Wednesday, July 8, 2015

Will Greece Play Its Final Card?

Long before Yanis Varoufakis became Finance Minister, he had outlined his strategy in his blog (default within Eurozone but no Grexit; blame others for it). There is one instrument which Varoufakis had emphasized in his writings but which has not been brought into play yet: Greece's veto power at the Council of Europe.

My understanding is that any single EU country can torpedo with its veto decisions at the Council of Europe, which decisions must be unanimous.

Picture this hypothecial case: the Western powers, propped by the US, decide on even harsher sanctions against Russia because of some new emergency which has come up. This time, the US and EU are on the same page; they both want to implement those harsher sanctions.

Except: little Greece says "no"; this time without a referendum. Now that would really set things in motion!


  1. Tsipras then will be a "dead" man.
    He will change his mind when beeing addressed : You feel lucky, hunk!

  2. No doubt that this would create turmoil.

    But I do not think that any Greek government would be so silly to go that route, because the longer term repercussions would not be favorable for Greece.


  3. I thought it needed four dissenting votes to torpedo a qualified majority vote - see ==>> Voting in the Council of the European Union - Wikipedia, the free encyclopedia

    But the EU rules are Byzantine, so better to ask a Greek.

  4. On the one hand it would tighten the emotions agains Greece.
    On the other side a comparable thing might happen as with Camerons veto: The other 27 countries sit together in a multilateral round and decide their veto without Greece. So Greece is not bound to the veto, but thats close of beeing all. And Greece would have burnt even more bridges.

    1. Add On: There is also a (quite conspiracy, so take it with salt) thesis that for Tsipras and Varoufakis still everything works fine, just as planned by the script. They would plan to attack the american wallstreet and the global finance system (You prob. know Yanis "global minothaurus"). And to destabilize the European Financial and Currency System would be actual big fight on the track. The increased suffering of all Greeks in the last months is a collateral damage that has to be accepted for the greater goal - and it can even be used to accuse the evil European transfer and financial system.
      Article with the thesis is only in German, perhaps google translate helps:

  5. Hi Mr. Kastner,

    I think Mrs. Merkel is creating a final end game. Even the above she has properly set up a Council of Europe on Sunday and for what reason? Either sign a deal or Greece is out of the EuroZone and Euro Council. (Not being in the euro council negates any card for Greece to veto anything for sanctions against Russia) Legal or not they will make it legal to kick us out.

    This negates any possible leverage any Greek may have in the back of their mind. From my understanding either this will be the glorious moment where we Greece will sign the biggest " capitulation in history or the biggest economical disaster in modern history.

    If have no contemplation of what is being dealed or not. Mrs. Merkel is in the strong seat regardless how much we have suffered. She has had enough with Greece and wants us in but with full capitulation. (She they will then decide to see what to do in the long run and try to mend the wounds) She has even masterfully played a game of chess with Greece, in such a way she is ahead in every move and when she is in a difficult position she manages to make pawns or units on the Greek side of the board to disappear.

    An orderly exit as you have said would be an ok, but i am quite certain that that, is impossible. Just going to the drachma, i am aware of how many private sector layoffs will come, which leads to no economy for peripheral sectors. We will have an unemployment rate of 50-60% by end August. Utter chaos. With such high unemployment i do not need to mention what that leads to.

    Basically Merkel is even expressing this to Tsipras. You will go back to the stone age and i will not be able to help you anymore. Sign!

    I do not know what lobby's or hidden promises have been given to Tsipras, for the drachma, but history even modern history the west and east has proven what promises mean. Example Smyrni.

    With the signiture Greece, will cease to be Greece. We will be the 1st tool of the new system. I am not sure that this is a good message europe can give to Greeks.

    Regardless of my good efforts, good faith and concern for fellow citizens of Europe and Greece, the turnout as it seems is not bright anywhere and under any option. Even if we survive the signiture, it will be nothing more than can kicking. We will be in the same mess in year. I guess it is enough time for me to get things in order.

    whatever the outcome. It needs to end now. If sunday comes and goes and we are still at, "we are close to and agreement.... europe is a democratic continent... final decisions to be made by next wek and next week and next week and so on..." then I am sorry to say it but the whole political structure of everything needs to go.

    As a wise and elder person, how do you see things just balancing, forget improment? Please enlighten me.


    1. @V: you overestimate the Germans' ability. Merkel is just trying to stay in power, and following the orders of her party. Nothing else. The Germans have no strategy, no economic plans for the eurozone, and are just tired of arguing with those who are more expert and competent in economic issues. They wish to assert German power over Europe. Let's see how that plays out, especially with the UK and France.

  6. First of all congratulation on your Varoufakis "letter". I think it hit the nail in the head. The same applies to the article about the ESM buying the Greek banks. I suspect this is the plan in Brussels, which will kill all socialist pretensions,as with the banks open irrespective of government policy the private sector will simply completely set aside the state.
    However the above is wrong. It is of course possible in theory and I suspect various SYRIZA members are thinking about it. The problem here has to do with what to do in the mean time. The suffocation policy of the EU is working. Cash is running out in the ATM's. Flour is in short supply in Athens. There are empty selves in Supermarkets. If cash runs our (pretty soon) then the government will be in a politically lethal mess. There is no escape. What I suspect is that we will relive the days of the summer of 1974, when the Junta PM was found hiding in a closet and suddenly everybody was a democratic warrior. If your wife was in Greece at the time she must be able to give an account of the utter chaos with empty military bases, nobody in charge and the almost immediate political abandonment of the junta by everybody. Expect,when the 60 € allowance becomes 20 or nothing at all the 61% to become the most vicious SYRIZA enemies.

  7. Interesting speechs at the euro parliment or council today.

    Bild's article on the new program bail out is also interesting.

    What a mess.


    1. Yes, it was quite interesting
      Especially the speech of Tsipras and what he did not say.

      Do you remind his promise that 24 hours after the referendum if voted "No", he would sign a treatment with EZ, and 48 h later banks would reopen?
      Nothing of both happened, but it is even worse!

      Even today, where he had a big European stage, where he could and should publicly present proposals that Europe would not be able to refuse - nothing. No substantial proposals, only cloudy rhetorics to play blame game against Europe.
      Obviously he still has not even an offer that anyone could subscribe. His promises - only lies.

      It gets harder and harder for me to believe that Tsipras longs for a deal to remain inside Euro, not to leave Euro.
      IMHO its time to stop the farce. If Tsipras wants a Grexit and the Greeks support him in their referendum, so it may happen. The sooner it happens the sooner the economic standstill in Greece may end.

      By the way, I liked the speech of the liberal Guy Verhofstadt: "You are talking about reforms, but we never see concrete proposals."

      As well the Green Rebecca Harms: "I thought that Tsipras would come along here and say this is how I’m going to go about it with my people. We want to have your views on a fair tax system, I thought you were going to present your views on a fair pension system."

      Did Tsipras afterwards offer proposals. Nope. Nada.
      Perhaps manana.

  8. It would surely get things moving. The others or the only economic important ones, would agree on the sanctions. They may even tell Greece they are out, "and see you in court in 5-10 years time", if Greece can afford legal help. It would most likely also temper European enthusiasm about humanitarian help. It is one of those thing he would later think back at as "at the time it seemed as a good idea". Tsipras is right in one thing though, Europe has a problem, it's called Greece.

  9. The correct name of the meeting of heads of state in the EU is "European Council". The Council of Europe is an international body quite separate.

    The use of a veto is relatively common in the meetings, but is usually exercised by a great power such as Germany, France or the UK. That does not alter the political and legal right of any small state to use a veto. This depends on other political pressures put on smaller countries, to go along with the great powers.

    Given that Germany is blocking any solution to the Greek crisis, it is very likely that Tsipras will provoke a constitutional crisis of the EU. Varoufakis always warned that the new Greek government would not accept to be treated in the abusive way that previous ones were.

    Now is the endgame not only for Greece, but also for the EU. Germany has only itself to blame, because it has been very clear from the first days of the Syriza government that they would assert the sovereign rights of Greece. If they have nothing to lose now, they will assert them aggressively. It is up to others to make peace, as opposed to lecturing Greece on economic issues that they themselves are incapable of dealing with.

  10. With General Varoufakis out of the game, Tsipras has to abbandon the Varoufakis's strategy. He can still sign a memorandum, grab the 35 billion investment package and bring the country out of recession and take the glory.
    He will have to deal with internal problems within the party, but that's another problem. In alternative, he can give in to Lafazanis and go to drachma. But it's easier to manage a memorandum with 35 billion, than a drachma recovery.

    1. May I suggest a correction

      "But it's easier to MISmanage a memorandum with 35 billion, than a drachma recovery.."

    2. To AnonymousJuly 9, 2015 at 12:17 AM

      Believe me, i don't exclude anything with SYRIZA, but the hardest part of the adjustment, was already made by Tsipras' predecessors without any investment package. In comparison, Tsipras must do much less effort, pass much fewer unpopular measures and he has an investment package. Greece in Doing business index went from rank 108 to 62 and this was done by those that Tsipras was naming traitors. If Tsipras finally gets a debt restructuring that solves doubts about Grexit, the efforts of previous goverments will bare fruits, for Tsipras to claim as his.

      A journalist on Skytv, yesterday mentioned that an anonymous govermental source ,simply told him that, as things have turned in this mess now, Tsipras will sign memorandum, because he doesn't have a plan for drachma and he doesn't think that anyone can handle this situation to make a politically viable return to the drachma. Meaning, he is scared that he will have to pay the ultimate political price if he goes to the drachma. And so he won't.

  11. I think you mean European Council. I know it is confusing, but the Council of Europe is something completely different.

  12. Are you endorsing this kind of political blackmail, Klaus? Don't you think that governments representing about 500 million people will find a way to make this a very costly act of treason for tiny Greece?