Published on 13 Jul 2015

Greece wins euro debt deal – but democracy is the loser

After an all-night negotiation during which Greek prime minister was subjected, according to one observer, to “mental waterboarding”, there is the basis of a deal to keep Greece in the euro. As I write, the Greek side do not have a document, but we have some details.

Greece will have to implement the tough austerity measures demanded by its lenders, plus hand €50bn of assets to a privatisation fund, where sales will be used to pay down debt.

In return it will get a new, third bailout deal reportedly worth €54bn; a promise of discussions on restructuring its debt; and a bridging loan to finance the repayments it cannot make. It is this – plus the imminent reopening of the banks under an ECB emergency lending scheme – that will allow PM Alexis Tsipras to save any kind of face with his own supporters, who are fuming.

If you doubt how it might play on the Greek streets, consider the headline of Dimokratia, a conservative tabloid: “Greece in Auschwitz: Schauble attempts eurozone holocaust”.

Last night the eurozone leaders presented Greece with an ultimatum that shredded all vestiges of control the government has over the economy going forward, and reversed every law it has put through parliament since being elected with 36 per cent of the vote in January.

While Greeks vented, and the hashtag #ThisIsACoup went viral across the globe, Tsipras and his team negotiated. They knew that to have any chance of getting the deal through parliament they must free themselves of IMF involvement, resist the foreign-held privatisation fund, get some commitment to debt reprofiling and an assurance that the ECB will turn the taps of emergency lending back on to the banks.

I said last night that without these things there was no chance of getting the austerity measures through parliament. It seems this morning that each of the measures has been fudged: so the privatisation fund remains in Athens, not Luxembourg; the IMF invovement is still there but apparently muted; the debt restructuring is there but unspecified.

So I am still not certain this will pass.

To understand what happens next you have to understand that, first, the Greek centre and conservative right is so morally and organisationally shattered by its defeats in the January election and the June referendum that it cannot simply take over.

There is only a parliamentary majority if Tsipras (pictured below) leads it.

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

 

The rebels in his party come in two genres: the hard left of the Left Platform, whose leader Panayotis Lafazanis abstained in Saturday’s parliamentary vote and may be sidelined in the coming days; and a more organic left, known informally as the 53 group, whose MPs voted yes on Saturday but can go no further.

The Syriza newspaper Avgi spelled out the party’s approach going into the negotiations: they must accept and vote through the outcome of negotiations in order to stay in power, because the overthrow of a government by the EU is unacceptable (nor indeed possible given the parliamentary arithmetic).

The eurozone took itself to the brink last night, and we will only know for certain later whether its reputation and cohesion can survive this.

The big powers of Europe demonstrated an appetite to change the micro-laws of a smaller country: its bakery regulations, the funding of its state TV service, what can be privatised and how. Whether inside or outside the euro, many small countries and regions will draw long-term negative lessons from this. And from the apparently cavalier throwing of a last-minute Grexit option into the mix by Germany, in defiance of half the government’s own MPs.

It would be logical now for every country in the EU to make contingency plans against getting the same treatment – either over fiscal policy or any of the other issues where Brussels and Frankfurt enjoy sovereignty.

Parallels abound with other historic debacles: Munich (1938), where peace was won by sacrificing the Czechs; or Versailles (1919), where the creditors got their money, only to create the conditions for the collapse of German democracy 10 years later, and their own diplomatic unity long before that.

But the debacles of yesteryear were different. They were committed by statesmen. People who knew what they wanted and miscalculated. It was hard to see last night what the rulers of Europe wanted.

What they’ve arguably got is a global reputational disaster: the crushing of a left-wing government elected on a landslide, the flouting of a 61 per cent referendum result. The EU – a project founded to avoid conflict and deliver social justice – found itself transformed into the conveyor of relentless financial logic and nothing else.

Ordinary people don’t know enough about the financial logic to understand why this was always likely to happen: bonds, haircuts and currency mechanisms are distant concepts. Democracy is not. Everybody on earth with a smartphone understands what happened to democracy last night.

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75 reader comments

  1. Veronica R says:

    Brilliant analysis, as usual. This is not over.

  2. Finns Party supporter says:

    The economic and financial boundaries of democracy, the reality of:

    You can make election promises for that for which there is no money, and the voters can elect a platform for which there is no money, but the money won’t appear out of nowhere for the elected leaders to follow up on their promises.

    Democracy in Greece was already a loser when Syriza gathered popular support by making completely unrealistic promises it knew it could not follow up on and when the Greek electorate believed and elected that completely unrealistic platform.

    1. Rowan says:

      You’re assuming that money is real. But it’s made up. The debt is made up.
      What’s real are the people and the land and the builldings and the other stuff.

      Money should be an abstract concept we use to help us, not a god we choose to believe and then let it rule our lives and destroy us.

    2. Dilip says:

      Convoluted interpretation of democracy by Greeks – 5% of Europeans deciding what other 95% pays, is NOT a democracy. There was no referendum across Europe to see whether other 95% agreed with the deal or not. It is like saying that in my home all four of us voted to have food, clothing and vacation of our choice, and by the way, we did not have any money to pay and ask all other citizens to find money ! Bizzaire concept of democracy !! Yes, they have a right to reject it, but there is always a consequence for every decision. Do not equate that to a democracy.

      1. Dave Hansell says:

        But the debt was a private debt between private Greek Banks and private German and European banks.

        Where was your call for the voters of the 95%, as you describe them, to vote for their money to be spent to bail out their private banks and other European private banks?

        Where is your self righteousness about demcracy in changing plate debt into a public one?

        You come across, whether you realise it or not, as a complete hypocrite because you cannot or will not be arsed to appraise yourself of the facts, the reality and the context.

        And people like you have to chutzpah to call Greeks lazy.

  3. James McDonald says:

    Sovereign nations joining a club with rules have a responsibility to their people to tell them the truth, and to the democratly elected leaders of other members to abide by the rules. Greece has failed to reform since the 2nd bailout in 2010, and is paying the price. The leaders of Greece have lied about who is responsible for their country’s mess, and used the democratic process to do so.

    1. Rowan says:

      The Syriza leaders didn’t lie. It was the people in power when Greece joined the euro who lied.
      And it was the gamblers in the financial world who caused the Great Crash of 2008.

      So how we’re allowing the people who caused the crash, the money-worshippers, to tell us all how to run our lives?
      Why are we letting the people who caused the crash now destroy democracy as well?

      1. James McDonald says:

        The ECB is not just some faceless institution, but is paid for by other Eurozone tax payers. Greek ‘official’ figures show €1.03bn remained unpaid in tax for May. Tax debt year to date is over €5bn. Total legacy tax arrears since 2014 are at €70bn. If paying tax was not one of their strong points, the EU press release of 28 June, attached the proposals to reform Greece’s economy & taxation abilities, http://europa.eu/rapid/press-release_IP-15-5270_en.htm, and you would be flabergasted that any modern European state had not yet done any of those reforms, rejected by Tspiras on 26 June, as he flounced off to call a referendum. These reforms, such as collecting tax, have been tragically ignored by Greece since 2010. I was in Greece that week and no one I spoke to seemed to have heard of, yet alone read, about these suggested IMF/EU/ECB reforms. Most of which were just plain common sense, if you want to be a modern country. Especially if you have a referendum on the subject.

  4. tdg says:

    This ‘relentless financial logic’ now means lending to those who (clearly) can no longer mist a mirror.

  5. Boffy says:

    “Ordinary people don’t know enough about the financial logic to understand why this was always likely to happen: bonds, haircuts and currency mechanisms are distant concepts.”

    It was only likely to happen, on the basis of the existing political leadership of Europe, just as austerity was only likely to happen in Britain on the basis of the political leadership of the Tories, and Blairite leadership of Labour. In 2008, Britain, the US and nearly every other country rejected austerity, and plumped for Keynesian fiscal stimulus to cut short the effects of the financial crisis. Samuel Brittain, wrote articles in the FT proclaiming “We are all Keynesians now.”

    It worked, the financial crisis was ended, growth rebounded in a traditional “V” shape. The US persisted with those fiscally stimulative measures, and continued to grow, despite the political machinations of the Tea Party driven Republicans to frustrate those measures, and the damage done to the economy by the political crises they created over the debt ceiling, budget and so on.

    The UK economy was growing by 2009, indeed in the quarter before the Tories took office, the UK economy grew by more than in any following quarter. Despite the additional spending, interest rates were falling, and growth provided the basis for reducing the deficit. Until just a few months before the election the Tories themselves supported such policies of fiscal stimulus. The Liberals even during the coalition negotiations continued to believe that austerity was a mistake, and David Laws commented to Sky News that the danger of the deficit had been “hyped up”.

    The US, which pursued policies of fiscal stimulus has continued to outperform those economies that introduced austerity like the UK, and EU periphery. It is the difference between governments following a social-democratic agenda, which supports actual business and the growth of real productive wealth, and those following a conservative agenda which tries to merely defend the fictitious wealth of share prices, bond prices and property prices.

    Marx described the same situation in the 19th century where policy driven by the interests of bankers resulted in the destruction of vast amounts of real productive wealth, just to protect those same paper values. The irony is that ultimately, by destroying the real productive wealth, it leads to all that much greater collapse of those paper prices anyway. The money lenders and the conservative politicians who represent their interests suffer the delusion that the interest on their fictitious capital simply appears from nowhere, rather than the reality that it is only possible on the basis of real surplus value produced in industry.

    By destroying industry to protect paper values, they destroy the potential for creating profits, and thereby for paying interest and rent, and so the basis of those inflated paper prices of shares, bonds and property.

    An alternative was possible, which is also the alternative required in Greece. That is to provide the necessary resources for investment in real production, rather than simply trying to prop up fictitious paper values.

    1. IKB says:

      Marx? You are seriously suggesting he has something to teach us apart from how to bring misery and ruin to untold millions?

      1. Dave Hansell says:

        Oh do grow up and focus on the practicalities of what this poster has laid out for you instead of going off in a self righteous tangent over one word.

        It’s not rocket science. Get off your arse and do some thinking instead of taking the easy lazy option.

  6. Frances Naggs says:

    How can we get some kind of democratic control over the financial system?

  7. Mark Horn says:

    What nonsense! Seriously, “democracy” was weakened when politicians in Greece behaved irresponsibly. The “referendum” was a distraction. These are the facts – the political classes in Greece are incompetent. They used clientele relationships to nurture their support bases over many decades. The trade unions were intransigent and have consistently resisted and reform. The Greeks used the implied guarantee of the EU to borrow. They borrowed excessively and funded a bloated State. When it became unsustainable, with the support of the EU they imposed on private lenders 3 years ago a 53.5% “haircut”. That in itself was a shock – the “State guarantee” of “Sovereign debt” was shown to be without foundation. That debt restructuring was only possible because the EU, ECB and IMF took the debt that had been subject to a vicious “haircut”. As such, Europe had already extended the hand of friendship and solidarity to the Greeks. There after we were all on the book. The Greeks were expected to undertake significant structural reforms, including reducing a bloated public sector, reforming an extraordinary generous pension system, reforming its tax system, and privatization. These reforms were not implemented, and indeed, Syriza reversed them when it came to power. Greek “democracy” is irrelevant – Greek voters can not vote to the effect that citizens of other European countries bail them out. That is a perversion of the concept of “democracy”. Journalists need to stop misrepresenting the facts. The mess here is a Greek mess. Only the Greeks are to blame.

    1. Doug Rocket says:

      What a beautifully simple narrative.

  8. RockySpears says:

    “The Syriza newspaper Avgi …….. given the parliamentary arithmetic)

    Does Greek Parliamentary law not allow for the UK equivalent of a “Vote of no confidence”?

    Surely there still remains a possibility of a refusal in the Parliament? Tsipras has 149 out of 300 seats, so he has no majority, surely some of his own will not want to be associated with this deal? The electorate have long memories, and it may be that many, if not most of the opposition will not want to be associated with what is clearly, to everyone the world over, a statement by Germany that it will do exactly as it please with small EU countries.

    Is the passing of these measures really so cut and dried?

  9. Elena says:

    I’ve been following your blog and tweets as they’re the only ones that do not pander to the right/ centre-right consensus. I have two questions for you:

    1. How can the rest of Europeans who want to support Greece do so? Send money? Support Syriza (how?)? What’s the feeling on the ground?

    2. What’s the path of resistance? A boycott of German products (given their reliance on export-driven growth)? Start campaigning for Brexit? Should Greece start legal proceedings against the EU (many argued that the role of the ECB in the run-up to the referendum went against its mandate to ensure financial stability)? We clearly need a resistance and fight back programme that is international in character — but how do we get there?

    On a different line: I worry about Tsipras’ mental and physical health. He’s been subjected to pressures untold and unthinkable since January; last night he was battered and sleep-deprived to make him bend. He now has to go back and fight with his own party to get this humiliating deal through. At least when Varoufakis was there he was absorbing a lot of the flack; Tsakalotos seems a cooler character, but it also means Tsipras is being barraged. Is anyone in Greece talking about how Tsipras can keep on going like this?

    1. Mess Mend says:

      rest of the Europe can go after their elected government and demand answers why they too supported destroying Greece. There’s nothing else You can do, but fight in Your home, Greeks do not need our cheap sympathy.

  10. Gertie 50 says:

    Why are you surprised? The European project has been democratically bankrupt for the past 25 years. Every time the EU has asked national elctorates- Ireland twice, the Dutch and French voters, about treaty change and the expansion of the EU behemoth, when the voters have returned a vote the vested European powers do not like, they ask them to vote again until they return the correct answer, or just steam roller ahead regardless. Hopefully this sad Greek tragedy will provide a catalyst for the national electorates to return an opinion on the EU that addresses this democratic deficit. This is a huge opportunity for Cameron.

  11. Brendan O'Rourke says:

    I am distraught, assuming Alexis Tsipras can get his vote through this Wednesday – I assume that he can. I am confused also as to why those who wish the democratic vote that was reinforced, (and should have been reinvigorated) last week to be respected are dubbed ‘hard left’ by intellectual lightweights.

    That was irony obviously – I actually thought I saw Merkel give a smirk when outlining how she intended to overthrow Syriza’s mandate.

    I still hope the vote on Wednesday goes against.

    Paul Mason’s perceptive comments on how the powers in Europe rode roughshod over a small state are illuminative of the necessity now for the left to campaign against membership.

  12. martin mcdonagh says:

    So now we have the real facts.
    Eurocrats will run Greece
    Europe is Thatcherism with a German face.

  13. Christopher Timmins says:

    Last night was a sad one for democracy and I can’t believe the Greeks still want to stay in the Euro. They are signing up to an extension of the same failed tax policies. Of course the Irish Government suffered a similar fate back in 2010 and nobody was more anxious than them to ensure that Greece suffered in a similar manner last night.

    The only measure which has been a help to the Irish Domestic economy over the past 5 years has been the reduction of the vat rate relating to the tourist sector from 13.5% to 9%. However, the Irish Government were rowing in behind the 23% vat rate hike yesterday.

  14. Mohsen says:

    Yup. Sad for democracy. Sad for Greece. But a predictable outcome. Neoliberalism has no place for the voice of people. That voice has to be crushed. It is a pity that a left government had to sign the death warrant.

  15. Tommy Twomey says:

    My educated nephew suggested that what has just happened to Greece is equivalent to the defeat of the Paris Commune – Lenin leant the lessons from that. Look out somewhere in 2061!

  16. Stephen Pettit says:

    Surely the failure in democracy as you put it is failure of governments of all persuasions over decades to tell their people unpalatable truths and promise the undeliverable. This crisis has been years and years in the making and we all starting to pick up the pieces.

  17. Roddy says:

    Paul, I normally agree with most of what you say. But surely a concomitant of democracy is rule of law, which means inter alia being able to fulfil your commitments?

    If democracy is the loser, it is the democracy which opened this spectacle in the first place. The largest and most powerful Greek families do not hold their businesses or assets in Greece and pay tax which support, er, a democracy?

    Democracies cost money and it is a pleasure for me to live in one and pay tax – I have seen the alternatives. But for us as citizens to have been lectured to by Tsipras over the preceding weeks about this being democracy which has lost?

    Mate, (Mason and more specifically Tsipras) democracy was lost years ago in Greece, when they waived the obligation to pay for it by not collecting tax.

  18. RP says:

    Time to rename your film? Instead of “And the Dreams Shall Take Revenge”, it could be “And the Dreams Shall be Ruthlessly Crushed”.

  19. qwert says:

    Great article that you should read.
    http://www.nakedcapitalism.com/2015/07/greece-brought-a-latte-to-a-gunfight.html

    Do you know if V and T have a plan B?
    To seriously not have started the process of returning to the drachma is madness.
    If they really have been that inept they might even cause those in Spain who currently support Podemos to start thinking that they wouldn’t hold up when things got serious either.

  20. Phil Neal says:
  21. allan scott says:

    We in Scotland know what is happening in Greece right now, as we Scots are in a similar situation with westminster government….Europe is under the influence of fascist right wing manderins who are hell bent in using the current economic climate to further their goals….backed by IMF, the WORLD BANK, and EU BANK. If greece capitulates to the demands of germany, then we will all be in the grip of these financial institutions ( FOR EVER )…The alternative to these American led warmongering institutions is ” BRICS ” …..I hope Greece has the courage to revert back to the dracma…they will not be any worse off than ” in the euro ” and may lead the way for the rest of us …..

    1. Roddy says:

      As Scots diaspora I beg to differ. Less right wing institution the World Bank ever was; its history of left-leaning is more than well documented.

      Why are you so opposed to the Euro for the Greeks when your (nationalistic) political leaders were so convinced Scotland should join the Euro?

    2. thecitygent says:

      LOL 10/10 for imagination

      Scottish victim mentality at play. Stick to the story about Greece. We all know the economic calculations for independence were flawed. With the collapse in oil prices you should be grateful you are not on the same train crash as Greece.

    3. IKB says:

      Indeed Allan. The Brics of course are doing wonderfully – not. I suspect this view of how a small country can be crushed by EU creditors has even more canny Scots thanking their lucky fried mars bar they voted no and are not out on their own.
      Like it or not you can’t beat the market – you can be in it or be North Korea.

  22. Michael says:

    Excellent article Paul and exactly my thoughts as well. EU has lost its way with a continuous blackmailing and crushing approach that has no agenda, no medium-term planning, no nothing. The North agreed to form an “alliance/family” seeing the South as potential customers of their products while the former did nothing to aid Europe (including the South) as they moved all of their production to Asian countries. In a few years EU will turn into a home of a handful of shareholder elite and the rest of the population struggling to survive while in continuous austerity. The EU we grew up will not be the EU our children will. One can only hope now that people will one day wake up and stand together

  23. Jim Carroll says:

    “The EU – a project founded to avoid conflict and deliver social justice”

    The article in general is great. Thanks. The above quote is an oxymoron. “Social justice” = “the application of force” and guarantee’s conflict.

  24. Francisco says:

    This deal is absolute capitulation and its a treason to the OXI vote on the referendum and to Syriza history and electoral platform. There is only one option for those on the left who are gainst this austeritarian, neo.liberal, anti-democratic logic. To fight against the implementation of this “deal” by all means necessary!
    #ThisIsaCoup indeed, and Tsipras is Berlin´s man on the ground.

  25. Richard Tibenham says:

    Wonga sends in the bully boys while Mr Big Uncle Sam watches from afar – Democracy dies not with a bang but a whimper

  26. Jerico says:

    Alexis Tsipras has the demeanour of a good tournament poker player. Check out the respective body language.

    The Eurozone leaders look like they know they won the last hand but in so doing have revealed too much about how they play, as any tournament player knows that only leads to one final outcome sooner or later.

    Beware of Greeks bearing a referendum.

    This is not the last hand.

    Go drink some fire water Paul then crash, you look weary through noble cause, hit the chemical reset button mate, everything will become crearer.

    Tomorrow is another day.

  27. Cathy says:

    The only hope for democracy is if the Greek parliament rejects the deal. This is unlikely but not impossible given that they still have plenty of money ( they pay themselves very well). No doubt we would then have another general election and that would undoubtedly see a strong rise in the fascist party’s strength as Greeks are grasping at straws in an effort not to drown.

  28. Philip says:

    By humiliating the Greeks in the name of a failed policy of financial rectitude (demanded by the bankers who caused the problem in the first place), the EU has destroyed the trust and belief of millions. It now looks more and more like a vehicle for German progress at the expense of weaker economies and an agglomeration working for banks & multinational business (see TTIP). Up to now, I’ve been a staunch believer in the UK remaining a member of the EU. the EU will have to do a lot in the next 18 months to regain any credibility. Britain may well be worse off economically on our own – but is this the sort of club one wants to be a member of?

  29. Phillip Byrne says:

    Hi Paul

    I predicted that the Greek government would hold a referendum for the electorate, which they did.

    I now predict that once the money is in place and the banks return to normal, the Greek government will resign and fresh elections will be held.

    Regards

    Phillip

  30. StuartM says:

    Everybody (yourself included) is being critical of Germany e.g “It would be logical now for every country in the EU to make contingency plans against getting the same treatment”, but all Germany is doing is making sure it is not wasting vast amounts of its own taxpayers money.

    Had Greece acted more sensibly 5 months ago instead of playing brinkmanship then the situation would not have been anything like so bad. Had Greece not tried silly games with more delays and the silly referendum then their economy would not have suffered so badly. Had Greece’s negotiators been more interested in finding solutions rather than playing “Game theory” and thinking they could achieve anything because they were professors” then a solution would have been found ages ago, their economy would not be in such a state, the critical trust would not have been lost and they would not be in the dire position they are in today. Greek politicians have massively increased the suffering of the Greek people and economy. Blaming Germany for trying to safeguard their taxpayers funds is daft – how would you feel if your government was throwing your good money down the drain in billions quantities.

    Greece politicians made their bad situation terrible whilst Germany (and others) were trying to act responsibly with their own taxpayers money. Greek people need protecting from their politicians not protected by their politicians.

    1. Barbel Ercole-Kurth says:

      I think I love you, Stuart M, you are the first person in ages not to lay all blame for the Greek debacle at the feet of the Germans (of which I am one)
      Snide remarks hurt, you know !
      Biting the hand that feeds you is not on and to call the nations who lend you money “terrorists” (not only Germany) was wholly out of order.
      I’d have proposed to Mr. Tsipras to apply for financial aid at IS, now there are your terrorists !

      Or perhaps with his yes Sir, no Sir policy Mr. Tsipras has tried to get the “war reparations” -I am in two minds about these – by the back door ?

    2. Stamatis Kavvadias (Σταμάτης Καββαδίας) says:

      You are right, but for 2 things.

      First, the Germans (and, indeed, many others in Eurozone) are not simply safeguarding their taxpayer money. They are doing so in a manner that is biased and based on the “blessing” of *very quick* oblivion. When Greece defaulted, in 2010, for exactly the reasons you describe:

      1) The Europeans and IMF did not acknowledge Greece was insolvent and not illiquid, expanding the losses they no want unilaterally paid. They expanded on this denial in the 2nd “bail-out” of 2012;

      2) There had been numerous bad (irresponsible ?) decisions by banks across Europe to lend Greece and the ECB had been accepting the Greek economy and bond ratings as AAA;

      3) Our “generous” partners moved the debt to the public sector, not accepting the part of the losses that should be accounted to the private sector (and thus to bank-home governments) and to the ECB (and thus to all Eurozone governments).

      As a result, Greece has suffered a dramatic blow up of its financial problems, with the help of our “generous” partners, also using conditionality and the ECB to force a manifestly wrong path for the Greek economy and society, in the name of their taxpayers’ money, which, surely, they have been “protecting” in an unsustainable, grossly irresponsible manner, doomed to lead to gigantic losses for those taxpayers, which are blowing up by the month.

      Secondly, the Greeks need to get rid of their political establishment –in fact the whole “representative” system must be demoted and strong direct democracy principals need to be imported, Switzerland style– but they do not need saving from them in any more significant degree than the rest of the Europeans.

  31. Richard Dargan says:

    Don’t want to be alarmist, but this feels like something ominous in that an elected Government’s policies can be subverted by politicians elected in other countries, and by unelected money men and women who have no connection with the country or its people whose affairs they are involving themselves with.

    Is this the start of the slow death of democracy?

  32. Manuelrda says:

    Why did Greece borrow so much money in the first place, and get itself into a position where it needs a 54 billion bail-out from European powers to survive? Perhaps if the Greek government had not gotten itself into so much debt, they would have more economic independence? Is Europe really to blame for what is happening, or was it the Greek government who got itself into trouble?

    1. Dave Hansell says:

      Try and keep up please.

      They already have forked out the money, which was a private debt between private banks and nothing to do with the Greek people ( whose pensions I might add are 14% of the level of German pensions and we’ll behind other EC economies like Spain, and France, as well as the UK , US, Japan, Australia, and only just ahead of South Africa) which has been transferred to taxpayers.

      Where is your concern about this reality rather tan the fantasy and falsehoods you are repeating

      It would indeed be gratifying to witness those perpetuating these terminological inexatitude to acknowledge how much in error they are.

  33. toffer99 says:

    It feels as though the glue holding the eurozone together is weakened. My guess is that countries will go flying off like sparks from a catherine wheel over the next decade.

  34. paulette altmaier says:

    I find this commentary on ‘democracy’ bizarre, and it makes me fear for democracy when people think that democracy means that the citizens of one country can vote for the citizens of another country to pay their bills. What absurdity is this?

    The other countries, I would add, are democracies too – and they said a clear no to doing any such thing. That is their democratic right.

    Greece can vote for whatever it wants – as long as it can pay for it itself. Greece was also free to say no. Freedom implies responsibility for yourself.

    Really irresponsible commentary.

    1. Dave Hansell says:

      How many times does it need to be said for the facts to sink in ( assuming of course you want the facts to sink in) the debt was a private debt between the Greek Banks and other Eurozone banks, primarily the German banks. It had absolutely nothing to do with the Greek people who saw none of he money. Private debts get written off every day through bankruptcies and so on.

      Moreover, the majority of the money ended up in Germany anyway from sales of armaments to the Greek state and consumer exports to Greece which benefited the German balance of payments and export stats and subsequently the growth of their economy (this is basic economics and trade 101 for crying out loud. An 8 year old could work it out without having to have it Janet John’d for them).

      The German state bailed out their own private banks and socialised that debt in much the same way that most Western states did when they bailed out the too big to fail banks back in 2008. Whereas much of the UK private debt which was transferred to the public as debt is being paid by using austerity on its own people and population (rather than chase the CDO end borrowers in the US for example) the Germans seem to be wanting it both ways, to benefit from the exports and then to pauperise the population of another democracy and steal it’s assets and service permanently for private gain, including that of its own finance minister.

      Talk about corruption on a massive scale. This lot make the mafia look like two bit street urchins.

      Given that the Greek debt to other EC economies is far smaller than that of the debts of Ireland, Spain and Italy you need to tackle the question as to why they are not being subject to the same harsh treatment and also consider how long it will be before they are.

      You also need to answer the question as to whether or not the value of Greek state assets is anywhere near the amount the gangsters are asking for to be deposited with them and privatised. Bearing in mind that ( and I’m helping you out here with the answer) a similar amount was part of a previous deal but could not be met for very obvious reasons rather than the bullshit about trust which Merkel was coming out with the other day.

  35. rokag3 says:

    the word austerity is an euphemism, the real word is genocide, already many Greek family find their food in the dustbins, there will be not enough dustbins after those measures.

    23% vat for restaurants this is going to increase the price of the Greek destination, so much less tourist to come, only full board that do not bring any money to the country, we had for 2 years 23% vat on restaurants and many of them are closed now, the survivors are without cash reserves so they will close in mass very soon.

    already the state does not pay anything and the few business left cannot get the refund of vat if they export:

    So the level of unemployment is going to space rocket (sky rocket is what we have now)

    In this condition obviously any money injected will never be repaid.

    We are seeing the victory of the Fabian 1984 is now, Tsipras act like a betrayer not only toward Greece, but also all the 99% Europeans.

  36. Dave Ellis says:

    So it seems varoufakis was right, democracy within the EU is a sham. It’s a pity tsipras did not go along with varoufakis’ plan as revealed in the New Statesman, to take on the troika.

    1. Gert says:

      Democracy is a sham in the EU? The Greek vote in a referendum and all EU citizens have no say about how their tact money is spent? You must be kidding! Let’s organize a Euro-zone wide referendum and see how many voters trust Greece enough to vote for a 3rd bail out! I assure you it won’t be 60%, more like 6%!

  37. Ma says:

    The blame lies with Tsipras and Syriza for not having a Plan B. The prior Greek governments had the same excuse– that the Troika made them do it.

    Unfortunately the plan will pass Parliament. The vast majority in Parliament want to hang on to their seats. Very few have the courage to give up their seats. This is in contrast to the Greek people who displayed the courage to risk giving up a lot more when they voted OXI. The few in Syriza who give up their seats can easily be replaced by a coalition of the willing from other parties, eager to serve the interests of the powerful.

  38. dusanmal says:

    Just curious and info can’t be found elsewhere: What are the changes to bakery regulations?

  39. Ben Jones says:

    Why are we surprised to see people in positions of power turning their attention on those unable to defend themselves. It’s what austerity politics seems to be all about #ThisIsACoup

  40. Its Wally says:

    If the EU was not run by France and Germany to the exclusion of everyone else it would have a better chance of working.

  41. David Coughlan says:

    The euro group, led by the German Government, are waging economic war on Greek People. I think it is the time for a boycott of German products until the treatment of Greece improves greatly. A significant boycott would change the mind of Merkel, as all she thinks about is money

  42. Fatema Patwa says:

    All of us who are fraustrated by the power of IMF and the banks, why don’t we agree to start a campaign in which we all agree to “default”. Let us all agree to campaign throughout Europe, using social media, to urge everyone who wants a democratic Europe, to withhold one month of mortgage payment/ or loan repayment. If we agree to “default” at the same time on the same month, the Banks will soon see that people matter.I suggest we default in December 2015, when we all need extra money anyway.

    By the way, in Britain they cannot take any action unless you have defaulted by more than three months of mortgage payment.

    1. Andrew Dundas says:

      What a delightful idea, Fatema Patwa!
      We could all renege on our debts and obligations. Pay no more taxes. Pay no more to shop-keepers. Simply refuse to part with what is ours.
      But suppose other people did the same to us? Help! I’d get no wages. Nor would you. How would I persuade shop-keepers to let me have their goods when they know I ‘can’t pay! Won’t pay!’
      Banks are where we park up our spending, safe in the knowledge that they’ll let us have our money back when we need it.
      But supposing banks refuse to pay us? Then what would you and I do?

  43. Izzie says:

    Another fantastic report. Paul’s been right on his game with this.

    It’s hard not to have sympathy with Tsipras. I can’t imagine the pressure he’s had to endure and must still face. I’d have run, screaming. Through gritted teeth, I believe he took the right pragmatic course in the circumstances. But boy do the circumstances stink!

    Somehow, grim as it is, this feels to me like a turning point in terms of how we think about austerity. The Germans had to push too hard and too visibly. If their policies were still ‘obvious’ the process would have been far smoother. This was anything but smooth. Partly that’s Tsipras & co.’s heroic if futile obduracy. (For that, Mr Tsipras, h/t and heartfelt thanks). But, partly, I think the ugliness of this process came from the fact that even Germany no longer believes in its ‘cure’. It can’t – the evidence against it is too overwhelming. This was, from them, a kind of imaginative cruelty that served to distract rather than guide the eye.

    Fingers crossed and chin up.

  44. Philip says:

    For those who appear to be Germans commenting here, might I remind them that in the early 1950s the German debts were substantially waived by various creditor countries – including Greece. The long recovery of the German economy & its rise to its current status began with that.
    One might also point out that yet again it’s governments requiring austerity to protect bankers’ money. Why can’t we let bankers deal with the consequences of their unwise loans themselves?

  45. Dxm_R1 says:

    Wait… wait… So the expectation is that the EuroZone is supposed to just fork out the money, allowing the obviously, and completely broke, Greek Govt and people to continue getting pensions and living out their normal lifestyles, and standard of living?

    …all with little or no conditions attached? Or allowing them to operate and spend as if nothing ever happened? After two failed bailouts where they just squandered everything away?

    What does this tell the other poorer member states like Bulgaria and Romania? Or how about Estonia and Latvia?

    Wow, charity indeed. Some people have high expectations when panhandling….

  46. sim says:

    Its nearly over Paul, time to get some sleep before the hyperbole gets even sillier- mental water boarding- please, he has had weeks to plan and prepare for this. Democracy cant just vote away debt particularly if you need to keep asking for more from the same group of people. Also do you really think anyone from the center of Greek politics is going to step forward into the mess after the Pied Piper ? No, democracy will have to do its job and dispose of him first.
    For any non aligned, non SWP/Corbyned but still thoughtful lefties the Daily Telegraph has had some surprisingly good articles on Greece this week.

  47. Andy says:

    Now the Greeks have capitulated, they can put the Greeks in Reservations in the mountains and when winter comes as it surely will, we can trade blankets for land. It has worked before!

  48. Andrew Dundas says:

    What can each of us do to help solve this crisis?
    Speculating about the course of democracy is unlikely to help either Greeks or their majority creditor banks in Germany and France.
    What would help enormously is for as many of us as possible to take a long holiday in Greece (the weather’s lovely) and spend as much as our own bank’s can afford on Greek stuff. Germans love travel. Great, travel to Greece and spend.

    Spend! Spend! Spend! That’s the Keynesian way to solve this crisis. Go for it!

  49. james casey says:

    Supposing the 50 billion of assets exist to be privatised and Tsipras is willing to agree to that, why doesn’t he exit the eurozone, default on debts and use the 50 billion for investment?

  50. Tim says:

    Paul,

    Is it possible that the €50bn-worth of assets to be placed into a privatisation fund might include state-owned museums and other tourist-related properties (a major source of revenue for Greece, I presume)? Might we be faced with a scenario whereby (say) the Parthenon ends up being owned by a German bank?

    1. Andrew Dundas says:

      Hello Tim,
      Perhaps a German Bank would look after the Parthenon better?

  51. Mark Byrne says:

    There is a curious premise behind this article that Greek democracy trumps all others. While it is true that Syriza has a clear mandate you do not explain why that requires other countries to ignore their own voters wishes and act solely in accordance with Greek desires.
    Surely if you truly believe in democracy that should apply equally in Finland, Lithuania et al, as well as in Greece?

  52. Cos67 says:

    A very practical interpretation of events.
    I think Tsipras has to still worry about a coup of some kind,
    or the shattering of his party.
    I think he has to wait for the Powers to fully interpret
    what they have just done and at least restructure
    or haircut the debt.
    Their actions have scared the whole world. They might
    end up paying the price for what they’ve decided.
    And, would some journalist please start telling the
    foundational truth of this whole debacle. The French
    and German banks are behind all of this sanctions
    regime. You see politicians, but I see bank puppets.
    If we don’t start accepting the truth, this disaster
    will never end, until a bigger disaster comes along.

  53. Nick says:

    I’m not sure I buy the whole “Democracy took a hit” argument here. Sure Greece voted for Germany to give them more money, but lots of Germans voted not to give Greece anymore German money. I think ‘reality won’ in a lot of ways. People learned you can’t vote for foreigners to give you their money against their terms. They learned that bank deposits aren’t cash, they are liabilities of the bank. They learned pension holders are really unsecured creditors of the state and nothing more. Hopefully Spain and Italy learned that the Euro creditors are not their friends, and if they want to balk at the austerity terms they better come with a credible plan B, because the Germans will call their bluffs.

  54. Yiannis says:

    I am Greek and a Tsipras supporter and sure, it’s not democratic for Greece to be demanding the monies of others, just because it voted this way. It was an unnecessary mistake, Tsipras has a clear mandate and sky-high approval rating for current greek political standards. At the same time people need to understand that much of the austerity imposed on the middle class makes the problem worse as a shrinking economy can simply not pay its debts.

    The problem in Greece is constitutional (no separation of powers) and one of political personnel (politicians that have been giving too many sole-bidder contracts to the owners of private tv channels). Austerity on the middle class makes the system less transparent and puts reformists in a very difficult situation.

  55. john says:

    This is a complete joke. The Europeans have appointed a Receiver to manage the affairs of Greece but it should be a Liquidator. This isn’t about a dysfunctional borrower, it is about dysfunctional creditors playing extend and pretend. The further the can gets kicked down the road the bigger this mess is going to be. Smell the coffee EZ and accept that the Euro is not a viable proposition in its current structure without political convergence. It’s never going to work.

  56. will says:

    Wearing denim to interview a greek VIP;, you rebel

    Hopw t=you had loads of sunscreen on too in that heat and humidity.

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