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Monday, November 17, 2014

Alexis Tsipras - Convert 7 Key Aims Into Just One!

The French blog LaTribune published an article about Tsipras/SYRIZA in which it hyperlinked a post which I had written just about one year ago: "Alexis Tsipras - Convert 7 Key Aims Into Just One!" After re-reading it, I decided to reproduce it below.


November 23, 2013
This article reports the answers which Alexis Tsipras gave when asked by the newspaper Avgi what his key aims would be during his first 100 days of governing (the bold emphasis is mine): 

* Cancelling the EU-IMF memorandum and replacing it with a national reconstruction plan.
* The plan will include bringing back collective bargaining laws and restoring the minimum wage to the pre-crisis level of 751 euros, from which it was reduced by 22 percent in 2012.
* The creation of an assets register to help with taxation, and the drafting of a new tax system.
* The renegotiation of Greece’s loan agreement.
* Increasing social welfare.
* Reopening public broadcaster ERT and legislating for the awarding of digital licenses.
* The overhaul of Greece's banking system, providing greater state control of lenders and the creation of small, regional development and cooperative banks.

I would suggest that the way Tsipras formulates his first key aim (in bold) may have as a consequence that his government won't last for 100 days. I would recommend to rephrase that key aim as follows: 

"Negotiate with our EU-partners to consensually transform the current EU-IMF memorandum into a long-term economic reconstruction and development plan for the Greek economy. The plan’s objective will be to transform, within one generation, Greece into a self-sustaining, value-generating economy on the basis of a sound, market-based private sector supported by an efficient and modern public administration, adequate in size and competency. A major pillar of the plan will be a focus on direct foreign investments in Greece’s productive sector, thus bringing not only financial resources but also know-how in all areas to Greece; thus enabling Greece to increase its productive capacity, to increase employment and to import less; thus enabling Greece to make products which other countries will want to buy. The primary responsibility for developing such a plan will be with Greece but we seek active participation of and know-how contribution by our EU-partners. We are confident that, once that comprehensive plan is on the table, our EU-partners - seeing that the plan has our unequivocal support - will willingly assist with financing it because such financing will be a good investment”. 

I would further suggest that if Tsipras were to focus on the above key aim, all his other key aims would fall into place naturally (because they would be part of a long-term economic reconstruction and development plan for the Greek economy).

11 comments:

  1. ... well i belive what you stated is what he (Alex) actually been discussing with Troika and EU in the last months. And you are right transforming point 1 into the large statement incompasses the other 6 points. His 7 key points are simply brought down into smaller points, for reason of gathering various voting categories and assure victory.....

    V

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  2. Tsipras, is showing signs, that he is preparing to do a "Andreas Papandreou" play. Papandreou in 1981, deflated the communist party's votes, by using part of their rhetoric (anti-EEC, anti-NATO, anti-US bases) and once in power, he did nothing of that. So, the latest from the SYRIZA camp, is that they will put in suspension all the agreements signed by the current goverment and negotiate everything from scratch, with emphasis on debt reduction. At least this is the line of the "presidential wing" of SYRIZA, leaning to Alexis Tsipras. There is the more radical wing in SYRIZA, that would rather prefer to exit the euro, but they are not in control at this point. So, there are good chances that Tsipras will follow the milder path you start with in your article.

    However, we then come to this:
    "on the basis of a sound, market-based private sector supported by an efficient and modern public administration, adequate in size and competency. A major pillar of the plan will be a focus on direct foreign investments "

    I don't know if Tsipras will do this, but certain will never say it. What you describe, is a liberal economic model. SYRIZA is supposed to be radical left. You know, as in more radical than your average european leftists. So you do understand the problem here.

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  3. This is an example, of how SYRIZA or at least, members of it, have "evolved" in the last months to more mild approaches compared to the usual rhetoric of "we unilaterally scrap everything and stop payments".

    This is a proposed plan, by 3 university economics professors. The interesting part, is John Milios, who is SYRIZA MP, responsible for the party's economic strategy as opposition.

    http://www.levyinstitute.org/pubs/wp_819.pdf

    Of course, you can't really rely on anything stable, since Milios for example, a couple of days ago said on radio when asked "what if the other side doesn't agree on stopping austerity measures or doesn't want to do anything abou the debt", he replied "we won't repay any bonds towards the ECB". When the journalist continued "but won't that trigger a reaction?", Milios said "ok, are they going to bomb Syntagma square? what is the most terrible thing they can do?"-

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  4. Do not pay too much attention to what Tsipras says in speeches. Even inside SYRIZA, they haven't made up their mind completely about what they will do. I also wouldn't bet that SYRIZA will remain in power for a full term. SYRIZA will act as catalyst of events in a way or another and this is what makes many vote for it.

    I despise Tsipras, i vote for a small non parliament party of the center, but Tsipras is right in one thing. That this sharade can't go on forever. Samaras' strategy of "i don't whatever troika wants and i will be rewarded with debt relief" isn't even going to work for him. Yesterday Draghi said that the greek debt doesn't need and wouldn't be useful to have a new debt restructuring. I was against the initial deal made by Papandreou (he sold out greek interests) , but i was in favour of reforms. Well, by now, it's clear that what was done was done and the permanent threat of the troika every 3 months isn't working anymore for social cohesion and it's more clear that the troika has no1 priority that the debt gets paid back, no matter what the cost for the greek population. So, in a way or another, this must stop. With SYRIZA there is risk even for Grexit, but at this point, the people are tired, so be it. At least the reforms will continue to exist even after Grexit.

    One of the most recent examples of the troika insanity, is that they insist now in raising VAT for all goods to 22% or to a more "generous" 18% if the greek goverment accepts other demands. The reasoning of the troika is: "there is VAT-evasion, so since there are losses at the low VAT coefficient, let's bring everything up to 22%, so that the state collects more from the sources that don't retain VAT". Unfortunately, this also means, that everyday goods like milk, bread, vegetables, supermarket goods, will all double in VAT. When you have 2 milion below poverty line and 1 milion unemployed, this is , YES, a very good measure for a creditor that wants to strangle the debtor to get his last drop of blood, but it's not so good for the debtor. Consumption will further fall, more will get radicalized and end up to SYRIZA and Golden Dawn. Nothing good will come out of this. The troika even asks to raise again the VAT in restaurants back to 22%, despite the fact that it was proven that dropping it to 13% increased VAT returns to the state coffers. To add to this, this year the taxation system will change AGAIN, to adapt to the new "troika targets". Let me tell you. With so high state taxes on oil, with ever increasing electricity costs for the industry, with an ever changing taxation every 6 months to adjust to the troika targets, NO investor will put his money in Greece. Not even the greek businessmen. NOBODY.

    continues...

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  5. continues here:

    The return to growth, is nothing to celebrate about. When you drop so hard, at some point you hit the bottom and can't go lower. GDP can't drop eternally. And given that in the past years, the volume of tourists has increased by some million, it was expected to see some growth. However, if you don't see the exports rise or investors pour money or both, there is no way that the famous troika predictions about 3% and 4% growth are going to happen. In Bulgaria, you get 10% tax and special discount in electricity to open a factory. In Albania, a new enterprise gets 10% taxation. In Greece, one semester it's 25%, the next you get a "one off emergency contribution", then 20%, then up again, then down again. I am sorry, whatever they are thinking in Brussels, is no more tolerable. I am not going to vote for SYRIZA, but i won't mind at this point. They can serve a purpose. They can solve this gordian knot. After they have served their purpose, a less left party, may even be more prone to apply more liberal policies like the one you describe. It's time for a greek goverment to say "enough is enough", we have played the game of the creditors far too well till now. Greece won't restart without a clear base on where it stands. People are scared of what will happen next month. You can't go on like that forever just because some troika thinks it's OK. Worst case scenario, SYRIZA will negotiate a Grexit, we will part ways and let the troika live happily ever after.

    So, don't think that the Greeks don't see the "holes" in SYRIZA's economic program. They do. Knowing SYRIZA, it's expected. When did SYRIZA ever had 1 voice in everything? Never. It's just that they vote SYRIZA, because the current situation, has become very tiresome. To make a blunt example, you know in films when one is wounded for too long and is between life and death and arrives to the point to say "let's get it over with, someone shoot me". Syriza's crazy economic theories, have ceased to scare a good part. Many just want to get over with it and know what there is ahead, finally.

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  6. And this is a glimpse to the other side of SYRIZA. The more pureblood SYRIZA if you will.

    http://www.skai.gr/news/politics/article/269659/lafazanis-me-suriza-kuvernisi-i-troika-feugei-koutsoukos-ohi-se-nees-apaitiseis/

    The gentleman in the middle, with the eyeglasses, is Lafazanis. He is head of the Left Platfrom, that controls about 36% of SYRIZA's votes in SYRIZA's council. He was always in favour of drachma and he ruins regularly Tsipras' official positions, like he did today, saying:

    "With SYRIZA in power the troika will never again come to Greece. It's final, it's our decision, the memorandums will be cancelled and we will negotiate the write off of the biggest part of the debt and we will achieve it. Troika must leave the sooner possible. We will not be begging low level troika clerks, we are sovereign nation".

    He doesn't say something out of his mind. This is the thesis voted officially in the last SYRIZA convention. The difference is, he really intends what he says, while Tsipras intends all the above more loosely. Make no mistake, Lafazanis is an idealist and is pushing hard on Tsipras. Should Tsipras start deviating from that position, Lafazanis will become his internal opposition and if Tsipras screws up, Lafazanis will likely be the next SYRIZA leader. Lafazanis is also the one who pushed more for a more recent thesis that appears always more often in statements by various SYRIZA members. "We will not accept any agreement without the consent of the people". Intending, that most probably, if they come before a hard decision, they will cause a referendum. And, that would actually be a good thing and it's yet another usefuleness that SYRIZA may have.

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    Replies
    1. ...you can not go to a knife fight without a gun.... risky but well worth it....

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  7. Well, we saw that too. Tsipras/Syriza in the same sentence with 'free markets'. Syriza core (the old 5%) is basically Che Guevara, and the rest are 20-25% are old lamogia from PASOK or hard-core anti-memorandum guys whose vote aligns with Kammenos/Golden Dawn/Syriza.

    As for the 'don't believe what Tsipras says crowd' I would say, why vote for him then, to implement the memorandum better than Samaras? The purpose of the memorandum is to tell the world that Greece is open for business. Tsipras is a big step in the other direction -assuming of course that Greece survives him and does not become a banana republic-.

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    1. Dear friend,
      First, i don't vote for Tsipras, i will vote for Tzimeros. But i hope you have understood why those who vote SYRIZA do so.
      Second, SYRIZA's climb to power, is inevitable. Samaras was worn out his political capital, SYRIZA appears as something new, it has the air of victory. To end the myth of the left that is good, charitable and always better, the left must rule at some point. Better now, controlled by the "River", than 2 years down the road, alone.
      Third, the purpose of the memorandum is for the creditors to take their money back. The measures applied were a mix of sane and insane reforms that drove away about 3500 greek businesses, despite the lower working costs and the improvement of business-friendliness.
      Fourth, we ended up like this, because we had managed to have a banana republic state even without the help of SYRIZA. Let SYRIZA end his merry opposition days and show how reality and responsibility is hard and then we will have a more balanced political life.

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  8. Albeit without the bananas

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  9. Mr. Kastner,

    This is for you, so that you don't have any illusions about the capabilities of SYRIZA. The paper is the impression of the presentations made by SYRIZA's chief economists Milios and Stathakis, in London. It's an email from Joerg Sponer of Capital Group Companis (fund).

    You can read directly the english version at the bottom of the page:

    http://www.protothema.gr/economy/article/429706/capital-oloi-osoi-vgikan-apo-ti-sunadisi-me-stathaki-milio-theloun-na-poulisoun-ta-pada-stin-ellada/

    Enjoy! This is why SYRIZA will be useful in waking up the Greeks from the sweet leftist utopia. And that's pretty much the only economic miracle SYRIZA can do. Don't illude yourself for other things.

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