From John Ward's The Slog.....
Sensational new leaks show how Brussels, Papandreou, Samaras and Stournaras snatched default from the jaws of restructuring
In a new blog post from Greek crisis veteran commentator Yannis Koutsomitis, 2010 documents show how, had reality rather than greed, pride and geopolitics been applied in early IMF negotiations, Greece would be in a far more advantageous economic and fiscal place than the debt-hole it occupies today.
Koutsomitis has obtained access to an explosive memo -
- that establishes how relatively easy it would have been at that stage to organise debt restructuring, given the opinions of key IMF States:
At some point in this process (as I posted to the sound of universal ridicule at the time) influences from Berlin via Paris to Washington intervened to arm-lock the Greek contingent out of accepting debt restructuring. It’s not hard to see why: German and French banks were hugely exposed to Greek debt, and America was paranoid about Wall Street banking firms and debt insurers being able to withstand the hit.
Clearly, that influence has continued….and helps explain some odd decisions by Greek Finance minister Yannis Stournaras of late.
Now that senior EU bods are confirmed to have been holding less than secret meetings about staving off a Greek default yet again in May 2014, it was interesting to note that Stournaras was not actually invited to the meetings concerned, as such.The Stournaras approach thus far has been as follows:
1. He doesn’t trust the IMF, who are (in case you hadn’t spotted it) behind on their promised loan aid. This partly explains his recent rejection of Christine Lagarde’s offer to break away from the Troika’s clutches, and help her persuade the other two prongs to give Athens massive debt relief. (Which would also reduce the depth of the hole she’s in). It also further suggests warnings and promises being given by Americans and Germans respectively.
2. Yannis doesn’t trust the non-ECB/EC lenders, because they keep on upping the demands and introducing new ones: hence their early departure from Athens last time, and unwillingness to return. As Ekathimerinireports today, ‘It is worrisome to hear the lenders keep moving the goalposts on some matters and sometimes bring up more issues. Some outsiders think this is part of the negotiation process as they try to exert more pressure on the government to honor its previous commitments or/and delay some important decisions, i.e. debt relief, until after the May elections.’
3. In that context of balls-sqeezing, Yannis staked his all on the EC/Berlin promise of debt relief at Christmas… relief that could’ve been trumpeted to the Greeks as evidence that all would be well….and enable New Democracy to regain its long-lost lead in the polls. But once the German election was in the bag, they reneged on the deal.
Looking back over this saga, the Greeks have been consistently lied to (first by the Germans, then the Americans, then the EC, and now the EC/Berlin axis again) while Washington has tried at every stage to protect its banking and insurance interests from debt restructuring….and the banking firms who tell the White House what to do have in turn kept Greek negotiators on tilt by constantly changing the rules of the game – and occasionally the game itself.
The leading EU powers want their financial institutions protected, and the euro not to fail. The American political élite wants to protect its institutions and push for Grexit as a means of massively increasing its influence in the region. And the US institutions themselves want the best deal they can get on the Dollar.
What Greece might need has never – not for a single minute – been a serious consideration. In the game of geopolitical chess, Samaras and Stournaras have been completely outclassed….and now hung out to dry. Samaras has been made to look ridiculous, and his Finance minister a hapless pawn.
But as always when it comes to Weltpolitik, the megalomaniacs underestimate the importance of regional reaction by the citizens involved. Between now and May, the Troika has one last golden opportunity to do the decent thing in relation to Greek debt: to make it realistic and repayable. My money says, firmly, that they will simply keep the sparrow within reach of the cat, with one leg broken to avoid any chance of escape. Sometimes you see, the past is an excellent guide to the future.
Greed, global aspirations, pride and energy obsession among the Troikanauts will push the Greeks further into a corner. That will destroy the only allies the major powers have left in Greece. And at some point thereafter, it will all come tumbling down.
But the Troika will not take the opportunity. Their sort never does.
Here we go again....... so ironic this is put out on Ground hog Day !
Third Greek Bailout Package Is Finally On Deck
Submitted by Tyler Durden on 02/02/2014 11:03 -0500
As noted on Friday, the Greek soap opera, in which Europe pretends to bail out Greece when it is just bailing out its insolvent banks by not touching the status quo, and Greece pretends to reform and comply with austerity reforms when it merely continues to spend as before until the money runs out and the entire act is repeated, is about to enter its third act.
Yesterday, Greek Kathimerini reported that the reason why the Troika has put Greece on ice is Greece is behind in the implementation of 153 actions demanded by its lenders, according to a timetable compiled by the Finance Ministry. "Of the outstanding actions, 57 are the responsibility of the Finance Ministry, 17 fall to the Development Ministry, another 17 to the Labor Ministry and eight to the Administrative Reform Ministry. The rest are divided among other ministries. A number of the actions have yet to be completed as the government remains in discussions with the troika about the measures. Inspectors are expected to return to Athens later this month but a date has not yet been fixed." In other words, the bulk of the conditions agreed to as part of the second bailout have yet to be met by Greece.
So what happens next? Why a third Greek bailout of course.
As reported by Spiegel over the weekend, citing a five-page German finance ministry 'position paper', Schauble is preparing the ground for a third aid package for Greece that would amount to €10-20 billion. When will the package be deployed? By May. Because that's when the European elections take place and when the next major Greek debt redemption takes place: after all can't have even the tiniest gust of wind blow on Europe's impecable house of cards...
The possibilities outlined include a further debt haircut that would mainly hit public creditors or a «limited additional program» in which Greece could receive fresh money from the European rescue fund, the report said.The package could amount to 10 billion to 20 billion euros, said Der Spiegel, and would be tied to commitments from Athens to undertake reforms with more vigour.A spokesman for the finance ministry denied that a new debt writedown was planned for Greece."There is no new situation,» said the spokesman and referred to previous statements made by German Finance Minister Wolfgang Schaeuble.The minister has in the past said there could be a remaining need for some refinancing but any further package would be far smaller than the aid granted so far.Greece has received 240 billion euros of support in two aid packages from the International Monetary Fund (IMF) and the euro zone since 2010 in return for spending cuts and reforms.A senior EU official said last month that Greece was not in urgent need of funds now and extra money would only be needed when Greece must pay back debt. Its next big redemption date is in mid-May.
That said, by now nobody cares as pretty much everyone has figured out the game, which will continue on its unsustainable path until one day it no longer can.