The Euro Summit statement (or Terms of Greece’s Surrender – as it will go down in history) follows, annotated by yours truly. The original text is untouched with my notes confined to square brackets (and in red). Read and weep… [For a pdf copy click here.]
Euro Summit Statement Brussels, 12 July 2015
The Euro Summit stresses the crucial need to rebuild trust with the Greek authorities [i.e. the Greek government must introduce new stringent austerity directed at the weakest Greeks that have already suffered grossly] as a pre-requisite for a possible future agreement on a new ESM programme [i.e. for a new extend-and-pretend loan].
In this context, the ownership by the Greek authorities is key [i.e. the Syriza government must sign a declaration of having defected to the troika’s ‘logic’], and successful implementation should follow policy commitments.
A euro area Member State requesting financial assistance from the ESM is expected to address, wherever possible, a similar request to the IMF This is a precondition for the Eurogroup to agree on a new ESM programme. Therefore Greece will request continued IMF support (monitoring and financing) from March 2016 [i.e. Berlin continues to believe that the Commission cannot be trusted to ‘police’ Europe’s own ‘bailout’ programs]. Given the need to rebuild trust with Greece, the Euro Summit welcomes the commitments of the Greek authorities to legislate without delay a first set of measures [i.e. Greece must subject itself to fiscal waterboarding, even before any financing is offered]. These measures, taken in full prior agreement with the Institutions, will include:
By 15 July
the streamlining of the VAT system [i.e. making it more regressive, through rate rises that encourage more VAT evasion]and the broadening of the tax base to increase revenue [i.e. dealing a major blow at the only Greek growth industry – tourism].
upfront measures to improve long-term sustainability of the pension system as part of a comprehensive pension reform programme [i.e. reducing the lowest of the low of pensions, while ignoring that the depletion of pension funds’ capital due to the 2012 troika-designed PSI and the ill effects of low employment & undeclared paid labour].
the safeguarding of the full legal independence of ELSTAT [i.e. the troika demands complete control of the way Greece’s budget balance is computed, with a view to controlling fully the magnitude of austerity it imposes on the government.]
full implementation of the relevant provisions of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, in particular by making the Fiscal Council operational before finalizing the MoU and introducing quasi-automatic spending cuts in case of deviations from ambitious primary surplus targets after seeking advice from the Fiscal Council and subject to prior approval of the Institutions [i.e. the Greek government, which knows that the imposed fiscal targets will never be achieved under the imposed austerity, must commit to further, automated austerity as a result of the troika’s newest failures.]
Yanis Varoufakis has announced he is standing down despite Greece's No vote in the referendum on proposed austerity measures.
In a blog post entitled “Minister No More”,
published on Monday morning, the Greek finance minister said he was
standing down because of pressure from Greece’s European partners.
Comment: With a little on hand advice from Putin... ---------------- RT
More than 61 percent of Greeks have voted “No” in Sunday’s referendum on
the bailout deal and austerity measures, reported the Interior Ministry
after 100 percent of the vote had been counted.
More than 61 percent of Greeks have voted “No” in
Sunday’s referendum on the bailout deal and austerity measures, reported
the Interior Ministry after 100 percent of the vote had been counted.
Thousands of people took to Syntagma square in front of the Greek
parliament in Athens to celebrate the ‘No’ vote, which was called
“a big Yes to democratic Europe” by the country’s
finance minister, Yanis Varoufakis.
"As of tomorrow, with this brave ‘No’ the Greek people handed
us.... we will extend a helping hand towards our lenders. We will
call on each one of them to find common ground. As of tomorrow,
Europe, whose heart is beating in Greece tonight, is starting to
heal its wounds, our wounds,” Varoufakis said, as cited by
Reuters.
Greek Prime Minister Alexis Tsipras praised the ‘No’ vote in the
referendum, saying that his government is ready to return to
negotiations with creditors immediately so that the country’s
banks could re-open.
The citizens of Greece face a referendum Sunday that could decide the survival of their elected government and the fate of the country in the Eurozone and Europe. Narrowly, they’re voting on whether to accept or reject the terms dictated by their creditors last week. But what’s really at stake? The answers aren’t what you’d think. I have had a close view of the process, both from the US and Athens, after working for the past four years with Yanis Varoufakis, now the Greek finance minister. I’ve come to realize that there are many myths in circulation about this crisis; here are nine that Americans should see through.
The referendum is about the Euro. As soon as Greek
Prime Minister Alexis Tsipras announced the referendum, François
Hollande, David Cameron, Matteo Renzi, and the German Deputy Chancellor
Sigmar Gabriel told the Greeks that a “no” vote would amount to Greece
leaving the Euro. Jean-Claude Juncker, President of the European
Commission, went further: he said “no” means leaving the European Union.
In fact the Greek government has stated many times that – yes or no –
it is irrevocably committed to the Union and the Euro. And legally,
according to the treaties, Greece cannot be expelled from either.
The IMF has been flexible. IMF Managing Director
Christine Lagarde claims that her institution has shown “flexibility” in
negotiations with the Greeks. In fact, the IMF has conceded almost
nothing over four months: not on taxes, pensions, wages, collective
bargaining or the amount of Greece’s debt. Greek chief negotiator Euclid
Tsakalatos circulated a briefing on the breakdown that gives details,
and concludes: “So what does the Greek government think of the proposed
flexibility of the Institutions? It would be a great idea.”
The creditors have been generous. Angela Merkel
has called the terms offered by the creditors “very generous” to Greece.
But in fact the creditors have continued to insist on a crushing
austerity program, predicated on a target for a budget surplus that
Greece cannot possibly meet, and on the continuation of draconian
policies that have already cost the Greeks more than a quarter of their
income and plunged the country into depression. Debt restructuring,
which is obviously necessary, has also been refused.
The European Central Bank has protected Greek financial stability. A
central bank is supposed to protect the financial stability of solvent
banks. But from early February, the ECB cut off direct financing of
Greek banks, instead drip-feeding them expensive liquidity on special
“emergency” terms. This promoted a slow run on the banks and paralyzed
economic activity. When the negotiations broke down, the ECB capped the
assistance, prompting a fast bank run and giving them an excuse to
impose capital controls and effectively shut them down.
The Greek government is imperiling its American alliance. This
is a particular worry of some US conservatives, who see a leftist
government in power and assume it is pro-Russian and anti-NATO. It is
true that the Greek Left has historic complaints against the US, notably
for CIA support of the military junta that ruled from 1967 to 1974. But
in fact, attitudes on the Greek Left have changed, thanks partly to
experience with the Germans. This government is pro-American and firmly a
member of NATO.
Alexis Tsipras called the IMF a “criminal” organization. That
was, charitably, an overheated headline slapped by Bloomberg onto a
very moderate parliamentary speech, which correctly pointed out that the
IMF’s economic and debt projections for Greece back when austerity was
first imposed in 2010 were catastrophically optimistic. In fact, every
letter from Tsipras to the creditors has been couched in formal and
respectful language.
The Greek government is playing games. Because
Finance Minister Varoufakis knows the economic field of game theory,
lazy pundits have for months opined that he is playing “chicken” or
“poker” or some other game. In Heraklion two weeks ago, Varoufakis
denied this as he has done many times: “We’re not bluffing. We’re not
even meta-bluffing.” Indeed there are no hidden cards. The
Greek red lines – the points of principle on which this government
refuses to budge – on labor rights, against cuts in poverty-level
pensions and fire-sale privatizations – have been in plain view from day
one.
A “Yes” vote will save Europe. “Yes” would mean
more austerity and social destruction, and the government that
implements it cannot last long. The one that follows will not be led by
Alexis Tsipras and Yanis Varoufakis – the last leaders, perhaps anywhere
in Europe, of an authentic pro-European left. If they fall, the
anti-Europeans will come next, possibly including ultra-right elements
such as the Greek Nazi party, Golden Dawn. And the anti-European fire
will spread, to France, the UK and Spain, among other countries.
A “No” vote will destroy Europe. In fact, only the
“No” can save Greece – and by saving Greece, save Europe. A “No” means
that the Greek people will not bend, that their government will not
fall, and that the creditors need, finally, to come to terms with the
failures of European policy so far. Negotiations can then resume – or
more correctly, proper negotiations can then start. This is vital, if
Europe is to be saved. If there ever was a moment when the United States
should speak for decency and democratic values – as well as our
national interest – it is right now.
James K. Galbraith holds the Lloyd M. Bentsen Jr. Chair in
Government/Business Relations at the Lyndon B. Johnson School of Public
Affairs, the University of Texas at Austin. He has followed the Greek
drama in Greece, Brussels, Paris and Berlin since January. His most
recent book is “The End of Normal: The Great Crisis and the Future of
Growth.”
