Tsipras’s nonpaper slamming SYRIZA dissenters

The Greek government released the following non-paper earlier today. After the warning shot towards the dissenters of the Left Platform, this time Prime Minister Tsipras uses even harsher words to slam on those MPs that still consider dissenting in tomorrow’s parliamentary vote involving the next set of prior actions.

Tsipras goes as far as warning SYRIZA MPs that “they should not hide behind the security of [his] own signature.” It is definitely an important non-paper, and it creates an even stronger indication that the PM is more than ready to clash with the radical parts of his coalition if they continue opposing him and the agreement [perhaps some stronger actions to be expected, other than merely changing the formation of his cabinet].

You can find the original version of the non-paper here. Below, you can find my own translation.

 

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Tsipras’s warning shot to the Left Platform (non paper)

Last night, the Greek government released a non-paper through which Prime Minister Alexis Tsipras issues a ‘warning shot’ towards the Left Platform of his party, after 32 SYRIZA MPs (most of which belong to the Left Platform) rejected the new bailout deal brought forth in the parliament.

You can find the original document non paper (in Greek) here, and a translated version below.

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Syriza’s Communist Faction call for rupture

The Communist Faction of SYRIZA has initiated a signature-collecting campaign among the many members of the party. In a text to be submitted in the Central Committee of the party on the upcoming weekend (23-24 May) – in the form of a referendum – the Communist Faction is asking from the SYRIZA-led government to “stop paying the lenders-blackmailers” and to “implement the true popular mandate” on which SYRIZA campaigned, and eventually got elected.

Below, you can find a translated version of the text, that has been already signed by 150 members of SYRIZA. The members who have already signed the text hail from different parts of Greece (some are even stationed abroad), and will be asking for the support of all factions within SYRIZA during the weekend.

An important thing to be noted here is the fact that there is no prominent MP or  MEP signing the document, at the moment. It is a small part of SYRIZA’s membership asking for a more radical stance from the government towards the finale of the negotiations.  Nevertheless, coupled with the “call for rupture” by many prominent members of the Political Secretariat and the Central Committee of SYRIZA that was made just yesterday, this only puts added pressure on many MPs and cabinet members that are already contemplating of breaking with the more moderate line that the government seems to be following. (And I say *seems* here, because, given the way the negotiations have played out until today, and considering the recent comments made by Varoufakis and two spokesmen of SYRIZA, it becomes increasingly apparent that the Greek government is taking its haphazard bluff until the very end.)

In any case, here is the Greek version of the Communist Faction’s document, which includes a link to the signatures collected thus far. Right below, you can find the translated version of the text (minus the 150 names). It is a fascinating call for rupture (once again).

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Call for “rupture now” by the Political Secretariat & Central Committee of Syriza

rrproject

Prominent members of the Central Committee and the Political Secretariat of Syriza are preparing an event for tomorrow, Tuesday 19 of May. Speakers and participants in the event include: Antonis Davellos (SYRIZA Political Secretariat), John Millios (SYRIZA Central Committee), Sofi Papadogianni (SYRIZA Political Secretariat), Panos Lambrou (SYRIZA Political Secretariat), George Sapounas (SYRIZA Central Committee).

Quoting from the event description, as well as the title of the invitation-pamphlet, the message of the event seems quite clear: “the only way out [of the impasse] is the choice of rupture with the lenders.”  

Read the announcement for the event below.

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The speech of Alexis Tsipras at the Economist Conference

Tsiprandreou

The Greek Prime Minister, Alexis Tsipras, delivered a very interesting speech at the Annual Conference event of the Economist in Athens. You can find the original speech, in Greek, here. You can find the translated version from the Office of the Prime Minister, here. Or you can read my own translation right below.

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What Varoufakis said in The Economist conference

Earlier today, Yanis Varoufakis, the Greek Finance Minister, gave the Keynote address to the “19th Economist Roundtable with the Government of Greece”. The topic of the two-day conference is: “Europe: The Comeback? Greece: How Resilient?”

While I could not find a video-taped version of the entire speech by the Minister of Finance, I landed on a video uploaded by Enikos.gr, which contains the better chunk of his speech. It seems that Varoufakis’s comments caused quite a stir earlier today, which led to an angry, official announcement by the Ministry of Finance. (See the end of this post)

As per usual, and given the fuzz created by his comments, I decided to transcribe the video of Varoufakis’s speech. Of course, it is incomplete (I begin at 3:05 of the video above, when V begins to talk about the really interesting stuff, and stop at the end of the video – and not at the end of Varoufakis’s speech). If I find the full video, I’ll make sure to provide a complete translation later on.

Segment of Varoufakis’s Speech at the 19th Roundtable with the Government of Greece [Starting at 3:05 of the video above]

… They often ask me – and I reply in the following way – why we have not finished the negotiation yet: it is because – and I speak personally – as a Minister of Finance, I will refuse to put my signature in such a package [deal] that, from a macro-dynamic perspective, is not dynamically consistent. These numbers do not tie with each other. Because, if I place my signature [in such an agreement], I will be yet another Minister of Finance that signs a medium-term program of fiscal adjustment, which he knows cannot work. And it can be proven mathematically that it does not work!

Unfortunately, on the other side, there is an understanding of this. But at the same time, there are political limitations in accepting it. When they tell you in the corridors and with closed doors that “you are right! But how can I pass this from my parliament?” you understand that we have a problem of consistency of those things that need to be done in order to have the comeback [of Greece, or Europe], and those things that can pass from the parliaments. And here, I will agree with Mr. Letta, that it is an issue of governing Europe. We know it very well that Europe does not have the structure of governance that is required in order to solve such disputes.

But since I want to focus and give more time, as I said earlier, for the discussion – I also have to go to the parliament, and answer four relevant questions today at 11:00 – I will tell you very quickly what I think must be the basis of a solution. Of an agreement-solution, so that the comeback can happen.

The first [thing that is needed], I explained: a dynamically consistent fiscal framework, a medium-term program of fiscal adjustment that has coherence, logic, [and] consistency – domestic and through time.

The second – and let us be clear here – even with divine inspiration and intervention, with someone pressing a button and making our debt vanish, the problem of growth would not have been solved. It would have been helped, but not solved. You know that better than I do.

Why? Our government is determined not to have again primary deficits. But an economy that is on a ‘Great Depression’ – it is not the same as what we call ‘great depression’ in Greek – with such low economic activity, with labour markets that are weathered, and without banking trust, and [even] with primary surpluses from the government, the question is: where will the growth-momentum come from?

It is clear that state assets must be utilized. And here comes the question of what does it mean to utilize state assets. Obviously, I do not mean a fire-sale. I do not mean selling them off in minimum prices – money that you take and throw it in the bottomless barrel of a non-sustainable debt. For us, the utilization of state assets must contain a reasonable mix. On the one hand, of privatizations; in parallel, the state must maintain an equity stake, which will be used as an asset that – together with other assets, primarily of real estate – after the reform on proprietary rights over those assets occurs, they can be integrated in a new development bank that can use them as guarantees, and in coordination with the European Investment Bank (EIB), to leverage them with the goal of creating a flow of investments in the private sector.

And you know, this leveraging via such an investment package that will use the EIB could also be connected with Mr. Draghi’s Quantitative Easing (QE), given that it has already been decided by Mr. Draghi that the ECB will purchase in the secondary market bonds by the EIB.

With the stocks of this development bank to have been conveyed to the insurance funds, as compensatory benefits, as compensation, for the large decrease in their capitalization with the PSI in 2012. And whatever profits this development bank has – or at least, its dividends – could go to the insurance funds. With a parallel reduction – a drastic reduction – of the early retirements and a restructuring of the management of the insurance funds.

At the same time, the banking system must be uncooped from red loans. There is no country in the world where the banking system – and particularly, a banking system which has been re-capitalized by the little the Greek people had, through an enormous loan from our partners…

Nevertheless, the banking system has huge percentage of non-performing loans (NPLs). If we do not find a way to manage those, there is no chance that the banking system will perform the job that it has to do. This is why a company to manage those NPLs must be created – a bank stressed asset management agency, if you will – in coordination with the Hellenic Financial Stability Fund (HFSF). Why does this pillow of the HFSF exist? It exists in order to help the capitalization of the banks.

The capitalization of the banks – to which the Greek people contributed from what little it had – right now loses [and] withers because of the red loans. Obviously, we must do something about that. I have discussed it with my counterparts in France, Spain, Germany, and in Finland with NAMA; and it is clear that there are things that can happen, must happen, but they also need to be part of the negotiation.

In the beginning, I talked about the dynamically consistent fiscal framework that must not begin from 2020 and, moving backwards, decide today what the primary surplus is going to be now. But this means that if we do it properly, and have a coherent fiscal framework, in 2020 the debt is going to be much higher than what the target was. The reason is that it is not sustainable, ladies and gentlemen. Truth to be told, it is time for all of us to say publicly what we say in private. To put it simply, and with a euphemism: the Greek debt must be re-designed.

To give you an example. I am not talking about a haircut! ‘Haircut’ is a bad word, and we have forgotten about it. Even in 2012, we did not call it a ‘haircut’ but a ‘private sector involvement’ or ‘initiative’, something like that. In Europe we are great at producing euphemisms. A few more investments would be more useful [however].

Let me give you an example. In July or August, the Ministry of Finance is going to be called to borrow 6 to 7 more billion euros from our partners, in some way, in order to repay the bonds from the SMP program that was created by Mr. Trichet back in 2010-2011, which are withheld by the European Central Bank (ECB). The remaining amount of those bonds is 27 billion euros, which will have to be repaid in the next months and years, very soon. These bonds – and this is very simple – should be send to the distant future. This is crystal clear. And I think it is also crystal clear to the people of the ECB. Of course, the ECB right now has the great agony of how to continue with the QE against a Bundesbank that is quite negative and hostile. That’s why any discussion about haircutting these bonds of 27bn euros comprises, if you will, [is] a red …

 

Unfortunately, the video is cut right at the best part. I will update the post once I find a full version. After creating considerable confusion in the international community by his comments [or at least, the way his comments were communicated via journalistic channels], Varoufakis issued the following statement through the Greek Ministry of Finance. (via Manos Giakoumis)

MinFin Announcement1

 

The interview of Syriza’s Lafazanis, hardcore Left-platform Minister

lafazanis_lifo

You can read the original interview in the website of the Ministry of Reconstruction of Production, Environment & Energy, here. The interview was given to newspaper “ΚΕΦΑΛΑΙΟ,” and specifically to journalist Niki Zormpas. Below, you can find my translation of the interview in English.

 

Interview of the Minister of Reconstruction of Production, Environment & Energy, Panagiotis Lafazanis, to the newspaper “ΚΕΦΑΛΑΙΟ” and journalist Niki Zormpas [Athens, 28 March 2015]

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The scathing letter of Syriza MP and Economist, Costas Lapavitsas

Earlier today, Costas Lapavitsas, Professor of Economics at SOAS and influential MP of Syriza, wrote a scathing letter in his blog addressed towards his entire party. Lapavitsas, who belongs in Syriza’s hardliners, says some extremely interesting things. Following Manolis Glezos, John Milios, Sofia Sakorafa (and Mikis Theodorakis!), who have already expressed their discomfort with Friday’s negotiation in the Eurogroup meeting, Lapavitsas joins the chorus of Syriza members that do not view the party’s compromising stance with a good eye.

I find the letter immensely interesting for many reasons, and I think that you will find it too. As such, I decided to translate the whole thing below. I leave the judgment part to you.

The link can be found here.

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GR Political Economy Digest #17

NEIN

While Friday’s Eurogroup storm seems to have passed, today is an equally (if not more) important date for the fate of Greece. Yanis Varoufakis, the Greek Minister of Finance, is expected to send a list of proposed reforms to TIFKAT (The ‘Institutions’ Formerly Known As Troika) for approval. Analysts, markets, and entire governments might have sighed in relief on Friday, but it is today actually that will illuminate whether a substantial compromise has been reached in the last Eurogroup meeting.

There is not much to say at this point, other than to wait and see what Varoufakis has planned. The list of reforms is expected to be quite short (no longer than 3-5 pages) and concise. Hopefully, it will also include meaningful proposals that speak more of a “compromise,” rather than the hardcore Left platform of Syriza or ANEL. “Wait, what?,” you may ask. “Who cares about those hardcore Lefties and the few ultra-nationalist crazies of ANEL? They are a fringe part anyways, right? And they wouldn’t jeopardize their ascent to power so soon, would they? As long as the moderate part of Syriza is willing to compromise, then there is no problem!” Well… I would love to share your optimism, but I am quite wary of the influence of the anti-austerity and anti-reform hardliners. I am also quite confident that we will witness some important schisms in the next couple of weeks – iff (if and only if) Varoufakis and Tsipras are true to Friday’s deal. Some senior Syriza officials and important figures of the Left have already begun speaking up (Manolis Glezos, John Milios, Sofia Sakorafa, and even Mikis Theodorakis). I suspect that more voices will soon follow in tune. Will that be enough to bring the government down? This is extremely early to say. But don’t be surprised if the inter-governmental dynamics change drastically in the upcoming weeks.

In any case, happy Lent Monday everybody! Here is the list of the top articles to read on the political economy of Greece today: 

  1. Greece: Four more months of hope and risks, by Frederik Ducrozet | Credit Agricole CIB, Feb 23 2015
  2. Greek bailout: Athens submits economic reform plan today (Live updates), by Graeme Wearden | The Guardian, Feb 23 2015
  3. Tsipras tamed as economists declare Greece loses austerity fight, by Simon Kennedy & Jennifer Ryan | Bloomberg, Feb 23 2015
  4. Greece scrambles to send draft reforms to EU institutions, by Peter Spiegel & Kerin Hope | The Financial Times, Feb 23 2015
  5. In defence of can-kicking, by Duncan Weldon | Medium, Feb 23 2015
  6. A hard week ahead for Greece after a last-minute deal, by Max Ehrenfreund | The Washington Post, Feb 23 2015
  7. Greece’s future is its past, by Rebecca Harding | Pieria, Feb 23 2015
  8. Greece: A debt colony with a bit of “home rule”, by Paul Mason | Channel4 News, Feb 23 2015
  9. Varoufakis ‘absolutely certain’ Greek reforms will meet approval | Deutsche Welle, Feb 22 2015
  10. Spain said to lead EU push to force terms on Greece, by Nikolaos Chrysoloras & Karl Stagno Navarra | Bloomberg, Feb 22 2015
  11. Ten days that shook the euro; how Greece came to the brink, by Alastair MacDonald & Jan Strupczewski | Reuters, Feb 22 2015
  12. Greece readies reform promises, by George Georgiopoulos | Reuters, Feb 22 2015

Photo Credits: Ilias Makris (Kathimerini, 22.02.2015)

GR Political Economy Digest #15

MAKRIS_KATHIMERINI

So many things have happened in the past week or so. And so many more are to come until the month is over.

Today, late at night, Syriza will announce its nomination for the new President of the Democracy (PtD) in Greece. Name-dropping about who will be nominated for PtD has begun as early as before the January elections. Two names that figured prominently in the rumors and speculations circulating via the Greek press are Dimitris Avramopoulos, a career-diplomat and former Minister in various Greek cabinets, currently serving as the European Commissioner for Migration, Home Affairs, and Citizenships, and Kostas Karamanlis, the former Prime Minister of Greece. Both of these people come from the New Democracy party (currently in opposition), and are considered emblematic figures of the center-right. Another name that circulated in the Greek press in the past few days is Marietta Giannakou, another (highly esteemed) member of the New Democracy party, who has served twice as Minister in a Greek cabinet, and was a MEP from 2009 to 2014. Out of the three, Giannakou is the less controversial choice, and the person with the biggest and most meaningful work legacy while in office. Nevertheless, given that she is facing some serious health problems at the moment, the chances are slim that she would be selected.

If you might wonder as to why the radical-left Syriza would nominate a center-right politician as the new PtD, no need to give it too much thought. It is standard practice for many years now in Greece for the party in power to nominate a seemingly un-harmful politician from the opposition as PtD, especially given the limited authority and leverage entailed with the ceremonial position. It is a clever tactic to show willingness to compromise in the spirit of democratic politics.

Tomorrow, Prime Minister Alexis Tsipras will meet with the Eurozone finance ministers to continue the negotiations that went south in last week’s Eurogroup. Tsipras remains confident that a viable solution will be found and that the negotiations will result in a “win-win” situation for all relevant parties. While the foreign press has largely drawn attention to the thin thread upon which Greece is currently walking on (as well as the devastating repercussions that will follow for the rest of the Eurozone if that thread won’t be able to hold Greece’s weight), Syriza’s official announcements, as well as the majority of the Greek press, have been intentionally painting a very rosy picture of the negotiations. For instance, while the Greek Finance Minister Yanis Varoufakis was, by and large, isolated in last Thursday’s Eurogroup meeting in Brussels, Greek media (TV, newspapers and portals) turned him into a heroic figure that supposedly went into the meeting with confidence, held the country’s head high, and “stole the show.”

Unfortunately, the reality is that Thursday’s Eurogroup meeting did not go that well. In fact, it didn’t go well at all. Varoufakis gave his (typical by now) theoretical talk, using fancy words and grand ideas. There were no data, no charts, no numbers from the Greek side. This, of course, did not sit well with the rest of the Eurozone partners who want exact numbers, specific percentages, and clear-cut reform proposals. But more importantly, at the last minute, when everyone thought that there was an agreement on the common press statement typically released at the end of the meeting, Varoufakis broke the consensus and no statement was released. By that time, many Finance Ministers, such as Germany’s Wolfgang Schauble, had already left the building.

I hope that tomorrow’s meeting will be more fruitful. We have already started to see certain glimmers of realism from the Greek side, something that even the Germans seem to have noticed. Given the number of protests that are planned to happen around Europe today in support of Greece, there might be a good chance that Germany will be pressured to loosen its stance. But this is only going to happen if Greece arrives at the meeting with neither generalities nor Varoufakis’s game-theory gimmicks, but rather with serious proposals, concrete plans, and specific numbers.

Without further ado, here are the top reads on the Greek political economy for today: 

  1. Eurozone must not allow Greece to become another Lehman Brothers, by the Business Leader | The Guardian, Feb 15 2015
  2. Greek prime minister ‘full of confidence’ ahead of Eurogroup meeting, by Caroline Copley | Reuters, Feb 15 2015
  3. Greeks brim with pride as country totters on the edge, by Karolina Tagaris and Deepa Babington | Reuters, Feb 15 2015
  4. Geopolitics versus politics in Greek debt drama, by Paul Taylor | Reuters, Feb 15 2015
  5. Greek exit from eurozone would be worst option, says bailout fund chief, by Andrea Thomas | The Wall Street Journal, Feb 15 2015
  6. Reforms, bloody reforms, by Frances Coppola | Coppola Comment, Feb 15 2015
  7. Eyes of the world on Greece, by Mike Peacock | Reuters, Feb 15 2015
  8. Greece’s Excess Burden, by Paul Krugman | The New York Times (Krugman’s Blog), Feb 15 2015
  9. SDOE to receive more power to go after tax evaders | Kathimerini, Feb 15 2015
  10. Greece and the euro: Hitting the ground running—backwards | The Economist, Feb 14 2015
  11. Greece faces  the cold stare of its creditor countries, by Arthur Beesley | The Irish Times, Feb 14 2015

 

Image Source: Ilias Makris (Kathimerini)