Whose Idea Was the Grab-the-Cash Move?

Was the grab-the-cash decision made by the Greek government or imposed by the Troika?

Well, I remember very well an interview on Austrian TV about 1-1/2 months ago with Thomas Wieser, an Austrian who heads up the Euro Working Group in Brussels. When asked what he thought Greece should do, his reply was something like: "I think the Greek government should raise all liquidity that they can find in the Greek public sector, be that pension funds, state-owned companies or whatever. The trick is for Greece to make it through to August. Thereafter, Greece's payment obligations are very minimal".

I must admit that I was, then, very surprised by that statement. And afterwards I was surprised that it literally went by uncommented.

So whose decision was it? I don't know but the decision must certainly have pleased the head of the Euro Working Group.

"Greece's Eerie Calm" by Nikos Kostandaras

"To avoid rifts in his party, save face over unrealistic promises he made to voters and underline that he will not be “blackmailed,” Mr. Tsipras prefers to risk a breakup with creditors, which could destroy the economy. Relishing their rise to power, he and his party display intransigence while demanding compromise. They either have unshakable confidence that they will get their way, or blind faith that, as time runs out, others will care more about the Greek people than they appear to and will step in to avert disaster".

A most insightful commentary by Nikos Konstandaros in the NYT: Greece's eerie calm.

Basta Yani! Sign On The Dotted Line!

What gives this article a lot of credibility, in my opinion, is the fact that its author is a supporter of the Greek government and of the Greek FinMin in particular. The author, Mr. Ioannis Glinavos, describes himself as a member of the academic community, a 'Greek patriot living abroad' who has 'no skin in the game'. 

"Syriza does not have a mandate to lead the country to default and/or Grexit. Syriza should not default internally or externally right now and cannot risk the destruction of the banking system by endangering ECB support. Yani, you have no mandate for such a rupture.

A banking failure with the inevitable capital controls, disruption and liquidity problems will destroy what is left of the economy and also drive away tourists at a time when most of the country lives hand to mouth. I repeat, Syriza does not have a mandate for this. 

Yani, you need to sign on the dotted line, agree to whatever you need to agree to secure the release of the bailout money and after the immediate liquidity problems are addressed you need to resign along with the rest of the government and call an election".

I would agree with Mr. Glinavos' proposal.

Martin Wolf's Summary Of Myths Surrounding The Greek Debt Drama

Below is what I consider a rather good summary by Martin Wolf of the FT about myths surrounding the Greek debt drama:

Mythology that blocks progress in Greece, Martin Wolf, FT

Greece - A Democratic Signal For A Return to Reason?

I have just read that, according to a skaigr poll, only 45,5% of Greeks agree with the government's negotiating strategy (down from 72% in February) and as many as 39,5% say the negotiating strategy is wrong (up from 28% in February). Now those are interesting figures in the context of democracy.

The new Greek government have been champions of declared democracy. The election victory and the overwhelming support since then were the means which justified just about everything else.

Will the government pay attention to those 39,5% of Greeks who think the government is on the wrong track? After all, that's more Greeks than ever voted for SYRIZA! Will the government pay attention to the fact that support of their strategy has tanked from 72% to 45,5% in only 2 months? Will the government be respectful of the vast majority of Greeks who definitely want to hold on to the Euro?

We may be about to see evidence as to how much respect the new government has for democracy when democracy doesn't suit its fancy.

Greece --- No Friends Left?

Here is the video of FinMin Varoufakis' presentation at the Brookings-Institute:

A conversation with Yanis Varoufakis

And here is Wolfgang Münchau's reaction to it as published in SpiegelOnline. Just one excerpt: 

"The performance of Greek Finance Minister Yanis Varoufakis at the Brookings-Institute was particularly gross. Instead of explaining his future plans for Greece, he gave once more a lecture about the deficiencies of the Eurozone. What bothers me about Varoufakis is less his middle finger; rather it is his index finger. Varoufakis is correct in many of his views. After all, I have written about them often enough myself. But who does still care about that? One gets the feeling that Varoufakis has little interest in specific financial policies and prefers to walk on theoretical ground.

There was a noticeable contrast between Varoufakis and the Ukrainian Finance Minister Natalie Jaresco who, at the Peterson-Institute across the street, presented in full details all reforms which her country had already undertaken und which reforms would still need to get done. Greece received over 200 BEUR from the EU in rescue loans. The Ukraine just about 2 BEUR. From Greece we got a sermon. From the Ukraine constructive proposals. The Greek government is presently in the process  of alienating those few friends which it still has in Europe and I consider myself to be one of them".

SYRIZA - Heed Prof. Krugman's Recommendations!

What a pleasant new discovery to read articles/blogposts by Prof. Krugman which I can agree with! After his visit to Greece, Prof. Krugman first posted quick Notes on Greece and then a more lengthy analysis Greece on the brink. If no one else can, perhaps Prof. Krugman can convince the Greek government that 

"Greece does not, in fact, face a solid bloc of implacable creditors who would rather see default and exit from the euro than let a leftist government succeed, that there’s more good will on the other side of the table than many Greeks suppose".

If only the Greek government would get around to seeing things this way! Then they might be able to conclude that 

"if Greece can negotiate a halfway reasonable compromise, one that more or less pauses further austerity, it’s hard to see that the risks of exit would be worth it. And the creditors would be equally well served by such a compromise".

Prof. Krugman reminds the Greek government that 

"exiting the euro would be extremely costly and disruptive in Greece, and would pose huge political and financial risks for the rest of Europe. It’s therefore something to be avoided if there’s a halfway decent alternative".

And Prof. Krugman concludes that such a halfway decent alternative is there. It's called compromise on both sides instead of blackmail "to blow the whole thing up" (FinMin Varoufakis).

If the neo-Keynesian Prof. Krugman cannot convince the Greek government, no one else will be able to.