(or read the transcript if you’d rather.)
At The Guardian: ‘Greece looks for political deal as creditors question progress – live updates now. Looks like it’s Showdown Time for Tsipris and Varoufakis, who by the by, says he/they won’t be joining the BRICS Development Bank. Christine Lagarde says:’ F you.’ Greece’s lead negotiator is Deputy FM Euclid Tsakalotos.
Greece’s debt negotiations are dominating discussions among the world’s top finance ministers and central bankers in Dresden
It seems that the wrangling and ‘no room for haggling’ is over for the day. This is the Guardian’s roundup:
“Summary: Greece optimistic, creditors not so much
Greece’s top negotiator has predicted that political intervention will be needed to finally close a deal with creditors, as time continues to tick away.
Euclid Tsakalotos told us today that the two sides are converging, but also criticised the International Monetar Fund for being “very very tough”.
In Athens, the Greek government has declared it hopes to get a deal by Sunday.
But creditors have both questioned this optimism; the IMF is insisting on sweeping reforms and credible surplus targets, while the European Commission warns that more work must be done.
In the last few minutes, Christine Lagarde warned that a deal is very unlikely to come soon.
The European Central Bank piled more pressure on, saying that the financial markets could be rocked if the Greek crisis ends badly.
Greece has loomed over a meeting of finance ministers and central bank chiefs in Dresden. Photos here and also here.
Europe’s markets ended the day in the red.
That’s probably all for tonight. Thanks for reading, and for all the excellent comments. See you tomorrow. GW”
Pension reductions, privatization of the commons, and further austerity measures are required by the IMF and ECB; Merkel is acting quite nonchalant about it all, of course, Syriza has lost a lot of support, and their claims that a deal is about to be reached seemed aimed at preventing a major run on their banks. LaGarde is seemingly cavalierly predicting a Grexit, but last I’d read polling says most Greeks don’t want to leave. That may change, of course.
A lot of folks at Naked Capitalism have advocated that Greece default on both ECB and IMF loans, leave the Eurozone, and point to Iceland’s experience with that, and how beneficial it was in the end. This economist make some interesting points:
“In a way, though, this is not the question the Greek government should be asking itself. Greece has been suffering an economic catastrophe since 2010. It is suffering from an economic catastrophe now and will continue to suffer from an economic catastrophe if it stays in the euro without generous debt forgiveness and policies that facilitate, rather than impede, growth. So the real question is not whether leaving the euro would be a catastrophe, because it would. The real question is whether it would be more of a catastrophe than staying in.
There are both political and economic dimensions to this question. Politically, Tsipras has a real dilemma: the Greek people voted for less austerity, Greece’s creditors want no let-up in austerity. He can please one or the other but not both. Bowing the knee to Angela Merkel would allow Greece to get access to the short-term finance that will allow it to pay its debts, but it will be political suicide for Syriza. Sooner or later, Tsipras has to decide what he wants to do: continue with a populist approach that is incompatible with euro membership or return reluctantly to the policies that have been pursued by the centre-left and centre-right governments since the crisis erupted.
Wolfgang Schäuble, Germany’s finance minister, has suggested that one solution would be for Greece to hold a referendum on whether it wants to go or stay. The message coming out of Berlin is that Germany doesn’t care much either way. If Greece wants to knuckle down to structural reform, that’s fine. If Greece wants to return to the drachma, that’s also fine.
Schäuble strongly suspects that faced with the choice, Greece would vote to remain a member of the single currency. But plebiscites are funny things, and the question asked would matter. The answer to the question “do you want Greece to continue using the euro?”, would be different to “do you want Greece to continue using the euro if it means cuts in wages and pensions?”. Germany should also not underestimate how strongly resentment still burns in Greece about how the country suffered when it was occupied during the second world war and how many Greeks feel they are being deliberately punished for choosing the sort of government that doesn’t suit the rest of the eurozone.
Hudson had made some of the same points especially that the IMF and ECP want to make all this an object lesson for the damned socialists vying for power.
“So what we’ve seen erupting in Europe in the last three months is the old class war. But it’s not really the old class war. It’s the war of finance against not only the Greek pensioners, not only the Greek economy, but Greek industry, Greek exporters, Greek banks. There’s a whole war to treat Greece as an object lesson, because the financial interests of Europe say, wait a minute. If the Syriza party is able to write down the debts to save the economy from depression, then Podemos in Spain and the Portuguese popular parties are all going to write down the debts. We’ve got to make an object lesson of Greece. We’ve got to absolutely crush socialism in the cradle so that it won’t grow into a European-wide movement to avoid depression.”
Crushing Chavismo and other pesky socialist parties in the global south is being done more covertly, however, through NGOs and propaganda, including some of the global ‘human rights’ organizations that are in thrall to the West.
Zo. It’s a small wonder that ECB chief Mario Draghi (on the left,heh) looks giddy as a school gurl. about to do a happy dance. “Gotcha on the ropes, my friends! Serves ya right!”
Zero Hedge plays with the odds of a Grexit, and additionally lays out what’s ahead for the next few months for Greece:
“The Greek Endgame Is Here”: Probability Of IMF Default Now 70%, Says Deutsche Bank | Zero Hedge// //
Thursday May 28th – Eurogroup Working Group to discuss Greece
Wednesday June 3rd – Weekly ECB review of ELA (and every Wednesday thereafter)
Monday June 1st – Bank holiday in Greece
Wednesday June 3rd – ECB monetary policy meeting Friday June 5th – 306mio EUR IMF payment
Friday June 12th – 344mio EUR IMF payment
Tuesday June 16th – 574mio EUR IMF payment Wednesday June 17th – ECB non-monetary policy meeting
Thursday June 18th – Regular Eurogroup meeting
Monday July 13th – 459mio EUR IMF payment
Monday July 20th – 3.5bn EUR maturity due to the ECB Tuesday July 14th – 87mio EUR interest payment
Thursday August 20th – 3.2bn EUR maturity due to the ECB
For financial wonks, via Naked Capitalism: