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  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    "Exemption was lifted because Greece was not deemed to be in a programme"

    Not at all, it was lifted based on: " "It is currently not possible to assume a successful conclusion" of Greece’s current bailout. "

    After 1, just 1, meeting with Varoufakis. Not rules based at all, regardless of claims.

    Greece was indeed in the program at the time and continued to make all debt payments as scheduled for months after.

    What is true, however, is that the waiver was unique to Greece because of the ratings on its collateral, and that the ECB had issued the waiver of its own design, and that it was entitled to remove the waiver at its own discretion. But it's also true that the waiver was rescinded due to the Syriza governments intentions of renegotiating the program, and not based on any rules at all whatsoever, and designed to put pressure on the Syriza administration.
    Jul 5, 2015. 05:52 PM | Likes Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    As an aside, Tricky, I was in Greece both before and after it became part of the Eurozone, attempting to invest in and build infrastructure level telecoms. I have family engaged in Greece in infrastructure level IT and heavy industry. I've watched the economy for 2 decades. I remember as recently as 2007, after heading to Greece after a trip for investment ideas in real estate in LatAm, thinking about how much better the bureaucracy was in LatAm than Greece. I've spent quite a bit more time contemplating and experiencing Greece than a lot of the commenters here playing a few grand looking for a quick double on NBG.
    Jul 4, 2015. 11:51 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    " The problem is that Greece has no credibility in being willing to do enough on the big structural reforms"

    You realize Syriza was explicitly barred from performing on many of these things? Varoufakis words:

    "The most frustrating part is that these negotiations are taking up all our energy and time. And moreover: the institutions are telling us, if we legislate before we reached a comprehensive agreement this will be seen as a unilateral action and it will blow up the negotiations. One of the very first things I said to my Eurogroup colleagues was, why don’t we push some of the legislation we agree on – the taxation system, the anti-corruption rules – through parliament and meanwhile continue the negotiations? And I was actually told a number of times if I dare to suggest this again this would constitute reason to settle the negotiations."

    Varoufakis wrote several times about the issues with establishing credibility:
    "Five months ago, in my very first Eurogroup intervention, I put it to you that the new Greek government faced a dual task:

    We had to earn a precious currency without depleting an important capital good.

    The precious currency we had to earn was a sense of trust, here, amongst our European partners and within the institutions. To mint that precious currency would necessitate a meaningful reform package and a credible fiscal consolidation plan."

    "The barriers to growth in the past were an unholy alliance among oligarchic interests and political parties, scandalous procurement, clientelism, the permanently broken media, overly accommodating banks, weak tax authorities, and a weighed-down, fearful judiciary. "

    Syriza is a very specific break with the past. Should elections lead to political leadership beholden to the old money oligarchs, under the aegis of someone like Panadreou, like they have in every election going back to world war 2 before Syriza, a return to the corruption graft and broken economy of that past will continue.
    Jul 4, 2015. 11:43 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    " They not only are refusing to reform the things that kill Greece's productivity and competitiveness"

    Wrong. It's actually pretty amazing you have so successfully ignored the volume of economics asserting that the Troika policies have failed and are based on misguided principles. Well, maybe it isn't considering you are are quoting the party line.

    Moreover, the backward looking focus in your comment entirely misses the point of the negotiations, which are forward looking, as in, intended to enable Greece to shoulder its debt burden in a sustainable way, long term.

    Your comments betray that you have not been following the events closely, and have no sense of how events actually played out.
    Jul 4, 2015. 11:09 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    I won't respond to trolling, thanks.

    Feel free to address me when you have something of value to further the conversation.
    Jul 4, 2015. 10:27 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    You are EXACTLY wrong.

    Syriza has quite explicitly stated, on multiple occasions, it doesn't want new debt.
    Jul 4, 2015. 10:15 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    The notion that Greeks need and desire the embrace of some foreign benefactor - China, US, Russia - is completely and unequivocally far-fetched.

    This is a EuroGroup issue - a common currency, Euro-user issue. Greece belongs to the European Union as well - the political union of many more states than those in the 19 member currency union - and has no need of some new foreign 'benefactor'.
    Jul 4, 2015. 10:07 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    " So would your Option 3 -- Greece has no credibility, everyone knows they'd be back for more shortly."

    Your comment completely and totally lacks any understanding of Syriza, its policy proposals to the Eurogroup, or its agenda, or for that matter Greece's history.

    Syriza quite explicitly positioned for an end to bailouts and a pro-growth regime, and pretty much anyone credible anywhere agrees that between the past 5 years of crushed growth and the current output gap, a managed default under the terms proposed by Syriza would be effective. It just isn't on the table because the policy agenda doesn't conform to the strictures of the Eurogroup.
    Jul 4, 2015. 10:02 AM | 1 Like Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    The referendum is non-binding. "Challenging" the results is unnecessary. He can simply state the vote is too close to be valid.
    As for "flip flopped", I quote, from someone who said it eloquently:

    "The hypocrisy of some of the commentary on Greece is amazing. When the ‘adolescent ideologue’ Mr Tsipras shows a statesman-like maturity in being prepared to compromise in an effort to get a deal, he is accused of inconsistency and not being able to make up his mind. When those who he is negotiating with push him further than he is prepared to go, he is accused of ‘taking Greece to the brink’ by having the temerity to ask the Greek people to choose."

    "Mr Tsipras is accused of failing to grasp that other nations too have democracies, as if the Troika had shown huge respect for democracy by acting as if nothing was changed by Syriza’s election."
    Jul 4, 2015. 09:57 AM | Likes Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    The Eurogroup - and primarily Germany - has made it clear that it will not negotiate with a Syriza administration, period.

    The Eurogroup makes its own policy. And it's only policy line today is austerity of a certain type. It is making clear - and this is reflected in Schauble's comments, stance, and positioning - that Eurogroup membership means adherence to Schauble's own particular doctrine of economic policy, with no room for alternative agendas.

    A "no" vote still gives Tsipras options, but none of those are good for the Eurogroup.
    Jul 4, 2015. 09:54 AM | Likes Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    " Letting Greece default in a polite way via a 100 year postponement of principal repayments will only encourage other to follow Greece's path."

    The issue now isn't 'letting' Greece do anything. The issue now is that the way the situation has devolved there are very real risks for the Eurozone and its membership.

    Since before 2010 the Eurogroup has failed to get out in front of this. When it was truly meaningless sums and negligible risks. In 2012 Greece held the vast majority of its bonds with local law and could have defaulted unilaterally and would have been in great shape today. Instead, it agreed with its Eurogroup peers to engage in this austerity drive, to help contain any contagion, and to effectively bail out European banks.

    The debt was then moved almost entirely onto the 'official sector', and ringfenced. And today, Greece has no bargaining position. It participated in the fiction of maintaining the Eurozone at all costs and 3 years later after the fallout was contained it is being pushed out. The Eurogroup has shown that maintaining membership at all costs is a fiction, and that it has clear policy agendas which do not take into account the domestic politics or unique agendas and situations of member countries.

    Greece won't be allowed to default in a 'polite way' and the Eurogroup has adopted a very aggressive anti-Greece stance. There are 3 options: 30 years of debt slavery under the auspices of Eurogroup driven austerity programs, Eurozone exit, or a negotiated managed default.

    With option 3 taken off the table by the Eurogroup, the options in Sunday's referendum become much clearer.
    Jul 4, 2015. 09:46 AM | Likes Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    The "output gap" is suspected by the OECD to be on the level of 10%. An exit from the Euro would clearly be in Greece's favor, even though Syriza and most Greek people would prefer to avoid it. Let me quote Simon Wren-Lewis, an economics professor at Oxford:

    "The OECD estimate that the output gap in Greece is currently well over 10%. In plain English that means that those currently unemployed could be producing something useful and GDP could easily expand by at least 10% without generating any increase in inflation. (Greek inflation is currently around -2%.) That would not only be in the interests of Greece, but also in the interests of Greece’s creditors. It is a way of achieving the primary surpluses that the Troika wants without inflicting more pain. It is also absolutely undeniable that further austerity would tend to reduce GDP, just as past austerity has done. So everyone can be made better off by giving Greece the breathing space so that its economy can recover. But apparently it is childish to try and negotiate for such an outcome."
    Jul 4, 2015. 09:34 AM | Likes Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]

    "but what was artificial was the liquidity of Greek banking as long as ELA was being increased nearly daily."

    Artificial: The ECB decided to lift the waiver affecting marketable debt instruments issued by Greece on Feb 4, within days of Syriza's electoral win. The waiver allowed those instruments to be used in Eurosystem monetary policy operations despite the fact that they did not fulfil minimum credit rating requirements.

    The ECB then forced Greece into ELA life support, which carries a higher interest rate. The entirety of ELA borrowings reflect pressure placed on Greece to comply with Eurogroup designed austerity.

    The ECB used ELA as a method of forcing political cooperation - outside its mandate, and even though cutting off ELA is only supposed to occur subsequent to insolvency, it was used as a weapon by the ECB to -create- insolvency.

    Greece never needed to be put on ELA life support if the ECB was looking for a real resolution, and ELA cessation created a liquidity crisis which forced a solvency crisis.

    Of the 60b in ELA post-Syriza win, 50b apparently reflects the shift from ECB's MRO to ELA as a result of the ECB declaring Greek debt ineligible as collateral, with only 7b reflecting liquidity needs.

    As for the subsequent increases in ELA, I've made my case that it is primarily money exported from Greece due to its broken balance of trade with Europe, as in, it is European profits from their business operations in the country.

    And yes, I continue to support Tsipras moves.

    The ECB has taken on a very political role in this, effectively having a veto on Eurozone states membership in the currency, via its control of ELA, and its ability to create solvency crises as a result. It has clearly elucidated in this drama that the Euro, far from what it purports to be is a glorified currency peg.

    Take note: this will be a concern in the future in Europe. You are looking at this purely in the short term light of Greece, while it is impacting the structure and foundations of how the Eurozone is built and ordered.

    Had the ECB not had the option of withdrawing ELA, policymakers would have been forced into a negotiated result, which would have resulted in a tighter political union. Instead the ECB is using access to ELA as a method to force Eurogroup policy on member states. The notion of the Eurozone has been clearly made less attractive and the future of the Eurozone less secure.
    Jul 4, 2015. 09:24 AM | 2 Likes Like |Link to Comment
  • Varoufakis promises to quit if Greeks vote for austerity  [View news story]
    Have you ever made a single comment that had real information or wasn't completely wrong?

    Since we're making assumptions about each other, you must be a lousy investor. Fun.
    Jul 2, 2015. 12:34 PM | 2 Likes Like |Link to Comment
  • IMF: 2012 Greek bailout didn't work  [View news story]
    ...and the debt ratio would continue to be unsustainable into 2030... no typo, 2030.
    Jul 2, 2015. 12:07 PM | 1 Like Like |Link to Comment