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(This article suggests to me that the real intention all along was for
Syriza to be ousted. By escalating its demands even after Tsipras
capitulated, the German bankers demonstrate that the real goal was not
just austerity but austerity without Eurocommunists to administer it.
They need a more reliable servant, plus the example of having a vocal
but ineffectual opponent toppled.)
WSJ, July 12 2015
Greek Deal Prospects Slim as Crisis Talks Resume
Meeting with leaders of nine EU countries outside eurozone is canceled
German Finance Minister Wolfgang Schäuble arrives for the start of a
meeting on the Greek crisis in Brussels on Sunday. ENLARGE
By GABRIELE STEINHAUSER and VIKTORIA DENDRINOU
BRUSSELS—Crisis talks set to determine Greece’s future in the eurozone
continued Sunday, with some finance ministers demanding the Greek
parliament start implementing unpopular overhauls and cuts before they
take a decision on new rescue loans.
“It is of course getting more difficult by the hour,” Austrian Finance
Minister Hans Jörg Schelling said as he arrived at the meeting. He said
the interruption of talks overnight allowed further preparations, but
warned that there was no unified position among ministers yet.
Mr. Schelling said that finance ministers might present eurozone leaders
with alternative proposals on whether to give Greece a new round of
rescue loans.
If the finance ministers fail to reach a decision, as is likely, the
baton will be handed over to eurozone leaders, who will gather for an
emergency summit later Sunday.
Finance ministers’ reluctance to take a decision on Greece’s request for
a new bailout—and thereby its future in the eurozone—despite the
government’s promise to implement most of the measures demanded by
creditors shows how much trust and goodwill has been eroded in recent
months. Greece and its creditors—other eurozone governments and the
International Monetary Fund—have been locked in negotiations since the
government of Prime Minister Alexis Tsipras was elected in late January.
A referendum last Sunday, in which a majority of Greeks voted against
budget cuts and economic-policy overhauls the government is now backing,
has raised doubts among creditors over whether they will ever be
implemented even further. Ahead of the referendum, the government had
campaigned against the measures.
“The main obstacle to moving forward is lack of trust,” said Italy’s
finance minister, Pier Carlo Padoan. He said that his country thought
the conditions were in place to start negotiations on a new aid
program—in contrast to others in the eurozone—and that the Greek
parliament should start implementing some of the promised measures as of
Monday.
Slovakia’s finance minister, one of Greece’s most outspoken critics,
sounded a more pessimistic note. “It’s not possible to reach a deal
today,” Peter Kazimir told reporters. He said only “frontloading”—early
and quick implementation of cuts and overhauls—could rebuild trust.
“This is not a question about whether it’s democratic or not. This is
about the economic situation,” he said.
The European Union’s economic commissioner was more optimistic. “I hope
that we have a deal, a good deal by the end of the day,” said Pierre
Moscovici, explaining that such an agreement would allow for starting
negotiations on a new rescue package.
He opposed a Greek exit from the eurozone. “The future of Greece, a
reformed Greece, is in the eurozone,” he said.
Greek Prime Minister Alexis Tsipras Riding High as He Attempts U-Turn
To allow for more negotiation among the eurozone’s heads of state and
government, Donald Tusk, who presides over these talks, canceled a
meeting with the leaders of the nine European Union countries that
aren’t part of the eurozone. That meeting had been scheduled to take
place Sunday evening.
The summit of eurozone leaders will go ahead as planned “and last until
we conclude talks on Greece,” Mr. Tusk said in a Twitter message.
Finland’s finance chief, Alexander Stubb, dismissed reports that his
country had been blocking a deal. “We’re all constructively trying to
find a solution to a very difficult situation,” he told journalists,
while warning that the austerity measures Greece has promised to
implement in return for a new bailout are “simply not enough at this stage.”
“We need clear commitments, clear conditionality and clear proof that
these commitments will be implemented,” he said.
Austria’s Mr. Schelling raised doubts that a full new rescue deal for
Greece could be completed by July 20, when Greece has to repay €3.5
billion ($3.9 billion) in bonds and €700 million in interest to the
European Central Bank.
“We have to discuss how we can come up with interim financing,” Mr.
Schelling said.
Early Saturday, the institution overseeing eurozone bailouts told
finance ministries that Greece would need another €74 billion in aid
over the coming three years—a figure that drew consternation from some
ministers. Some €25 billion of that figure may be needed to recapitalize
the country’s banks, which have been damaged by months of deposit flight
and two weeks of capital controls.
Greek banks have been shut for two weeks now, after the ECB declined to
extend more emergency loans to buffer deposit outflows. ATM withdrawals
have been limited to €60 a day, while no money can be transferred
abroad. Greek banking officials have warned that lenders may run out of
cash after Monday. Without new outside financing soon, the government in
Athens may have to start printing its own money again.
—Jason Douglas and Natalia Drozdiak contributed to this article.
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