The amount of the debt, although is sounds large, is small compared to the economic size of the EU, as the analysis sent to me by a Greek friend last night shows.

  1. To see capital controls imposed on an advanced economy is a great indictment of the IMF and the EU. Exactly what they were to prevent.
  2. Greece is being squeezed by the EU not for a vast sum. But for 0.01% of EU GDP. That is how petty this is.
  3. The EU and ECB are at fault. They could and should solve this fake crisis in a second. That they don’t is pure politics.
  4. To see the EU being broken and betrayed for 0.1% of GDP isn’t just tragic. It’s nonsensical, absurd, beyond reason.
  5. The idea that Greece is “free-riding” is wrong (and stupid). Rich EU countries benefited hugely by having artificially cheap currencies.
  6. By squeezing Greece for 0.1% of EU GDP, the EU isn’t just creating a needless tragedy. It’s destroying its own credibility and legitimacy.
  7. The EU is not rational. If Greece costs it 0.1% of GDP, so what? The currency benefits are far greater. This is being done out of spite.
  8. And that 0.1% of GDP is enough to cause the rich EU to turn on the poor, despite far GREATER benefits, is the true, historic tragedy.
  9. If anything, it’s now rich EU members who are free riding on poor ones. They’ve benefited by more than the trivial amount they demand.
  10. By making an example of Greece, the EU is only betraying itself. If a union can’t even absorb a cost of 0.1% of GDP, it’s not a union.

She ended with

NO wins but let’s watch tomorrow Europe’s reaction.

In 2010, Greece borrowed more money. It was used to pay off the German banks and other private investors. Greece was saddled with more debt. It was unsustainable. IMF has said at least 30% should be written off.

Austerity has destroyed Greece, the economy has shrunk by 25%.

This evening a stupid German CDU politician tonight demanding blood, Greeks should pay more taxes. If you destroy an economy, no tax base.

Tourism is the backbone of the Greek economy. July-August peak holiday season. On one Greek island, hotel occupancy 10%, cancellation rate 99%. It is going to take Greece decades to recover from the economic terrorism of this last week, let alone what austerity has done to the country over the last five years.

EU engineered a coup against Syrizas, they failed. Greek Prime Minister Alexis Tsipras now has the backing not only of the Greek people, but of all the political parties. What is EU now going to do, mount a coup against the Greek people?

EU has a very simple choice. Agree terms that are fair to Greece, that Greece can afford, that allows the Greek economy to recover from economic terrorism, or face a default and watch the EU burn.