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Friday, February 13, 2015

Which Objective Fits The Displayed Strategy?

Like so many others, I have been trying to figure out what objective could be behind Greece's negotiating strategy. Before doing that, the task was to understand that negotiating strategy which ranged from "surprise & confuse" to "putting a gun to one's head and then demanding a ransom for not pulling the trigger", with a lot of shades of grey in between them.

As of now, that is Friday the 13th around 9 pm, I can think of only one objective for which this strategy would work very well: provoke a Grexit in such a way that the responsibility for it clearly falls on the EU and use that climate to negotiate very high alimonies.

I have been most impressed by the peaceful demonstrations in Greece in the last days. Something was set in motion here which is going to be impossible to stop. One has to be overwhelmed when seeing how the Greek people are obviously coming together with an utmost desire not only to regain dignity but, most of all, to regain self-determination. What I am feeling here would suggest that the Greeks would be prepared to assume all possible consequences and do "whatever it takes" to regain self-determination.

There is obviously no 100% self-determination when one shares a common currency with others.

42 comments:

  1. Klaus, you don't read the situation correctly. Those Greeks that demonstrate in support of the government, they just support a generic idea (rejection of austerity), nothing more than that. They don't seem to understand that in order to be prosperous you have to produce the material goods and services that are gonna allow you to do so. They are also unaware of what a grexit would bring forth. I repeat, unaware. Therefore their demonstrations are meaningless.

    Self-determination? Don't make me laugh.

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    1. I totally agree. As soon as there is a grexit the in-fighting (also on the streets) will begin. And it will be vicious.

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    2. Just Wow to both.

      V

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    3. I think LOL is what you probably meant, V. Both comments show a profound lack of understanding of the Greek psyche.

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  2. Beware of Friday the 13th o_O, but anyhow: You have come to similar conclusions that I had drawn a few weeks ago. And I still am convinced that Germany and a few other EU countries also prefer a Grexit.

    But for obvious reasons everybody tries hard not to be blamed for having pulled that trigger. Imho until the deadline on Feb. 28 no new agreement will have been signed (the ministers spending one more night in order to show their voters how extremely hard they work ;) )

    Greece will default, Tsipras will say that this never has been his intention blah blah. The EU will say that they had warned and that Greece government decided to go their way, blah blah.

    All those who have predicted that Grexit will trigger a major earthquake in Euroland will express their surprise and find reasons why - and within an few years this episode of history will be forgotten.

    H.Trickler

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    1. Looks like Syriza supporters already expect this outcome and try to spin it as a positive move, the ultimate debt reduction and a declaration of Greek independence. Google greekreporter greece should exit the euro.

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  3. Mr. Kastner,

    I think you are wrong.

    1)You have argued in the past, that a greek goverment needs a "national plan". I have argued, that you can't have a national plan, if you are being imposed upon a plan that isn't yours. SYRIZA is saying the same: "I want a plan that i can consider it mine". So, now that time comes to fight for it, you expect them to simply capitulate at once and accept "the previous program"?

    2) You have argued in the past, that a greek goverment should have a "plan B". Well, it seems that the plan B, is "default into the euro" and from there, possibly to drachma.

    Now, how are you going to be able to do that, if the population isn't prepared for that? Can you do it, like Samaras did, who was repeating "i will do anything to stay in the euro"? But, then, you either burn your plan B or if you arrive to the point of having to go to planB, the population won't be ready!

    3) All past greek goverments, tried to negotiate in a way that was liked by everyone outside Greece. This is why you didn't see this again. It is also why you didn't see them have any results. Germany, in all times, had an easy time to "negotiate" with greek goverments, based on the fact, that they would not dare arrive to the point, where a grexit could happen. This was also the source of failure for the greek goverments. The equivalent, would be a negotiation between USSR and USA, with USA declaring that "will do nothing that could cause nuclear war". The whole MAD doctrine, was based on the assumption that both sides could resort to nuclear weapons.

    For the first time, SYRIZA, is prepared to do the unfathomable. Or at least, the finmin is! I am certain, it is a shock to Brussels, just like it is to you! Because when you are accustomed for 5 years, doing negotiations like this:

    http://i62.tinypic.com/bgbtic.png
    http://i61.tinypic.com/20rvgqe.png
    http://i61.tinypic.com/20rvgqe.jpg
    http://i58.tinypic.com/2v2a780.png
    http://i62.tinypic.com/idg7sm.png
    http://i62.tinypic.com/2z7pt9v.png

    All the above, "rude" negotiators, were warning for more than 1 year their colleagues and the troika, to "give us some slack, because otherwise, you will be dealing with SYRIZA". They were not believed, because the powers at be in Brussels, thought that Tsipras would come around with little resistance and become "the left Samaras".

    Now, all of a sudden, the resistance appears so bizarre, so unheard of! "Why doesn't he take Samaras' plan and call it his own!".

    Mr. Kastner, the greek population voted something precise at the elections. If Tsipras can't get something close to that and close to a program he can digest, then, either there is no reason to hold elections anymore and simply transfer the parliament powers to Berlin or the population must be ready to follow Tsipras to prof. Varoufakis' plan B.

    In any case, you can always use this as fallback plan:
    "SYRIZA Will Always Do The Right Thing - After Exhausting All The Alternatives!"

    http://klauskastner.blogspot.it/2015/02/syriza-will-always-do-right-thing-after.html

    See, how fallback plans can be apparently contraddictory? Germany has fallback plan and is prepared for Grexit, says the german goverment. But this shouldn't be regarded as a plan where Germany would be tempted to kick Greece out. Correct?

    http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_15/05/2014_539738
    But now that SYRIZA has also a plan in case things go south, he is preparing in reality to intentionally go to Grexit. Does that sound fair?


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    1. Don't quite follow. First you cite my alleged inconsistencies and then you link an article of mine where I pointed to all those things where I have said the same thing as SYRIZA does (but also those where we differ).

      I can't hear this "the Greek people have voted for this, that and the other" any longer. Suppose a politician promised every Greek a private jet and got elected, will all Greeks now get a private jet?

      Yes, they will, provided that the Greeks can afford that. But I find it a very strange definition of democracy where one country can by democratic vote decide what other countries, which also have democracies and voters, should do for them. To me, that is a rather immature understanding of democracy and self-responsibility.

      Just remember what the Slovaks, much poorer than the Greeks, say, namely: we have already contributed to the Greek rescue an amount which is greater than the cost of our unemployment insurance. Suppose all Greeks lived in Slovakia with Slovakian living standards. Would they be prepared to reduce their living standards even further to send money to the much wealthier Greeks?

      Greek demands European solidarity because Greece could now use it. How much solidarity did Greece show when the European subsidies were to be re-divided to also include the new member states in Eastern Europe without increasing the overall pot. I. e. those who already had received large subsidies would receive a bit less to now subsidize the poorer newcomers. If I recall, Greece was the most vocal opponent whenever it came to share its EU benefits a bit with other EU members.

      I can only suggest what I have suggested on numous occasions when my patience ran short: grow up and deal with reality!

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    2. Mr. Kastner,

      I don't follow either. You say, that SYRIZA will do the right thing, after having explored all other options. Why do you anticipate that the exploration has already come to an end? The program officialy ends on Feb 28, the negotiation only started a few days ago.

      No, no, Mr. Kastner, yet another misunderstanding. The Greeks, didn't exactly vote the various promices made by Tsipras. Most Greeks were aware that you can't do all that. If you were watching greek television, you would have seen simple people on the street saying to Tsipras "If you do 3 out of 10, i will be extremely satisfied". They voted though, for "no more austerity". As in "i can't take more cuts". And Tsipras will have to fight for that. Or he is finished politically...Even more, since he was shooting at his predecessors following the program.

      I agree with you that democracies exist in all countries. However, each country has to decide for its own people through its own democratic process. Greeks vote in Greece, Austrians vote in Austria. If a modus vivendi for all can't be found, in deed, the solution is to part ways.

      About Slovakians. There is a usual mistake done with generalizing. The "average". Many people in Greece, about 1/3, is below poverty line, living out of charity from relatives or searching in garbage bins. This is mainly evident in Athens. These Greeks, live with less than the "average" Slovakian. By that i mean, that one thing is the GDP per capita, another thing is the really available income after taxes and yet another, the purchase power of sectors of the society. Yet another factor, is the hope or not in a policy. People usually when they don't hope in a policy anymore, vote against it, be them Slovaks or Greeks.

      It is also worth remembering, that until now, there haven't been real money transfers to Greece out of state budgets, but warranties. Some countries like Germany, have won roughly 70 beur until now, either directly or indirectly and is protesting much more than the Slovaks, who would have in deed much more right to protest.

      Prof. Varoufakis, if you recall, didn't ask for new loan, but for right to issue T-bills and for the gains of the ECB from greek bonds bought at discount. The real solidarity, would come through the debt restructuring in SYRIZA's plan.

      Mr. Kastner, this is where i can't understand where your comprehension of the greek position is. The Greek population didn't vote for others to "capitulate" to SYRIZA's electoral campaign program. It voted for a guideline to the greek goverment to "go and negotiate on this line". If the greek goverment can't come to an agreement with the other parts that have their own democracies, then nobody is forcing either side to do something they don't want. You say about agricultural funds. I really can't remember, but let's assume it is true. How much power do you think Greece has in the EU? You think that Greece rather than France has a say on what happens in agricultural policy? All i remember is France clashing with UK over the CAP. Each country has interests in the EU. Do you think that Greece was happy with the milk quotas in favour of the northern countries, that made Greece importing milk? Or do you mean, that in 2010, the Europeans were elblowing each other on who will show the most solidarity to Greece? You can call this solidarity.

      (continues...)

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    3. “We’re going to teach the Greeks a lesson. They are really terrible. They lied to us. They suck and they were profligate and took advantage of the whole basic thing and we’re going to crush them,”
      http://blogs.ft.com/brusselsblog/2014/11/11/draghis-ecb-management-the-leaked-geithner-files/

      In other terms it is called "making a virtue out of a necessity", but solidarity can work too.

      "Greeks demand "solidarity" because they can use it". Why do Europeans gave solidarity in 2010? Maybe because they could use the greek accounts to cover their aid to their banks, instead of having the unpopular task to tell their voters "we have to give 200 beur to our banks"? When a country goes bankrupt Mr. Kastner, defaulting on the debt,is done to quickly bring 2 conseguences: 1) regain competitiveness, 2) solve the debt problem. Now, let's assume that the program for Greece was a success. Has it solved either of the problems? Do the Greeks have the right to have a say on to whether they want more of the same? Do the Europeans have the right to say if they want to give more of the same?

      A negotiation is called such, because you accept some things from one side and the other side does the same.

      Didn't Germany asked Allied solidarity because it could use it in 1953? Why did the others "gave" it? Out of "solidarity" or out of interest having a stronger Germany to act as a wall to the looming Soviet threat?

      Mr. Kastner, i am sorry if you run out of patience, people who are discussing willing to hear other views too, need to have patience. Or rather, it is better to have "my german friend, my Swiss friend, my other german friend all come together and agree on how things are". SYRIZA has a reasonable plan (although, admittedly lacking money i may add), Tsipras looks
      The reality Mr. Kastner, is that Greece must undo the damage of 30 years. But, the Greeks have a right on having a say on how to do that. If this comes to odds with what the others think must happen, the solution is obvious.

      I will bid you farewell (permanently this time), with a line from the new looming threat, the leader of Podemos in Spain:

      "Spaniards should be aware that it is physically impossible that they can pursue policies that meet the national interest, within the euro as it is designed. The euro was conceived as a real trap, but nowhere is it written that people have to accept it ."

      My opinion, is that Greece should have defaulted in 2010 and take the hard hit, for the history. Hard hit, but the debt was all under greek law, with a 50% haircut, it would have dropped to 160 beur and the various miraculous mirages coming from the left, would have been absent, since there wouldn't be another way. I always tended to agree with Obama's recent statement "that you can't reform while you are doing an internal devaluation of 25% at the same time, because at some point, people will react".

      Thank you for your hospitality and courtesy, i will definitely not bother you anymore.

      P.S.: I am already grown up. More than i would like to. This is why i am too cynical when i read about "solidarity" and why i don't lose my patience so easily. I can't imagine what you would do in a greek blog, with 2 Greeks, 1 Italian, 1 Spaniard and a pseudoaustrian agreeing on everything with each other and getting surprised all at the same time. It is a common pattern in greek discussions too. They can't fathom why Tsipras could seem aggressive for instance. Comunication of opposite ideas is usually what leads to better understanding.

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    4. I would suggest the same on the Slovaks, the Finns, basically anyone that was forced to contribute to the bailout funds despite their banking sector's nonexistent exposure to peripheral debt. They had veto power over these decisions and the ability to put two and two together and predict the consequences. At least they should be excluded from any contribution to the EFSF and ESM funds or better yet stick to the no-bailout principle and let indebted countries default if necessary and let everyone rescue their own banking system. After all they weren't the ones that benefited as creditors from the higher interest rates that peripheral euro zone bonds provided.

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    5. @ Anonymous at 1.55
      Since you really test my patience (which doesn't happen so often), I suggest you do a little research project (I would do it myself but I don't know how to get such information out of the internet):

      1) compare luxury goods in Greece with other countries (iPhones, iPads, smartphones in general, upper scale cars and motorbikes, high-end multi-media equipment, etc. etc.). Just one food for thought: in the first quarter that it was on sale, over 50.000 iPhones were sold in Greece. Now that's quite a number for an impoverished country which needs a debt haircut.

      2) Give me an explanation why I see in Northern Greece (I never get elsewhere in Greece) Albanians at every construction site and farm work (like olive harvesting), Egyptians on fishing boats, South East Europeans at hotels and restaurants, etc. etc. when the cafés of Thessaloniki overflow with young Greeks whose standard equipment is a smartphone and a pack of cigarettes.

      3) Tell me how in nice weather downtown Thessaloniki can be so full of shoppers that one thinks someone is given something away for free. Yes, some shops are cheap now but there are still many shops which are very expensive. Tell me how the Cosmos Mediterranean (allegedly the largest shopping mall in the balkans with a HUGE parking lot) can be so full on Fridays/Saturdays that one cannot find a parking space. That it is difficult to find a space in one of their many restaurants. Etc.

      4) Yes, about one-third of Greeks are in misery today but my sense is that there is close to another third which lives far better than many compatriots of mine in Austria and I am not sure that their incomes and wealth are the result of hard work and clean living. Before one asks for European solidarity, one should show solidarity at home.

      Believe me, since my wife is Greek I do have some rather good insights into Greek society which foreigners normally would not have and I definitely know that there is some extreme hardship in Greece. Under no circumstances do I want to belittle that and if you have read my blog for some time, you will know that I wrote about it a lotl.

      I still maintain that Greeks on the whole (i. e. all 11 million together), when adding their domestic and foreign wealth, are among the richer societies in Europe, if not the world. Just think of the triple-digit BEUR in foreign bank accounts, not to mention foreign material assets like real estate, etc. If one could take that entire wealth and divide into 11 million equal parts, Greeks would live rather happily even today. The fact that the distribution of that wealth is totally out of whack (worse: some have accumulated their wealth by robbing the others) is totally and exclusively a domestic Greek problem!!! And it's not a problem of today. It's been a problem ever since independence.

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    6. Mr. Kastner,

      You are a banker, i would expect something more "original" from you. Do you know about the real estate boom in Miami, FL? Big part was caused by money being poured in from Venezuela. The same Venezuela of proud socialist Chavez, Maduro, etc. Do you remember the Yeltsin years in Russia, how the russian elite was quickly formed, moving around in limousines? What do you expect? That everyone in Greece was flattened out and became a beggar? Don't you have poor in Austria? Do they all have the same standards of life? Those who were paying nickles for taxes for 30 years, you think that vanished or didn't procreate? About a quarter i 'd say, have enough money for them and their children.. Make it a third if you wish. Another is hanging on and yet another third is below poverty line. You don't see unfortunately the approx. 150.000 children of those who aren't in position to have their children with a pack of sigarettes and left the country, because it is better to put a university degree to work, rather than get a job with minimal pay and no insurance.

      About the triple digit Swiss number. I am sure you read Spiegel, since the myth was created from there, the famous 600 beur of greek accounts. According though to the swiss banks, the total amount of money from european sources in swiss bank deposits, is 800 beur. Claiming that 600 are greek, is far stretched.
      http://www.imerisia.gr/article.asp?catid=26516&subid=2&pubid=96139157

      For your information, the attempt that begun in 2011 to tax greek deposits in Switzerland, according to the british model, failed in 2014, when the Swiss side said that previous models used with other countries are obsolete and also that they can't accept to retroactively tax bank accounts.

      http://news.in.gr/economy/article/?aid=1231292672

      According to LSE Professor Gabriel Zukman, who used the date from the BNS (Central Bank of Switzerland), the greek accounts amout to 60 beur.
      http://www.real.gr/DefaultArthro.aspx?page=arthro&id=294780&catID=2

      If you check the Forbes list, you will find 3 Greeks (2 are ship owners if i recall) in the 2-4 beur range. WIth 600 beur, i am sure there would be more.

      Going further, this is from the Bank of Greece tracing the capital that left the country.

      (continues...)

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    7. (,,,)

      Greek bank deposits: 18 beur. Foreigners' bank deposits 22 beur. The rest was bonds and direct foreign investment.
      http://tvxs.gr/news/ellada/se-poies-xores-pigan-oi-katatheseis-tin-periodo-tis-megalis-fygis

      The problem Mr. Kastner, even if we leave aside big fish (like ship owners, that maintain large accounts in Switzerland), when the tax offices are a mess of paperwork, the taxation becomes unjust. When justice is also slow, tax evaders take years before they have to actually pay something. SYRIZA, just anounced that he can't make the periousiologio work for this year despite the previous preparation, it will wait for next year. Former head of the tax collecting service, Mr. Theoharis, who was congratulated by the EU Commision for his efficiency, when he resigned, he was asked "but why didn't you go after big sharks". He replied that this is easier said than done, because they have good lawyers and accountants, that know how to move wealth between off shore companies and how to stall investigations.

      You are right, it is a domestic problem! But you see, the third that is struggling, can't wait for when the successor of Mr. Theoharis will be able to catch the big fish (fiscal paradises, exist, because apparently they work. If they didn't, they woulnd't exist) or when the Swiss will agree to make an agreement to tax the Swiss account. Banning the sons of the upper third from the cafeterias or students that like cafeteria break so that one can understand the problem of the 2 other thirds, isn't much of a solution in the short term. ND, for lack of better method, did a blanket taxation. The ENFIA may not be popular, but it made pay also those who never paid. The problem though, was in those who couldn't afford to go buy iphone. Because, Mr. Kastner, if you go to Gstaad, it is likely that you will see many rich people. Those 2/3, you won't see in the shopping mall, because it's too expensive for them. Try the local bazaar instead. Also, in case you don't know, Thessaloniki was always in better shape than Athens and it attracted constantly rich farmers from Thessaly that do their shopping to Cosmos Mediterranean, as well as rich foreigners from the Balkans. Ιf you go to Nairobi, the "westerners" have a sort of "western district", their own small world that you wouldn't believe it can be in Kenya. Every comfort, rents in the range of 2500-3000 euros. The poverty lies elsewhere, you don't get to meet it...

      I don't disagree with you on the matter of tax evasion, i disagree on the meaning of "solidarity". I replace it with interests. Why doesn't anyone want to show solidarity to Egypt for instance? It can't be that Egypt is less popular than Greece, because even back in 2010, i remember that Greece wasn't popular at all in certain countries. Most importantly, one can't give "solidarity", if he doesn't want. In fact, prof. Varoufakis, said "we don't want new loan". And the 2/3s on their side, must decide on what to do, while trying to see what the upper third does. Do you think that there are not rich Spaniards or Italians hiding money? "Luxleaks" come out constantly. Those 24% unemployed in Spain or the 50% unemployed in Italy, are they supposed to wait forever to catch everyone or are the likely to vote for something else?


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    8. Addendum:

      "If one could take that entire wealth and divide into 11 million equal parts, Greeks would live rather happily even today. "

      Mr. Kastner, this "ideal division", i don't think is coming any time soon. It's capitalism (look the map)

      http://en.wikipedia.org/wiki/List_of_countries_by_percentage_of_population_living_in_poverty

      I would be satisfied with less.

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    9. I will leave you, with this. 13 February, Italian parliament, while passing new reforms:

      https://www.youtube.com/watch?v=ibCBrFdVddM

      This is to say, it is so easy to change things from far away.

      And a new interesting chart:
      http://i57.tinypic.com/2elxlhk.png

      And i will leave you and the other neighbours in peace. At the end, Mr. Kastner, when a population sees no light, it no longer asks. It just does what it has to do. I don't think Tsipras wants to default, but i think that prof. Varoufakis has it as plan B. Tsipras won't accept a plan that he will feel that he will have great difficulty to follow, because it will become the repetition of George Papandreou and took whatever they gave him, only to return to Greece and say "i am a socialist, heck, i am the president of the Socialist International! This plan is far away from our beliefs, from our roots, but, well, i guess we have to do it". If Papandreou failed miserably, Tsipras with his more radical ministers will also fail. If they let him make something with "no more austerity" he will take it. Prof. Varoufakis today said "we will pursue agreement even on the +5 minute". And if anything, he hasn't been bluffing all this time. He wrote exactly what he is doing in an February's 2014 article.

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    10. Oh, if you don't mind bothering your wife, in case you are interested out of professional curiocity, Gabriel Zuckman gave interview to Vima newspaper:

      http://i58.tinypic.com/2ajqqyt.png

      Main points. Total foreign wealth in Switzerland 1.8 trillion. Greek 60 beur, German 200 beur. The usual procedure is that the banks open an account on behalf of a pupper company in Panama or Virgin Islands, so that the person won't appear directly. This method currently covers 60% of the deposits in Swiss banks. He also says that Greece alone won't be able to achieve anything significant. It must form an "alliance" with some bigger countries that on their turn, will threaten Switzerland with a punitive tax (he suggests 30%) on swiss exports for example, unless they abbandon their refusal to reveal their data. No need for all the EU to do it, 2-3 big countries that would flex their muscles, would suffice he claims.

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    11. @ Anonymous at 10.47
      Bear in mind that our younger son is a V.P. at one of the largest Swiss asset managers, so I do have some information.

      The big Greek money left Switzerland (much of it in the direction of Singapore) quite a while ago. Around that time, the Swiss National Bank implied that the Greek money was about 150 BEUR.

      The stories about 600 BEUR or so are pure myths; simple not possible. But I would guess that the true number is somewhere between 200-300 BEUR. The rule of thumb which I learned during my time in Latin America is: in developing economies, black foreign money is typically plus/minus the amount of foreign debt of the state.

      Mind you, you can't only take offshore bank deposits. You also have to include foreign investment of wealthy Greeks!

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  4. Agree with you. All actions of the new government start to make sense under the assumption that the new government had a Grexit in mind from day one. Djisselbloom and his colleagues must think about this a lot these days.

    This is a fascinating case for everyone interested in strategic games. I just hope all players are aware that this is not a board game but reality.

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  5. Yeah, there is no 100% self-determination if you have to make compromises with others. And europe is all about compromises.
    If total self determination is what Syriza and Greece really wants I feel reminded to the saying: "Dont stop travellers." They are a free country, free to leave Europe. No need to always stare toward north-west, there are other directions on the compass as well. Even if I am sceptial the other directions are that brightful:
    In the South Libya in in civil wars, and Cypria pays the price for betting on Russia.
    In Southeast Arab world is in a mother hell of civil wars.
    In the East Turkey heads to a autocratic, antidemocratic government style.
    In the Northeast Ukraine is between civil war and proxy wars, and Russia heads to autocratic and antidemocratic society.
    In the North former Yugoslavian states are in a desperate poorness, even compared to Greece. They demonstrate how greeks are complaining on a quite high level.

    Lots of alternative role models. Greeks are free to choose what to prefer, what they like more than the European "dictate" of getting steadily more money.
    Europe and "austerity" european rules are no easy track to paradise, but they offer a perspective for a better, sustainable future, even if the path is hard and stony.
    Nobody is required to enter this hard and stony path, blind alleys are always an option. No example is useless, at least Greece may offer a bad role model for others to avoid.
    Take your choice,
    Roger

    PS: Sorry for sounding that defeatist.

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  6. Yeah, there is no 100% self-determination if you have to make compromises with others. And europe is all about compromises.
    If total self determination is what Syriza and Greece really wants I feel reminded to the saying: "Dont stop travellers." They are a free country, free to leave Europe. No need to always stare toward north-west, there are other directions on the compass as well. Even if I am sceptial the other directions are that brightful:
    In the South Libya in in civil wars, and Cypria pays the price for betting on Russia.
    In Southeast Arab world is in a mother hell of civil wars.
    In the East Turkey heads to a autocratic, antidemocratic government style.
    In the Northeast Ukraine is between civil war and proxy wars, and Russia heads to autocratic and antidemocratic society.
    In the North former Yugoslavian states are in a desperate poorness, even compared to Greece. They demonstrate how greeks are complaining on a quite high level.

    Lots of alternative role models. Greeks are free to choose what to prefer, what they like more than the European "dictate" of getting steadily more money.
    Europe and "austerity" european rules are no easy track to paradise, but they offer a perspective for a better, sustainable future, even if the path is hard and stony.
    Nobody is required to enter this hard and stony path, blind alleys are always an option. No example is useless, at least Greece may offer a bad role model for others to avoid.
    Take your choice,
    Roger

    PS: Sorry for sounding that defeatist.

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    1. Not at all.

      There is another alternative. Maybe Greece could develop closer relationships with the State of Mount Athos and become a Neo-Byzantine Empire. The Monks certainly have a lot of gold which could come in handy for a bankrupt country.

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  7. For those who delve into official documents, the ultimate option of exiting the euro is mentioned in SYRIZA's programme, which was drawn up long before the elections. It is mentioned as a last resort, i.e., assuming that the negotiations break down completely. SYRIZA in government has displayed its willingness to negotiate - to give and take. It has tabled proposals for the humanitarian crisis to be overcome and for the debt to become sustainable through the economy growing again. Nothing unreasonable there. However, SYRIZA's proposals challenge the orthodoxy of austerity and deregulation esp of the labour market, which are at the heart of current EU policy and not just vis-a-vis indebted countries. As for the Greek people peacefully demonstrating in front of the parliament in support of the government (quite unique!), they are claiming their dignity back. They do not clamour to get out of the euro. They are not even rejecting the euro rules. They are clearly rejecting the impossible regime imposed on them by the country's creditors and by the previous governments. It is really quite simple, even if it sounds complicated to those used to have the Greek officials stand attention in front of them.

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    1. Dear Marica,

      The thing is Professor Varoufakis did not actually negotiate at all. He came with nothing, no plan on paper, no powerpoint presentation of Syrizas plan, to the Eurozone meeting on Wednesday. He just made the same grandiose kind of speech which he has been giving on his blog for years, and which I guess he could make in his sleep. The goal was only to "surprise and confuse". And that is unreasonable, but also a very smart strategy for provoking a grexit.

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    2. Seukel, bravo! Well said and analyzed. I like that.

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  8. Mr. Kastner,

    Your german is better than mine, i have to rely on what greek newspapers say.

    Does "Eurogruppe erwagt doch euro-austritt von Griechenland", mean "The eurogroup consides Grexit as manageable"?

    It is supposed to be a yesterdays' article from Spiegel, where both Greece and Cyprus are manageable to exit the euro.

    http://www.protothema.gr/politics/article/451393/spiegel-i-europi-theorei-diaheirisimi-tin-exodo-elladas-kuprou-apo-to-euro-/

    Does that mean that the negotiation strategy of the Eurogroup, is to lead Greece and Cyprus to exit the euro area? Of course not, right?

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    1. You translation is correct but I haven't read the article you make reference to. What I did read was a Varoufakis-interview in Der Spiegel of yesterday. Varoufakis' points: Greece will insist on a haircut; the EU was worse than the CIA in the art of waterboarding, fiscal waterboarding that is; and Greece does not have a Plan B.

      Given all the insults and other offensive language and/or behavior which the members of the Greek government have directed at Germany and Merkel before and after the election, I am quite surprised that the German government holds still and pretends to not even have heard them. My son once gave me the following lesson when I started blogging and commenting: "Don't argue with idiots! They pull you down to their own level and beat you by experience!" Maybe Merkel & Co. are saying: "Don't argue with radical leftists! The pull you to their level of argumentation and beat you by skills!"

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    2. Mr. Kastner,

      In greek media, what was read about Spiegel, was prof. Varoufakis saying that "haircut would cost less to everyone". Not sure if this is accurate. I find it odd to change his idea of swaps, unless this is Lazard's advice, because in the greek press, there have been some articles from Lazard's head, suggesting a haircut of 100 beur would be preferable, so i don't know if prof. Varoufakis is now being influenced by Lazard or not.

      Mr. Kastner, that there would be no good blood with SYRIZA, it was to be expected. Tsipras since day one, had to use a way to gather the people behind him. If you had followed the greek Obama's rhetoric in the past years, you would have seen he was always very aggressive. On his turn, in every election since 2010, he had various EU politicians more or less advicing the Greeks to vote against Tsipras "or else"... Tsipras, is young and lacks experience. He is the first PM in Greece to become PM at 40 years of age and as such, despite appearing calm, holds grudges. This is why he didn't meet with Merkel instead of sending prof. Varoufakis. I have once written, that if it was up to me, i would slam the door on him. But money is important, this is why they don't slam the door. I don't believe in prof. Varoufakis' Armageddon either, in the sense, that i don't believe that it will automatically cause the collapse of the euro. Maybe there is some more long term danger, from the fact that "exiting" will have a legal precedent, so in a subsequent crisis, it would be a readily available option. But, not in the short term. Some tremors in the stockmarkets and after one month normality would return. It would be a matter of money and no more.

      Mr. Kastner, i don't think Tsipras is an idiot. Tsipras is a master of occupying and blackmail. I have written so before. If you think that for instance you could reform the public sector quickly while not being Tsipras, you would be counting without the endless strikes and occupations.

      On the other hand, as things have gone, Tsipras can do many things that no right wing goverment can do. Imagine that yesterday Tsipras had a cordial meeting with the president of the greek pharmacists, who traditionally were pro-ND. They went to Tsipras because he was against the liberalization of pharmacies...

      Again, as things have turned, Tsipras does have a democratic mandate. While they are ideologically driven against catching high end tax evasion and have the means to do this more efficiently now, they are also ideologically driven against reforms in the liberal sense, which is what the EU is heading at. And this will be his problem, unless he delegates most decisions to his less radical ministers, like prof. Varoufakis, who more or less single-handidly rescured Cosco from the hands of minister Lafazanis.

      In my life, i had to deal with all kinds of people. Both intelligent ones and idiot ones. So i 've learnt to be patient, if i had to finish my task with them. But i certainly understand that there is no reason to deal with those you regard idiots, if you don't have to. It is also why i think that "plan B" of prof. Varoufakis, is actually an honest alternative. And the drachma too. But i still don't believe that it is Tsipras' plan A.

      Again, i am sorry if i made you lose patience. It is the reason why i didn't start a blog of myself. I would have to cut many insulting comments, i would have to spend too much time trying to "prove" my point, etc.

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  9. Have you seen the Monty Python's sketch "the man who jumped over the English Channel"? It is very funny and actually quite relevant to our situation regarding the completion of the previous program that everyone in the eurogroup insists upon. Simply put it is an impossible task. Cannot be done, did not have a chance, not now, not back in 2010 when it was accepted by past Greek administrations as part of the MoU. Maybe that was the point all along, to push Greece towards eurozone exit. If that is the case so be it, but I think it is time for everyone to acknowledge that by systematically insisting on impossible to achieve fiscal targets like the ones required by Greece from 2015 (Somehow, magically Greece has to come up with something like 21 billion this year alone in order to achieve a 4,5% surplus) and for some 15 years the eurozone powers are pushing Greece through the door and not the other way around. So to return to my previous analogy, no amount of jawboning, no amount of threats is ever going to achieve the requested impossible result. The man is not going to land safely in the middle of the center of Callais no matter what, he is going to drown. So unless reason prevails when it comes to what Greece’s lenders are requesting the correct answer is “Piss off” or as more eloquently our latest finmin put it: ”I don’t have a plan B, if Armageddon is what you want, you can have it.”.

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  10. Yesterday I found an article with a photo where a man, that had joined the "peaceful" demonstration, shows a text written with big capitals, that this government gave/gives them, the Greeks, their dignity back.

    Our comment here in the home "group": the only way to get their dignity back is to pay their debts back via a government that leads the people through difficult times that are connected with a Spartan but fair and educating psychology.
    Syriza makes out of what is a crisis (caused by a country that does not want to follow up any plan, ever) a "humanitarian drama". Some days ago the Lithuanian Dalia Grybauskaite, present in the EU-meeting with also Tsipras, had a wonderful comment on his speech, sharp as a knife, and perfectly true. Bravo.

    My comment on Tsipras: in countries with humanitarian dramas nobody is able or allowed to use fireworks to open Carnaval. There is no money for it, not either for wine, or other kinds of alcohol. IF Tsipras would really was convinced that a humanitarian drama is existing in Greece he could have spoken to the people with strong words, and demanded to keep their Carnaval festivities small, fitting within the drama for many other Greeks that are too poor to buy meat, or other highly important things. Tsipras did not raise his voice against it.

    The money used for Carnaval could have been used for real needs inside the country. It would have helped Greeks to learn really to stand together.
    To take their responsibilities for its own fellow Greeks and pointing themselves instead of pointing to Europe. Holding their hands open to Europe for money and spoiling it inside the borders for what is not a humanitarian problem but a social disgrace.

    What Greece really needs are psychiatrists, psychologists, more than economists and politicians.

    Interesting to read yesterday was also an article that I found in Bloomberg Business:
    "The Troika That Greece Should Really Fear" (by Lorcan Roche Kelly)
    http://www.bloomberg.com/news/articles/2015-02-13/the-troika-that-greece-should-really-fear

    In the last paragraph of the article he speaks also about Pyrrhus:
    "If the Greek government makes the mistake of spending too much time on the bailout negotiations and not enough securing the domestic economy, it may risk comparisons to the great Greek general Pyrrhus, coming home with a victory to an economy that is beyond saving."

    A video with a full documentary about Pyrrhus, for those who do not know who he was:
    "Heroes of History: Pyrrhus of Epirus, the Fool of Hope"
    https://www.youtube.com/watch?v=waRjfawaZ8Y

    Yes, you read it well: the Fool of Hope.
    Greece is facing a new fool of hope.

    Another interesting article is an interview of Helena Smith (The Guardian) with Varoufakis.
    http://www.theguardian.com/world/2015/feb/13/greece-finance-minister-yanis-varoufakis-interview-syriza-eurozone

    He says that he is working at a book about Europe and he is longing to finish that book, more than being a minister of finances: he does not like to be in his minister's room at all. He is waiting for the right moment to be able to leave.

    The title of the interview is:
    "Greek finance minister Yanis Varoufakis: ‘If I weren’t scared, I’d be awfully dangerous’."

    Comment of the home "group" here: "So he IS dangerous, because he does not show to be scared at all."

    Where he maybe might be scared for is to lose his face and this will be the big reason that he will resign, sooner or later, with some cheap excuses.

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  11. Klaus, I wonder how spontaneous these demonstrations really were.

    Demonstrations to support a government, particularly when this government has almost no internal political opposition to care about, mostly are orchestrated from above. In cases like this questions about the legitimacy of demonstrations have always been raised (like in Hong Kong last August).

    I have seen images from these demonstrations in Athens, Thessaloniki and other towns and they looked strangely similar. People holding signs with identical texts and identical typeface etc.

    We are told that the demonstrations we organised primarily via social media, but these media are easily infiltrated and manipulated from above (Syrizas professional activists + the Pasok politruks inside Syriza now, with their old unionist networks).

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  12. Dear Klaus,
    your argumentation in this discussion seems very convincing to me. Maybe the time has now come to let Greece default (and leave the euro, I suppose). I wonder - like others - whether this is not what the present government is in reality aiming at. Once Greece is back to the Drachma there would be all the self-determination, independence and national dignity that some people seem to want, but I am not sure that they would be happy with the consequences. At least they would have to stop blaming others for what happens in Greece.

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    1. The greatest risk of a Grexit for the Euro would be that a drachma-Greece recovers nicely after a couple of years of chaos...

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    2. I am not sure whether I understand your comment correctly. Wouldn't you be happy if Greece recovers? If Grexit is the best way to that end, shouldn't we (both Greece and the rest of Europe) perhaps accept it - even if it means a period of chaos in Greece and another big cut in the Greek debt (which may be inevitable anyway). If Greeks were happier before the euro, isn't better to go back? At a later stage Greece might want to join again, but then everybody would be aware of the risks for all sides.

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    3. What I meant to say is that, if Greece really fared better with the drachma (which no one can tell at this point), the EU wouldn't look good for having heralded the Euro all this time.

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    4. o.k. I get y<our point.

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    5. I feel the same.

      I think that even if Greece gets a moratorium, extension, new programme or whatever, it is hard to see how it could become a totally different country in six months as Tsipras promises. As long as it stays in the E(M)U it will have the same economic problems as it has today even in three years from now.

      Also outside the E(M)U the country will stay poor, and have economic problems, but the Greeks would be "masters of their domain". Poor but proud as they were in the fifties.

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    6. A return to the drachma isn't so simple for post-bailout Greece.

      What happens to the debt which is denominated in euros? Would Greece default on it? If yes, how would the Europeans react? Wouldn't they throw Greece out of the single market? Wouldn't they impose an embargo? Wouldn't they take Greece to court? These are thorny matters.

      Furthermore, one should be very careful when it comes to drawing conclusions from the past performance of drachma-era Greece. Prior to the early 90's Greece had very tight foreign-exchange controls in order to protect the currency. That wouldn't work in today's globalized environment. After the early-90's and prior to joining the Eurozone, Greece reformed by liberalizing the banking system and following a hard-currency policy (a prerequisite for joining EMU). Both of these periods however were characterized by rapid credit expansion: the early 80's by public-debt expansion, the late-90's by private debt expansion. These conditions would be very difficult to reproduce, thus making a return to a national currency an ever more difficult task.

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    7. Sounds reasonable. In that case the Greek government (1) doesn't know what it is doing, or (2) doesn't know what it is doing.

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    8. If you had read the blog of Varoufakis attentively, you would know at least his opinion. Which is also a view that I share 100%. He has stated several times that if the Germans want to destroy Greece, they will not be allowed to do so without destroying Europe at the same time.

      Of course, Varoufakis does not want an exit from the euro: that would be extremely difficult to manage without horrendous short-term consequences for living standards and politico-economic stability. However, this is the ultimate threat that the EuroGroup (read Germans) is making, in order to intimidate the Greek politicians into doing as they are told -- regardless of the terrible economic cost of following the lunatic ideas of austerity.

      In this context, any country's true patriot will choose to fight to the death (politically speaking) in order to protect his country -- including the potential destruction of the EU. Indeed, that is what Germany is doing -- putting its own interests before those of the EU. The Greeks are merely responding to the aggressive nationalism of Germany with their own version of defending national interests. History will pass a judgement on the situation, but I would bet my last penny that Germany will come out the loser -- as it has in every single conflict situation within living memory.

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    9. You love the Greeks and hate the Germans. What's new about that? Same old UKIP stance.

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  13. Not only can you not have 100% self-determination when you are in the EZ, you can neither have it when you are in EU or a country. In any civilized, democratic, developed society you give up a part of your personal freedom, that never dawned on Greeks. The nation is a lawless jungle, be that in traffic or business.
    Lennard

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