The question, as explored in depth this morning by Yves Smith, "Obama Administration Throws Greece Under the Bus; ECB Leak Recommends Capital Controls; Greece Weighing Capitulation," is whether Greece's six-month extension request is a capitulation to the troika's austerity demands. Smith sees it as such:
Things are not going well for Greece. It appears Syriza has largely capitulated to the demands of the Troika. Greece has submitted a request for a loan extension that the Eurogroup will consider Friday. From ekathimerini:
Government officials on Wednesday worked until late finalizing a proposal…Specifically the government is expected to seek an extension to the so-called Master Financial Assistance Facility Agreement, the official name for the European Financial Stability Facility’s loan contract. That contract stipulates, however, that the dispensation of financial assistance is dependant on Greece honoring the terms of the so-called memorandum, which contains the economic reforms that the previous government committed to and which the current SYRIZA-led coalition has contested. Indeed, former Prime Minister Antonis Samaras had made the same request in December last year when he sought to extend the European part of Greece’s bailout program, from the end of the year to February 28. Kathimerini understands that Samaras’s request had then used the words “technical extension to the existing Master Financial Assistance Facility Agreement,” the same phrase that the new government was said to be considering last night.The compromise is expected to satisfy both sides as it would mean Athens can avoid using the phrase “extension of the existing program” and the creditors can avoid using the term “loan agreement.” In substance, however, there would be little difference from the extension sought by Samaras as the terms of the memorandum would have to be respected in order for rescue loans to be disbursed.
This means that Greece is effectively asking for an extension of the bailout, which is what it had refused to do. And that means keeping the “conditionality” as in privatizations and labor-crushing structural reforms, intact. Greece is still fighting to keep some flexibility there but it is not clear they will obtain much. Again from ekathimerini:
The European Commission’s vice president for eurozone affairs, Valdis Dombrovskis, said efforts were under way to reach a compromise by finding “common ground for an extension of the current program.”He insisted that “the best way forward is to extend the existing program with its conditionality.” Dombrovskis noted, however, that if Greece wants to substitute some of the existing measures in the memorandum with alternatives, it could do so.
In other words, this is a “peace with honor” solution.Smith then goes on to list what led to the presumed capitulation: 1) the Syriza-led government was abandoned by the United States (no surprise there); 2) Greece is going to run out of a cash February 24, much earlier than originally anticipated; and, most importantly, 3) the European Central Bank (ECB) is fanning a bank run and then restricting the amount of Emergency Liquidity Assistance (ELA) that Greece could tap (basically, the ECB has been working to crater the Greek banking system to force Tsipras and Varoufakis to kneel).
The problem for the troika is that clearly Greek's Syriza-led government has no intention of implementing the austerity diktats contained in the loan memo. Can you imagine a situation in Athens (approval for Syriza is sky high) where Tsipras starts taking bids on publics assets and issuing pink slips to government workers? It is not going to happen.
If there is any wiggle room in the six-month extension document, Dijsselbloem will try to eliminate it. For one, Greece insists that the troika's auditors will not be welcomed back to Athens to oversee implementation of the diktats. According to Yves Smith,
[I]t may be that even the concessions that they are apparently prepared to offer will not be deemed sufficient. For instance, it does not appear that Syriza has agreed to let the Troika monitors back in, one of the five demand seen as critical by the Germans. And even though the European Commission spokesperson Valdis Dombrovskis said there might be some negotiating room on specific conditions, that is also inconsistent with the FAZ description of the German stance. Recall that it was a European Commission trial document that Varoufakis said Greece was willing to sign but was firmly nixed by the Eurogroup.
So it may be that this last round of concessions is meant not as a capitulation but to demonstrate how much Greece was willing to give in the face of implacable Eurogroup demands and was still rebuffed. We’ll know the outcome either way shortly.This has been my feeling all along about the underlying strategy of Syriza. Syriza is a pro-EU party. Varoufakis spoke eloquently and sincerely -- and in an impromptu manner -- about European unity during his Monday press conference. But if Syriza can prove that the status quo is irrational, which Varoufakis has made some headway communicating over the last several weeks, then a Grexit and the resulting turmoil will not be blamed on Syriza but on the troika.
Kitsantonis and Kanter are reporting that Germany is opposed to Greece's six-month extension request:
Germany is probably the central eurozone member in [Friday's] proceedings, and a German Finance Ministry spokesman, Martin Jäger, said in a statement on Thursday that the letter from Athens was “not a substantial proposal to resolve matters.” He added: “The written document does not meet the criteria agreed in the Eurogroup on Monday.”Germany's intention is to break Syriza, de-legitimize it. Smith said the German ambassador to Greece requested that Varoufakis be replaced as finance minister. Germany sees Greece as a serf in bondage, and Germany will not accept an outcome that places the nations on equal footing.
The temptation in the West to interpret every relationship as one of lordship and bondage is on display in Ukraine. The junta's loss in Debaltseve is clearly a turning point. The Ukrainian Army which was cracking prior to Debaltseve (to the point that the Gray Lady was reporting plans floated in Kiev to create a brand new army) will probably not be able to recover from the rout it suffered this week. The Saker outlines the Debaltsve turning point as follows:
The real problem for Kiev is that more or less all of the current line of contact can become a potential counter-offensive point for the Novorussians who, by the way, have never concealed their desire to get back all of the historical Novorussian lands. So while the current (relative) cease-fire is all nice and dandy, I think that by this spring, when the Novorussians will have reinforced their infantry with up to 100'00 more men the situation for the Kiev regime will become absolutely horrific and no amount of US weapon deliveries will change that. This might well be the beginning of the end for the Nazi experiment in Kiev.
The implications for the AngloZionist empire are rather clear: if the 1%ers have any kind of sense of reality left, they should toss out Poroshenko and the rest of the crazies and foster some kind of government of technocrats in charge of drafting a new constitution and organizing a referendum on federalization simply because the folks in Kiev better negotiate while there still is something left to negotiate then to way to be hiding in a surrounded bunker like their hero Hitler did. Alas, I don't think Uncle Sam or the Eurocretins have any common sense left in them.
Whatever may be the case, by the ballot or by the bullet, but we *are* winning.With the Ukrainian Army mortally wounded, Poroshenko is trying to get UN peacekeepers introduced to Donbass. Russia has nixed the move.
Would the U.S. try to piece together a "coalition of the willing"? I don't think so; such a move would invite an enormous Russian response.
No, Kiev's days are numbered, and so too apparently the eurzone's.
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