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Greek Govt Backs Down on Red Lines to Secure Deal by Philip Chrysopoulos The Greek Reporter, May 25 http://greece.greekreporter.com/2015/05/25/greek-govt-backs-down-on-red-lines-to-secure-deal The Greek government has been forced to back down on several of its pre-election campaign pledges as negotiations continue at a slow pace while state coffers are emptying at an alarming rate. The so-called “Thessaloniki program” that Prime Minister Alexis Tsipras had announced in September 2014 and boosted his popularity is now subject to negotiation with creditors while many items have been abandoned altogether. In other words, the “red lines” the government has set in negotiations are already partially crossed. The impasse in deliberations over the reforms that need to be implemented in order to secure further financial aid for Greece has forced Tsipras to push back several of his pledges. Government spokesperson Gavriil Sakellaridis indirectly admitted that several of the items of the Thessaloniki program cannot be implemented saying that they will be pushed back to a four-year timeframe. More specifically, the pledge for a 751-euro minimum wage has been pushed back for 2016. Accordingly, this means that the unemployment benefits raise also promised is pushed back as well. The abolition of the single property tax (ENFIA) will remain, for 2015 at least. The bill will apply, albeit with a different name. The bonus Christmas pension (the so-called 13th pension) also goes to the back burner. The pledge that incomes up to 12,000 euros will not be taxed is also “forgotten.” The 2-billion-euro program to battle the “humanitarian crisis” has been reduced to a bill reinforcing these actions by 200-300 million euros. The plan to form a program that would fund 300,000 job positions was also a promise that would never be kept. The pledge to stop privatizations does not seem to materialize either as the government is already negotiating partial sale of the Piraeus Port. Finally, and most importantly, the pledge to get a generous debt haircut from creditors was forgotten as early as February 20, when the bailout extension was signed. . . . Debt talks resume amid concerns over differences, looming repayment, political upheaval I Kathimerini, Athens, May 25 http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_25/05/2015_550362 Government officials on Monday expressed confidence that Greece was close to a deal with creditors that would allow loans to be unlocked but pressure is growing on Prime Minister Alexis Tsipras from abroad and on the domestic front. The cautious optimism in Athens does not appear to be shared by creditors. A European official with knowledge of the negotiations, which resume Tuesday, told Kathimerini that momentum is lacking. “For us to move forward there has to be a political decision,” he said. There are four sticking points – fiscal issues, pension and labor reforms and changes to value added tax rates. The two sides have made few concessions and continue to differ on forecasts. According to Olivier Blanchard, the International Monetary Fund’s chief economist, Greece’s budget proposals are not adequate to ensure a surplus this year, which had been forecast at 3 percent of gross domestic product. In an interview with French newspaper Les Echoes, Blanchard stressed the need for “credible measures” if Greece is to regain a surplus, saying however, that “this is far from being the case at the moment.” Briefing reporters in Athens, government spokesman Gavriil Sakellaridis was upbeat, saying he believed a deal could be reached “soon.” The deal would have to be sealed in the coming days for it to go through Parliament and gain approval for the release of loans. A 300-million-euro IMF repayment looms on June 5. Sakellaridis said that Greece intends to make the payment. “We want to be consistent with our obligations and so we are striving for a deal so the economy can get some relief,” he said. His reassurances came after Interior Minister Nikos Voutsis said Greece “can’t and won’t” pay the IMF on June 5, the first such explicit statement by a minister. Voutsis made his comments on Sunday, a few hours before SYRIZA’s central committee voted down a proposal by the party’s radical Left Platform to halt payments to creditors. Sakellaridis did not confirm reports that Greece is considering asking the IMF to allow it to settle repayments worth a total of 1.6 billion euros next month in one sum at the end of June. Greek Negotiations Resume Tuesday to Discuss VAT and Pensions by Philip Chrysopoulos The Greek Reporter, May 25 <http://greece.greekreporter.com/2015/05/25/greek-negotiations-resume-tuesday-to-discuss-vat-and-pensions> Negotiations between Greece and the Brussels Group will resume on Tuesday with value added tax and pension reforms as the main topics. The Greek team will propose three VAT rates of 23%, 14% and 7%. Creditors, on the other hand, suggest two rates at 10% and 23%. Athens proposes 7% VAT on food staples, medicine and books, 14% on food, utility bills and clothing, and 23% on cars, alcohol, tobacco and electronics. It is estimated that the changes would increase tax revenues between 500 million euros to one billion, thereby closing a big part of the 2015 fiscal gap. Regarding pension reforms, the Greek team will propose the abolition of early retirement but will refuse any cuts in supplementary pensions that pertain to about 200,000 pensioners. US Treasury Secretary to Greek PM: Must Reach Agreement with Creditors by A. Makris The Greek Reporter, May 23 <http://greece.greekreporter.com/2015/05/23/us-treasury-secretary-to-greek-pm-must-reach-agreement-with-creditors> U.S. Treasury Secretary Jack Lew spoke with Greek Prime Minister Alexis Tsipras on Friday to discuss the latest economic developments in Greece. Secretary Lew noted that the Treasury Department continues to closely monitor developments in Greece and remains engaged with all parties involved. Secretary Lew welcomed Prime Minister Tsipras’ commitment to the negotiations but cautioned that failure to quickly reach an agreement would create immediate hardship for Greece and uncertainties for Europe and the global economy, a Treasury official said in a statement. (source: MNI) [Market News International, Frankfurt am Main, Germany] Greece says it has no plans for capital controls as debt crisis deepens Officials say cash-strapped country can't make June payment to IMF without a debt deal CBC News, May 25 <http://www.cbc.ca/news/business/greece-says-it-has-no-plans-for-capital-controls-as-debt-crisis-deepens-1.3086339> The Greek government on Monday ruled out imposing capital controls that would restrict the movement of money, despite fears that it is close to leaving the euro. In a weekend TV interview, Interior Minister Nikos Voutsis, a senior Syriza member, said Greece can't pay its June IMF instalment of 1.6 billion euros unless it gets a bailout agreement. Then on Sunday, Syriza's central committee defeated a proposal by the hard-left wing of the party to stop making its IMF payments and nationalize the banks. That led an opposition spokesman to suggest the government would begin restricting bank withdrawals as soon as June 1 in an effort to prepare Greece for withdrawal from the euro. If Greece fails to make its payment and pulls out of the euro, it will lead massive capital outflows from Greek banks. On Monday, the Syriza government was scrambling to throw cold water on that scenario, with government spokesman Gabriel Sakellaridis insisting Greece was close to a bailout deal and had no need for capital controls. . . . Greece’s Governing Left Divided Over Debt Terms Syriza faction says it favors default and a eurozone exit to swallowing measures creditors are demanding by Stelios Bouras Wall St. Journal, May 25, 2015 2:28 p.m. ET <http://www.wsj.com/articles/greeces-governing-left-divided-over-debt-terms-1432578490> ATHENS—As financial pressure mounts on Greece to sign a deal with its foreign lenders, Prime Minister Alexis Tsipras is facing what may be his biggest problem yet: the struggle within the ruling Syriza party over whether to swallow creditors’ tough terms or default. Dissent is spreading within leftwing Syriza against the economic policies Greece is likely to have to enact in return for fresh bailout funding from other eurozone governments and the International Monetary Fund. The Syriza-led coalition government holds only a thin majority of 12 seats in Greece’s 300-seat Parliament, so a rebellion against a deal could easily cost Mr. Tsipras his governing majority. Greece’s lenders are particularly worried about vocal threats by Syriza’s Left Platform, a hard-line leftist faction within the party, to reject any deal that crosses ideological “red lines” by cutting pensions or workers’ rights. Mr. Tsipras’s difficulty in selling a painful compromise to Syriza’s hard left, as well as to other parts of his ideologically diverse party, has become the largest obstacle to a deal. European officials and analysts—and privately even Greek government officials—say they don’t know whether the roughly 30 lawmakers who make up Left Platform will vote as defiantly as they talk if creditors’ terms are put before the Athens Parliament. Greece needs to agree on a list of economic policies with lenders in time to avoid defaulting on a series of loans repayments to the IMF in mid-June. Although the government probably has enough cash to repay a €300 million ($329 million) loan due June 5, it almost certainly can’t meet three further payments totaling about €1.25 billion on June 12, 16 and 19, European officials say. Greece needs a deal as soon as possible so it can service its IMF debts, government spokesman Gabriel Sakellaridis told reporters on Monday. “To the extent that we are in a position to pay our obligations, we will pay our obligations,” he said, adding: “It’s the government’s responsibility to be in a position to pay its obligations.” The European Central Bank has told eurozone governments it would allow Greek banks to buy more short-term Greek government debt if an economic-overhaul agreement between Athens and creditors is imminent. That would allow Greece to survive until July, when further debts fall due and fresh bailout loans will be needed. Lenders, led by the IMF and Germany, are insisting that Greece enact further budget austerity, cut the cost of its pension system, step up privatizations, and make corporate layoffs easier, among other measures. The creditors’ hard line has exasperated Syriza leaders, who won election in January on a promise to end such painful retrenchment, which many Greeks believe has deepened rather than cured their country’s economic crisis in the past five years. When Syriza’s Central Committee debated the state of debt negotiations this weekend, the Left Platform submitted a motion calling for the government to default on the IMF loans rather than compromise its principles. The proposal was narrowly rejected, with 95 people voting against and 75 in favor. The Left Platform’s leader, energy minister Panagiotis Lafazanis, told the meeting that default was preferable to surrender, even if it meant Greece tumbling out of the euro. “Who says that an exit from the euro and a return to the national currency is a catastrophe?” Mr. Lafazanis said at the meeting. The Central Committee agreed on a text saying any deal with creditors must involve no pension cuts, a small budget surplus before interest, increased public investment, and a restructuring of Greece’s debt—terms that lenders are unlikely to accept. The text isn’t binding on Mr. Tsipras’s government but indicates how hard it will be to sell a deal to Syriza. The weekend’s debate came after other recent challenges to Mr. Tsipras from Syriza’s hard-liners, including a call last week by five members of Syriza’s highest leadership body, the Politburo [Secretariat], to leave the euro rather than give in to creditors. Many analysts say Mr. Lafazanis and the Left Platform might back down and follow Mr. Tsipras in the end, because strong party discipline is also part of the group’s ideology. Even hard-liners also don’t want to be accused of bring down a left-led government. But the rest of Syriza’s diverse ranks, which range from center-left moderates to Maoists, also includes potential rebels. “The biggest threat may not end up being Mr. Lafazanis, but other parliamentary members who lack party discipline, who are newly elected and are completely unpredictable,” said Dimitris Keridis, an associate professor of international politics at Panteion University in Athens. Parliamentarian Ioanna Gaitani, a self-described Trotskyite within the Left Platform, said in an interview that Greece can survive a debt default and that lenders aren’t respecting the mandate Syriza won from voters. “When faced with the pseudo-dilemma of ‘euro or national currency,’ the answer is a unilateral write-off of most of the debt, the taxation of large wealth, and the implementation of Syriza’s program,” she said. “For the Left, the needs of the people are above profits and debts.” Greece's radicals: The wild ones [the only information here is the attitude of capitalist establishment publication The Economist, dayne] Alexis Tsipras, the prime minister, must defy the radicals in his own party as he negotiates with the EU and IMF The Economist, May 25th <http://www.economist.com/news/europe/21652076-while-prime-minister-alexis-tsipras-negotiates-eu-and-imf-his-partys-radicals-pull-another> "WOULD [a Greek exit from the euro] be such a catastrophe?" asked Panagiotis Lafazanis, Greece's industry, energy and environment minister, at a two-day meeting of the governing Syriza party over the weekend. Mr Lafazanis is the leader of Syriza's Left Platform, the radical faction of an already radical left-wing party. At the meeting of the party's central committee, Left Platform argued for an alternative plan to Greece's ongoing efforts to negotiate an agreement with its creditors: the government should break off the bail-out talks, default on its loans from the International Monetary Fund and prepare the country for Grexit. A strong minority of the central committee's 350 [actually 201, d] members backed the radicals' plan. But ultimately Alexis Tsipras, the prime minister, won support for the government's negotiating efforts in a show-of-hands vote. . . . Greek Govt: SYRIZA Decisions Binding, no Plans for Reshuffle by A. Makris The Greek Reporter, May 25 <http://greece.greekreporter.com/2015/05/25/greek-govt-syriza-decisions-binding-no-plans-for-reshuffle> The decisions taken by SYRIZA’s Central Committee are binding for the party’s MPs as well, government spokesman Gavriil Sakellaridis said during the regular press briefing on Monday, in response to questions on the resolution voted on Sunday. He also made it clear that the government has no plans for a cabinet reshuffle, when asked whether any agreement reached with creditors would be implemented by the existing government team. . . . ‘To Potami’ Will Vote for an Agreement with Greece’s Creditors by A. Makris Greek Reporter, May 25 <http://greece.greekreporter.com/2015/05/25/to-potami-will-vote-for-an-agreement-with-greeces-creditors> Greek opposition “To Potami” leader Stavros Theodorakis made it clear on Sunday that his party is prepared to vote in favor of an agreement with Greece’s creditors when the government brings it to Parliament. “We are absolute. The other parties and some politicians might bargain and discuss but we said from the beginning that we will vote for this agreement. If Tsipras and our partners agree on a text, ‘To Potami’ will vote for this agreement without provisos,” he said. At the same time, he stressed the Prime Minister’s obligation is to now get the various groups and wings within his party under control, and behind the changes and reforms that must be made. . . . _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
