Yanis Varoufakis's Blog, page 124
June 19, 2017
Looking back in anger – review of Adults in the Room, The Hindu Times
Whether it is agricultural policies that hurt farmers’ interests or labour ‘reforms’ that erode workers’ rights, or welfare cuts that hurt the poor, it has been seen time and again in democracies around the world that all political parties, regardless of their electoral promises and ideological persuasions, invariably adopt the same economic policies that caused their predecessors in power to be voted out.
No country has exemplified this phenomenon more spectacularly than Greece. In January 2015, fed up after five years of austerity, the Greeks voted for the radical left Syriza party. Syriza had campaigned on a singularly anti-austerity, anti-troika platform. [The ‘troika’ being the moniker for the triumvirate of Greece’s creditors—the European Commission (EC), the European Central Bank (ECB), and the International Monetary Fund (IMF)].
In July 2015, within days of a referendum in which the Greeks voted overwhelmingly against a bailout deal with the troika, the left-wing Syriza government headed by a communist, Alexis Tsipras, betrayed its people by signing a draconian austerity package that would have made even its neo-liberal predecessors shudder in horror.
Ringside view
How could a democratic mandate be so casually binned at the behest of a bunch of unelected technocrats—which is what bureaucrats of the European Commission, the ECB and the IMF are?
In Adults In The Room: My Battle With Europe’s Deep Establishment, Yanis Varoufakis offers a ringside view of the inner workings of political power, which rests, as he discovers, not in the hands of elected representatives but with a tiny cabal of international financiers and power-brokers. For this global power elite—the eponymous “deep establishment”—democracy is a necessary evil that must be humoured once every five years through the spectacle of a general election while governments do as they are told. This is a matter of common sense if you are an ‘insider’. But then, if you are an ‘insider’, you would not talk about it.
Varoufakis is an outsider—a professor of economics at the University of Athens. But circumstances, and a well-intentioned prime minister, catapult him into the midst of seasoned insiders. He served as Greece’s finance minister in the Syriza cabinet from January to July 2015. He was offered the job, and he took it, to accomplish one mission: renegotiate Greece’s bailout agreement so that Syriza could ease the austerity imposed on the Greeks.
It doesn’t take long for Varoufakis to realise that Greece’s creditors are not interested in serious negotiations. They want nothing short of capitulation to the terms laid out by them. When Varoufakis doesn’t surrender, they threaten Greece with a liquidity crisis.
Varoufakis’ moment of reckoning arrives one spring night in April 2015, in a hotel bar in Washington DC. A sympathetic friend had fixed him a meeting with a formidable yet unlikely ally, Larry Summers. Varoufakis had worked briefly in the United States and knew that the former US Treasury Secretary was one of the most influential men in the power corridors of Washington DC, Wall Street, and beyond. If he managed to convince him, Summers could not only help in securing some urgent liquidity for Greece but also lean on the troika negotiators to soften their stand.
As they chat for a couple of hours over whiskey, the two economists find themselves in agreement on how best to revive the sick Greek economy. But Varoufakis must first pass a test to prove himself worthy of his assistance. He must give the correct answer to the American’s trillion dollar (literally) question.
“There are two kinds of politicians,” Summers tells the Greek. “Insiders and outsiders. The outsiders prioritise their freedom to speak their version of the truth. The price of their freedom is that they are ignored by the insiders, who make the important decisions. The insiders….never turn against other insiders and never talk to outsiders about what insiders say or do.” Their reward? The power to influence outcomes. “So Yanis,” Summers asks, “which of the two are you?”
Varoufakis would not lie, but neither could he give the wrong answer and shut the door on his last hope. He ends up prevaricating. His answer – that he would act like an insider to ensure Greece’s recovery—isn’t good enough for the wily Summers, who concludes, correctly, as this book now proves, that Varoufakis cannot be trusted to be an insider.
Varoufakis has to confront the wolves of EC, ECB and IMF on his own. He might have stood a chance of salvaging a decent deal if it weren’t for two factors: the troika’s infiltration of Varoufakis’ own negotiating team; and Angela Merkel. Seasoned political grandmaster that she is, the German chancellor outplays Tsipras as if he were a school boy, leading him on before turning the tables on him.
Ultimately Varoufakis fails only because Tsipras fails to honour their “covenant”. The reasons for the Greek prime minister’s betrayal – both of his friend and his countrymen—are complex, and Varoufakis comes up with an intriguingly flattering, if none too convincing, explanation.
Though a memoir, this is a work of novelistic intensity and power. It reads like a thriller, and what’s more, all the characters are from real life. We get candid portraits of the most famous names in European politics—Angela Merkel, Emmanuel Macron, Wolfgang Schauble, Christine Lagarde—and also of lesser known but powerful players such as Thomas Wieser, president of the Eurogroup working group, and Mario Draghi, the ECB president. Even Obama has a small but memorable cameo.
Disturbing truths
Varoufakis had the foresight to secretly record the many inter-ministerial meetings, summits, and telephone conversations with prime ministers and EU officials. So his extended replays of who said what to whom are not only accurate and detailed, they are disturbing in the way that only truth can be.
And the truth, in Varoufakis’ telling, is that the European Union is a supremely undemocratic arrangement. It is an instrument controlled by a global oligarchy that has infiltrated every government with trusted “insiders” who could be counted on to insulate their interests from the vagaries of democracy.
At 560 pages, Adults in the Room is not a quick read, but it’s an essential one for anyone interested in understanding contemporary statecraft, and the vast gap between what is reported in the media and what actually transpires behind the scenes.
Adults in the Room: My Battle With Europe’s Deep Establishment; Yanis Varoufakis, Bodley Head, ₹1,840.
June 18, 2017
June 17, 2017
To DiEM25 στο Ηράκλειο: Κεντρική Ομιλία 14ης Ιουνίου 2017
Ο Γιάνης Βαρουφάκης ξεκίνησε την ομιλία του αναφέροντας μία ρήση του παλιού ηγέτη των Εργατικών Τόνι Μπεν:
«Ξέχνα την ιδέα της τελικής νίκης. Δεν υπάρχει τέτοιο πράγμα. Όπως δεν υπάρχει τελική ήττα. Κάθε γενιά, όλες οι γενιές, έχουν ιστορική, ηθική υποχρέωση να δίνουν την ΙΔΙΑ μάχη την καλή -‐ ξανά, και ξανά, και ξανά. Για αυτό ας σταματήσουμε να θρηνούμε την ήττα μας του 2015. Αυτό που μετρά είναι να δώσουμε την μάχη του 2017, του 2018, του 2019, του 2020. Σήμερα, το κίνημά μας, που πραγματικά διέσωσε το πνεύμα της Ελληνικής Άνοιξης, της Ελληνικής Εξέγερσης, μεταλαμπαδεύοντάς το σε όλες τις γωνιές της Ευρώπης – ενός κινήματος που σήμερα επιστρέφει, στην γενέτειρά του, στην Ελλάδα, στην Κρήτη που ξέρει όσο καμιά άλλη γωνιά της πατρίδας τι σημαίνει να μην το βάζεις κάτω.»
Έδωσε έναν ορισμό του DiEM25 που ενθουσίασε πολλούς από τους Κρητικούς:
«Το DiEM25 είναι η νέα Φιλική Εταιρεία των ευρωπαίων δημοκρατών που ετοιμάζει την ρήξη με την Ανίερη Συμμαχία του Eurogroup, του EuroWorkingGroup, του Βαθέως Κατεστημένου που διαλύει την Ευρώπη. Αλήθεια, ποιοί έφεραν το Brexit; Ποιοι ευθύνονται για την στροφή των λαών εναντίον της Ευρωπαϊκής ιδέας; Εμείς; Ο Βαρουφάκης; Ή ο Ντάιζελμπλουμ, ο Σόιμπλε, ο Ολάντ, η Μέρκελ και ο Γιούνκερ και το ανεκδιήγητο Eurogroup; Ρητορικό το ερώτημα. Ακόμα και οι βαμένοι ευρωλάγνοι της τρόικας εσωτερικού σκύβουν το κεφάλι στο άκουσμά του.»
Προέβλεψε μία ακόμα αποτυχία για το Eurogroup και προειδοποίησε για μια ακόμα φορά για τον κίνδυνο μετατροπής της Ελλάδας σε αποικία χρέους:
«Αύριο έχουμε άλλο ένα Eurogroup. Άλλη μια φορά θα αρνηθούν να ελαφρύνουν σοβαρά το αβάστακτο χρέος. Ας καταλάβουμε κάτι: Το μη βιώσιμο χρέος καθιστά τον δανειστή δουλοκράτη. Ένας υπερχρεωμένος άνθρωπος είναι δούλος των δανειστών του. Ένας υπερχρεωμένος εργαζόμενος είναι σκλάβος του εργοδότη του. Ένα πτωχευμένο κράτος, που προσποιείται ότι αποπληρώνει τα χρέη του ελέω δανειστών που παίρνουν δισεκατομμύρια από την μία τσέπη τους και τα βάζουν στην άλλη τσέπη τους, την ώρα που εκποιούν την δημόσια περιουσία και ερημώνουν την χώρα, δεν είναι παρά μια αποικία χρέους. Και όσο υπογράφουμε ό,τι κουρελόχαρτο μας δίνει το Eurogroup, ο κ. Σόιμπλε, ο κ. Βίζερ, ο κ. Νταίζελμπλουμ, ένα πράγμα θα γίνεται: Μέρα με την μέρα η χώρα μας θα τείνει να μετατραπεί σ’ένα πανέμορφο, απέραντο παραθαλάσσιο οικόπεδο, στο οποίο θα κτίζονται ακριβά γηροκομεία-‐ θέρετρα για βορειοευρωπαίους συνταξιούχους την ώρα που οι δικοί μας συνταξιούχοι θα κυκλοφορούν σαν φαντάσματα και οι νέοι μας θα έχουν μεταναστεύσει στα τέσσερα σημεία του ορίζοντα. Για αυτό τον λόγο, και μόνο αυτόν το λόγο, είμαστε απόψε εδώ. Για να βάλουμε τέλος σε αυτό. Μαζί. Μαζί και με τους γερμανούς μας συντρόφους είμαστε ως σάρκα μία – όχι σύμμαχοι αλλά μέλη του ίδιου πολιτικού κινήματος. Όταν μέλη του DiEM25 όπως η Judith βρίσκονται στην Ελλάδα, δεν είναι απλά φιλέλληνες – γίνονται έλληνες. Κι όταν εμείς πηγαίνουμε στο Βερολίνο, γινόμαστε γερμανοί. Αυτό είναι το DiEM25: Το Κίνημα της Συμφιλίωσης των Ευρωπαίων Δημοκρατών.»
Ανέλυσε τις 7 τομές που το DiEM25 θεωρεί απαραίτητες για την αποφυγή της ερημοποίησης της Ελλάδας:
Μεγάλες και άμεσες μειώσεις όλων των φορολογικών συντελεστών – 18% ο μέγιστος ΦΠΑ, 20% ο μέγιστος φόρος των επιχειρήσεων, κατάργηση της προπληρωμής φόρων, κατάργηση του φόρου αλληλεγγύης για εισοδήματα κάτω των 30000.
Αναδιάρθρωση δημόσιου χρέους μέσω ανταλλαγών νέων ομολόγων των οποίων οι αποδόσεις εξαρτώνται από την ανάκαμψη
Στόχο πρωτογενούς πλεονάσματος το πολύ 1,5% του ΑΕΠ
Άμεση ίδρυση Δημόσιου Εξωτραπεζικού Συστήματος Πληρωμών– που επιτρέπει την πολύπλευρη ακύρωση ληξιπρόθεσμων οφειλών, τις εξωτραπεζικές πληρωμές, και δημοσιονομικό χώρο για το κράτος καθώς και δυνατότητες χρηματοδότησης νέου προγράμματος καταπολέμησης της φτώχειας
Ίδρυση Δημόσιας Εταιρείας Διαχείρισης Μη Βιώσιμων Ιδιωτικών Χρεών με μορατόριουμ στους πλειστηριασμούς και στις εξώσεις
Μετατροπή Υπερταμείου-‐ΤΑΙΠΕΔ σε δημόσια αναπτυξιακή τράπεζα που δανείζεται με εχέγγυα την δημόσια περιουσία (την οποία διαχειρίζεται με στόχο τις επενδυτικές ροές που αναβαθμίζουν την ίδια την δημόσια περιουσία) και με τις μετοχές αυτής της νέας αναπτυξιακής τράπεζας να εκχωρούνται στα ασφαλιστικά ταμεία τα οποία έτσι στηρίζονται με νέα κεφάλαια.
Σεβασμός στην μισθωτή εργασία και στην επιχειρηματικότητα: Τέλος στο «μπλοκάκι» και το ΤΕΒΕ-‐ΕΦΚΑ για μισθωτούς οι οποίοι εντάσσονται στο ΙΚΑ. Πλήρης ψηφιοποίηση όλων των συναλλαγών ώστε να καταργηθούν οι μεταχρονολογημένες επιταγές που παίρνουν οι αγρότες και οι μικρομεσαίοι από τα σουπερμάρκετ και τους μεσάζοντες. Για νέες επιχειρήσεις, start-‐ ups, απαλλαγή για 5 χρόνια από ασφαλιστικές εισφορές. Για όλες τις επιχειρήσεις εισαγωγή «ταβανιού» στο συνολικό ποσοστό φόρων και εισφορών στο 50% των εσόδων τους.
Παρατήρησε ότι οι δανειστές «συμφωνούν σιωπηλά ότι αυτές οι τομές είναι απαραίτητες αλλά δεν τις δέχονται γιατί η ανάκαμψη της Ελλάδας δεν τους αφορά. Το μόνο που τους νοιάζει είναι να μην φανεί πως μια κυβέρνηση μικρής χώρας τους φέρνει αντίσταση και πετυχαίνει αμοιβαία επωφελή συμφωνία μαζί τους. Έτσι, καταλήγουμε παράπλευρη απώλεια στην τιτάνια μάχη συμφερόντων Παρισίων, Βερολίνου και Ουάσινγκτον.»
Εξήγησε πόσο σημαντική είναι η επιμονή στη στρατηγική της δημιουργικής ανυπακοής και της αδιαπραγμάτευτης στάσης της χώρας απέναντι στον παραλογισμό της τρόικας και εξήγησε ποια η διαφορά με το 2015:
«Καλοπροαίρετα κάποιοι θα ρωτήσουν: Καλά, μπορεί να αντέξει η χώρα εντός της ευρωζώνης υπό καθεστώς σύγκρουσης με την τρόικα; Δεν το προσπαθήσατε αυτό το 2015 και αποτύχατε; Τους απαντώ: Το πρόγραμμα για επιβίωση εντός της ευρωζώνης υπό συνθήκες ρήξης με την τρόικα δεν απέτυχε το 2015. Απλά δεν εφαρμόστηκε! Ο πρωθυπουργός παρέβη την υπόσχεσή του και, απλά, δεν με άφησε να το εφαρμόσω. Λογικό ήταν να επέλθει η ήττα. Σφάλαμε. Όχι επειδή πιστέψαμε ότι η απελευθέρωση ήταν εφικτή. Σφάλαμε που πιστέψαμε τους λάθος ανθρώπους οι οποίοι κάποια στιγμή για να συνθηκολογήσουν αποκάλεσαν αυταπάτη τον εφικτό στόχο.»
Θέλεις να μαθαίνεις για τις δράσεις του DIEM25; Γράψου εδώ.
June 16, 2017
June 15, 2017
DiEM25’s New Deal for Greece
Yesterday, the Eurogroup came up with another fudge, another extend-and-pretend loan tranche, for Greece. It is, as this annotated version of the Eurogroup statement explains, a further boost to Greece’s never-ending crisis. Greece’s creditors, the EU and the IMF, are refusing even to discuss Greece’s recovery, Greece’s escape from debtor’s prison.
So, what should be done? DiEM25 just published the English language version of our New Deal For Greece. Click here for an 8-page outline
The Annotated 15th June 2017 Eurogroup statement on Greece
Back in August 2015, while sitting gloomily in the Greek Parliament during the sad, long night leading to the voting in of the 3rd MoU, I found solace in annotating the MoU’s text. Last night, I felt the need to repeat that wretched ritual once more, this time with the 15th June 2017 Eurogroup statement on Greece. (In blue you see the Eurogroup’s statement text – my annotations in red )
[To download this document in pdf click here.]
Orwell’s doublespeak revisited, as the troika rejoices at having agreed to pay itself, once again
The troika, that hides behind and is the motive power of the Eurogroup, has imposed upon Athens, once again, an ‘agreement’ according to which the troika will re-pay to itself a part of Greece’s unpayable debt on conditions that guarantee (a) another postponement in the country’s return to growth and (b) a deepening of the structural imbalances characterising public finances and private enterprise. In truly Orwellian form, the Eurogroup has exercised again, and with no compunction, its unique capacity for truth inversion. Here is how they phrased this new phase of extending-and-pretending:
The Eurogroup welcomes that agreement has been reached between Greece and the institutions on a policy package of structural measures, which aims at shoring up growth and addressing the underlying structural imbalances in public finances and paves the way for a successful completion of the second review of the ESM programme.
More austerity by which to sink Greece’s private sector deeper into insolvency and its people further into the arms of despair
The Eurogroup also welcomes the adoption by the Greek parliament of the agreed prior actions for the second review, notably the ambitious post-programme fiscal package, which is composed of an income tax reform broadening the tax base and a pension reform.
Here we go! “Income tax reform broadening the tax base” & a “pension reform”. Let’s see what these entail:
Together they deliver net savings of 2% of GDP which will underpin the fiscal targets post-2018.
In short, poor pensioners will annually forfeit one of their twelve monthly pension payments, as a result of a reduction in the threshold above which income tax is withheld. For a country where one in two families have no one working in it, and thus have to survive on some small pension that a grandparent collects, this is a socially devastating cut. Moreover, it will also lead to further small business failures (due to the large multiplier effect of reducing a small pension: when poor families reduce their spending in local shops already on the brink, many of these will go under), the result being more people on the scrapheap of unemployment and fewer contributors to the stressed pension funds.
It also contains a contingent expansionary package to enhance the growth potential of the Greek economy and to improve the Greek social safety net that will be implemented provided that the agreed medium-term targets are met.
Note the “also contains…” phrasing. The Eurogroup is, indirectly, admitting that the pension and fiscal reforms are recessionary but hastens to add that they “also contain” expansionary elements. What are those?
We also welcome the adoption of a package of decisive measures to effectively address non-performing loans (NPL), such as establishing an active secondary market, an Out-of-Court Debt Workout framework, as well as all actions to make the Hellenic Corporation of Assets and Participations (HCAP) fully operational.
Non-performing loans are, indeed, a scourge. But when the troika speaks of “decisive measures” to deal with them, they mean the sale of those loans to vulture funds and the simultaneous activation of evictions (though a summary-execution mechanism that bypasses the courts) followed by electronic auctions of the foreclosed properties. In an economy where real estate prices have been plummeting for years, the troika’s “package of decisive measures” is only going both to boost homelessness and undermine the housing market further.
Workers’ and trades unions’ rights will not be restored while mass dismissals made easier
Moreover, the policy package includes a large number of structural measures aimed at enhancing the growth potential of the Greek economy.
And what might these structural measures, that will enhance Greece’s growth potential, be?
With regard to labour market reforms, the Eurogroup welcomes the adopted legislation safeguarding previous reforms on collective bargaining and bringing collective dismissals in line with best EU practices.
I see! “Safeguarding previous reforms on collective bargaining” refers, of course, to the 2012 removal of the right to collective bargaining and the end to trades union representation for each and every Greek worker. Our government was elected in January 2015 with an express mandate to restore these workers’ and trades unions’ rights. Prime Minister Tsipras has repeatedly pledged to do so, even after our falling out and my resignation in July 2015. Now, yesterday, his government consented to this piece of Eurogroup triumphalism that celebrates the ‘safeguarding’ of the 2012 ‘reforms’. In short, the SYRIZA government has capitulated on this issue too: Workers’ and trades’ unions’ rights will not be restored. And, as if that were not bad enough, “collective dismissals” will be brought “in line with best EU practices”. What this means is that the last remaining constraints on corporations, i.e. a restriction on what percentage of workers can be fired each month, is relaxed. Make no mistake: The Eurogroup is telling us that, now that employers are guaranteed the absence of trades unions, and the right to fire more workers, growth enhancement will follow suit! Let’s not hold our breath!
Small business to be driven off the cliff with greater alacrity
The Eurogroup also commends the Greek authorities for adopting legislation to implement OECD recommendations to strengthen competition, to facilitate investment licensing, and to further open-up regulated professions. We welcome the commitment by Greece to continue on its reform path.
One of the first things I did when I became finance minister was to enter into discussions with the OECD in order to replace the so-called OECD toolkits (that took aim at small businesses) with reforms targeting the oligarchic corporates responsible for the worst type of rent-seeking behaviour. OECD Secretary General Angel Gurria and I agreed to proceed along those lines. Alas, after the government’s surrender, the troika forced Athens to jettison the new reform agenda that we had developed in conjunction with the OECD and to return to the regressive, ineffective OECD toolkits that even OECD Secretary General Gurria had referred to as ‘unhelpful’. Why? For a simple reason: The troika, and in particular the IMF, cannot tolerate the existence of small-scale, family owned businesses and want to see them close down before being replaced by chain-stores controlled by multinational companies (e.g. close down family pharmacies and replace them with drugstores owned by corporates in which the pharmacists work as proletarian labour).
European structural funding to decline
The Eurogroup also commends Greece and the European Commission for the exceptional mobilisation of EU Funds to boost investment in support of jobs and growth since July 2015, for a total amount of nearly EUR 11 bn. The Eurogroup calls upon the Greek authorities to work closely with the European Commission to ensure that additional EUR 970 million made available following the review of the national cohesion policy funding envelopes for the period from 2017 – 2020 are fully absorbed. Furthermore, we commit to continue to provide high-level experts to support the design and implementation of reforms through technical assistance projects.
This all sounds very impressive. Until, that is, one realises that the above-mentioned structural funding for the period (2015-2020) is 25% less than its equivalent for the period 2010-2015. In other words, cuts in structural funding are misleadingly portrayed as a great source of future growth.
In parallel the Eurogroup invites Greece together with the institutions as well as relevant third parties by the end of this year to develop and support a holistic growth enhancing strategy including improvements of the investment climate. Further options for mobilizing additional funds from national development banks and other international financial institutions (such as the EIB and EBRD) should be explored.
That’s excellent: It is like a lifesaver tying a ball-in-chain on the leg of a weakened swimmer, throwing him back into deep waters, and then inviting him to “develop and support a holistic buoyancy-enhancing strategy, including improvements in the swimming climate”.
Establishing the National Development Bank Greece needs while denying it the capitalisation necessary to make it macro-economically significant
The Eurogroup supports the efforts of the Greek authorities to work with the European institutions on the creation of a National Development Bank that would coordinate the implementation of development and promotional activities. The Eurogroup calls upon Greece, the European Commission and IFIs to work together to strengthen the pipelines of viable investment projects. Efforts should be made to step up the technical assistance from the European Investment Advisory Hub with a view to facilitating the preparation of investable projects and the establishment of investment platforms.
This is precisely that which I was working towards and arguing in favour of in 2015: the creation of a Greek National Development Bank. Excellent news, one might think. Except that the Eurogroup forgot to say where the capital base for the new Bank will come from. My proposal, that the troika and the Eurogroup treated with contempt, was that most remaining public assets be passed on to the new Development Bank so that the latter can use them as collateral (i.e. as its property/capital base) in order to generate the home-grown investments into the same public assets so as to boost their value and create jobs. Of course the troika does not want this, since they want all public assets to be sold immediately to their favourite bidders (usually from Germany) with the tiny proceeds used to pretend to pay the mountains of Greece’s debt. So, instead of capital and property the new Development Bank that the Eurogroup is happy to ‘support’ will be given “technical assistance” and advice from the troika’s own folk!
No debt relief. Period!
Today the Eurogroup discussed again the sustainability of Greek public debt with the objective that Greece regains market access at sustainable rates. Which, of course, means that, again, one more time, they decided not to decide. The Eurogroup reconfirmed the commitments and principles contained in the statements of May 2016. OK, it’s clear now: They reconfirmed that they were committing to absolutely no debt relief! (After all, the May 2016 statement said that they agreed to disagree and to, therefore, do nothing about debt relief until some unspecified moment in the future – most probably after we are all dead.) We noted that the implementation of the agreed short term debt measures already contributes to a substantial lowering of the gross financing needs (GFN) of Greece over the medium and long term and significantly improves the profile of Greek public debt. Yes, yes, yes, we got it! The Eurogroup thinks that Greece’s debt is viable and nothing needs to be done about it.
Hence, insane primary surplus targets until 2022 followed by ludicrous debt repayments until 2060
The Eurogroup welcomes the commitment of Greece to maintain a primary surplus of 3.5% of GDP until 2022 and thereafter a fiscal trajectory that is consistent with its commitments under the European fiscal framework, which would be achieved according to the analysis of the European Commission with a primary surplus of equal to or above but close to 2% of GDP in the period from 2023 to 2060.
Put a little more clearly: The Eurogroup remains committed to an insane level of austerity (for this is what 3.5% of GDP means) until 2022. After those further four years of mind&soul numbing recession, for those Greeks that remain in the country (and who have not migrated as a result of the utter misery the Eurogroup has spread all over the land), the austerity will be a little lessened until… 2060. (We are really experiencing levels of cynicism that have never been observed in Europe, or indeed anywhere else, before!)
The Eurogroup concluded that debt sustainability should be attained within the framework of the debt measures envisaged by the Eurogroup in May 2016. In this regard, the Eurogroup recalled the assessment of debt sustainability with reference to the agreed benchmarks for gross financing needs: GFN should remain below 15% of GDP in the medium term and below 20% of GDP thereafter so as to ensure that debt remains on a sustained downward path.
Behind the fancy acronym (GFN) hides an interesting proposition: That Greece’s state will be paying to its creditors 33% of its tax revenues until 2022 and 44% of its tax revenues from 2022 onwards. Usury has now acquired a new term in troika-speak: debt sustainability!
Greece may be given some of its own money back (to be paid back to the lenders). What generosity!
The Eurogroup recalls that it stands ready to implement a second set of debt measures to the extent needed to meet the aforementioned GFN objectives, in line with the Eurogroup statement of 25 May 2016. This includes abolishing the step-up interest rate margin related to the debt buy-back tranche of the 2nd Greek programme, the use of 2014 SMP profits from the ESM segregated account, the restoration of the transfer of the equivalent of ANFA and SMP profits to Greece (as of budget year 2017), liability management operations within the current ESM programme envelope taking due account of the exceptionally high burden of some Member States, and EFSF reprofiling within the maximum Programme Authorised Amount.
The SMP profits referred to above are profits that the European Central Bank has been making since 2010, when the ECB purchased from German and French banks a wad of Greek government bonds (without benefitting the Greek state by a single euro), at the expense of the Greek government (since these bonds would have been haircut by up to 90% had the ECB not purchased them). The Eurogroup agreed back in 2012 that these profits should be returned to Greece, and be used to repay part of our debt (primarily to the IMF, as I was suggesting). Since 2014 the Eurogroup has reneged on this promise. Now, the same Eurogroup is announcing with fanfare that, after all these years, it may return these profits to Greece. Hurray! (-even though it makes not an iota of a difference to the Greek State’s insolvency)
Eurogroup admits that all of the above is based on the lack of any debt sustainability analysis
The Eurogroup stands ready to implement, without prejudice to the final DSA, extensions of the weighted average maturities (WAM) and a further deferral of EFSF interest and amortization by between 0 and 15 years. As agreed in May 2016, these measures shall not lead to additional costs for other beneficiary Member States.
“Without prejudice to the final DSA”. What does this mean? It means that the Eurogroup’s pronouncements are not based on a proper Debt Sustainability Analysis (DSA). In other words, the IMF (which is the only troika institution with some expertise to carry out a DSA) thinks that the Eurogroup’s claim that Greece’s debt is sustainable is utter tosh!
As for the idea of a “further deferral of EFSF interest and amortization by between 0 and 15 years”, when coupled with the pledge that there will be “no additional costs” to the lenders, this means only one thing: The Eurogroup may allow Greece to skip some of its interest and capital repayments while the long debt burden grows and grows. As every mortgage ‘owner’ knows, when the bank allows you to skip payments, you end up with a much larger debt to pay in the long run. Easy payments are the opposite of debt relief!
In order to take into account possible differences between growth assumptions in the DSA and actual growth developments over the post-programme period, [Noticed the delicious declaration of incompetence here? The Eurogroup is saying effectively that: “As we have been wrong for 7 years in a row, and ridiculously over-optimistic, regarding Greece’s return to growth, here is what we propose to do when it turns out, yet again, that we erred badly:”] the EFSF reprofiling would be recalibrated according to an operational growth-adjustment mechanism to be agreed. [Back in 2015 I proposed a link between nominal GDP levels and growth rates with our debt repayments. The new French administration, to its credit, has brought back the idea. Except that, as we shall see in the next sentence, the Eurogroup is only paying lip service to it in prose in order to deny its essence in practice:] This mechanism will be fully specified as part of the medium-term debt relief measures, following the successful implementation of the ESM programme to make sure the GFN benchmarks defined above are respected and to ensure that the ceiling established by the EFSF Programme Authorised Amount is respected. The Eurogroup mandates the EWG to work further on this as of 2018. [They shall start working in 2018 on something Greece needed in… 2010! What a relief!]
New austerity locked in for 2018 and beyond – just because they can!
At the end of the programme, conditional upon its successful implementation and to the extent necessary, this second set of measures will be implemented.
This is unique nastiness, even by the troika’s standards: For the first time in the history of Bailoutistan, the Eurogroup is imposing further austerity on a ‘bailed out’ member-state to kick in after the ‘program’ is ‘successfully concluded’. Till now, imposed austerity was a condition for loan tranches, to be implemented during the period under which disbursements are made. Now that the Tsipras government has already legislated all the awful austerity measures asked of him, the Eurogroup insisting on new austerity that kicks in after the present loans run out in 2018. There is only one explanation for this: The Eurogroup knows that they will have to extend-and-pretend well beyond 2018, by means of a 4th loan agreement in 2018. This is the price one pays for extend-and –pretend loans: one must keep them coming!
The exact calibration of these measures will be confirmed at the end of the programme by the Eurogroup on the basis of an updated DSA in cooperation with the European institutions, so as to ensure debt sustainability and compliance with the European fiscal policy framework. In other words: “We are clueless on what we shall be doing then!” This DSA, while based on cautious assumptions, will also take into account the impact of growth enhancing reforms and investment initiatives. [Good to know!]
Eurogroup will look at delaying debt repayments (that boost the total debt burden) if Greece continues to wither after 2019
For the long term, the Eurogroup recalls the May 2016 agreement that in the case of an unexpectedly more adverse scenario a contingency mechanism on debt could be activated. [No one can accuse the Eurogroup of not having foreshadowed yet another ludicrous predictive failure. This is the second time in the same statement that they pre-announce it.] The activation of this mechanism would be considered subject to a decision by the Eurogroup and could entail measures such as a further EFSF re-profiling and capping and deferral of interest payments. [More extending-and-pretending, therefore, is to be expected if (or, more precisely, when) their extending-and-pretending fails!]
13.IMF caves in, once again
The Washington-based International Monetary Find has consistently argued that Germany and the Eurozone need to offer Athens substantial debt relief. Time and again Christine Lagarde and the IMF have threatened to pull the plug – to leave the Greek ‘program’ if Berlin and Brussels refuse this. And time and again the IMF has caved in. All that is interesting in the following paragraph is how the Eurogroup phrases and portrays the IMF’s latest cave-in.
Acknowledging the staff level agreement reached with Greece on policies, IMF management will shortly recommend to the IMF’s Executive Board the approval in principle of Greece’s request for a 14-month Standby Arrangement. [i.e. Christine Lagarde will propose to the IMF’s Executive Board that it caves in to Berlin’s refusal to grant debt relief] The IMF welcomes the further specification of the debt measures given today by Member States, and agrees that it represents a major step towards Greek debt sustainability. [In truth, the IMF is licking its wounds and its staff are, once more, angered by the fact that no specification of any genuine debt relief measures has been offered.] The IMF arrangement will become effective with resources made available in accordance with its terms, provided that the programme stays on track, when IMF staff can assure to the IMF’s Executive Board that there is an agreement on debt relief measures, that, appropriately calibrated at the end of the programme, would secure debt sustainability. [The IMF will pretend to be happy and to be part of the troika but it will stay at an arm’s length, lending no money to Athens before the debt relief measures that the Eurogroup alludes to but refuses to specify are… specified.]
Troika to take €8.5billion this July and hand it over to the… troika
In view of the full implementation of all prior actions and subject to the completion of national procedures, the ESM governing bodies are expected to approve the supplemental MoU and the disbursement of the third tranche of the ESM programme amounting to EUR 8.5 bn to cover current financing needs, arrears clearing, and possibly room to start building up a cash buffer.
This is what it has all been about: How to justify legally the troika’s transfer of €8.5billion to itself this coming July. The reason the troika is keen to do this is that Athens must pay the ECB around €7billion. Of course Athens in bust and has no chance of doing it. So, the troika will take that money from one of its pockets (i.e. from the bailout fund, called ESM) and put it in its other pocket, the ECB. To ‘allow’ the troika to pay itself in this way, Athens has had to swallow the above-mentioned toxic austerity and anti-labour measures…
It is also worth explaining why the additional sum of a little over €1 billion that will be handed over to Athens: Since 2015, Athens has been paying out of its state’s bare coffers considerably more back to the ECB and to the IMF than it was supposed to under the loan agreements with the troika. The reason was the delayed disbursements by the troika. Those monies that the Greek state was paying to the ECB and to the IMF were coming out of the already depleted hospital, school and local government budgets. Some of those arrears are now being returned in the form of delayed loan tranches. In essence, money that Greece should not have paid to the IMF and to the ECB, but it did, is now replaced with more loans.
Eurogroup to help Greece return to the markets in 2018
In view of the ending of the current programme in August 2018, the Eurogroup commits to provide support for Greece’s return to the market: the Eurogroup agrees that future disbursements should cater not only for the need to clear arrears but also to further build up cash buffers to support investor’s confidence and facilitate market access.
A little like promising pigs that they will be offered flying lessons!
June 14, 2017
LIBERATION: Bruno Le Maire dans les pas de Yánis Varoufákis?
Le ministre de l’Economie va proposer une indexation du remboursement de la dette grecque en fonction de la croissance du pays.
Neuf thérapies en forme d’austérité budgétaire, trois plans d’aides, un changement de gouvernement et, au bout du compte, un énorme fiasco. Malgré l’obstination de la «troïka» (BCE, FMI et Commission européenne), qui n’a cessé d’imposer (le pistolet sur la tempe) à Athènes des politiques d’austérité aussi impopulaires qu’inefficaces, le constat est sans appel : la Grèce reste sur une trajectoire qui peut se résumer par deux courbes qui, après s’être croisées en 2008, n’en finissent plus de s’éloigner.
D’un côté celle du PIB, qui a chuté de près de 28 % depuis 2010. De l’autre, une courbe ascendante qui mesure un stock de dette publique toujours plus gros. Cette dernière représente aujourd’hui près de 180 % du PIB (326,5 milliards d’euros). Malgré les abandons de créances privées (100 milliards). Compliqué d’affirmer que «l’austérité c’est dur, mais [que] ça finit par payer».
Ironie.Le mantra : quand on doit de l’argent, on rembourse intégralement. Pas question d’annuler tout ou partie de la dette grecque. Ça passe ou ça casse ? «Ni l’un ni l’autre», assure-t-on dans l’entourage du ministre de l’Economie, Bruno Le Maire. Il a fait le tour des grandes capitales pour proposer ses bons offices. Et en premier lieu à Athènes qui n’est, à en croire Bercy, pas contre une idée que plaidera ce jeudi à Luxembourg Bruno Le Maire. Sa proposition : qu’Athènes puisse rembourser sa dette, mais en fonction de sa croissance. «Avec notre proposition, on pourrait avoir des années sans remboursement si la croissance est jugée trop faible. En revanche, nous dirons aux ministres de l’Eurogroupe que ces remboursements seront plus élevés lors de meilleures années», explique-t-on à Bercy.
Ironie du sort, Yánis Varoufákis avait fait la même proposition. C’était en 2015, il était alors ministre des Finances et se disait disposé à repousser des promesses électorales. «Nous voulons rembourser notre dette jusqu’au bout, assurait-il. Mais nous demandons à nos partenaires de nous aider pour relancer la croissance en Grèce. Plus rapide sera la stabilisation de notre économie, plus rapide sera le rythme de notre remboursement.» Varoufákis expliquait que son idée était de «convertir la dette en des obligations indexées sur le taux de croissance. Plus la Grèce se redresse, plus elle se trouve en condition de rembourser les prêts». Réponse : un non catégorique.
Remise au goût du jour par Bruno Le Maire, l’idée s’accompagne cette fois d’une proposition de rééchelonnement. «Tout le monde sait qu’on n’échappera pas à un rééchelonnement de la dette», confie-t-on à Bercy. Certains allant jusqu’à évoquer un calendrier de remboursement dont le terme se situerait aux alentours de 2060-2070. Une éternité pour les Grecs. Reste, si Paris parvient à convaincre ses partenaires, à aplanir un différend entre le FMI et les pays de la zone euro. Christine Lagarde estime que la dette grecque est insoutenable et plaide pour son allégement. Mais allégement ne veut pas dire annulation. Pour la patronne du FMI, la Commission européenne fait preuve d’un trop grand optimisme dès lors qu’il s’agit de réaliser des prévisions de croissance de la Grèce. Et c’est cette question des prévisions de taux de croissance de la Grèce qui risque de bloquer les discussions. Pas question de mettre la main au portefeuille pour le FMI si la dette d’un pays est jugée insoutenable, comme le prévoient ses règles.
Cassandre.Le Fonds avait mis de l’eau dans son vin orthodoxe en reconnaissant avoir sous-estimé les effets récessifs des coupes budgétaires sur la croissance grecque. Mais pas question de lâcher sur l’éventualité d’une annulation, partielle ou totale de la dette. Le FMI, comme l’UE, reformateront-ils leur logiciel à l’avenir ? Ce ne serait pourtant pas le drame annoncé par trop de Cassandre. Et cela tordrait le cou à des idées reçues. Comme celle martelée par le ministre de l’Economie Michel Sapin en février 2015 : «Pas question de transférer le poids de la dette grecque du contribuable grec au contribuable français»… Et d’assurer que l’ardoise serait de «735 euros par Français». Certes, la France est engagée à hauteur de 40 milliards par rapport à la Grèce. Mais c’est oublier qu’une petite partie lui a été prêtée dans le cadre de prêts bilatéraux. Le reste ? Une trentaine de milliards apportés par le biais du Fonds européen de stabilité financière qui a emprunté sur les marchés financiers avec la garantie de l’Etat français pour prêter, ensuite, à Athènes. Et dans les deux cas, les prêts sont déjà comptabilisés dans la dette publique française (environ 2 000 milliards). Leur annulation n’augmenterait donc en rien la dette française.
der Freitag: Eine neue Partei für Europa
Eine neue Partei für EuropaDiEM 25 Ein radikales und zugleich seriöses Programm, gute Leute, ökonomische Expertise: Wird Yanis Varoufakis’ Bewegung zur Konkurrenz für die Linke in Deutschland?
„Ein anderes Europa ist möglich“: Dafür kämpfen viele, aber bisher noch keine transnationale Partei
Löscht eure Paypal-Konten und helft, das Monopol privater Finanzkonzerne über Europas Zahlungsverkehr zu brechen! Der Bewegung DiEM 25 mangelt es weder an Kreativität noch an Konkretion: ein öffentliches digitales Gratis-Bezahlsystem für ganz Europa, das ist einer von vielen, vielen Vorschlägen aus dem 100 Seiten zählenden Programm. Keine Sorge, es gibt Kurzfassungen. Die wird DiEM 25 brauchen auf dem Weg, den Mitgründer Yanis Varoufakis vergangene Woche in Berlin verkündete: hin zur ersten paneuropäischen Partei, rauf auf die Stimmzettel bei der Wahl zum Europaparlament 2019. Dieser Weg wird steinig.
Zuerst gilt es, die europaweit 60.000 Mitglieder starke Basis von der Transformation zu überzeugen. Dann soll aus der richtigen Euro-Fehleranalyse, den radikalen, aber keineswegs utopischen Reformvorschlägen sowie den so prominent wie progressiv besetzten Gremien eine Wahlalternative werden. Und schließlich muss Europas Demokratiedefizit überwunden werden, wofür das Parlament keines bleiben darf, dem eigene Gesetzesinitiativen verwehrt sind wie heute.
Wer all das als Träumereien abtut und sich lieber für eine Rückkehr zu starken Nationalstaaten in Stellung bringt, ist bei DiEM 25 falsch. Sich von mutmaßlichen EU-Aussteigern in der hiesigen Linkspartei abzusetzen und Konkurrenz an den Urnen zu erwägen, wie es Varoufakis tat, macht Sinn – zum Zwecke der Profilierung als transnationale Partei, die sich Marxisten, Liberalen wie Sozialdemokraten empfehlen will. Und wem Sahra Wagenknechts Rede vom verwirkten Gastrecht immer noch in den Ohren dröhnt, der bekommt hiermit eine interessante Alternative. Eine, die sich zudem von Initiativen wie Pulse of Europe differenziert, indem sie nicht im pro-europäischen Affekt verharrt, sondern sowohl ökonomische Expertise als auch seriöse Ideen zu bieten imstande ist.
Das beides wiederum kann mit Recht auch die Linke für sich proklamieren, aus deren Umfeld noch dazu die einzigen bekannten Köpfe von DiEM 25 hierzulande kommen, Parteichefin Katja Kipping in erster Linie. Am Ende wird mit DiEM 25 wohl kaum eine neue linke Kraft im parlamentarischen Spektrum Deutschlands erwachsen. Sondern im besten Falle ein kritischer Impulsgeber für die Linke – und ein Bündnispartner an den Wahlurnen.
June 13, 2017
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