Thursday, November 27, 2014

Supreme Nonsense From SYRIZA's Economic Leadership!

Yiorgos Stathakis (SYRIZA's top economist) and Yiannis Milios briefed investors in the City of London about the plans they would implement when SYRIZA comes to power. Protothema published an email which Joerg Sponer of the Capital Group sent out after having attended the meeting. I take the liberty of publishing it below.

"Yes, I was at Stathakis (ca. 15 investors) and a separate one mit Mr. Yiannis Milios, Chief Economic Advisor (ca. 20 investors).

Overall summary
* Everyone coming out of the meeting wants to sell everything in Greece.
* The program is worse than communism (at least they had a well thought-through plan). This will be total chaos.
* I expect if SYRIZA get to 36,5% and thus absolute majority given the +50 seats, you will see a Cypriot scenario --- massive run on deposits, corporate clients moving everything they can abroad and a complete stop of foreign direct investments.
* They believe that Samaras will not get more than 174 MPs in March; they have written statements from several MPs not to follow Samaras.

If they weren't that serious when talking, I thought this was a theater play / joke.
* "We feel most connected to 'Podemos' in Spain and 'Die Linke' in Germany. However, they are too liberal".
* "We will stop austerity. We told people on the street to stop protesting as we will come in an take care of them".
* 5 cornerstones of their program:
-- (1) stop humanitarian crisis by providing free electricity, food, shelter and healthcare to all in need.
-- (2)  increase wages for everybody to a minimum of EUR 750/month x 14, and for pensioners EUR 750/month x 13. Start to hire several thousand employees into government positions.
-- (3)  primary surplus of 1% through a sudden stop of the black economy. There is no more incentive for black economy as people now have a minimum of EUR 750/month (what a joke!). No more property taxes (costs 2 BEUR). Cut all taxes to 20% except high incomes (costs 2 BEUR). All being paid for by collecting 70 BEUR in unpaid taxes. They expect GDP growth post-SYRIZA taking over of 3-5% as SMEs can now invest with confidence (LOL). They expect huge FDI.
-- (4) renegotiate sovereign debt.
---- (a) ECB to buy entire Greek sovereign debt for 60 years and forfeit any interest (Germany got in 1952 a 62% debt haircut so Greece should get one, too).
---- (b) I mentioned that Germany also embraced huge structural reforms at the same time. Both sides said that the structural reforms had gone too far already.
---- (c) Greek debt/GDP to go to 20% by 2080 (hahahaha - what a joke!).
---- (d) further increase of deserved subsidies from Bussels by 5 BEUR.
---- (f) nobody in Brussels gains if Greece leaves Euro so Greece has a lot of leverage. Tsipras made the mistake of agreeing with Merkel that Greece is to stay in the Euro.
-- (5) debt moratorium of private debt with a maximum debt service of 20% of disposable income above EUR 750/month.
---- (a) create 2.000 FTI credit bureaus to intermediate between banks and borrowers. They decide who pays what and how much debt is forgiven.
---- (b) HSFS will recap banks with 3 BEUR (cost of year 1 losses of above). In year 2 write-back's (both of them said that seriously!) as the Greek GDP will grow strongly and investmens will flow.
---- (c) banks are too strong, creditors are too weak. They will reverse that.
---- (d) they will exchange 100% of senior management at 3 large Greek banks (ex Eurobank as no more majority)
---- (e) they will order judges to be more productive

Couldn't have made it up, even if I wanted".

So much about Joerg Sponer's email. So far, I have always been very constructive about every plan which has been announced by Tsipras/SYRIZA. In case of doubt, I have read constructive intentions into their announcements. If the above is a correct report of what Stathakis/Milis said at those meetings, then one cannot but consider SYRIZA's economic plans as supreme nonsense!


  1. By the way, those Syriza's members came from its conservative side; they kept the radicals at home for obvious reasons!

  2. SYRIZA's defense, was that Sponer wasn't invited to attend the meeting. However, his fund was and well, all the above points are no surprise to any greek, it's known SYRIZA's position.

    To SYRIZA's defense though, gave another blow, a second report from Bank of America Meryll Lynch, which more or less confirms the Sponer email.

    You can see the original in english, if you click the small icon below the photo:

    In alternative, you can read it here:

    SYRIZA hasn't debunked the Meryll Lynch report till now (Meryll Lynch was present with multiple members, so SYRIZA can't deny that), so SYRIZA is limited to the usual conspiracy theory of "mud war from centers with interests".

    "If the above is a correct report of what Stathakis/Milis said at those meetings, then one cannot but consider SYRIZA's economic plans as supreme nonsense!"

    When i was saying that the benefit from SYRIZA would be through his failure, you didn't want to believe me...

  3. Tsipras today:

    "Today, it is confirmed, in the most dramatic way, the dead-end of the stratefy of obbedience and submission to the most irrational demands and wishes of the troika. Today, it is confirmed, the dead-end of the strategy of the obedient and good student that the Samaras goverment has selected since 2 years. And unfortunately, today we are in a position much worse than in 2012. The only realistic way out is the way of rupture with the insanity of the austerity preconditions, of the dissolution of the social cohesion and the destruction of the productive basis of the country."

    He asked elections immediately, so that people can give "strong mandate to renegotiate, to a goverment of social salvation, which will pull the country out of the dead-end, opening a perspective democratic and and progressist for all Europe, for all the people of Europe. And now it is the time for this big and decisive step."

    SYRIZA has 2 options theoretically:
    - Clash with troika to whatever extent. Possibly to the point of returning to drachma. This will turn and bite him eventually.
    - Continue with austerity and the demands for 4.5% primary surpluses. This will again turn to bite him, because he will lose the real leftist voters and will anger the rest for being lied to again, after George Papandreou and Samaras.

    An alternative, is the Pontius Pilate escape route: Negotiate with Europeans, arrive to a point of impasse and then say "we did our best, this is the best deal we can have, we will hold referendum, so that you, the people can decide what you want us to do".

    1. .... for me this is all a theotrical event anyway. All prestaged and premeditated. What they state is ridiculous but then again isn't the austerity of the last 5 years in the eu ridiculous? There was no other route?

      All this show play is more or less to test the ground of the greek people's resolve. Which will be measured in polls as usual. The theoter will adjust based on the results of the polls. It is all being played out to see when the elections do come what will be concluded for the next 2-3 years for greece.

      For me if it is Samaras we will continue as is. If it is Syriza it will be as AnonymousNovember 27, 2014 at 1:18 PM, states, A nice try for a negotiation on everything. They will get a few penny's and indeed say this is the best we can do. Then they will continue with Samaras politcal road.

      To be honest i like the tactic that Syriza is doing. Maybe now out of fear of Syriza coming, they (troika) might double think what deals they are making with Samaras.

      All in all it is dust in our eyes... everything in every scenario has already been pre-arranged. We are nothing but pawns. Maybe all people of one country are nothing but 1 pawn on a chess set.



    2. On the contrary, it seems that out of fear of SYRIZA, the troika is harshening its position. Look at Hardouvelis' words: "Even if we 've done 99%, they ask for 1%. The IMF in particular doesn't care who will be goverment in March". Seems more like the troika is entrenching itself now, to gain as much leverage it can now, so to be able to deal from a position of superior force when Tsipras comes. Samaras' own Waterloo in the terms of "we work with our partners, they will support us back and i will go to elections with a debt relief in my pocket as they had promiced".

  4. Mr. Kastner,

    Syriza released the slides that Stathakis and Milios used in London (or so they claim).

    You can read it in english here: