May 312015
 May 31, 2015  Posted by at 5:00 pm Finance Tagged with: , , ,

Jack Delano Brockton, Mass., Enterprise newspaper office on Christmas Eve 1940

This is a letter From Greek PM Alexis Tsipras in today’s Le Monde. I have little to add, his eloquence needs few comments at this moment. One thing is certain: the negotiations will never be the same. And neither will Europe.

Straight from the Prime Minister’s offical website: :

Alexis Tsipras: 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”.

Home Forums Alexis Tsipras: The Bell Tolls for Europe

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    Jack Delano Brockton, Mass., Enterprise newspaper office on Christmas Eve 1940 This is a letter From Greek PM Alexis Tsipras in today’s Le Monde. I ha
    [See the full post at: Alexis Tsipras: The Bell Tolls for Europe]

    Formerly T-Bear

    In 1959, our family was privileged to a three month summer tour of Europe. The Rome Treaty was about a year old then. Being 16 years, the curiosity was about everything and everybody; as all who can attest or still attest in the main of experiencing that age, there is a propensity to have more answers than one has had time to discover questions for. Those who I encountered had in general some reticence as to the viability of the Treaty, being a road they had never traveled before, caution held the day. With the unfolding of the modern version of Greek tragedy, indeed that caution was well conceived.
    The wounds of war were then fresh and suppurative, the fine words and ideals of the Treaty were well enough, actions were then still a matter in the future. That Camelot age has given way to the new ideology, the high religion of the neoliberal thought collective (read: P. Mirowski, “Never Let a Serious Crisis Go to Waste”; as well as; C. Rubin, “The Reactionary Mind”) who have insinuated their beliefs into the operation of the original institutions devised to accomplish the socio-politico-economic juncture of sovereign states. Few if any so-called neoliberal programs or policies have ever been put to public referendum or even been exposed to public discussion or scrutiny in any meaningful way; but the control of the troika enforcing austerity upon the greater population of the EMU is firmly held in their grasp and shall not be relinquished until wage enslavement is firmly established throughout that block and those peripherally associated to it. Neoliberal theology does not self-correct, it denies error. Doing so, it cannot but fail. That is the future of the EU, unless fundamental changes are not immediately made. May you live in interesting times – indeed they are so.


    Does anyone, other than Tsipras, even believe that the first strategy exists?
    Kumbaya Oh Lord, Kumbaya


    Superb indictment of the Chicago Boys algorithm.

    John Day

    The first strategy was the model on the sales floor.
    It went out the door first, but the ad is still running.
    It is good to hold up the advertisement in public and say, “I want this one you advertised”.
    Actually, Varoufakis is the right guy to help the EU thorough massive debt restructuring, for all EU members.
    The other finance ministers cannot bear to gaze in that direction.
    Massive debt restructuring makes their entire class disgorge their wealth and privilege.


    I admire the intellectual independence of the new Greek leaders. And I hope that their stance will bring about change to the undemocratic structures in the EU and the EU countries. Unfortunately the economic analysis of Tsipras is not completely correct. Or if it should be correct it is not visible from his article in Le Monde: The Greek economy and it’s citizens will never recover unless Greece is relieved from it’s current debt burden which is probably closer to 500 billion than to 200 billion. The amount to be forgiven is already big enough to change the foundations of the EU and this is why this will never be agreed. Greece is terminally entangled in debt slavery with Schäuble being it’s master unless it frees itself from the EURO and the debt service. The last chapter in the Le Monde article is therefore either missing or not yet visible.


    Christoph, Tsipras doesn’t have the mandate to write such a chapter. He has to very carefully guide his country there, and in the meantime he can’t say it out loud.


    Writing from Athens:
    A friend suggested 60% seriously today ‘Shall we all go to Syntagma and start burning euros?’

    Tsipras has done a great thing here: he has shattered the ‘cone of silence’ that has so far shrouded ALL EU decisions and negotiations since 2009. Europeans are only informed of general results, usually in one liners: these are never spelled out. The tradition of silence and Greece’s previous collaborative crisis governments has allowed the European-American press to take the lead in coordinated disinformation, incrimination (always of Greece), coordinated insult and myth-making, blame, threats and last but not least 5-6 years of trolling in both the English language greek press (I invite you to look at the comment threads at Kathimerini Opinions) and international press.

    Not only, but Tsipras has pierced the veil that has shrouded the previous Greek governments’ relationship with Troika that we Greeks were simply left to deduce (at least 70% is unknown as to details), helped along by activist lawyers, economists (Yanis Varoufakis being one) and brave independent journalists. To this day we do not know details or even the entirety of the burden the citizens have been left to assume. No information, no explanation and certainly never consultation. What we do know is bad enough. Meanwhile the total of Greek oligarchic wealth has risen from 14 BN in 2010 to 18 BN today. Yes, huge fortunes are being made on the back of the Greek crisis / people. Yet we still don’t know how or exactly by whom.

    Most important, Tsipras has opened out the truth to the Greek people. In my quite extensive circles I hardly know anyone, left OR right, who wants to stay in the euro: we are all mystified by the polling – since in their circles they too hardly know anyone who doesn’t want OUT. And this has only grown over the last 3 months, following the last 5-6 years.

    My hope – HOPE! – is that Yanis Varoufakis was removed from the front line of the grindstone to oversee strategy (on the one hand) and coordinate Plan B (on the other).
    And my feeling is that this “act of betrayal” (as Tsipras’ letter will surely be perceived by the Institutions) and this Greek end run round the goal (as it will be perceived by awake Europeans – there are many) is a signal to Greeks. If the Institutions back down (reacting or not to the letter) it will have worked. If not, the purpose of this letter will be to shift the apocryphal Greek pro-Euro opinion toward exit, a preparation for freedom.

    Fasten your seat belts.



    Thank you Tsigantes for your comments about Greece. We in America only hear or read what the media wants us to believe, not what is really going on.


    Tsigantes and others,

    A few things:

    • “Greek oligarchic wealth has risen from 14 BN in 2010 to 18 BN today”
    I would love some info on that, haven’t seen any.

    • “Yanis Varoufakis was removed from the front line of the grindstone:”
    I see no reason to believe that is true. Western media never tire of repeating it though. Yanis has always denied it.

    • I’m thinking of spending some time in Greece (Athens) soon.
    I’d love contacts, people to talk to, maybe a place to stay (we avoid hotels as much as we can). Nicole is in New Zealand, so I’ll be traveling alone. I simply think it’s the place to be.

    Contact • at • TheAutomaticEarth • com


    In my opinion Tsipras and Varoufakis are two of the most important people in the world right now. There is some coverage in the MSM about the possible GREXIT but it doesn’t really expose the implications for the already debt supersaturated EU and therefore all the other economies.

    The European neo-cons, those who run the big banks and the ECB and the IMF could not help themselves (like in the scorpion and the frog fable) in pushing the Greeks to the limit in their drive to extract as much wealth as possible. It may be that this insatiable destructive greed will be the thing that pushes the European project off it’s knife edge.

    I think the neo-cons have painted themselves into a corner and have to be seen to punish the Greeks to prevent anyone else form exiting the Euro. This Euro project was doomed from the point it a. made life unbearable for any of the peripheral countries and b. build a financial system so fragile it would collapse when the first country left. Hubris and fate. Scorpion and frog.

    Now it may be that a deal can be made to avoid default for now, it may also be that they can somehow strongarm Syriza or somehow remove them from power, but the writing is on the wall for the Euro, the sensible thing to do would be an orderly planned Euro breakup and the admission that taking financial autonomy from countries is a mistake.

    And to think I used to be a Euro-phile

    Dr. Diablo

    I had the same impression some weeks back, when the center news cycle was that Varoufakis was being removed, replaced by his minister, in order to (perhaps) break the logjam in negotiations. ‘Cause he’s such a horrible person. News, and I’m sure it was right here, how *gasp* no one would talk to him at parties, especially because he *gasp* wore jeans and had his top button undone. Not making it up.

    Anyway, same idea: there’s no way Varoufakis is backing off the negotiations, although sure they may want to take a cooler on his personality clash for a bit. So what was he up to? And top guess was, yes, Plan B. So if EU negotiations were going nowhere (i.e. “Submit or Die.” “No.” “Submit or Die.” “Um, no.” “Submit or Die.” “Still no.”) maybe there’s a tiny chance that Tsipras instead send the A Team to Russia/BRICS side to set up the REAL negotiations there, leaving his placeholder behind? And Lo! We had the pre-pay of the pipeline profit news shortly after, along with the fruits and veg embargo end. If the EU is so hot to privatize, they’ll privatize the port to the Chinese, and sell a military base to Russia, which of course is simply ridiculous! Greece can only be sold to OUR billionaires! Now this week, they may have gotten a response from the EU, as talks are to open a joint weapons factory in Greece with Russia–Kalashnikovs in this case. And given what’s happening in neighbor Macedonia, they may need them. I suspect one reason they haven’t tried to get into Venezuela a lot more was the hundred thousands of Russian AKs Chavez bought back when. They can go toe-to-toe with fighter jets, but not urban rifles. No way. Ominous sign, terrible choices, but it is what it is. All Europe has to do is not kill and eat Greece, an amount of favor and debt forgiveness any single-digit billionaire could afford. A City like Frankfort could probably bail them out—they only have to get through June 2015. They won’t, steering EU away from democracy and into rule-by-force, exactly as Tsipras just wrote yesterday. So if that’s the case, what can you do? Greece had the exact same option in 1941, although back then Hitler gave 5 hours for the decision. But the options were the same. Submit and be occupied, thousands killed, your workforce enslaved forever, or be attacked by a unified and superior army and cease to exist as a nation and people.

    PS. “Furiously defiant” Tsipras? Really? The puffed up green Incredible Hulk Tsipras? The letter to Le Monde was the most thoughtful, thorough, nuanced, and somewhat bureaucratic thing I’ve read in some time. So when Tsipras says “hey, let’s step back and think about what we’re doing” it’s “Furiously Defiant” (from Ambrose Pritchard) but when Schäuble won’t budge or “negotiate” in a “negotiation” it’s perfectly normal. How does that work??? How do we set up this meta-context, this expectation, so radically skewed from sense and equality? How do people swallow this and not choke?

    Tune in next week….

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