Even I cannot believe it. This is the Editorial in Athens news today.
The long and the short of it is that Tsipras appears to be of the opinion that Greece is not able to support itself, it is a weak country, the people are not able to look after themselves so Germany should be forced to pay the bills.
His reasoning appears to be that Greece holds the key to the stability of the Euro currency and that Germany simply cannot let Greece leave because of the costs to the German economy.
So to sum up. Tsipras is going to try to blackmail Germany if he gets into power.
Let me quote the article directly
The idea is that if the Greek electorate rejects the bailout in next month’s elections, the ball will return to German Chancellor Angela Merkel’s court and she will have to decide whether it’s worth risking the destruction of the eurozone project by halting Greece’s bailout loans or be forced to accept a negotiation of a new, more lenient, approach towards the loan-dependent nation. Tsipras’ strategy hinges on the anticipation that Merkel will blink first.
Notice the writer does not ask what the cosequences would be I Mekel does not blink but I will.
(As a side note: I have said this before about Venizelos, but why is a politician who believes Greece is weak so popular in Greece?
Why do Greeks seem to support politicians who think their country is crap?)
Anyway, getting past that, Tsipras comments are fufilling a prediction I have made on the 25th of Feb 2012
This is an excerpt from that (excellent) article,
So what tools do the ECB, France and the private banks have to coerce Germany?
Greece.
Germany is insisting that strict conditions be applied to the loans to the Greek government. Germany wants to see the Greek government being run sustainably.
Germany, understandably in my mind, does not want to throw good money after bad.
So how is Greece being used as a toll to coerce Germany?
The deliberate mismanagement of the Greek austerity measures. Greek politicians, whether they are aware of the situation or not, are working with the ECB, France and international banks by sabotaging the reorganisation of the Greek economy.
Greek politicians whether they realise or not are sabotaging their own efforts to make the Greek government sustainable.
Why would the ECB, France and the private banks want to see Greek politicians destroying their own economy?
To Germany look bad.
In short, Tsipras, with this blackmail strategy is doing the work of the banks.
He has stated he is willing to force Germany to pay for the Greek government.
Germany is resisting and is insisting that Greece should be a strong country capable of looking after itself, something all Greeks should support.
Tsipras however is saying no, we want Greece to be a dependant country and we are willing to hurt Germany if that is what it takes.
Tsipras is completely naive. Either that or he is working for the banks.
The banks want Germany to give the go ahead to print money, to devalue the Euro currency so their debts are devalued.
Tsipras wants Germany to print money, to give to Greece.
Tsipras and the banks want the same thing.
Tsipras believes he can use the break up of the Euro argument against Germany. He is wrong. Sure the Euro is a bonus for German business but it is by no means the be all and end all for them. Germany has shown itself to be strong with or without the Euro.
The German economy is fundamentally sound. The currency is largely irrelevant.
The only tool that can be used against Germany is public humiliation on a European and worldwide scale.
This is the only weakness Germany has, and it is this that will be used to coerce the course of the German government.
Tsipras believes that Germany will simply cave in to protect the Euro.
Okay, let us assume they do not, then what?
Given that he has said he will reverse all the public sector firings, you can assume that Germany will cut off all funding and then where will we be?
First of all you can expect Tsipras to make a mess of his underwear when, to his surprise, Germany does not cave in to his blackmail.
You can then expect his second response to be rage. When he came to power he recruited a 100,000 workers back to the government, he has increased pay and pensions of public workers and he has increased the taxes on businesses.
And given the certainty that Tsipras will not reduce taxes in response to the German withholding of funding, and given the likely hood that he would seize private means of production to support the government, you can expect things to turn pretty bad in Greece, pretty quickly.
And his response will be rage directed at Germany for causing the mess he himself created.
In the environment of total state control, and rapidly depleting currency reserves you can expect the international mainstream media to focus its sights on Germany as the villan.
Germany is the villan because it will not give money to poor Greece.
No questions will be asked as to why Greece even needs money from Germany in the first place.
No questions will be asked as to what sort of environment the Greek government created whereby the country cannot support itself.
So to recap, as things stand today, it looks like the future in Greece will play out as follows
1. Syriza gain power
2. They increase the size and cost of government because they believe Germany will never refuse to bail them out.
3. Germany refuses to bail out Greek government citing the kamikaze economics of the Syriza regime
4. Syriza seizes more and more private sector assets to fund public sector. Greek economy continues to decline leading to shortages of goods.
5. These shortages broadcast around the world with Germany labelled as the villan
6. This is where things get much less certain.
How long this will go on for depends on how long Germany resists. Either Germany will start to dictate the headlines and highlight the self-destructive behaviour of the Greek government, or, and this is more likely, Germany’s PR machine will be shown to be non-existent, which has been the case until now, and more and more public pressure will be brought onto the German government for their obvious “cruelty” towards the Greek people.
Make no mistake, Tsipras is working for the banks, whether he knows it or not.
How about an emergeny reduction on imports to Greece. To stimulate a more happy economy. I have a theory ,call it a hunch, that regions on the periphery of a currency union decline because the economic activity graduates to the centre.
You could do that, but why should you need to? There is no reason Greece can’t be competitive. About the centre. Economically, no logical reason for Greece not to be the centre of Europe. Geographically, Greece is more central to the world than Germany. Europe is not the only market.
Woops spelling- replace graduates with – gravitates
Simplistic assumptions based on soundbites from a biased press.
Let me start by saying that I do not support SYRIZA or Mr. Tsipras in the slightest. Having said that, I cringe when I see articles like the above that present this particular party and his leader as little more than the devil, and the vote of the Greek people as little more than moronic.
What is Mr. Tsipras main election pledge? In his own words, to “denounce the memorandum”. This is a nice soundbite for the Greeks and terrifies the rest of the world. When explained further what they basically mean is: “we will renegotiate the terms and conditions of the financial bailout”. This is nothing more or less than what the main concervative party has been saying all along.
All Greeks and most Europeans that know what’s going on agree that austerity is not working in Greece. It is meant to reduce the Debt to GDP ratio and make Greece more competitive but it has failed spectacularly. Austerity brings recession and recession both sometimes raises the Debt but certainly lowers the GDP as the economy contracts. This means that the Debt to GDP, being a ratio, is a moving target. If your economy contracts by 1%, the ratio increases. Even if you lower your debt/GDP2007 from 110% to 100%, if your economy contracts by 25% (which is what happened in the past 5 years), Debt/GDP2012 will be 133%. It’s simply madness, Greece will never be able to repay the bail out loans and will always be subserviant.
So if austerity is not working then what? Simple. Growth is needed to raise the GDP and hence lower the ratio. For this the government needs to spend money to stimulate the economy, build infrastructure projects, and basically get jobs for people so that they can pay taxes and raise the GDP. Instead, the all-knowing caretakers (see Merkozy) decided that, instead, it would be a good idea to get the unemployment from single digits to 22+% (50% for under 25s), destroy the internal market and tax pensioners to oblivion. The idea was that the bail out terms would be so punitive and harsh that no other EU country would ask for such help ever again. We all know how that went.
Also, Greece is accused of not abiding with all the terms of the loans. Let’s see what these refer to. First of all, something that I agree with, sack 150,000 public sector workers. The problem was that they wanted those lay offs to happen at the same time. Besides being unconstitutional, imagine the shock to an economy to find another large part of the working population out of work. Then consider the redundancy pay, unemployment benefits (although restricted to 6 months they are a considerable factor) and the social impact. The Greek government refused and the Troika replaced this term with the need for even more taxes to plug the hole.
Another term was the sale of state assets to raise another 150b euros. None of it happened, but it wasn’t merely unwillingess from the govenmen. Quite simply nobody would invest in a country with spiraling recession and uncertainly about the currency. Every time a German this or that would make a statement that Greece is going to be out the eurozone by next month or week or whatever, it destroyed any chance of selling any state asset in Greece. It’s as if they were doing it on purpose. Oh wait, maybe they were…
So what is Mr. Tsipras advocating? We need to stop with this austerity only nonsence right now and get growth going with stimulus packages. He still promises to perform the necessary reforms as laid out in the terms (as far as I can tell).
As I see it the main difference between Syriza and the concervatives is that Syriza promisses to negotiate more eagerly for changes to the terms, while the concervatives are ready to continue with the status quo and make “tweaks”.
Why is the EU and mainly the european press so afraid of the big bad lefty wolf? I am afraid of him because he is not alone. His coalition is a mishmash of parties that range from centre left euro-socialists to far left Marxists and Trotskiists. They don’t seem to speak with one voice. Although Tripras is the leader, others crop up with silly ideas, like a voluntary contribution of €100/month for those earning more than €20,000 that would in fact be compulsory if not paid (eh?). Others continue with old matras like “out of NATO”. Oh, so many examples. They are basically in a stupor, drunk with the power that comes from increasing your votes from 5% to 16% and in recent pols even up to 30%.
Why do Greeks vote for them? Because they are different. The big concervative and socialist parties have failed citizens in the past 38 years, after the restoration of democracy. And these guys are not them so different is good right? Also, they offer a way out. For two years now Greeks are suffering the greatest depression without a war in known history. Companies closing, unemployment soaring, violent crime rising, taxes increasing, and for what? They see no light at the end of the tunnel. In such circumstances people will follow anyone with a candle, even if he is heading in the wrong direction.
Hi
A few points.
Yes I agree, Syriza is coming more and more into line with PASOK/ND the closer they get to power.
To quote a couple of points
For this the government needs to spend money to stimulate the economy, build infrastructure projects, and basically get jobs for people so that they can pay taxes and raise the GDP.
The last thing the government needs is to spend more of the people’s money. You say to give people jobs, but where is the money coming from to pay for these people? The people that are already struggling. Government spending is the problem, more spending is not the solution. Maybe if the used the money they already have to do what you say, that would be better, but I dont think that is going to happen.
Merkozy
I have highlighted this before. If there is one person in Europe fighting for the working Greek it is Merkel. She has simply said the government needs to balance its books, it is Greek politicians that imploded the economy by not reducing spending and increasing taxes.
Sarkozy is happy to print Euros and pay for the problems.
Merkel and Sarkozy are coming from completely different perspectives.
Sarkozy’s solution is money printing, Merkels solution is for Greece to become a sustainable country. I know which solution I prefer.
The idea was that the bail out terms would be so punitive and harsh
The Greek politicians have made it harsh because they want to pander to the major banks because the major banks are the ones who fund the massive government.
It did not have to be this way, cutting government spending ONLY would have been the solution. Tax increases were only going to implode the economy.
First of all, something that I agree with, sack 150,000 public sector workers. The problem was that they wanted those lay offs to happen at the same time. Besides being unconstitutional, imagine the shock to an economy to find another large part of the working population out of work. Then consider the redundancy pay, unemployment benefits (although restricted to 6 months they are a considerable factor) and the social impact.
This is black and white. 150,000 out of work is the answer. Unconstitutional? Okay, the country has to default. Simple.
About not finding work. I agree, but I can only conclude this was done deliberately. The first measures involved destroying the private sector making it impossible for the public workers to find work.
The end game here is money printing and all actions are working in this direction. Having Greece sustainable and independent from bank loans does not help the bank insolvency problem, which is why the measures have not enabled Greece to become sustainable.
Another term was the sale of state assets to raise another 150b euros.
I covered this in the fraudulent conveyance article. And besides the whole idea made no sense. How is Greece selling off money making assets going to help Greece in the long term? Greece has long term problems, not short term. In my opinion this is a side issue.
So what is Mr. Tsipras advocating? We need to stop with this austerity only nonsense right now and get growth going with stimulus packages.
There is no meaningful austerity in Greece. None. Only tax increases.
He says stimulus. Assuming Greeks had the money, why does he think it is better for government to spend people’s money than the people who earned the money in the first place?
Why do Greeks vote for them? Because they are different. The big concervative and socialist parties have failed citizens in the past 38 years, after the restoration of democracy. And these guys are not them so different is good right? Also, they offer a way out. For two years now Greeks are suffering the greatest depression without a war in known history. Companies closing, unemployment soaring, violent crime rising, taxes increasing, and for what? They see no light at the end of the tunnel. In such circumstances people will follow anyone with a candle, even if he is heading in the wrong direction.
Most voters are uneducated so this last comment in nothing against Greeks. But Greeks are getting the shaft big time so they need to be the most educated voters if there is going to be prosperity in Greece.
Greeks need to reject any party that says government has the answer and the only party I see that says this is the Greek Liberals.
Greek Liberal Article http://independence4wales.com/2012/greek-elections-june-2012-would-you-vote-for-this-party
How the Greek Economy Was Sabotaged http://independence4wales.com/2011/8-ways-papandreou-sabotaged-the-greek-economy