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Greek PM calls referendum on bailout terms

43 points by antouank 11y ago

evanpw 11y ago
There is no moral dimension to this situation: Greece is not morally obligated to pay back its existing debts, and the rest of Europe is not morally obligated to loan more money to people they don't believe will pay them back. (If you think that Greece "needs" the money and Europe should give it to them because they're suffering, there is a list of 140+ countries poorer than Greece here: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...). It seems like a bad idea to _me_ to default and leave the Euro. It will almost certainly be economically worse for the Greeks in the near-term than accepting the Troika's conditions for more loans, but it could be rational if the Greeks value independence very highly compared to maintaining their current standard of living. If you're going to do something with such dire consequences, though, a referendum seems like the way to go.
deleted 11y ago
[deleted]
- jlangenauer 11y ago
  The core of the matter is that Greece simply cannot pay back even the payments due on their government bonds / loans without further loans, and this has been the situation for a number of years now. Now while Greece has made major reforms as already demanded by the Troika, it has also suffered a 25% reduction in its GDP: this is a simple byproduct of austerity, you cannot (easily) reduce government spending without it having a flow-on effect on GDP, and it is rather easy to push an economy into a debt spiral, where austerity leads to reduced GDP, and thus reduced government revenue, which requires further austerity, and produces further GDP contraction. For it's part, the Syriza government has offered to run a budgetary surplus of around 1% of GBP this financial year (which would affect GDP negatively) to around 3.5% of GDP in 2018 (which is flat-out insane). This has not been accepted by the Troika. My own view is that the rest of Europe is acting to protect those who made the risky loans to Greece, knowing full well that there was a risk of default, and for which they extracted high rates of interest. There has now been plenty of pain from the Greek people, and to expect more to protect bondholders who knew exactly what risk they were getting in to reeks of moral hazard.
  - _delirium 11y ago
    I agree with the first part: the bailout package so far has failed, which is not a huge surprise. An interesting aspect has been that, more or less, the Americans were right on this one: American economists thought the plan's projections were unrealistic and that significant GDP contractions were more likely. The ECB had very rosy projections about the economic growth that would be follow on very soon after the austerity program (within 1-2 years), which were not really in keeping with reality. I'm not sure I agree with the who-benefits part in the last bit, though. As an explanation of the 2010 bailout, protecting the bondholders has some truth to it. But by now that has mostly already happened: the bailout package shifted most of the debt held by the private sector (mostly German and French banks) to the IMF and ECB's books. That is one reason that Greece's negotiating hand is worse now. At that time they had a mutually-assured destruction angle, because the bailout was necessary to bail out the German and French banks. Greece did a poor job playing that hand, agreeing to a package that successfully bailed out the German and French banks (with EU, ECB, and IMF money) but without even plausibly solving the problem on Greece's end. What's the motivation now? It could be to protect the remaining bondholders (basically, the "troika"), but realistically even they cannot believe they will actually receive payment in full, so their interest can't be rationally protected by simply demanding it. In my opinion, the motivation is more driven by two political constraints: 1) Europe is in a national-populist mood, and other countries' politicians have their own domestic voters to worry about. Parties like True Finns, Alternative for Germany, and Dansk Folkeparti exert significant influence (in the case of True Finns, within government), and their line is "tough on foreigners" and euroscepticism. 2) The EU & ECB don't want to admit that their economic policy in this case has been poorly designed, so there is a bit of saving-facing stubbornness going on. (The IMF by contrast has come close to admitting a policy rethink is necessary, though not officially.)
  - stock_toaster 11y ago
    The inability of the Greek government to print their own money to try and counter deflation (I read it was something like between 2% and 3% year over year for the last two years) is also pretty rough. Not only due to probably further contracting GDP, but also by making loans more expensive!
nextweek2 11y ago
The real solution is that Germany leave. The Euro could then devalue for the benefit of all the weaker Eurozone members: Greece, Italy, spain, Portugal and Ireland.
- aaggarwal 11y ago
  Eurozone was formed by strong economical powers to bring economic stability in their countries and it's like a club of rich friends. Why would Germany leave the Eurozone and devalue their own money? Why would UK and its other rich friends let the euro and thus their money be devalued. And even if Germany leave the Eurozone which is highly unlikely, there are still many strong economic powers in Eurozone, so the Euro wouldn't devalue enough to support weaker economies. This situation is much more complex due to continuous delay by European powers to discuss this matter.
  - mkempe 11y ago
    Note that the UK, Denmark, and Sweden have kept their own currencies, not using EUR. Look up GBP, DKK, SEK.
    - aaggarwal 11y ago
      Yes, point noted. Still they would never want euro to devalue against their currencies, it will result in huge inflation.
      - mkempe 11y ago
        You truly have no idea what you're saying. If EUR falls relative to SEK, Swedes will pay less for goods purchased in Europe. Falling prices are not a consequence of inflation, rising prices are.
        aaggarwal 11y ago
        I am certainly not the authority on economics, but if EUR falls relative to SEK, then in Sweden imports would be high, exports would be low. This in turn would effect local manufacturers because people would prefer buying things from outside for lower price rather than within country for higher price. This might lead to closing of manufacturing units in Sweden and loss of jobs in the country. Also, wages would decrease relative to the rest of Europe because SEK is more valuable now (This would also result is movement of jobs out of Sweden to other European countries). Now the imports are flourishing and export industry is dying out and wages are getting lower, unemployment may be rising. The in-country manufacturers would keep the prices same for their goods to be sold within the country, but people's wages has decreased, so in order to compete with competitive import industry they will reduce the goods prices, which in turn will decrease their staff's pay. Thus, even though SEK is strong compared to rest of Europe, but within Sweden, people are making less than before, which in turn will lead to inflation. Also, I haven't yet accounted to another possible consequence of this, while SEK is stronger relative to Euro and Swedes might be making less money, American economy might not be affected and $ would still be the same. This will affect Swedes international buying power. A strong control by government may change a few factors here. If I am wrong somewhere, I would be happy to be learn new things, please give reasons.
Alkim 11y ago
It is interesting to think about the motivation of the Greek elected officials. To me it looks like they are trying to avoid the responsibility of making a painful decision. It also appears quite likely that the Greek citizens will vote against reducing pensions, etc. So with that in mind, what happens after 5 July? The rest of the EU will be placed in the uncomfortable position of either caving to the demands of the Greek citizens or somehow taking the position that the referendum is irrelevant--which will look very undemocratic. But to cave to Greece would mean the rest of the EU taking on an indefinite financial drain. I don't see how this ends any way other than Greek banks collapsing or Greece leaving the EU.
- tomp 11y ago
  > To me it looks like they are trying to avoid the responsibility of making a painful decision. In reality, they're just keeping their word. They were elected to prevent austerity. By not signing up for even more austerity, they are just fulfilling their democratic mandate.
- return0 11y ago
  They are looking for the easy way out. The greeks will predictably vote for euro and they 'll be called to resign, which they will. Bubble popped, new coalition government accepts bailout terms and reality resumes.
  - junto 11y ago
    And if that happens we are back to square one. Greece can't pay this back. Whether it was wrong of them to accept a loan they couldn't pay back is now a mute point. Greece are bankrupt. Everyone just needs to accept that fact. A new government that accepts the terms of yet another loan they can't pay back is just going to end up in the same mess two years down the line. Germany wants them to turn into some German style mini-clone. Germany needs to accept that other states are like children; naively, you think you can bend them to your will and force them to behave in this bmanner you think is acceptable, but you are a fool if you believe that to be the case.
tomp 11y ago
It's really sad that it has come to this.
lifeisstillgood 11y ago
This is a huge deal, and is a make or break time for the European Project. We are now asking (a second time) for a democratic mandate to negotiate against an unelected (but appointed by elected officials) economic central bank. I honestly did not expect this one :-) Inhave spent some time trying to wrap my head round this and it does seem that the Greek government, fairly or unfairly, is going to have have its legs broken over this, but if serious fiscal Union of other steps towards solving the fixed exchange rate and debt issues across all of Europe are not included then the ECB is at fault - they need to turn round to the rest of the council of ministers and say "you need to include this - we don't have the authority"
tsotha 11y ago
Of course he wants a referendum. That way whatever happens people can't blame it on him. IMO that's the sign of a weak leader.
- jon-wood 11y ago
  I think this is the sign of a leader who knows his bounds - the Greek parliament were elected on a campaign to reduce austerity measures. For them to now go ahead and impose further measures would be a clear violation of the trust the electorate has placed in them. I wish more political leaders would recognise that they're answerable to the electorate, and put more controversial laws to a public vote instead of just imposing their will.
- tomp 11y ago
  It's a sign of a honest leader, given that he was elected on a promise of reducing austerity while keeping Greece in the EU/Eurozone, which right now seems impossible.
- mrweasel 11y ago
  I don't think so, quit the opposite actually. He can't give the Greeks what they want, it's not within his means, not without breaking promise he made earlier on. Arguably he may have made promises that where perhaps never realistic. The people want two contradictory things, based on the anti-austerity and "We want to stay in the Euro" protests. It seems fair to ask the people "Do you want the Euro, regardless of what austerity measures that might require" or "Do you want to avoid austerity and risk having to leave the Euro"?
  - tsotha 11y ago
    >I don't think so, quit the opposite actually. He can't give the Greeks what they want, it's not within his means, not without breaking promise he made earlier on. Arguably he may have made promises that where perhaps never realistic. If you put it that way he's not a leader at all. He's just an opportunistic liar taking advantage of a bad situation.
return0 11y ago
Amateur move at best. Should the germans and the french follow suit with a referendum whether they should bail out greece again? The government that acted like nagging teenagers doesn't want to grow up, and chooses to bail. It saddens me that i voted for them. Truth be told, the EU is forced to look in the mirror this time: Despite all the rhetoric and despite most europeans liking the idea, the greeks do not become more like germans and the germans do not become more like spaniards.
- konstruktor 11y ago
  > Should the germans and the french follow suit with a referendum whether they should bail out greece again? Yes, and they should have done so much earlier. If the other Eurozone governments would have listened to popular demand, Greece would not have been bailed out, and the default would not affect their taxpayers as much as it does now. The whole bailout programme was hubris, and it is time to call the bluff.
  - bornabox 11y ago
    Well, it's politics. A lot of the big lenders were german banks. So it made sense for the german government to support more loans to Greece, because those were used to keep paying back german Banks. Grossly simplified, but that's what has been happening in the last years.
venomsnake 11y ago
That is the right move. Also Germany should stop talking about fiscal results and demand political reforms. Clean corruption in the administration and good fiscal results will follow on their own. And Germany should elect finally someone competent. Merkel is a joke.
- claudiug 11y ago
  why merkel is a joke?
  - venomsnake 11y ago
    Because she is incompetent, indecisive, keep the Eurozone stagnating because of her "austerity" politics, have no idea what "foreign politics" means.
- nik736 11y ago
  I'm from Germany and couldn't agree more :)
- chappi42 11y ago
  You are right but 'demand political reforms' is easier said than done. Greece is paralyzed since 7 years without progress. Motte: blame others do nothing, cry. Merkel is no joke, she is the most intelligent and gifted politician around. (Of course this is as subjective as your statement, but I'm right :-)).
  - venomsnake 11y ago
    > she is the most intelligent and gifted politician around. She is entertaining Cameron's crazytalk of secession. Instead of just saying - go on, let me see you. And that means she has no idea what she is doing.
    - ZeroGravitas 11y ago
      Cameron doesn't want to leave the EU. He represents business interests, who overwhelmingly benefit from EU membership so he's fighting to stay in. But his party also has lots of people who cling to dream of the British Empire, and don't like social democracy, who dislike what the EU stands for. Those people were threatening to defect to a smaller party, which under the UK's ridiculous first-past-the-post system meant that those single issue voters could heavily influence policy despite their relatively small numbers. As a result we're going to have a referendum, that Cameron didn't actually want to have, and which he's going to campaign on the pro-EU side for. So Cameron needs to make it look like the EU is making concessions, so that he can return to the UK and campaign to stay in and make it seems like he's won some great victory. Note that he's being very vague about what he wants from the EU, this is because he's going to claim victory whatever happens, and he knows probably nothing will happen. Merkel also knows this, and knows he knows, and so the only thing she needs to do is not embarrass Cameron too much in order for the UK to vote strongly to remain in the EU. Calling his bluff and exposing this nonsense for what it is would be fun, but not particularly smart.
rsp1984 11y ago
What is actually happening here is that Tsipras is simply trying to save face. Attempting to get the Troika (EU, IMF, ECB) to bend in the negotiations was a suicide commando in the first place. Now he realizes that his plan failed and is trying last minute to shift responsibility to the Greek public (i.e. "let them decide what the right path is"). In any outcome event (Greece leaving Eurozone or Greece accepting Troika terms) he would be able to point to the referendum and tell everyone that it wasn't "his fault".
- MisterWebz 11y ago
  So letting the public decide their own fate is now called "shifting blame"?
  - exDM69 11y ago
    They had ample time to put up a public vote weeks or months ago. Their deadline for submitting a proposal or accepting the terms given to them passed five days ago. They initially sent "wrong papers" to the participants of the EU ministers' meetings. Now the referendum. At this point, they are just playing time.
    - DominikR 11y ago
      They are now for the first time in power and only for 5 months. Of course they needed time to conduct negotiations to see, if there is a way to end austerity on the basis of a mutual agreement with the EU institutions. Apparently this didn't work out (ultimatum by the EU), but how could they find out without at least trying to negotiate with the EU. He wasn't voted into power to leave the Eurozone, he was voted into power to end austerity and stay in the Eurozone. When should he have called for a referendum? After the first negative response they received from the EU? This would be silly. Of course they tried to negotiate and to explore all possibilities until they either reached a mutually acceptable agreement with the EU or they received a final ultimatum.
- TillE 11y ago
  Given that he and his entire party are loudly supporting a "no" vote, I don't think this is the case. Their position is clear. They simply don't have a democratic mandate to accept continued, worsened austerity. Everyone basically agrees that if the vote is "yes", that will be the end of the Syriza government. If it's "no", well, then they have the support to continue rejecting austerity.
pjc50 11y ago
Well, this is going badly; lots of grey top-level comments. The real underlying issue is: who has budgetary authority in Greece, and what does that mean? State debt does not usually come with strings attached. Even if the repayments cannot be made, debtors don't get to make policy. The big exception is the IMF. The ECB is now also trying to take on that role. The ECB is trying to run Greece like a chapter 11 bankruptcy. Not only a repayment plan, but dictating who wins and who loses in Greek society. The critical issue is pensions, which are considered "high" despite that not really being true: http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-system-isnt-that-generous-after-all/ http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-sys... There is an extra factor in the pension system that out-of-work benefits are really not generous or even functioning at all: http://greece.greekreporter.com/2014/06/16/85-in-100-unemployed-do-not-receive-benefits/ http://greece.greekreporter.com/2014/06/16/85-in-100-unemplo... So it has become common for elderly people to support younger ones. Cutting pensions too deeply will blow up the unemployment problem. The question is really poverty+independence vs vassal status. Quite a lot of people are saying they are willing to put up with poverty to preseve their dignity.
- chappi42 11y ago
  It's not poverty+independence, it's - poverty+bad_government+continued_corruption+leftish_dreaming+failure vs. - poverty+listen_to_advices+reform+better_life The 'quite a lot of people' might want to think about their ego and should not confuse it with dignity. It's Greece vs. the whole of EU. And do you really think one is independent if one is broke?
  - DominikR 11y ago
    Wow, you simply presume that they (the Greek) are wrong and the West is always right with their good advices and reforms. Just look at what kind of better life the "good advice" and "reforms" of the West has brought the people in Africa, the Middle East and the various western supported military dictatorships around the world. This way of thinking (we are always good and mean good) is the fundamental underlying issue in the conflict between the west and the east that has been raging now for more than a thousand years. Western way of thinking is all about superiority, cruelty and power disguised as good advice because we know best whats good for others.
acd 11y ago
I picture a visual picture of Newtons falling apple towards the ground with gravity as the rising debt in comparison with Greece ability to pay those debts. It is certain that the apple will fall to the ground its just a matter of time vs distance until it gets there analogy with the ability to pay of the debt. The Greece debt default are inevitable unless the Greece people suddenly behave like German productivity wise which is quite unlikely. The latest wording was that Greece needed the new loan to be able to pay off the old the old IMF loan payment which is coming up end of June. That to me sounds very much like something similar to a Charles Ponzi scheme, you need new participants in the scheme in this case a new loan to keep it rolling. A programmer spelled it out on a blog entry, its the same currency the Euro, German productivity is rising with x percent per year versus the Greece are falling in comparison with Germany. Combine that with unwillingness to pay taxes in Greece and you have bad funding, non efficient government with high debt. My suggestion, let the Greece people default on their debts, let the original bond holders take their investment losses on the investment. Give the Greece people back their local currency the Drachma it will then become a cheap country to have a vacation in and people will go there instead of other countries.
- ZeroGravitas 11y ago
  The original lenders were in so deep they'd have crashed the French and German economies, and taken the rest of the EU with them, if not bailed out. But the politicians don't like talking about this as a northern European bank bailout, preferring to blame the Greeks. The Greeks have issues, just like a lot of homeowners got in too deep, but if your bank, or your banking sector can't deal with bankruptcies then its not really the bankrupts fault, They took the deal they were offered with interest on one side balanced against risk on the other.

43 points by antouank 11y ago

There is no moral dimension to this situation: Greece is not morally obligated to pay back its existing debts, and the rest of Europe is not morally obligated to loan more money to people they don't believe will pay them back. (If you think that Greece "needs" the money and Europe should give it to them because they're suffering, there is a list of 140+ countries poorer than Greece here: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...). It seems like a bad idea to _me_ to default and leave the Euro. It will almost certainly be economically worse for the Greeks in the near-term than accepting the Troika's conditions for more loans, but it could be rational if the Greeks value independence very highly compared to maintaining their current standard of living. If you're going to do something with such dire consequences, though, a referendum seems like the way to go.

deleted 11y ago

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jlangenauer 11y ago
The core of the matter is that Greece simply cannot pay back even the payments due on their government bonds / loans without further loans, and this has been the situation for a number of years now. Now while Greece has made major reforms as already demanded by the Troika, it has also suffered a 25% reduction in its GDP: this is a simple byproduct of austerity, you cannot (easily) reduce government spending without it having a flow-on effect on GDP, and it is rather easy to push an economy into a debt spiral, where austerity leads to reduced GDP, and thus reduced government revenue, which requires further austerity, and produces further GDP contraction. For it's part, the Syriza government has offered to run a budgetary surplus of around 1% of GBP this financial year (which would affect GDP negatively) to around 3.5% of GDP in 2018 (which is flat-out insane). This has not been accepted by the Troika. My own view is that the rest of Europe is acting to protect those who made the risky loans to Greece, knowing full well that there was a risk of default, and for which they extracted high rates of interest. There has now been plenty of pain from the Greek people, and to expect more to protect bondholders who knew exactly what risk they were getting in to reeks of moral hazard.
- _delirium 11y ago
  I agree with the first part: the bailout package so far has failed, which is not a huge surprise. An interesting aspect has been that, more or less, the Americans were right on this one: American economists thought the plan's projections were unrealistic and that significant GDP contractions were more likely. The ECB had very rosy projections about the economic growth that would be follow on very soon after the austerity program (within 1-2 years), which were not really in keeping with reality. I'm not sure I agree with the who-benefits part in the last bit, though. As an explanation of the 2010 bailout, protecting the bondholders has some truth to it. But by now that has mostly already happened: the bailout package shifted most of the debt held by the private sector (mostly German and French banks) to the IMF and ECB's books. That is one reason that Greece's negotiating hand is worse now. At that time they had a mutually-assured destruction angle, because the bailout was necessary to bail out the German and French banks. Greece did a poor job playing that hand, agreeing to a package that successfully bailed out the German and French banks (with EU, ECB, and IMF money) but without even plausibly solving the problem on Greece's end. What's the motivation now? It could be to protect the remaining bondholders (basically, the "troika"), but realistically even they cannot believe they will actually receive payment in full, so their interest can't be rationally protected by simply demanding it. In my opinion, the motivation is more driven by two political constraints: 1) Europe is in a national-populist mood, and other countries' politicians have their own domestic voters to worry about. Parties like True Finns, Alternative for Germany, and Dansk Folkeparti exert significant influence (in the case of True Finns, within government), and their line is "tough on foreigners" and euroscepticism. 2) The EU & ECB don't want to admit that their economic policy in this case has been poorly designed, so there is a bit of saving-facing stubbornness going on. (The IMF by contrast has come close to admitting a policy rethink is necessary, though not officially.)
- stock_toaster 11y ago
  The inability of the Greek government to print their own money to try and counter deflation (I read it was something like between 2% and 3% year over year for the last two years) is also pretty rough. Not only due to probably further contracting GDP, but also by making loans more expensive!

nextweek2 11y ago

The real solution is that Germany leave. The Euro could then devalue for the benefit of all the weaker Eurozone members: Greece, Italy, spain, Portugal and Ireland.

aaggarwal 11y ago
Eurozone was formed by strong economical powers to bring economic stability in their countries and it's like a club of rich friends. Why would Germany leave the Eurozone and devalue their own money? Why would UK and its other rich friends let the euro and thus their money be devalued. And even if Germany leave the Eurozone which is highly unlikely, there are still many strong economic powers in Eurozone, so the Euro wouldn't devalue enough to support weaker economies. This situation is much more complex due to continuous delay by European powers to discuss this matter.
- mkempe 11y ago
  Note that the UK, Denmark, and Sweden have kept their own currencies, not using EUR. Look up GBP, DKK, SEK.
  - aaggarwal 11y ago
    Yes, point noted. Still they would never want euro to devalue against their currencies, it will result in huge inflation.
    - mkempe 11y ago
      You truly have no idea what you're saying. If EUR falls relative to SEK, Swedes will pay less for goods purchased in Europe. Falling prices are not a consequence of inflation, rising prices are.
      - aaggarwal 11y ago
        I am certainly not the authority on economics, but if EUR falls relative to SEK, then in Sweden imports would be high, exports would be low. This in turn would effect local manufacturers because people would prefer buying things from outside for lower price rather than within country for higher price. This might lead to closing of manufacturing units in Sweden and loss of jobs in the country. Also, wages would decrease relative to the rest of Europe because SEK is more valuable now (This would also result is movement of jobs out of Sweden to other European countries). Now the imports are flourishing and export industry is dying out and wages are getting lower, unemployment may be rising. The in-country manufacturers would keep the prices same for their goods to be sold within the country, but people's wages has decreased, so in order to compete with competitive import industry they will reduce the goods prices, which in turn will decrease their staff's pay. Thus, even though SEK is strong compared to rest of Europe, but within Sweden, people are making less than before, which in turn will lead to inflation. Also, I haven't yet accounted to another possible consequence of this, while SEK is stronger relative to Euro and Swedes might be making less money, American economy might not be affected and $ would still be the same. This will affect Swedes international buying power. A strong control by government may change a few factors here. If I am wrong somewhere, I would be happy to be learn new things, please give reasons.

Alkim 11y ago

It is interesting to think about the motivation of the Greek elected officials. To me it looks like they are trying to avoid the responsibility of making a painful decision. It also appears quite likely that the Greek citizens will vote against reducing pensions, etc. So with that in mind, what happens after 5 July? The rest of the EU will be placed in the uncomfortable position of either caving to the demands of the Greek citizens or somehow taking the position that the referendum is irrelevant--which will look very undemocratic. But to cave to Greece would mean the rest of the EU taking on an indefinite financial drain. I don't see how this ends any way other than Greek banks collapsing or Greece leaving the EU.

tomp 11y ago
> To me it looks like they are trying to avoid the responsibility of making a painful decision. In reality, they're just keeping their word. They were elected to prevent austerity. By not signing up for even more austerity, they are just fulfilling their democratic mandate.
return0 11y ago
They are looking for the easy way out. The greeks will predictably vote for euro and they 'll be called to resign, which they will. Bubble popped, new coalition government accepts bailout terms and reality resumes.
- junto 11y ago
  And if that happens we are back to square one. Greece can't pay this back. Whether it was wrong of them to accept a loan they couldn't pay back is now a mute point. Greece are bankrupt. Everyone just needs to accept that fact. A new government that accepts the terms of yet another loan they can't pay back is just going to end up in the same mess two years down the line. Germany wants them to turn into some German style mini-clone. Germany needs to accept that other states are like children; naively, you think you can bend them to your will and force them to behave in this bmanner you think is acceptable, but you are a fool if you believe that to be the case.

tomp 11y ago

It's really sad that it has come to this.

lifeisstillgood 11y ago

This is a huge deal, and is a make or break time for the European Project. We are now asking (a second time) for a democratic mandate to negotiate against an unelected (but appointed by elected officials) economic central bank. I honestly did not expect this one :-) Inhave spent some time trying to wrap my head round this and it does seem that the Greek government, fairly or unfairly, is going to have have its legs broken over this, but if serious fiscal Union of other steps towards solving the fixed exchange rate and debt issues across all of Europe are not included then the ECB is at fault - they need to turn round to the rest of the council of ministers and say "you need to include this - we don't have the authority"

tsotha 11y ago

Of course he wants a referendum. That way whatever happens people can't blame it on him. IMO that's the sign of a weak leader.

jon-wood 11y ago
I think this is the sign of a leader who knows his bounds - the Greek parliament were elected on a campaign to reduce austerity measures. For them to now go ahead and impose further measures would be a clear violation of the trust the electorate has placed in them. I wish more political leaders would recognise that they're answerable to the electorate, and put more controversial laws to a public vote instead of just imposing their will.
tomp 11y ago
It's a sign of a honest leader, given that he was elected on a promise of reducing austerity while keeping Greece in the EU/Eurozone, which right now seems impossible.
mrweasel 11y ago
I don't think so, quit the opposite actually. He can't give the Greeks what they want, it's not within his means, not without breaking promise he made earlier on. Arguably he may have made promises that where perhaps never realistic. The people want two contradictory things, based on the anti-austerity and "We want to stay in the Euro" protests. It seems fair to ask the people "Do you want the Euro, regardless of what austerity measures that might require" or "Do you want to avoid austerity and risk having to leave the Euro"?
- tsotha 11y ago
  >I don't think so, quit the opposite actually. He can't give the Greeks what they want, it's not within his means, not without breaking promise he made earlier on. Arguably he may have made promises that where perhaps never realistic. If you put it that way he's not a leader at all. He's just an opportunistic liar taking advantage of a bad situation.

return0 11y ago

Amateur move at best. Should the germans and the french follow suit with a referendum whether they should bail out greece again? The government that acted like nagging teenagers doesn't want to grow up, and chooses to bail. It saddens me that i voted for them. Truth be told, the EU is forced to look in the mirror this time: Despite all the rhetoric and despite most europeans liking the idea, the greeks do not become more like germans and the germans do not become more like spaniards.

konstruktor 11y ago
> Should the germans and the french follow suit with a referendum whether they should bail out greece again? Yes, and they should have done so much earlier. If the other Eurozone governments would have listened to popular demand, Greece would not have been bailed out, and the default would not affect their taxpayers as much as it does now. The whole bailout programme was hubris, and it is time to call the bluff.
- bornabox 11y ago
  Well, it's politics. A lot of the big lenders were german banks. So it made sense for the german government to support more loans to Greece, because those were used to keep paying back german Banks. Grossly simplified, but that's what has been happening in the last years.

venomsnake 11y ago

That is the right move. Also Germany should stop talking about fiscal results and demand political reforms. Clean corruption in the administration and good fiscal results will follow on their own. And Germany should elect finally someone competent. Merkel is a joke.

claudiug 11y ago
why merkel is a joke?
- venomsnake 11y ago
  Because she is incompetent, indecisive, keep the Eurozone stagnating because of her "austerity" politics, have no idea what "foreign politics" means.
nik736 11y ago
I'm from Germany and couldn't agree more :)
chappi42 11y ago
You are right but 'demand political reforms' is easier said than done. Greece is paralyzed since 7 years without progress. Motte: blame others do nothing, cry. Merkel is no joke, she is the most intelligent and gifted politician around. (Of course this is as subjective as your statement, but I'm right :-)).
- venomsnake 11y ago
  > she is the most intelligent and gifted politician around. She is entertaining Cameron's crazytalk of secession. Instead of just saying - go on, let me see you. And that means she has no idea what she is doing.
  - ZeroGravitas 11y ago
    Cameron doesn't want to leave the EU. He represents business interests, who overwhelmingly benefit from EU membership so he's fighting to stay in. But his party also has lots of people who cling to dream of the British Empire, and don't like social democracy, who dislike what the EU stands for. Those people were threatening to defect to a smaller party, which under the UK's ridiculous first-past-the-post system meant that those single issue voters could heavily influence policy despite their relatively small numbers. As a result we're going to have a referendum, that Cameron didn't actually want to have, and which he's going to campaign on the pro-EU side for. So Cameron needs to make it look like the EU is making concessions, so that he can return to the UK and campaign to stay in and make it seems like he's won some great victory. Note that he's being very vague about what he wants from the EU, this is because he's going to claim victory whatever happens, and he knows probably nothing will happen. Merkel also knows this, and knows he knows, and so the only thing she needs to do is not embarrass Cameron too much in order for the UK to vote strongly to remain in the EU. Calling his bluff and exposing this nonsense for what it is would be fun, but not particularly smart.

rsp1984 11y ago

What is actually happening here is that Tsipras is simply trying to save face. Attempting to get the Troika (EU, IMF, ECB) to bend in the negotiations was a suicide commando in the first place. Now he realizes that his plan failed and is trying last minute to shift responsibility to the Greek public (i.e. "let them decide what the right path is"). In any outcome event (Greece leaving Eurozone or Greece accepting Troika terms) he would be able to point to the referendum and tell everyone that it wasn't "his fault".

MisterWebz 11y ago
So letting the public decide their own fate is now called "shifting blame"?
- exDM69 11y ago
  They had ample time to put up a public vote weeks or months ago. Their deadline for submitting a proposal or accepting the terms given to them passed five days ago. They initially sent "wrong papers" to the participants of the EU ministers' meetings. Now the referendum. At this point, they are just playing time.
  - DominikR 11y ago
    They are now for the first time in power and only for 5 months. Of course they needed time to conduct negotiations to see, if there is a way to end austerity on the basis of a mutual agreement with the EU institutions. Apparently this didn't work out (ultimatum by the EU), but how could they find out without at least trying to negotiate with the EU. He wasn't voted into power to leave the Eurozone, he was voted into power to end austerity and stay in the Eurozone. When should he have called for a referendum? After the first negative response they received from the EU? This would be silly. Of course they tried to negotiate and to explore all possibilities until they either reached a mutually acceptable agreement with the EU or they received a final ultimatum.
TillE 11y ago
Given that he and his entire party are loudly supporting a "no" vote, I don't think this is the case. Their position is clear. They simply don't have a democratic mandate to accept continued, worsened austerity. Everyone basically agrees that if the vote is "yes", that will be the end of the Syriza government. If it's "no", well, then they have the support to continue rejecting austerity.

pjc50 11y ago

Well, this is going badly; lots of grey top-level comments. The real underlying issue is: who has budgetary authority in Greece, and what does that mean? State debt does not usually come with strings attached. Even if the repayments cannot be made, debtors don't get to make policy. The big exception is the IMF. The ECB is now also trying to take on that role. The ECB is trying to run Greece like a chapter 11 bankruptcy. Not only a repayment plan, but dictating who wins and who loses in Greek society. The critical issue is pensions, which are considered "high" despite that not really being true: http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-system-isnt-that-generous-after-all/ http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-sys... There is an extra factor in the pension system that out-of-work benefits are really not generous or even functioning at all: http://greece.greekreporter.com/2014/06/16/85-in-100-unemployed-do-not-receive-benefits/ http://greece.greekreporter.com/2014/06/16/85-in-100-unemplo... So it has become common for elderly people to support younger ones. Cutting pensions too deeply will blow up the unemployment problem. The question is really poverty+independence vs vassal status. Quite a lot of people are saying they are willing to put up with poverty to preseve their dignity.

chappi42 11y ago
It's not poverty+independence, it's - poverty+bad_government+continued_corruption+leftish_dreaming+failure vs. - poverty+listen_to_advices+reform+better_life The 'quite a lot of people' might want to think about their ego and should not confuse it with dignity. It's Greece vs. the whole of EU. And do you really think one is independent if one is broke?
- DominikR 11y ago
  Wow, you simply presume that they (the Greek) are wrong and the West is always right with their good advices and reforms. Just look at what kind of better life the "good advice" and "reforms" of the West has brought the people in Africa, the Middle East and the various western supported military dictatorships around the world. This way of thinking (we are always good and mean good) is the fundamental underlying issue in the conflict between the west and the east that has been raging now for more than a thousand years. Western way of thinking is all about superiority, cruelty and power disguised as good advice because we know best whats good for others.

acd 11y ago

I picture a visual picture of Newtons falling apple towards the ground with gravity as the rising debt in comparison with Greece ability to pay those debts. It is certain that the apple will fall to the ground its just a matter of time vs distance until it gets there analogy with the ability to pay of the debt. The Greece debt default are inevitable unless the Greece people suddenly behave like German productivity wise which is quite unlikely. The latest wording was that Greece needed the new loan to be able to pay off the old the old IMF loan payment which is coming up end of June. That to me sounds very much like something similar to a Charles Ponzi scheme, you need new participants in the scheme in this case a new loan to keep it rolling. A programmer spelled it out on a blog entry, its the same currency the Euro, German productivity is rising with x percent per year versus the Greece are falling in comparison with Germany. Combine that with unwillingness to pay taxes in Greece and you have bad funding, non efficient government with high debt. My suggestion, let the Greece people default on their debts, let the original bond holders take their investment losses on the investment. Give the Greece people back their local currency the Drachma it will then become a cheap country to have a vacation in and people will go there instead of other countries.

ZeroGravitas 11y ago
The original lenders were in so deep they'd have crashed the French and German economies, and taken the rest of the EU with them, if not bailed out. But the politicians don't like talking about this as a northern European bank bailout, preferring to blame the Greeks. The Greeks have issues, just like a lot of homeowners got in too deep, but if your bank, or your banking sector can't deal with bankruptcies then its not really the bankrupts fault, They took the deal they were offered with interest on one side balanced against risk on the other.