Wednesday, January 28, 2015

Tough Talk Between EU and Greece?

Suppose the Troika negotiation didn't get anywhere and, at some point, the EU has had enough of Greece. They prepare a take-it-or-leave-it proposal and present it to Greece's Chief Negotiator. And then imagine that the following dialogue would take place:

Chief Negotiator of Greece: "No Greek government could accept such a plan!"

Chief Negotiator of the EU: “ your parliament and your constitution. The EU is an elephant. Greece is a flea. If this flea continues itching the elephant, it may just get whacked by the elephant’s trunk, whacked good. We pay a lot of good European Euros to the Greeks. If your Prime Minister gives us talk about democracy, parliament and constitution, he, his parliament and his constitution may not last very long!"

Rest assured! No European politician would ever talk like that. I am only paraphrasing above what President Johnson said to the Greek ambassador over the Cyprus issue in June 1964.


  1. In that case, president Alexis Obama, will either take a very hard blow or he will resort to referendum.

    What would Obama say?

  2. And i will repeat it once more. The only people in the goverment, in sectors related with the economy, that have a contact with reality, is Prof. Varoufakis and Prof. Mardas (his deputee). It's entirely up to them, to find a deal with the troika. There are several other ministers in there, that are so happy with living their dream of "tearing up memorandum" laws, that have no problem to default or go the drachma (some actually wish it).

  3. Hehe, sweet, but I'm almost certain there won't be any negotiations, after the news of day three. Syriza burned all bridges. Greece is at the point of no return now. They'll have to get along with their own means, no foreign money anymore. Since the economy is already tanking, there's no way to fund their lofty programs. Grexit has become virtually unavoidable.

    1. Mr. Gray

      Not ALL bridges have been burnt yet. Tsipras is burning the bridges that would force him to continue the current memorandum. Tsipras is still open to a debt relief, provided they leave him alone maintain a balanced budget. The problem, is agreeing on what "reform" is. And it's up to Prof. Varoufakis to do it. Tsipras, is pointing on the following points:
      1) Greece defaults, several billions of damage to the creditors.
      2) Greece exits the euro, it will form a precedent for others to have in mind in the future (crisis tend to repeat themselves at some point).
      3) Geopolitically, Greece is actually about to get a promotion. Russia is about to cut all gas supply to the EU from Ukraine and instead, it will be diverted to a pipeline that will cross Greece. To this it will probable be added cypriot and israeli gas. The EU wouldn't like a Greece under Russian influence. The Russian press is today in jubilee for Tsipras:
      - RIA Novosti: Tsipras taught the EU a lesson in democracy, for his objection to new sanctions against Russia.
      - BBC russian version: Is SYRIZA Russia's new ally?
      - Russiskaja Gazzeta: Greece threatened to veto new sanctions on Russia.
      - Fiodor Lukianov (president of the comittee of russian council for foreign affairs and defense): Greece could potentiall veto further sanctions on Russia in the upcoming summit of EU foreign ministers.

      But, regardless of an agreement or not, the problem remains that SYRIZA has a plan, that according to SYRIZA's prof. Lapavitsas, is 20 beur short (he wrote that before becoming candidate).

      SYRIZA claims that can find 3.3 beur more this year, out of fighting tax evasion and oil smuggling. It is true that Tsipras will have an upgraded electronic database about taxes these years, but the number seems far stretched and still can't cover losses from ENFIA, missed privatizations, new raises, etc.

    2. I missed something. Apparently, neither USA wants Greece under Russian influence. Surprise assistance to the greek Obama from the american Obama:

      "The United States, will stand helpful to the attempt of the greek goverment to escape from the austerity policy", said Obama in phone call to Tsipras a while ago. SYRIZA sources said that Obama promiced that US assistance will be translated in facts, with cooperation between the 2 finance ministers.

      Obama told Tsipras that he is sure he will make it and told " i also started young and i have grey hair".

      Mr. Gray, Lennard, other german friends, after this, you can expect american intervention towards Merkel and i think the divorce will be postponed.

  4. I agree, Gray. What also is bothering is the utterly hostile tone of the new government, particularly towards Germany. Before the elections Tsipras tried to create the impression that he was becoming more "moderate" and diplomatic. That seems to have been just a farce. Now he is showing his real face. And Varoufakis is as aggressive as Tsipras. I think he was the one coming up with the "waterboarding" image.

  5. Syriza has really nice friends. Did you know that the new Greek foreign minister Nikos Kotzia during a visit to Athens in 2013 met with the Russian ultranationalist Alexander Dugin? Dugan was the man who last year called for genocide in the Ukraine.

    1. Mr. Seukel,

      Dugin is "nobody" in Greece. It is far more interested that Golden Dawn today released statement applauding SYRIZA for its proRussian policy and the cancelling of all privatizations. There is a funny unholy alliance triangle between SYRIZA-ANEL-Golden Dawn, because they actually agree on many things.

  6. I think Varoufakis, a fourth rate professor, will start his pompous talk -thinking he still talks to some news media and the Greek voter- and Schauble's bodyguards will summarily guide him to the door.

    The markets started dancing pentozali to the Syriza tunes.

    1. Dear compatriot,

      And yet, Prof. Varoufakis, is the only man in there that can make a deal happen. If not for any other reason, exactly because he is also a "TV star" economist and he can't have himself fail into such negotiations. I am convinced that he will accept debt extension, the real problem is SYRIZA's program, the troika and how exactly the others will agree that the measures anounced today by the ministers, are the reforms towards Greece must move.
      At any rate, Tsipras isn't getting out of this, without political cost of some extend.

    2. Greetings,

      I hope you are right. But, I think Varoufakis has those wet dreams of grandiosity and he might very well be seeing himself as an agent of the, leftist, apocalypse. He will be a bigger TV star once the whole thing collapses and he can claim he stood up to the interests of the bankers, etc etc. Either way, he's going nowhere, that's for sure.

      Finally, I am not worried about the rhetoric. I am worried by the actions of the government. Hiring back of the people that got laid off, change in the minimum wage and on and on. Where are they going to get the money from?

      Ke mi hirotera.

    3. Dear compatriot,

      Prof. Varoufakis, i think is very intelligent man and he was right on many things, but as with most ideologically driven analysts, at some point, he did some errors due to wishful thinking ("we are all in the same position, Greece is just the mirror of what will happen to others", "Italy is likely to default in few months").

      However, I think he is the only man in that goverment that can actually make a deal and most of all, he is like Cardinal Richelieu to Tsipras. Tsipras gives him carte blanche. And after the Obama phonecall, i think that once again, "Uncle Sam" will solve the situation once more. Uncle Sam doesn't want to see Greece, the future hub for all EU gas, becoming a russian puppet. It's the only explanation that i can come up with for this sudden love from Obama to Tsipras.

      There is reason to worry. But, i think in a deal, the Europeans will put some safeguards to avoid total collapse. Hiring back is in the DNA of the greek left, the public sector is the good father that gathers the children, you can't change that. You must let them govern and show how good they are, because 4 years in opposition, they didn't vote for 1 single reform (could it be that they are ALL so bad?) and always said they have the solutions.
      Of course, had the right done mass hirings like this, now the scandal would be in all newspapers about clientelism...

      The way i see it, if they really mess up things, they will simply fall. Kammenos will go in survival mode and he will leave the goverment. I don't really expect any miracle from SYRIZA, i can already see the damage hitting hard in many ministries, i just hope Varoufakis and Mardas can keep afloat the economy.

  7. Mr. Dragasakis to the rescue of his fellow ministers:

    "We have ministers that are for the first time in such positions"
    "We are preparing a long list of investing opportunities that exist in Greece".
    "We have 2 minister ready to inform investors on the direction the goverment is heading and not the one that others say it is heading".
    About the halting of privatizations: "There are investors of all kinds. If some had wrongly invested in a privatization that now won't happen, it is natural that they change strategy"
    "We won't go to rupture with EU, but nor to a policy that is destructive"
    About banks "we will use our rights, but won't hurt the rights of private shareholders. We are open to hear their suggestions".
    About where they will find money to give free public utilities to households, he said "that the companies won't be burdened, they have a special program for that".
    About the sockmarket crash: "It is natural for this to happen when there is a policy change".

    Very obvious attempt to throw water onto the fire and show a more conciliatory and calming disposition towards everyone. A couple of obscure points remain (about funding) and an odd comment about "investors that wrongly invested in a privatization". Why does one wrongly invest in a privatization? Because SYRIZA cancels it?

  8. Tough talks between bankers and Tsipras?

    According to this article, foreign shareholders in the greek banks, have sent ultimatum to Tsipras: "Either you come to agreement with EU or we withdraw".

    Paulso, Capital and Fairfax funds, all had phonecalls with the directors of the greek banks. Anonymous banker said "it's the first time we had such a severe and absolute intervention". Another american fund, that has top position in Greece said to a greek banker: "We are so disappointed with investments in Greece. The recent events force us to review radically our strategy here. We are ready to abbandon Greece".

    When these "rumours" come from a fiercely proSYRIZA website, things are bad and explain why Dragasakis ran to the TV cameras to calm things.

    Tsipras will make the deal.

  9. Mr. Kastner,

    After Obama's phone call to Tsipras, may i suggest your next title to be "Will the United States save the euro once more? Yes they will!"

    1. I called my banker this morning. It does not mean he will give me any money.

      Obama has no authority to provide any money to Greece. He can give us some in case of a humanitarian crisis (earthquakes, civil wars, wars, other big things). The Congress has to authorize the money. Looking at the composition of the Congress, do not expect to give him any.

      Do not count on anyone else to help you if you mess up because they probably will not.

    2. Dear sir,

      I am trying to be optimistic here. Obama didn't give any money to Greece either, but he influenced Germany on preventing Grexit before.

      I consider Tsipras a necessary evil for Greece and despite the much more favourable conditions that he finds the economy in and likely a much better offer from the EU than the other his predecessors got , i am not expecting miracles.

      Besides, have you read SYRIZA's program? It is very promicing!

      Don't be a pessimist. Tsipras is a masterful blackmailer.

  10. @ Mr. Seukel:

    Sergei Lavrov just invited the new greek foreign minister Mr. Kotzias to Moscow. The official russian spokesman Alexandr Lukasevic said: "We are listening at the new statements from Athens, we were listening them in the past too and never put in doubt the so old,, historically forged relationships we had. This is why this change of goverment in Greece, allows us to hope that these ties of us will grow stronger, develop and gain new momentum, if we take into accont the statements of the new greek PM. Russia was always in favour of economic and political interests of Greece and in the same direction we will continue".

    There will be no divorce. There will be phone calls from Washington to Berlin...

    1. Most interesting! I remember one of Varoufakis' first blogposts back around 2010/11 where he argued that the Cold War had actually started in Greece, in December 1944 when ELAS became too dangerous for the Greek and international establishment. Does Greece now have the chance to rekindle the Cold War?

    2. Mr. Kastner,

      It is quite obvious that the greek civil war was the first "proxy" war between the 2 blocks. I don't think Greece can rekindle the Cold War, but as i have written elsewhere, Greece in the near future, will become the main gas hub for Europe. The Russians will stop the flow through Ukraine. The cypriot and israeli gas, will also need probably Greece to go to Europe.

      Traditionally, "who controls the route of energy, controls the energy itself", i think was a quote from Kissinger or Bresinsky. Just look what happened to the Burgas-Alexandroupolis russian pipeline after USA had a chat with the Bulgarian goverment and George Papandreou. Pipeline no more.

      I don't think that the Americans, would like to have EU with more tracts of pipelines passing from philorussian countries. It is also well known, that the Russians always wanted access to "hot waters". Their base in Syria is the best they have right now. A Greece that will be cut off and turn anti-european, with a SYRIZA goverment, could possibly offer an anchorage for russian fleet in the Aegean. I don't think Obama would like that.

    3. Mr. Kastner,

      Another thing. Few days before the greek elections, Putin said that should Greece exit the euro, Russia will feel free to selectively lift its embargo on greek goods and absorb big part of it.

    4. Mr. Kastner,

      Here is something else interesting. Russia was interested in the privatization of the greek railways. Now statement from Vladimir Jakunin (personal friend of Putin's), head of the russian state monopoly:

      "If the railway privatization gets cancelled, we are ready to find other versions of cooperation. If the privatization goes forward, we will partecipate. If it doesn't proceed, we will see how the greek goverment plans to develop its railway companies to see if there is a possibility for common cooperation".

      In Greece, this is called "attack of friendship". Does Obama (the american one) speak german?

  11. I could not resist to bring up the following link with a cartoon from Petar Pismestrovic, Kleine Zeitung, Austria showing Tsipras dancing Sirtaki:


    1. And how about this one?!?

      Takes two to sirtaki.. #merkel #tsipras via @derfreitag

    2. A different link:

    3. The election has obviously motivated a lot of cartoonists:

      Although the theme is too serious, let's have fun and see what future brings

      H. Trickler

    4. Mr. Kastner,

      Despite my lack of faith in SYRIZA, i think Tsipras and Merkel will dance. What i can't tell you, is how many times they will step on the toes of each other.

    5. Bear in mind that Tsipras' dancing with Merkel is not good enough. Much more importantly: Merkel needs to dance with German tax payers!

    6. Mr. Kastner,

      If anything, this crisis has taught, that the population can bare many things. Tsipras will agree to extension, so it will be easier for Merkel to sell it. The real problem is how Tsipras will make his plan fit to a balanced budget, even if we take out any debt payments and how the EU will agree that the antimemorandum measures, are the way to go. But, in the worst case, if Tsipras can't make it, he will fall, there will be new elections... The ANEL leader is opportunist. He was ND MP, when he saw that he is about to take political cost, he jumped ship and make his own antimemorandum party. If he sees that his party is taking much attrition, he will abbandon Tsipras.

  12. The Flea may get smack yes,....

    but when the elephant dies 2-3 weeks later from the deadly virus the flea was carrying, the elephant will fall harder.....


  13. Mr. Kastner,

    In the past, you had said that Tsipras is a lucky man. Yes, he is. Because the help isn't coming from the "alliance of the South", as he was saying for years, but rather, from the "transatlantic enemy", the "killer of nations" and other such names that the greek left has for the United States.

    Who would have said, that time would come, where Avgi (SYRIZA's party newspaper), would have front page with Obama's photo, saying "Obama's support against austerity". And right underneath with smaller letters: "Lavrov calls Kotzias to Moscow".

    "Saved by the enemy"... Samaras must be meditating on the irony of life, after his bitter reward for being "good European"...

  14. Numerous nations are allegedly lining up to save Greece (but not Greece), it must be nice to have so many suitors to pick from.
    @H. Trickler, nothing is too serious to have fun about. Thanks for the cartoons all. I thoroughly enjoy the newspapers lately. Yesterdays nugget for me was To Vima's Tsipras quote "debate and consent, but without compromises". Today's was the comments on Greece's foreign policy toward Russia. The versatile Finance Minister and the Energy Minister had each their opinion about it, and the Foreign Ministry declined to comment. I pee my pants once a day.
    PS. Or how about the Vice President excusing to the Medias for all the stupid things the other ministers are saying.

  15. Mr. Kastner,

    It seems i am good with "predictions" lately (i have told you the problems with Samaras and his alibi, not to bet your money and he won't elect Dimas). Here is something even more interesting:

    Russian Finance minister:

    "We will seriously examine the eventuality of financial help to Greece. The rubble may be low, but life goes on".

    Not Cold War because of Greece Mr. Kastner, but an energy war between Russia and USA has been going on for some time now, because USA does not want EU so much dependent on russian energy sources.

    An unexpected gift to Tsipras. Can you hear Mrs Merkel's phone ringing? In case you don't know, SYRIZA's party position, much like KKE, is "out of NATO". Tsipras simply said that "right now, this isn't a priority".

  16. Please do not write or comment things like that, unless you understand geopolitics pretty well. I am sure that many EU and international politicians (especially IMF mandarins) would love to tell Greeks to shove it. However look at the map: if something like that happens a pissed, unstable Greek government may try an ISIS: invade Albania (to free N. Epirus of course) but at the same time blocking the Otrando straits seriously damaging C. Europe economies (including Austria's), invade FYROM and destabilise Tetovo and the S. Balkans, block the flow of sea trade through the Aegean, destroying the Ukraine and maybe Russia too, and destroying the Danube trade route, destabilise Turkey, allow a rebellious Greek navy to raid ships coming out of the Suez. A mess of such proportion will take years to resolve, destroy the EU economy and possibly drag the EU into war. With ISIS running around and N. Africa in a mess the only thing the world needs is an unstable Greece. IN UNSTABLE, HIGHLY STRATEGIC AREAS YOU NEVER TALK LIKE THAT.
    This highly important strategic position is what traditionally has saved Greece and is saving it right now. This must be making many in the EU and IMF mad, especially some Germans. It is a well known fact that continental countries, like Germany, have limited understanding of geopolitics and I suspect some of them must be going insane from rage. I can also understand that most E. Ευropeans are uncomprehending for historical reasons. But rage or incomprehensibility do not change geography.
    What the EU will do if things reach an impasse:
    a) Slowly (or not so slowly) strangle the economy through the banking system. The second public sector salaries or pensions cannot be paid the Greek government will buckle.
    b) Scandals galore will explode. Given the many Gstaad socialists in Syriza this is easy to arrange.
    c) Finally there is the possibility of targeted assasinations. That is why Mr. Xiros was out and about, practically released not escaped. Intelligence service X will terminate annoying Greek Y and the latest escaped terrorist will declare on TV that the revolution is removing the enemies of the people.
    I believe that there two real political problems as far as the EU is concerned. One is the unholy alliance between SYRIZA and the ultra nationalists of Indepedent Greeks. This was expected in Greece for about a year now, but this deeply cynical behaviour and detachment from any ideology must be scary. The other is lethal for many EU political structures: the failure of PASOK indicates that any left of center party participating in German inspired austerity risks destruction. With PASOK as an example, left of center parties will become much less willing to participate in "Merkel" inspired politics. This is a problem that is impossible to solve, as far as N. Europe Christian Democrats are concerned.
    Finally two points a) I just heard about a poll that indicates that 84% of SYRIZA voters don' t expect SYRIZA to keep its promises. This seems about right. Remember cynicism is a a greek concept and word. b) LBJ is a bad example. From say 1950 to 1980 the US was in a unique position in history. More relevant is the case of the UK and Cyprus during the 1950's. When EOKA started its campaign the British tried to do a Kenyan job (see the Guardian to see what happened in Kenya during the war of indepedence)MI5 informed the Cabinet that EOKA sleeper cells were ready to kill British politicians in case Geneva conventions were grossly violated. The British made many a threatening statement but no real brutalities of Kenyan nature.

  17. You have got to hand it to the Greeks. They are in a position to control Europe (or the world?) and they still behave as grown up mature persons.