[The deal achieved on the last 20th has triggered off a heated debate, particularly on the Left. But one thing is pretty clear to any sensible person that Greece/Syriza is at the moment in quite a tight spot. It has too few bargaining counters facing an imminent economic collapse.
The "system" is too powerful and intimidating. Without simultaneous coordinated mass actions in a number of EU member countries, it is too difficult to make it budge, let alone shake. At sl. no I & II below are three analytical articles. At III & IV are two reports.] I/IV. http://links.org.au/node/4302 SYRIZA's debt deal: breathing space or capitulation? Three assessments Greece's finance minister Yanis Varoufakis. February 23, 2015 -- Links International Journal of Socialist Renewal -- The interim deal between European authorities and the SYRIZA government of Greece has caused controversy on the left, with accusations of "capitulation", sell out" and worse from some sections. Below are three assessments from the left that offer a more sober analysis. Greece gets its deal... but if the detail's wrong 'we're finished' By Paul Mason February 20, 2015 -- Channel 4 --- The eurozone and International Monetary Fund (IMF) have done a deal with Greece, extending its bailout for four months in return for a commitment to run all policy measures with significant economic impact past the lenders. The second part of the deal has to be done on February 23, by Greece submitting a list of proposed measures. In football terms Greek finance minister Yanis Varoufakis has snatched an "narrow away defeat" from a potential knockout - from the cup and the league combined. Here's why. The draft does not give Germany everything it wanted. It allows Greece to vary its fiscal target this year - meaning it can run a lower surplus, as yet unspecified. In addition, according to Varoufakis, there is "creative ambiguity" about the surpluses Greece is required to run beyond this year. Second it maintains the words Varoufakis proposed on February 19: that Greece will not rollback old measures or unilateral policies "that would negatively impact fiscal targets, economic recovery or fiscal stability" - however with the addition of the words "as assessed by the institutions". This clarifies who gets to decide whether the revised Greek program threatens these things. By February 23 Greece has to submit a list of measures, in order to get the money to recapitalise its banks, and roll over its loans. Varoufakis spun this at a press conference as something that would be assessed jointly - so effectively the power game between Germany, Greece and everybody in between now continues, but with the IMF - whose methodologies are considerably less doctrinaire than the European Central Bank (ECB) on what Syriza proposes to do - in the loop. In addition, the word "bridge" appears in the agreement. Eurogroup president Jeroen Dijsselbloem indicated that it would be a bridge to any future arrangement - and in that sense, the German opposition to any signal of the possibility of a transition phase was overcome. Positives for Greece Here's why I think Varoufakis has achieved something. In the hours before the deal the Greek media reported deposit flight had significantly increased. So it was not the ECB threatening Greece with capital controls but the Greek central bank and finance ministry knowing they would have to limit ATM withdrawals as early as February 24. With that hard deadline clear Greek negotiators feared the position they signed up to tonight would be chipped away by their opponents to nothing - i.e. towards the German position. So by signing early, they - they believe - have removed the ticking-clock issue, and if the ECB - as Varoufakis expects - makes positive announcements on restoring normal credit lines to the Greek banks, the banks are safe. He said in the press conference the banks would remain open "Tuesday, Wednesday and ad infinitum". A nightmare scenario for Greece was that, if they imposed ATM limits on February 24, the EU/IMF could then drag their feet, Cyprus style, forcing total capitulation. The true substance of what's been agreed will only be decided as the IMF/EU and ECB say yay or nay to each of the Greek measures. The German finance minister, and indeed the German "tone of voice", was not present at the final announcement of the deal. So it remains to be seen what the German lawmaker's response is. Syriza's left Varoufakis was visibly relieved. He has - we think - averted a bank run and total surrender, but only by beating a retreat from what Syriza promised in the aftermath of the election. Syriza's left will criticise this - and they will criticise the conduct of Varoufakis and his team who seemed to have very few bullets left in the clip by this evening. But because Varoufakis can sell this as "better than it could have been" I would expect there to be relief, and the anger focused on Germany, on the Greek streets this holiday weekend. Asked what happens if the IMF/EU do not agree the list Syriza presents on February 23, Varoufakis said, disarmingly, "then we are finished". But if it can be agreed, there is a massive amount Syriza can do on policies not tied to its fiscal limits, and four months only takes us to the end of June, which has always been "riot season" in the Greek crisis. The strategic crisis is not over. But the damage to trust and solidarity, with one nation - Germany - being seen to attempt to force another's electorate into total surrender - is real. I asked Dijsselbloem in the press conference: "What do you say to the Greek people, whose democracy you've just trashed." He replied that he did not think that was a very objective question. We'll have to agree to differ. Greek bailout extension deal a 'significant retreat' by the European authorities By Mark Weisbrot February 20, 2015 -- Center for Economic and Policy Research -- A deal reached between the Greek government and European authorities represents a "significant retreat" by the so-called troika and shows that their austerity program, which has failed miserably, is no longer politically enforceable. Greek government officials reached a deal with European authorities earlier today to allow bailout funds to be extended to Greece for another four months. As the Guardian and other media outlets have reported, the new Greek government agreed to submit a list of reforms to the European authorities on February 23. But the agreement gives Greece fiscal flexibility, lowering previous fiscal surplus constraints. Bloomberg cited a Greek official as saying that tax increases and cuts to pensions were not part of the agreement. The accord forestalls the immediate threat of Greece being forced out of the eurozone through a loss of support from the European Central Bank (ECB). European officials had a gun to the head of the Greek government, and they just pulled it away - at least for now. This is a significant retreat and shows that their austerity program, which has failed miserably, is no longer politically enforceable. The Greek election has been shown to be a turning point for Europe. European officials' had threatened to collapse the Greek financial system by cutting off needed credit. On February 4, the ECB announced that Greek government bonds could no longer be used as collateral for the least expensive loans from the ECB. Greece was still eligible for Emergency Liquidity Assistance, but last week European officials indicated that this too would be cut off if Greece did not agree to continue implementing the terms of previous governments' agreements. Today's agreement will allow the new Greek government some fiscal space to increase employment and economic growth, and undo some of the damage of years of troika-induced depression. That is the most important thing. The details of what to do about the debt can be worked out later. The agreement allows for a smaller primary surplus in 2015, and indicates that Greece will not be held to the large primary surpluses (more than 4 per cent of GDP for years, according to the IMF Fifth Review), that European officials wanted to hold the government to. This relaxing of fiscal policy is most important to allow for the recovery that Greece needs. The next few months will be important, since the confrontation between the new Greek government and the European authorities is the first time since the Great Recession that voters have successfully been able to challenge the troika's previously unaccountable power. Their policies have been widely unpopular in Europe, but this is the first government that is really forcing them to change. European finance ministers will review the deal next week, and the German parliament still must approve it before it can be considered final. Now the ball will be in the European authorities' court. They'll have to be the ones who say that what Greece is doing isn't enough, and they're increasingly going to appear unreasonable, not just to the Greeks but to the world. For more information, see CEPR's work on Greece here. Snipped II/. http://rs21.org.uk/2015/02/21/greek-debt-negotiation-does-this-constitute-a-sell-out/ Greek debt negotiation: does this constitute a sell out? rs21onFebruary 21, 2015/6 comments Nathan Bolton examines the implications of the deal made in the Greek debt negotiations Image via Theophilos Papadopoulos on Flickr Image via Theophilos Papadopoulos on Flickr A deal has been made. But the deal made is sufficient to allow commentary to rage for days, perhaps even longer. Does this represent a full capitulation by the Greeks, a capitulation by the Germans, or simply a 'kicking of the can further down the road', as is so often the case when it concerns matters of the European Union? How the deal is perceived will also depend on one's own particular position on the deal and this economic war, whether one is supportive of Syriza's attempt to bend the institutions from within, whether one is a proponent of Grexit in either its debtor led or creditor led forms, or whether one wanted to see the full capitulation of the Greeks (see Wolfgang Schauble). Since the beginning of the week a position has been arrived at by the mainstream European press, bar a few exceptions, that Greece has made or will make significant compromises on its electoral promises in this deal. I am certainly no expert on the debt negotiations and will not pretend to be, but in the interest of clarity, I want to present the deal as is and present some headlines from Syriza's pre-election Thessaloniki programme to clarify whether or not this 'sell-out' is real or an apparition. Before beginning, it is worth mentioning the context that I think is most important, more important than the 'reformist nature' of Syriza and the affect this may have had on their bargaining position. The European Union has a fundamental fissure, an economic, power and political disparity between its core and its periphery, a fissure that is there by design. Without understanding this disparity, it is impossible to understand a number of things: the pressure on Greece as a member of the peripheral states, why Syriza sees its salvation as within the European Union, but paradoxically equally why some in the Greek left, including within Syriza, see Grexit as the only solution. This distinction on the question of the European Union transcends not only the reformist/revolutionary categorisation, but even that of right and left. Pre-election Before presenting the deal, it's important present the programme that Syriza was elected upon, the so-called 'Thessaloniki Programme', as it is this programme from which we will have to judge whether Syriza has back-tracked, made concessions or caved in entirely as the days, weeks and months unfold. The Thessaloniki Programme is based on four pillars: Confronting the humanitarian crisis Restarting the economy and promoting tax justice National plan to regain employment Transforming the political system to deepen democracy It also set out a number of goals to restore sovereignty and dignity to the Greek people which included measures such as 'excluding public investment from the Stability and Growth Pact' (Government deficit limits of 3% of GDP and debt of 60% of GDP), that any agreed debt would be paid off financed by growth, not budget surpluses, and the repayment of the forced Nazi occupation loan. Costas Lapavitsas writes in the Guardian that the headlines Syriza took into the elections were twofold: One, a substantial write off of the Greek debt as part of a wider European debt conference, two, lifting austerity by aiming for balance budgets "not from primary surpluses, which deprive society of income". In addition, Lapavitsas confirms Syriza, "will reconnect families to the electricity network, provide food relief and shelter the homeless. It will take immediate action to reduce unemployment through public programmes. It is committed to lowering the enormous tax burden and to boosting public investment in an effort to accelerate growth." Even before the election it was noted by some commentators that despite the epithet "far-left" so often attributed to Syriza, these policies were not radical, let alone revolutionary, but were offering a path away from the policies of the Memoranda. However as has been widely reported, Syriza repeated its intention to remain in the monetary union and avoid political unilateral decisions. It saw its salvation occurring within the EU, so not only saving itself but the political ideal of European integration with it. Deal As I have already argued, the weakness of the peripheral states as independent economic units as well as the lack of political leverage these states have against the core has to be at the front of our minds when looking at the current deal. Syriza's intention to remain within the monetary union also arguably deprives it of the weapon really puts the frighteners on the European core. Would Merkel want to be remembered as the Chancellor who tore apart the European dream? So, on Wednesday the European Central Bank (ECB) issued Greece with additional emergency liquidity for Greek banks. Since the election, with the fears of the Government refusing to comply with the wishes of the European core, or even a full default, up to 25 billion euros has been withdrawn by depositors in the form of cash or electronic transfers to banks in the United Kingdom and Switzerland. The emergency liquidity granted would only have seen Greek banks through to next Tuesday. It is at this point that Yanis Varoufakis, the Greek Finance Minister sent a letter requesting an extension of its loan agreement which was summarily rejected by the Germans. Again, it is in this context that a deal was made on Friday: A possible run on the banks and the fear that the rest of the Euro group would coalesce around the German position. Syriza repeatedly promised a break from the old parties, that the Memorandum would not stand and that new, mutually beneficial, agreements, would be sought. The central aims of the Thessaloniki agreement were: 1) a substantial write off of the Greek debt as part of a wider European debt conference, 2) lifting austerity by aiming for balance budgets and 3) restoring Greek sovereignty by casting off the dreaded Troika. On these three points, 1) has to be chalked up as a loss, 2) arguably as a draw and 3) certainly as another loss. Paul Mason suggests that "Greek finance minister Yanis Varoufakis has snatched a 'narrow away defeat' from a potential knockout - from the cup and the league combined." He's probably right. The positive here, if you can call it that, is the terminology of the deal as a "bridge" to any future agreement (post-June). This means two things: This may be a transition phase towards a new arrangement, one which could be closer to something that looks like Syriza policy (with a lot of 'cans', 'coulds' and 'might be's') and that German opposition to anything other than continued unmitigated austerity may no longer be viable. The draw in relation to enforced surpluses is that the deal again didn't go entirely the German's way. This gives the Greek government some room to run lower surpluses in order to finance some of the policies to reverse austerity measures. But it also keeps the wording that Varoufakis placed in his aborted letter to Dijsselbloem, which stated that Greece will not pursue policies "that would negatively impact fiscal targets, economic recovery or fiscal stability" with the dreaded addition of the phrase "as assessed by the institutions". Here point three of restoring Greek sovereignty is paramount. Whilst Varoufakis may contest that there will be joint agreements on the government's policies as to whether they violate this clause, in the context of the core/periphery antagonism it is obvious where the power to abort or approve these decisions lies. This may be the battleground going ahead. Where next? The continued and devastating pressure of the European core on Greece, the spectre of a run on the banks and the fear of a forced outright capitulation led by the Germans certainly made Varoufakis and the rest of the government budge. Could it have been any other way? I don't know. Syriza were never going to advocate Grexit, and have taken steps at every juncture to reassure the institutions that this wasn't an option for them. Whether or not this deprived them of a powerful weapon, or a star striker, to continue Paul Mason's football analogy, will be the subject of incessant discussion going forward. So was this a capitulation? On this I would have to say no. The compromise came from the intense pressure placed upon the most devastated eurozone state, the fact that banks were on the precipice and that Syriza is simply not ready to exit - the Greek people don't want it either as things stand. Anger will spill out as a result of this compromise and should be directed in one direction, toward Germany and the core states of the European Union who have tried to cynically force a democratically elected government into collapse. This is not the time to direct fire at Syriza but at the brutal, undemocratic barbarism of the EU. The compromise has kicked the can down the road for another four months, but there will be flashpoints along the way as the European Union issues its diktats to Greece grappling with undoing five years of brutal austerity. Lastly on the question of Grexit, I have to agree that without a doubt, as is outlined by a number of economists, and academics, including elected members of Syriza like Lapavitsas, the only route to end austerity is outside the European institutions. Whether the Greek people begin to warm to such a position will depend on their reading of the last few days. Was this a sell-out by their government, or was the naked coercive force of the German-led EU trying to crush the popular will? In that contest I know which side I'm on. II/IV. http://www.theguardian.com/world/2015/feb/21/syriza-greece-debt-deal-eu-alexis-tsipras Syriza's honeymoon over as Greece strikes debt deal with EU Alexis Tsipras says long struggle lies ahead while finance minister describes deadlines as 'inhuman' greece A man busks in front of a graffiti that refers to Greece's prime minister Alexis Tsipras. Photograph: Thanassis Stavrakis/AP Helena Smith in Athens Saturday 21 February 2015 19.34 GMT Last modified on Sunday 22 February 2015 00.09 GMT Helena Smith in Athens Saturday 21 February 2015 19.34 GMT With a deal, of sorts, to keep Greece in the eurozone, prime minister Alexis Tsipras marked his first month in office this weekend acknowledging that only now does the hard work begin. Facing a 48-hour deadline to produce a list of reforms that could make or break his insolvent country's future, the anti-austerity leader admitted the honeymoon was over for a government that had sent ripples of hope through Europe. In a sombre address, hours after a dramatic meeting of euro group finance ministers in Brussels, Tsipras said that, while Athens under the stewardship of his radical left Syriza party had for the first time embarked on "real negotiations" with its creditors, a "long and difficult " struggle lay ahead. "We have won the battle but not the war," he said. "We showed that Europe can be an arena of negotiation and mutually acceptable compromise and not an arena for exhaustion, submission and blind punishment ... but negotiations did not end yesterday." Five years into Greece's worst crisis in modern times, the relief was almost audible in the voice of its youngprime minister. Weeks after assuming power, his leftist-led coalition has endured a baptism of fire amid acceptance by inexperienced officials that they are learning on the job. With bailout funds expiring on 28 February, keeping Greece afloat and in the single currency - while not being seen to ditch the anti-austerity platform on which Syriza was elected - has been a balancing act of almost existential proportions. The programme, extended for four months under the agreement, stopped Greece from being shown the euro exit door but has come at a heavy price. Speaking to reporters after its announcement, Greek finance minister Yanis Varoufakis described the deadlines the new government had been forced to meet as "inhuman". The accord, in many ways, was not one that Tsipras would have chosen. The spectre of capital controls being imposed on Greek banks that have haemorrhaged funds as anxious investors have rushed to withdraw deposits is believed to have forced Athens' hand. On Friday, as eurozone finance ministers were about to discuss Greece's fate, the country's central Bank announced that capital flight had reached EURO 1bn (£739m) that day. An estimated EURO 20bn is believed to have fled local lenders since December, when Athens was plunged into political turmoil with parliament's failure to elect a new head of state automatically triggering snap polls. In the cafes of Athens on Saturday there was consensus that what the country had essentially agreed to was the best of increasingly bad deals that inevitably would have been on offer. "The government won time, it got a four-month extension to the adjustment programme, but it was a lousy deal, and that's because this new government managed to antagonise the euro group, the German government, the European Central Bank, Spain and Portugal from the outset with its negotiating stance," said Giorgos Kyrtsos, a Euro-MP with the centre-right New Democracy party. "And the response was to impose rules in a very strict manner ... We have a huge financing gap that will present itself in the next few months," he told the Observer. "It is a time-bomb. The government will not be able to service its debt and meet its government programme." Greece, still down to receive a last instalment of aid under its old bailout programme, has been told the EURO 7.2bn tranche will only be disbursed once reforms are agreed and a review of its economic progress concluded at the end of April. In a huge concession, Athens accepted continued oversight of its finances by officials representing the country's hated "troika" of creditors at the EU, ECB and IMF, albeit under a new name - the "institutions". It also reneged on demands for a write down of its monumental debt - at over 175% of GDP one of the largest in the world - and conceded that it would not take any unilateral measures that would wreak havoc on its fiscal stability. Tsipras, who at 40 is Athens' youngest prime minister ever, was swept to power on promises to increase the minimum wage, reinstate employees fired from the state sector and 'cancel' the austerity that has impoverished more than a third of the nation at large. "The agreement does not even include the term 'humanitarian crisis,'" said Notis Marias, who represents the government's junior rightwing partner, Anel, in the European parliament. "That worries me." While the pause button has been pressed on the Greek drama, it is not over. Haggling over reforms expected to focus on eradicating corruption, overturning the tax system and modernising Athens'dysfunctional public administration will take months - if, indeed, creditors accept them in preliminary form on Monday. And Tsipras will have to placate hard-left militants in his party while also selling the deal to disappointed voters. "Only now are we coming to crunch time," says Dr Eleni Panagiotarea, senior research fellow at Greece's leading thinktank Eliamep. "Tsipras has got the breathing space that he wanted but he is also faced with huge challenges and will be walking a very fine line. He will have to specify measures that will be painful domestically while keeping Greece's partners on board. How he will do that when he has committed to not taking any move that will upset the fiscal balance is going to be very difficult." IV. http://www.nasdaq.com/article/european-stocks-seen-higher-after-greek-debt-deal-20150223-00029 European Stocks Seen Higher After Greek Debt Deal By RTT News, February 23, 2015, 02:00:00 AM EDT AAA Vote up Share | Subscribe (RTTNews.com) - European stocks are seen opening higher on Monday after Greece struck a tenuous agreement for a four-month extension of its bailout funding program, ending weeks of uncertainty about the country's future inside the currency block. The temporary economic lifeline would help Greece avoid an economic crash out and bridge the time for discussions on a possible follow-up arrangement to bring back the country to a financial stability. After the meetings in Brussels, Greece finance minister Yanis Varoufakis has pledged to honor all debts and continue with painful reforms. Greece's new government will present a first list of reform measures today, which would be assessed and if found sufficient, could be the catalyst for a successful conclusion of the review. The review will be carried out Tuesday by representatives from the European Central Bank, International Monetary Fund and European Commission. Asian stocks are mostly higher after Wall Street shares surged to record highs on Friday, buoyed by the Greek debt deal. Oil prices are little changed, with Brent crude futures hovering near $60 a barrel as key producer Libya resumed oil exports from the eastern port of Zueitina after an almost year-long suspension. In economic releases, investors await German business confidence as well as U.S. existing home sales data later in the day for further clues on the outlook for monetary policy. The Ifo Institute's business climate index is forecast to increase to 107.6 in February from 106.7 in January. The current conditions index is estimated to rise to 112.7 from 111.7 while the expectations index is forecast to climb to 103 from 102. Federal Reserve Chair Janet Yellen gives two days of testimony to Congressional finance committees on the economy and interest rates starting tomorrow, with investors looking for hints about when the central bank plans to begin raising interest rates. In corporate news, Shire Plc announced the successful completion of the tender offer for all of the outstanding shares of NPS Pharmaceuticals, Inc. and the subsequent acquisition of NPS Pharma. Mourad Raji, a sales analyst at French bank Societe Generale SA, has filed a sexual discrimination lawsuit against his former boss for harassing and ridiculing him for being gay. Real estate lender Aareal Bank Group said that it agreed to acquire all of the shares of Westdeutsche ImmobilienBank AG, which specializes in commercial property financing. The European markets ended mixed on Friday as investors awaited developments on Greek debt negotiations amid hopes that a deal will eventually be reached. The German DAX and the U.K.'s FTSE 100 both rose by 0.4 percent, but France's CAC 40 edged down marginally. U.S. stocks rose on Friday after Greece agreed not to roll back austerity measures and draw up a list of financial reforms it was prepared to make by the end of April under the EU debt deal. The Dow rose 0.9 percent and the S&P 500 gained 0.6 percent to close at fresh record highs, while the tech-heavy Nasdaq added 0.6 percent to reach its best level since early 2000. 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