Feb 222015
 February 22, 2015  Posted by at 3:16 am Finance Tagged with: , , , , ,

John M. Fox Window display of imported and domestic cheeses, New York 1948

When it comes to the ongoing Greek question, I see a lot of people eagerly jump to conclusions, after the ‘debt deal’, that I don’t think are justified; certainly not yet. The overall conviction in the press seems to be that Syriza has given in on just about all fronts, and Germany and Dijsselbloem are the big winners.

But since that may well be the exact position Syriza wants ‘the other side’ to be in, where they think they have prevailed, one will have to try and think a few steps ahead before judging the situation. There’s far more grey area here than many pundits seem to assume, easily 50 shades of it.

If Greece wouldn’t have given Germany the idea that it was winning, Athens would have already come very close to an exit from the eurozone. The problem with that is that it is not part of the mandate Syriza has been given by Greek voters. Who have spoken out for an end to austerity, but within the existing euro framework.

Varoufakis et al. may long have concluded that such a set-up is simply not realistic, but they would still have to work up to a situation where, at some point, they can present this to the people. And that can only be done after they can convincingly show that Germany and Holland refuse to honor the democratically decided mandate Syriza brings to the table.

They would have to make absolutely sure that the other side gets the blame for the failed negotiations. They have to do that anyway, even if a Grexit is not their preferred outcome. They need to be able to prove that they bent over backwards and Germany still wouldn’t play ball.

The 4-month extension debt deal agreed on this week is still contingent on a set of measures Varoufakis is due to hand to his various European ‘partners’ on Monday. If the ‘partners’ throw out the package, or too much of it, then Tsipras can go to the Greek people and say:

“Look, they’re not acting in good faith, they refuse to honor your democratic vote, and the mandate you handed us with that vote. So what are we going to do now? Do you want to stay in the eurozone and the austerity programs it forces upon you, or are we going to try to find out what would happen if we leave the euro?”

Even if Tsipras et al had been relatively sure, before the recent elections that brought them to power, what the negotiations with the ‘partners’ would lead to, it couldn’t have those negotiations and show the results to the voters. Perhaps as early as this Monday, it may be able to. It was simply always going to be a necessary step in the process.

Over the past week, Syriza has shown its ample willingness to negotiate, to do concessions, so much so that it’s being accused of betraying its voters. Also a necessary step. But if Schäuble and Dijsselbloem overplay their hand the coming week in reacting to Varoufakis’ proposals for getting the 4-month extension, the trapdoor may fall shut, and Greece may start preparing to leave the euro. Either after getting the people’s mandate first, or after being thrown out by Brussels and Frankfurt.

Would that be such a bad thing for Greece? Nobody really knows, even if everyone is more than ready to opinionate about it. One must not forget that things are already very bad in Greece, so threats of armageddon could easily ring hollow.

An interesting perspective comes from a Bloomberg interview with Gordon Kerr, co-founder of Cobden Partners, a firm I know Varoufakis was urged to consider as financial advisors, before Syriza chose to go with Lazard (I can’t seem to embed the video, so please click the link and watch it on Bloomberg, it’s only 5 minutes and worth every second):

Euro Is One of the Worst Designed Currencies

Q: Why should they bail? Why should Greece go: you know what: we’re going it alone?

A: Because that’s probably the best alternative for them in the medium term, if not the very short term. I suspect the reason why Greece is clearly trying to do something with the European Central Bank in the next couple days is maybe they have no contingency plan ready to go.

Q: Is Europe ready for Greece to leave? Are the contingency plans in place?

A: I don’t think Europe has any contingency plans.

And a few more points from the conversation:

• Even Citibank are saying that if the ELA’s (=ECB emergency loans) are not extended, Greece would be perfectly within its rights to repudiate up to €300 billion of debt.

• So the day after this happens, Greece will be €300 billion better off than it is right now.

• Bulgaria’s currency collapsed in 1996; within a weekend it was restructured..

• They [Greece] don’t have systemically important financial institutions dragging down their economy ..

I find it hard to believe Syriza wouldn’t know at least a good chunk of what Kerr says. And that would give them a lot more room to move than is generally assumed. Thing is, they need to get that mandate from their voters.

The long and short of it is there are a lot of possibilities, lots of shades of grey area, both when it comes to what people involved are thinking and in what they are doing. It doesn’t seem very wise to draw conclusions before having thought through the possibilities, like a strategist, like an army general or a chess player would.

Perhaps Syriza is just playing for time, perhaps that is their no. 1 priority, just so they create the space to come up with a contingency plan in case they leave the euro. But also perhaps they already have such a plan, and what is happening now is simply part of that plan.

And then there’s the option they’ve already been defeated and they’ll have to get ready for more humiliation next week. It’s just that that would make them look very short sighted, and awfully bad strategists.

Home Forums 50 Shades of Greece

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    John M. Fox Window display of imported and domestic cheeses, New York 1948 When it comes to the ongoing Greek question, I see a lot of people eagerly
    [See the full post at: 50 Shades of Greece]


    Well they did get to live another day.

    Beyond Tsipras and Varoufakis who is the Greek government? Are there any people who know how reestablish a currency? Not just in theory but in practice. Is whoever is in charge of their equivalent of a State Department actually in charge of it? Have the institutional support of its ambassadors? What of the military and intelligence services? Are the top people there left over from the previous governments? If so are they playing ball with Tsipras?

    Are you getting my drift here? While Syriza and its coalition partners have a solid majority in parliament and with voters real power lies behind the scenes in all places unless there is a real revolution, in which case the old establishment is thrown out. Real power lies in institutions and between those institutions and the people therein who comprise the establishment. People entwined with the wealthy, the oligarchy if you will, who came out just fine after the generals took over in 67.

    It’s one thing to lead but unless your sure others will follow your options are very small. I am not discounting the possibility that Tsipras and Varoufakis have decided to live another day or 4 or 4 months so as to gain time to make a definitive break. It must be considered however that they could not make the break now and reject Friday’s agreement because there is no there there as far as institutions who could carry out a break.


    Spot on analysis! Unlike the avalanche of reports about the glorious victory of the industrious Reich over the lazy Greeks, you drive the narrative to its real proportions, as always!

    Germany’s Full Media Dominance is the real problem here. After years of having Greek and European “journalists” on the payroll and sending them on trips to “Institutes of Journalism” in the Fatherland to teach them the “sound principles of good journalism” or having German banks lending Greek TV stations to save them from oblivion, Germany has bought full compliance to its wishes and whims inside Greece and Europe. Same goes for many politicians. Hell, the previous Samaras Government was actually relaying the German dictates without even changing a single comma! The last bills they were producing, regarding more austerity, were clearly translated from German and needed a second bill to “adjust them to the Greek reality!”

    The truth is that Syriza knows that it needs to control both the Media and the oligarchs, if they want to continue governing. If you were watching a number of Greek TV stations reporting on the negotiations, you would think you were watching a German right-wing channel! The only thing they didn’t say was “we Greeks are so lazy and dishonest, we don’t deserve better!” (which they actually did in the past), but they were pretty close to that. All the pro-austerity TV personalities of times past and present were used heavily to try to convince Greeks that Syriza failed utterly, that austerity is the only way, that we should ask Germany for forgiveness and that Varoufakis is “insulting” our poor Partners and especially the good Doctor, a father figure “who loves us and doesn’t want to hurt us”. Samaras even signed a condemnation of the negotiations, along with his EPP buddies, who stated that Greece should shut up and do as it was told. Hardly a winning attitude to negotiate your country’s future, is it?

    Let us also not forget that the timing for the elections and the negotiations were quasi-accidently set up by Samaras himself. He had failed to have his candidate elected for President in December (i.e. he had to go to elections he knew he would lose) and then requested an extension on the austerity program for 2 months only and not 6 (hint: the extra 4 Tsipras got). As a result, Syriza was set up to have to negotiate 10 days after they won the elections. Samaras even stated over and over, with his disgusting smug psycho look, that he will return to power within 60 days and that Syriza is just a small interval to his rightful governance! I kid you not…

    This time extension is crucial for Syriza to try and establish their power and try to control the deep state, the oligarchs and the Media. Without that they will not survive and there can be no real negotiations with the EU, for the 5th Column is active and strong in this country. Now that Syriza has won some room to breathe, we will see heavy fighting to control the Media frequencies and suppress their oligarch owners (hint: the “real” tax evaders) in the next couple of weeks. Even as we speak, ERT (the public TV station illigally shut down by force, by the direct order of the former PM Samaras) is preparing to resume transmissions once again. The next steps will be the bankrupt private TV stations, saved only by their loans from German banks.

    Sage Eurasian

    Sadly, Raúl Ilargi Meijer finds it hard to accept betrayal by the latest fake ‘opposition heroes’ supplied by Nato-lands thug-meisters, & so makes contorted excuses for them.

    Whereas Greeks were calling out Syriza as liars and hoaxers since well before the election that put them into power. Some data points about these entirely fraudulent ‘caviar communists’:

    Alexis Tsipras & Yanis Varoufakis are both tied to backing by CIA billionaire George Soros & the CIA Brookings think stink tank, & Varoufakis to king billionaire Bill Gates, as well as being himself from a wealthy Greek family, Varoufakis’ father having been president of Greece’s Halivourgiki steel. Syriza has rapidly assembling overall Greek oligarch loyalty, such as from George Angelopoulos (shipping, steel) & Spiros Latsis (petroleum, banking), for their deception of Greek citizens.

    Syriza is the age-old ‘triangulation’ political game of leaders who ‘Talk Left – Act for the Oligarchs’ (USA Presidents Carter, Clinton, Obama; UK ‘New Labour’ Tony Blair etc), but now with a far-Left rather than centre-Left covering veil. That makes this treason a turning point.

    In interviews, smirking liar Yanis Varoufakis lets on how twisted & devious he is. Varoufakis’ bizarre ‘Marxist theory’ to justify himself, is that socialism doesn’t work / can’t apply now, and so he claims only real choice is between pro-bank capitalism or a much worse fascism … therefore, argues Varoufakis, very jesuitically, a ‘Marxist’ should support bankster capitalism and try to make it ‘more sustainable’, because that ‘helps people’ to avoid fascism … Plus Varoufakis accepts Bolshevik ideas that ends justify means, you can deceive & lie to voters etc. At the Friday post-deal presser Varoufakis showed both visible lying behaviour tells, & perverted enjoyment of deception. Varoufakis admits he loves the company of rich powerful people like his billionaire connections.

    In a nutshell, Syriza’s rationale is that lying to Greek voters and helping EU bankster money-lending elites, is necessary ‘fighting fascism’ and therefore all good. Help the big banks & wealthy bond-holders & you are really anti-fascist, ha!

    What continually rains down us from Nato-lands, are (1) false flag gov-pushed ‘terror’ incidents, (2) fake ‘news’ and media, & (3) fake ‘opposition heroes’ and alleged ‘dissidents’. The oligarchs love how these fake ‘opposition’ games work over and over again, even on very intelligent people.

    But Europeans are being pushed to the edge now by the blatant nature of this betrayal. Podemos in Spain now must answer gravely to the question, whether they are fake liars too like Syriza … whilst increasing numbers of Greeks & Europeans tend to feel that far-right groups may be the only honest ones out there. The betrayal by the fake ‘far Left’ Syriza, precisely because it de-legitimises the far Left as well as the already morally bankrupt EU centre-Left, will have cascading, colossal consequences.

    Ken Barrows

    We’ll see about Syriza. It’s interesting to me, though, that Syriza has had a couple of years to figure out what to do if it took power. It takes power and then kicks the can for four months. I suspect Syriza thinks its people aren’t quite up to the challenge of leaving the Euro. Greece, as all of us eventually, has to prosper without total debt rising faster than growth. Leaving the Euro will make Greece do that sooner rather than later.

    Greece can accomplish that better than most countries. It has a good climate and can use tourism for foreign exchange. But if most Greeks think the country can easily return to 2007, they are in for a tough slog. Finally, it appears that Syriza thinks a return to the recent past is possible, too.


    Most new governments need 6 months to find their feet, so this delay isn’t so important. They have to make changes to the finance departmental staff, who up till now have been selected for their willingness to go along with Austerity. They have to get the media on-side, or at least get their message out to the people that the Eurogroup is the one forcing the situation. They have to physically print the new Drachmas, and reprogram the government’s computers. Syriza isn’t a 100% unified party either, and so they need to ensure they can get the votes through parliament. It all takes time.

    When the terms of the Eurogroup are clarified, and the alternative Grexit plans are formulated, they then need to hold a referendum, asking: “Do you want more Austerity?” Nobody ever rioted for Austerity, and no one ever voted for it either, so then the government will have an even stronger democratic mandate to do what is necessary.

    The only question then will be how harshly the EuroZone will devalue the Drachma. Everyone thinks they will be very harsh, “pour encourager les autres“, but that might not be how it turns out at all. The harsher they are, the more cheaply Russia and China will be able to give the Drachma the international support it needs, and the more likely that Greece will also leave NATO (it is already part of Syriza’s party platform).

    John Day

    @ The Greek One,
    Thanks for the perspective on the elites and their media assets.
    @ Sage Eurasian,
    I’m moderately good at reading people, and Varofakis is hard to read. (Good style, though.)
    We shall see before the weather gets too hot, what Varoufakis and Tsipras are actually made of.


    I hope to God you are wrong, but fear you are correct. We shall soon see.

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