15 Jul 2015

Decoding the IMF: Greek deal doomed, exit likely

It’s easy to get drawn in to the detail. I spent some of yesterday in the hot corridors of the Greek parliament where the various factions and groupings within Syriza, the radical left party, were working out their postures on today’s vote.

No to the rescue deal, says the left. Abstain, say others. Vote yes while declaring it’s been done at gunpoint, says Alexis Tsipras in a live TV interview. But step away from the argument, bitter as the black coffee served in the parliament’s canteen, and the bigger picture is: the deal will pass, Syriza will vote for it.

Greece's PM Tsipras and Greek Finance Minister Tsakalotos leave a euro zone leaders summit in Brussels, Belgium


Step back further and take in the implications of the IMF’s secret report, leaked yesterday, into the dynamics of Greece’s debt. The IMF says – after the weeks of dislocation caused by the relentless bank run and the capital controls – that the austerity deal is pointless. Greece needs a massive debt write-off or large upfront transfers of taxpayers money from the rest of Europe. It needs a 30 year grace period in which it will stop repaying the loans.

Yet the entire deal done on Sunday night was premised on not a single cent worth of debt relief. Vague commitments to “reprofile” debt – pushing repayment times backwards and lowering the interest rates – were all Angela Merkel could be persuaded to do.

What this means is very simple: the third bailout agreed in principle on Sunday night is doomed to fail. First because the IMF cannot sign up to it without debt relief; second because, without debt relief it will collapse the Greek economy. This is even before you factor in issues like mass resistance to its details, or the total lack of enthusiasm for execution of the deal by the Syriza ministers who will have to do it.

IMF report

But on both sides of the Greek political class there is cognitive dissonance, and it’s being generated by the same thing: a blindness to what the Euro has become.

The Greek centre and centre right will keep Syriza in power today on the grounds of being good Europeans. Syriza will vote for a deal it opposes, and which anybody who’s read even a summary of the IMF report now understands is doomed. Again on the grounds that it is demonstrating commitment to Europe and that, as Alexis Tsipras argues, “rules out Grexit”.

The implication of the IMF report is that Grexit is inevitable. Without debt relief the Greek debt to GDP ratio will rise to 200%. It will be using 15% of its GDP simply to make interest payments and payments coming due.

So we go back to the old problem that has dogged Greece since 2010. Yes it has an inefficient, state-dominated economy that needs to be reformed; yes it has antiquated and corruption-inducing restrictions on who can run certain businesses. But you can’t modernise a place like Greece amid the relentless downward pressure on growth that austerity measures produce.

By saying this – albeit in a secret document the Europeans wanted suppressed – the IMF has shown it is a learning organism. It has abandoned the dogma that predicted austerity would bring a 4% fall in GDP and drawn conclusions from the 25% fall in GDP that actually occurred.

One of the recurrent features of this crisis is the mismatch between the speed at which political parties learn things and how people do.

I’ve found, among ordinary people who were passionate supporters of the No vote in the referendum, the widespread acceptance that – to go forward with measures on social justice or alternatives to austerity – Greece will have to leave the Euro. Most people I talk to want it done in a controlled manner, consensually and with some kind of mandate from the people.

They’ve realised that Angela Merkel’s absolute refusal to countenance debt write-offs inside the Euro, alongside the IMF’s absolute insistence that they should happen, have created a cul-de-sac no Greek government can get out of without reversing out of Euro membership.

Syriza – which was always a coalition of left social democrats, New Left marxists and a harder left communist group – is finding it institutionally hard to accept this logic.

Opponents of exit argue that, with the Euro question “solved” they can get on with prosecuting a domestic crusade against corruption, poor police methods and the dysfunctional judiciary and the state.

What nobody knows is how much of its absolute sovereignty over domestic law the Eurozone would actually use if, for example, Syriza tried to cleanse the judiciary. Would this be deemed as “politicising the state?” Nobody knows – because the European Commission and ECB have never had to have policies on such things before.

‘Third bailout will be a disaster’

Equally uncertain is: what kind of party does Syriza now become? Right now it is still, basically, an expression of the desire of large numbers of Greek people to stay in the Euro with less austerity.

The Greek electorate’s pattern over the past 5 years has been to put parties into power who say they will mitigate austerity but stay in the Euro. First Papandreou, then New Democracy – who also, now barely remembered – once opposed an austerity memorandum – and now Syriza.  By throwing successive parties into the European mincing machine, the outcome has been to shred party politics. Pasok was shredded, New Democracy was shredded and it’s possible that Syriza too will split, be vilified, denounced as traitors etc.


We know from opinion polls that about 35% of Greeks want to leave the Euro but that a further 25% of those who voted No in the referendum probably fear what Alexis Tsipras spelled out last night: €250bn has left the country over the past 5 years and if Greece leaves the Euro this “drachma lobby” would be able to return to Greece and buy out everything and everybody.

But listen to the IMF report – which implies the third bailout will be a disaster; and to the intransigence of Angela Merkel – who says no debt relief within the Euro. The more I look at it, logically and dispassionately, that €250bn waiting outside Greece for Grexit now looks like very smart money. And you the highly logical and dispassionate investment community is drawing that conclusion too.

The levels of economic pain and dysfunctional borrowing set to be inflicted on Greece mean that at some point in the next 12-18 months there is a chance that centrist 20-30% of public opinion will flip to a policy of controlled, or maybe temporary exit from the Eurozone. The only question then is: which party will offer a convincing narrative and lead it.

Follow @paulmasonnews on Twitter.

45 reader comments

  1. Mark Moffett says:

    I am not related to Paul Mason. And used to work for the BBC. But just wanted to say that it is difficult to see – especially in a world of diminishing resources – how journalism can get any better than his series of sports from Greece. Hope you get enough sleep and keep going. And that Snow man isn’t doing all that badly either. Gaza and elsewhere. Thank you, Channel 4. Life-enhancing in a damaged world.

    1. Roger Colt says:

      I agree. Indispensable.

    2. Izzie says:

      Me too! These reports have been fantastic. Full of fact, insight and moment. I’ve been most impressed by how Paul has stayed with this story through all its phases. Plus the fact that as well as providing answers he asks the kind of questions that we usually have to wait on historians to ask, long after the event. The written blogs and vlogs have been a vital resource. I am full of admiration for C4 News’ nightly commitment to the situation in Greece too. Those 3 and 4 minute slots over the weeks build up into a significant and sustained contribution to our understanding. Many thanks to all concerned.

    3. Andrew Dundas says:

      But Mark, Paul’s blog excuses the real culprits. The gung-ho EZ members. Especially Germany, France and Italy.
      I’ll explain:
      Paul’s observation: “… has an inefficient, state-dominated economy that needs to be reformed; yes it has antiquated and corruption-inducing restrictions on who can run certain businesses” is correct and well-known for decades. Those risks were well advertised by the high interest rates Greece had to pay for loans prior to joining the Euro.
      And all of that was known before the EZ members decided to allow Greece to join the Euro group in 2000 – despite those clear risks. Moreover, they compounded their ruinous policy by treating Greek Debt as if it were just as secure as the debts of the rest of the EZ States. Which was plainly barmy back even in the early 2000s – and I said so to my MEP at the time (to no avail).
      We correctly excoriate bankers for not checking the real value of the derivatives they bought. And which often turned out to be wonky.
      We should also excoriate and punish EZ governments who’ve been just as reckless as any dealing room. I note that the UK has very few greek bonds.
      [What an admirable judgement by our former Labour Government!]
      As their penance for those gross errors of political and economic judgement – that is those of mainly France, Germany and Italy – the IMF wants the EZ to write-off a large proportion of those Greek Bonds that they so stupidly invested in. If that causes their own banks to need bail-outs, I’m sure their taxpayers will oblige. Because people who make high risk investments should absorb the write-offs.
      One way of writing down the value of those Greek Bonds would be to change the bond redemption dates to some year far far into the future, and on the current short-term nominal interest rates. Auditors will then write down the real value of those Bonds. Government debts will rise, and their leaders will learn a tough lesson: don’t lend cheaply to bad credit-risks!!!

      All of which is missing from Paul’s otherwise interesting account.

  2. Judith Chernaik says:

    I just want to thank Paul Mason for his superb reporting both for Channel 4 and the Guardian, a lifeline for those of us — I hope a huge number — who love Greece and cannot bear the bullying self-interested and thoroughly hypocritical tactics of the faceless EU bureaucrats.

    Judith Chernaik

    1. Andrew Dundas says:

      Hello Judith
      In support of your observation and Paul’s report, let’s recall that the EU States that took the huge risk of buying Greek Government Bonds are the ones that would suffer the loss of any ‘haircut’.
      Which could be why the Germans (the most reckless investors in Greek Bonds) don’t want a write-off of some of the value of those Bonds. They don’t like it up ’em!
      It’s worth saying that – for some undisclosed reason – British Banks and our Government in the noughties – bought hardly any of those dodgy Greek Bonds. How fortuitous! Or maybe how prescient!
      There’s a moral here: avoid taking investment advice from either the German government or their bankers.

  3. Boffy says:

    “I’ve found, among ordinary people who were passionate supporters of the No vote in the referendum, the widespread acceptance that – to go forward with measures on social justice or alternatives to austerity – Greece will have to leave the Euro. Most people I talk to want it done in a controlled manner, consensually and with some kind of mandate from the people.”

    On my blog post A Deal That Is Not A Deal I describe the fact that both conservative and left nationalists have presented the options for Greece as either in or out of the Euro, as being like someone who complains about their wages, and is told then only option is to put up with it, and stop moaning, or else to get another job.

    There is another option, which Syriza has tried to pursue, which Podemos is still pursuing, and which sections of the left, and working-class across Europe are being attracted to, which is to stay and fight, for something better, accepting, like every trade unionist does, that you don’t win every, or even the majority of fights. A look at the win for the SNP, a nationalist party that only uses traditional social-democratic rhetoric, the rise in support for Sinn Fein on the same basis, contrasted with the failure of a Blairite Labour Party offering austerity lite policies to fire anyone’s enthusiasm, and the fact that despite all the media hostility to him, Jeremy Corbyn is romping away with every leader’s debate, not just amongst party members, but amongst the general public who attend the events, shows that this option is the one with wind in its sails.

    Not surprisingly, because if you are in a terrible, poorly paid job, but its better than every other job on offer, you have no other realistic option. The fact, is that if Greece were to leave the Euro, there is no possibility of carrying through any kind of progressive policies, but such policies, as Marx set out more than a hundred years ago, depend upon the economic structure and conditions of society, which is why he thought outright opposition to the use of child labour at the time, was a liberal utopian demand.

    The idea that Greece or Scotland or any other tiny nation could be better off outside a larger economic structure, is equally reactionary utopian nonsense. Marx and Engels again more than a hundred years ago, described why such small states are reactionary, and Lenin made a similar point later, in opposing the creation of any new bourgeois states. A look at Scotland, where the SNP has deceived people into the belief that they could be better off with an independent Scotland illustrates the point, because now with the start of the crash in the oil price, an independent Scotland would find itself near bankrupt, in short order. It would find itself immediately needing to implement far more austerity than it is currently undertaking.

    Socialism in One Country is a reactionary demand, and led to disaster in the USSR, it is even more reactionary and utopian in tiny Greece, beset with all the problem it has. Its like telling the coal miner complaining at their £500 a week wages, that a solution to their problems is to become a self employed window cleaner, earning £200 a week, only if they work all hours of the day, and if they can compete with every other person deluded into thinking that they can get rich via self employment.

    Moreover, the idea that Greece could leave the Euro in some organised manner is unrealistic. When people leave their jobs, the best way they can usually do it, is by getting some better job lined up, before they tell the boss they are off. Otherwise it usually leads to a period of unpleasantness for the worker. Often the transition is more about the worker just getting the sack, and the worker then trying to create as much disruption, before they go out the door that they can!

    1. Leginge says:

      Boffy – what a load of hogwash you write. The Greek people have no choice or power in or out of the EU – Global capital will decide their fate. And as for Scotland being a basket case without oil, this just shows your ignorance of economics.

  4. bryan davies says:

    Paul – there are essentially only two options – stick with the EU whatever or go it alone. My choice would be to go it alone because that has more upside. Given that the Greek people have now been exposed to the EU style of negotiating and the fact that to accept the EU deal will cripple them there appears no way forward other than to go it alone. OK it will not be pain free but after say three five years all the upside will be theirs. I also sense that as a people the Greek will bind together when the chips are down – possible a more mutual society than the Birts. If they come out of the EU Im going to Greece for my hols next year that’s the least I can do.

    1. RockySpears says:

      When you go back, if the Greeks leave the Euro, Starbucks/Costa/Nero will be running all the corner Cafes, West Western will have the family tavernas, Lidl, Aldi and Carrefour will have all the markets etc etc The Greece you go to will not be the Greece it was. It will be Brussels, but warmer.

    2. jack says:

      I reckon an exit is a more preferable choice for Greece’s future. There is no need to reprimand Tsipras for what he is doing. My guess is that he is fully aware of what is on the table and what lies ahead for his country, and if the people want a more measured approach to an exit from the Euro, who can blame him. Politicians of all stripes need to be adaptive to make progress of any kind, so there is nothing inherently wrong with his strategy in light of the implications of a hurried Grexit, with so many jackals around baying for the blood of Greece.

  5. Michael Bischof says:

    Paul – „…but that a further 25% of those who voted No in the referendum probably fear what Alexis Tsipras spelled out last night: €250bn has left the country over the past 5 years and if Greece leaves the Euro this “drachma lobby” would be able to return to Greece and buy out everything and everybody.“
    Is there anything a left government could do about it to favour a mutual society rather than going back to the old system under new premises?

  6. Peter Batt says:

    And excellent outline of the third Greek bailout ‘deal-that’s-not-a-deal’, Paul. The economics of this is as punishing and vindictive as it is counter-productive. But it’s politics that will determine the eventual outcome and, judging by the misery and economic destruction this ‘deal’ is certain to cause, the whole European political enterprise will be poisoned beyond repair. The self-absorbed, hypocritical idiocy of the dominant eurozone member, Germany, will surely see to that.

  7. Leo Regan says:

    Good luck on this odyssey, until when? It’s been real, just at the moment of hysterical cognitive dissonance, at last, you use the phrase. No one sees the obvious because their brain rejects haircuts. Does NOT Compute. Herr Schaeuble. Law, what law, temporary Grexit because you dreamt a way out of the inevitable hit of debt write-off. It cannot be paid, and it won’t be paid. End of. Greece stays in, and the Germans take the hit. Move on.

  8. Jerico says:

    It’s such a relief to see good journalism still exists. Thanks for this ray of light Paul.

    Angela Merkel has been made to look, quite rightly, foolish, vindictive, narrow minded and lacking in moral courage by the IMF (mercifully) leaked report. It was a joyous moment.

    What I don’t get is why the people of Greece do not take the opportunity to seize the narrative now on offer, pull together and pull out, being accepting of a short period of intense pain over never ending creditor driven purgatory.

    What the hell are they waiting for!

    I can’t wait to visit an independent Greece again and spend some money with its amazing warm people, who wants to visit and invest in Merkels slave ship vision for Greece? Seize the moment guys and others will follow.

    Hurrah to the IMF ! ( did I even just type that).

  9. Bruce Steedman says:

    100% agree with Mark & Judith on quality of reportage by Paul Mason. Your Blog is a must-read Paul.

    A key person in the critical decision-making right now surely remains Mr Varoufakis. Although no longer minister, he remains in parliament and has said (link below) that he will assess the legislation on the 3rd bailout. As a person convinced all along that ‘relief’ without write down is doomed – and now with IMF saying so in so many words – one can only hope he can help shatter the “cognitive dissonance”.


  10. Tim Salmon says:


    A Vanity Fair piece published in 2010: read it, all of you Mason fans. If you spoke any Greek or could read what the Greek papers are saying, your enthusiasm for Mason’s nonsense might waver.

    “What kind of a party does Syriza now become?” he asks. It might have been helpful if he could have told you earlier what kind of a party it started out as. He writes of “recurrent features of this crisis”: one that I notice is the unannounced manner in which his own accounts of what is going on slip and slide as he tries to keep his footing on ground he really does not understand.

    1. George Vasilopoulos says:

      Paul Mason’s reports are spot on. Believe me I live in Greece. They are far more objective than the Greek newspapers

    2. John Gill says:

      The VF piece by Michael Lewis at the above url was an entertaining tissues of lies, not least in his poorly fabricated claims regarding events around the Marfin Egnatia Bank fire in 2010 (I was researching in Athens at the time, and Lewis’s timeline is so whacked I can only conclude he made that part up at a desk in Manhattan later). A half-decent subeditor could pick apart the other factoids in Lewis’s mendacious racist amusement in one single reading, yet it has become an ur-text among lazy Grecophobes.

      I too would like to thank Paul Mason for his reasoned and sympathetic reporting on Greece, and look forward to his documentary, Dreams Take Revenge, on the crisis and the rise of Syriza.

  11. Martin Bryce says:

    I would like to add my thanks to Paul Mason for his despatches from Greece. He has shown us why the different elements in Greek society feel as they do, the heavy burden carried by the country’s politicians in trying to save their country’s economy and the forces that constrain their actions. Above all, it has been the stories reported by Paul and Matt Frei of people trying to continue their everyday lives in such difficult circumastances that has made this series of C4 reports such exceptional journalism.

    Martin Bryce

  12. Aggelos Zacharopoulos says:

    This is a great report as always by Paul. Also big thank you to C4 for the detailed and objective coverage of the crisis so far. Unfortunately the BBC has lost its credibility since it decided to dump down its reports over the last 5 years.

    The summer will be long and hot in Greece, the winter probably worse….

  13. Dave Hansell says:

    The real elephant in the room across Europe and elsewhere is the nature of the Sovereign Debt.

    In Greece, as elsewhere, a large part of the problem causing the austerity race to the bottom is the fact that massive levels of private debt generated by private banks has been transferred to the public sector causing unsustainable Sovereign debt problems in many States.

    We have seen this in the UK where the public sector debt has rocketed as banks have been bailed out with public money and the most vulnerable are being asked to pay for it. We see massive amounts of hidden and overt public subsidies to private concerns and a lax tax regime where the most wealthy individuals and companies are allowed to get away without paying taxes, just as has been the case in the past in Greece and other countries facing the Eurozone austerity yolk to pay for that laxity.

    We have seen private liabilities transferred to the public sector. For example the pension liabilities of former public sector concerns now privatised, like Royal Mail and BT, which the City would not have touched with a barge pole without those liabilities transferred to the public sector.

    And the point is that the private sector levels of debt in the UK dwarf those of the public sector by a massive and significant factor, for now.

    Because past recent practice and precedent, some detailed above, suggests there is nothing to stop that private sector debt being transferred into the public sector causing a UK Sovereign Debt problem which may well result in a Greek style problem.

    As we sit here and consider the Greek and the Eurozone problems, self inflicted by the insistence on bailing out private concerns in which too many politicians across Europe and the US have a large vested personal interest, it should be sobering for anyone with the intellectual honesty to accept the reality that we are currently facing the third asset bubble in 15 years.

    An unprecedented historical event.

    Sober men in suits and ties are talking seriously about preparing for bail in’s where depositors money is used to prop up the insatiable to of private banking and finance concerns, along with the stellar salaries and bonuses of their major stock holders, CEO’s and senior management teams. Just like what happened in Cyprus a year or two back only on a much larger scale.

    Already, for example, legislation to allow this exists in some places.

    Meanwhile, whilst the focus of attention is currently on Greece allowed their problems the MSM seem to be ignoring similar problems in another Eurozone country which, surprisingly, is often held up allowed an exemplar of a good financial partner in the Eurozone.

    Perhaps this reticence on the part of the MSM to do its proper job and inform the public it purports to serve n that regard may well have everything to do with the fact that Finland has a right wing regime which toes the neo liberal voodoo economic orthodoxy, whereas Greece has a nominally left wing one, ie anyone which seeks to act outside of the Washington Consensus.

    Quelle Surprise!

  14. Tim says:

    Thanks Paul. Another excellent report. For anyone following the story of this Greek tragedy, this is simply *the* website to visit (and The Guardian’s website is good too).

    I would be interested to know if there is any risk that part of the 50bn euro sell-off of state assets that is being proposed might include state-owned museums and heritage sites. Is there any danger that the “Parthenon might be privatised” (serious question), museum contents sold to the highest bidder etc. etc.? If so, how could any Greek countenance such a thing? Thanks.

  15. eddie-g says:

    Thank goodness there’s a mainstream reporter willing to spell out the situation in such stark terms.

    Ambrose Evans-Pritchard is doing fine work over at the otherwise awful Telegraph, and there’s a loose coalition of Econ-bloggers who get it. But so much reporting to date has been fudged by the notion that this is debt that Greece must repay… It can’t, and now it is being held hostage by creditor nations in what can only be charitably described as an economic war-crime. The Euro has chronic, probably insurmountable design flaws, and making Greece pay for this sin, and trying to heap all the blame on Syriza, is unforgiveable.

    History is not going to be kind to Team Merkel.

  16. Francisco says:

    Ok, now this is a story that makes some sense! Truth is this deal will be a catastrophe, nobody believes in it to start with, both in Greece or abroad. It is bound to fail and take with it all the ones that are tied to it.
    That is why it is so decisive that Syriza rejects this and distances itself from this sinking ship and presents an alternative which includes Grexit one way or the other…
    “The only question then is: which party will offer a convincing narrative and lead it.”
    Paul Mason hits the nail in the head with this one! Finally someone understands the obvious! It better be a Syriza, purged of the capitulacionist traitors who want the party to implement a failed salvage neo-liberal deal. If Syriza cannot purge itself, than I hope for the best that its healthier parts can make a decisive break and lead the alternative.
    Fortunately there are important signs from the Ground pointing that Syriza will be able re-born from the ashes, not as a minion of the Imperial EU, but has a purged and Healthy party of the resistance!

  17. Adam Short says:

    It’s not that there are only two options – in or out. There are myriad options! The EU could create a fiscal body that made block grants to member states on a per capita basis to wipe out a certain amount of debt in the debtor nations on a certain schedule without banks having to take a haircut. The EU could authorize a “Geuro” scenario where Greece’s Euros become a sort of provisional currency that doesn’t clear at par with the Euro – a kind of soft Grexit. Greece’s creditors could agree to another big haircut – maybe something like what Argentina got in 2005. There are plenty of other options – Levy Institute has a number of proposals available on their website, as do other economic policy shops.

    The problem is that Greece has no power to effect or really even propose any of these deals – they would have to be initiated by the EU/troika. So as long as the EU is saying “austerity or Grexit” the Greeks must choose Grexit if they want to get out from under the grinding weight of the failure of the Euro (and in Greece, the Euro is not failing, it has failed.)

    The immediate aftermath of leaving a currency union is, alas, quite nasty. It’s similar to abandoning an Fx peg – decline in living standards due to the lack of availability of imports, then inflation in domestic sectors that are trying to replace those imports. It’s a painful situation that requires active mitigation by an engaged central government.

    But it is logically impossible that a fully employed Greece would be worse off than a depressed Greece. That’s ESPECIALLY true in Greece where the population is highly skilled and educated compared to, say, Argentina. The Greek workforce is essentially dumping about $25 Billion worth of human labor into the Mediterranean every year due to the 25% unemployment rate – those lost hours of productive human effort can never be recovered. They are lost forever.

  18. Christian Parenti says:

    Paul, superb work you are doing thank you.

    A question with a preamble:

    A key piece of the current predicament is the Greek government’s lack of a real plan for Grexit. But, as you and others have pointed out Gregxit may be coming anyway.

    Yanis Varoufakis has said in interviews that he feared the Greek state did not have the capacity to manage the default and transition option, be that actual Grexit to drachma or just default and issuing new euro denominated debt.

    So the question: What is your sense of the Greek technocrat class in the banking sector? Will they oppose the left-wing government or will they cooperate?

    If the government nationalizes the banks — or if the government doesn’t nationalize but takes over the Bank of Greece by appointing new leadership and starts giving emergency orders to the rest of the banking system while trying to recapitalize the banks with Drachma or Greek Euros — will the technocrats cooperate? Or will they, like the professional class in Venezuela, try to sabotage the project of the left-wing government?

    Is this issue of financial and managerial capacity to deal with a Grexit-like crisis being discussed in Greece?

    If Grexit is coming, and it seems to be, this question of “capacity” will loom large but it is currently not getting much attention. Any light you can shed on the “capacity” isseu would be appreciated by many.

    Thank you.

  19. tr says:

    Unusually sycophantic for me, I have to say that this is an excellent, thoughtful, well-informed piece with intelligent comments…

    From Europhile to Europhobe, well done M and S, you have achieved a complete turn around of my enthusiasm for greater European integration. I didn’t agree with Cameron’s idea of a referendum and, when it was inevitable, I was a dead cert ‘Yes’. Now I’m not so sure.

    I can’t imagine a
    ‘ negotiation’ which would have done more to worry citizens of the potential future of life in the EU. Euro-Sceptics fear a loss of sovereignty: confirmed. Southern European culture will be lost: confirmed. A Berlin-centric neo-liberal agenda is the only game in town: confirmed.

    But how can Tsipras say ‘no’ to this unworkable bailout and accept a probable inability to import medicines, food and oil, and the potential implications for the population? With great power comes great responsibility, and he seems mindful of this.

    So where from here? Of course there are more than two potential futures. The ‘randomness of life’ will likely bring an unexpected outcome or at least an unexpected route there; I hope it doesn’t have the word ‘Colonels’ in the description.

  20. Sarah says:

    I am also very grateful for Paul’s epic coverage of history in the making in Greece.
    The terms of the 3rd bail out look eye-wateringly painful and unendingly dismal, reproduce all the errors of the previous 2 attempted bailouts and further diminish anything that might be working in Greece. The lack of any enlightened self-interest on the part of the Eurozone is mind-boggling: everything that they propose has had in the opposite effect with fewer people in Greece now working or paying tax than ever…and nobody using banking transactions since the end of June the country is returning to a cash economy. Not to forget the human capital that is lost over the 5+ years in these awful circumstances; this is a tragedy of our times. And tonight there are riots in Greece. This is not progress or success or peaceful nor does it offer the people of Greece hope, dignity or a future.
    Moving from one crisis to another is no way to live for the people in Greece. History is in the making – as this can’t go on and something has to change. Grateful to Paul for bringing the news directly from Greece. The question is, how will history shape up and shape us all?

  21. Andre says:

    I think it would be better for Greece to leave EU. I think the things are not working out for them and for EU. I would rather see Greece crashing than all EU. Many people are saying “poor Greece; bad Germany and EU” but I think the reverse is true. If we remind ourselves how this situation came about, then it’s clear that Greece is the first offender: Greece cooked up the book to be in EU; Greece entered in the EU and started borrowing astronomical amounts of money; Greece sustained a huge debt ignored by corrupt and irresponsible Greek political parties; EU agrees that Greece has to pay its debts if it wants support from EU but needs austerity measures to contain catastrophic crisis in Greece; Greece’s Siriza came into power and, with no clear plan to be achieved, defies EU austerity in terms agreed by previous government; Greece rejects austerity but wants the bailout, wants to be in EU and have euro; EU says that in order to have euro, be in EU and to have the bailout, austerity has to happen; Greece feels humiliated and protest against EU.

  22. Ben McCall says:

    Agreed Christian, even Paul does not discuss who inside Syriza is planning leaving the Euro “…in a controlled manner, consensually and with some kind of mandate from the people.”

    If Varofakis is right (and I for one am not about to question him) that explains why Syriza has not been doing this planning, as they too believe that existence outside large economic blocks is utopian and the forces/consensus necessary to achieve this do/es not exist: they did not win an outright majority at the general election, but the referendum consolidated the anti-austerity mandate.

    Remember Joan Robinson’s “The only thing worse than being exploited by multinational corporations is not being exploited by multinational corporations.” ? If left-oriented Greek people wanted to leave the ‘neoliberal club’ EU, they could have voted Communist, but more of them voted Syriza. Time will tell whether it is better to ‘stay and fight’ inside the EU (I personally favour this for the UK, but the evidence is not great so far) or find a new path.

    Yes, life outside the EU for a small, relatively poor state with few natural resources, however relatively skilled the population is, is going to be hard. But at least it will be on its own terms and not hard plus endless debt to repay, etc.

    Paul and others have reported elsewhere on the myriad of alternatives – from neo-hippy / DIY survivalist to anarchist / anarcho-communist squatters and recyclers/volunteers/co-operators doing things which privatisation/austerity has forced out of state provision – whom surely are doing some of that planning and living that at present in Greece?

    Do these ‘new’ (old) ways of doing things with and for each other have the potential to either shape a post-Euro Greece, or at least contribute to survival in the painful transition? Paul is good at describing the pluralism of such situations and I look forward to more of this, which has been missing to date. Or maybe he thinks that on even a small state scale, these things are – albeit worthy – insignificant.

    And what about the comparison with Iceland, which other commentators (eg. Jenkins, Guardian) are still making? Obviously a very different country and situation, but …?

    I agree Christian, capacity is a big question, but so is ‘will’. It is the people who will have to do the work, enjoy the independence of Grexit and suffer the consequences. Their will to do this, or vote out a government who lead them to it, will define whether or not ‘another world is possible’ – viva optimism of the will!

  23. Nick Howard says:

    How can Syriza be social democratic when nationalisation of the banks is not on its agenda? Old Labour continued the 1844 Bank nationalisation act which was put in force when the Railway boom collapsed to save the investors from bankruptcy but Blair and Brown accepted the tory privatisation and sold off the gold reserves to keep the UK from bankruptcy after 2008 and used the gains to turn to QE. The Eurozone is trying to impose neo liberalism/New Labour without national autonomy across the continent but Grexit would tarnish the project. Grexit must have an alternative currency, the drachma ready to hand. Syriza must order the cash from the printers now. It is to prevent this that the Troika, is imposing on site inspectors with supra-national authority. Send them packing is the best response to that kind of capitalist dictatorship.

  24. Marcus H says:

    I would also like to add my appreciation for Paul Mason’s Greece reports. In my opinion, he tops the small group of international journalists who actually have any insight for the situation on the ground, and in the corridors of government. I work for a political risk analysis company and my colleagues have found his dispatches to be indispensable.

  25. Philip says:

    As well as the excellent journalism, the comments above show an intelligence & lack of oversimplification, prejudice or rant which I fear is only too apparent on BBC equivalents. (Not that it’s the Beebs’ fault)

  26. Januaria says:

    for those who gorge on gory images of atrocities re: pathologically untreatable trollism. Psycopathy.

  27. mervyn johnson says:

    Who are these people that have woken-up to the hard facts that Greece cannot sustain such crippling debts, It was known 5 years ago before the first bailout that Greece couldn’t or wouldn’t be able to repay such a loan, let alone further bailouts. And yet it’s only now that the IMF have considered the true long-term implications for Greece in it’s current position to square it’s accounts with creditors.
    And these are the qualified monetary professionals that swan around the world, paid huge salaries, supposedly know what they are doing. Because they badly misjudged (if they did at all) the Greek state of affairs they expect everyone else to foot the bill.
    All the creditors are fully aware that no matter what the new terms are for the current bailout offered the Greeks can never repay.

  28. Derek says:

    Looking forward to the the documentary. Thanks for the great reports and for seeing the € crisis in its true context.

  29. Philip Edwards says:

    All this blog and its responses show is just how neocon far right Mason is and how gullible others are.

    If you can handle the truth, read this: http://johnpilger.com/articles/the-problem-of-greece-is-not-only-a-tragedy-it-is-a-lie

    It shows up Mason and his ilk for the frauds they are.

  30. Januaria says:

    .. this is gettting me so down. All I can say to you is good luck mate. toodloo from meelie stew.
    I am off back to my sick bed .. that is how down this crisis has gotten me. see you all on the other side

  31. Carole says:

    ‘The IMF’s Original Sin in Greece was to let Dominique Strauss-Kahn hijack the institution to save Europe’s banks and the euro when the crisis erupted, dooming Greece to disaster’.



  32. Carey says:

    Where are you Paul – nothing more on Greece?

  33. Tim Salmon says:

    Can Paul tell us whether in his anti-monetarist Utopia farmers, as in Greece, will be exempt from income tax? And will the definition of farmer include dock workers who have planted three rows of beans in the village from which their families originally came? And will they also be able, along with lawyers with rural property, to buy “agricultural” cars at discounted prices?

  34. VN Gelis says:

    Syriza will try to become a sister party of Merkels CDU but will fail in the process.
    History won’t allow this privilege to occur.
    Better luck next time.

  35. Fred says:

    Sorry to ask a dumb question but why would an exit from the euro help the debt repayment problem? Does this imply that if Greece exits, it will not repay Eueopean debt?

    1. Carey says:

      No a “dumb question” , I believe that its all about being able to set their own currency levels against others. If you are in charge of your currency, you can reduce its value and through the variety of internal factors, like labour for instance, and services, boost exports, and boost external demand. Then when the country has scraped its way out of the very big hole that they are in – to a tolerable degree, they are able to pay off more “debt”. That results in a number of things like less of the GDP going toward “debt” repayment and so the more chance for investment within the country by the Gvt for example on infrastructure, and on keeping your people well through state managed health services, which in turn is more enticing to more external investment. It also boosts their credit rating – important for more loans should they need them, for they will get a lower interest rate on what they borrow. So, control of currency for many reasons can offer more safeguards. Hope that helps?

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