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Greece has now requested ESM funding. There's no word about whether Greece has complemented this request with a structural reform proposal.
Apparently, the European Finance Ministers who showed up for today's discussions were stunned by Greece's failure to produce a plan. From The New York Times:
Greece’s prospects for staying in Europe’s currency union darkened on Tuesday after the new Greek finance minister showed up for an emergency meeting in Brussels without a specific new proposal, leaving European finance ministers aghast and unable to judge whether a deal for another bailout package was possible...
Greece’s delay in outlining what it wants, the latest in a long series of surprise moves by Greek negotiators that have shredded the European Union’s rigid procedures and etiquette, means that Athens lost at least another day in an already tight schedule to try to break months of deadlock and unlock funding so that it can reopen its banks and avoid a potentially calamitous financial collapse.
http://www.nytimes.com/2015/07/08/b...st-column-region®ion=top-news&WT.nav=top-news
As noted earlier, the current Greek government's lack of urgency is shocking. Of course, it is plausible that the current government is seeking to exit the Eurozone, but in a fashion in which it could try to evade responsibility for an outcome, which remains widely opposed by Greece's people. It's difficult to attribute all of the responsibility for today's failure to utter incompetence, especially as the Greek government was explicitly advised that it needed to come to Brussels with a proposal.
Although Greece is expected to formally request funding from the European Stability Mechanism tonight or tomorrow, it will probably be difficult to get the unanimous support required should the current Greek government fail to offer some credible demonstration that it (1) understands the magnitude of risks facing its people from a failure to reopen banks, (2) wishes to make a serious effort to avert that situation, and (3) is willing to assume the responsibility for launching and sustaining that effort. Today's inaction may well have further undermined support among the countries Greece needs, unless, of course, the current government really wants to abandon the Euro.
I cannot remember exactly, but I am not sure that the esm requires unanimity or even approval by the owners. The board could lose their jobs, if they acted out of line, but it is not clear, what the owners really want behind the curtains.
Sunday is the big summit apparently. Not just euro group, but all 28 eu countries called to convene. Grexit seems to be the official line if Athens doesn't present anything.
Maybe Cameron has the answers?
The latest news said Greece will present a plan tomorrow, would be able to get it through their parliament by Sunday, and the odds of a compromise solution have dramatically increased. Fingers crossed. Of course a zillion things can still go wrong but there seems to be some hope.
From the ESM's FAQs:
The most important decisions taken by the Board of Governors require mutual consent (unanimity). These include decisions to provide stability support to an ESM Member, the choice of instruments, conditions and terms of such support, calling in authorised unpaid capital (with the exception of emergency capital calls), changing the authorised capital stock and adapting the maximum lending volume.
http://www.esm.europa.eu/pdf/FAQ ESM 041020121.pdf (A5, p.2)
No, the Greek problem existed long before the debt crisis. Also, the rest of the EU seemed to be able to weather the debt crisis OK.
What about the left wing sychophants that blame all of this on the Banks and the Creditors ?
Those Che Guevara flag waving morons who blame " austerity " when no one in their right minds would lend Greece a dime ?
They're the one's who've turned this into a cluster.
The Greek banks are giving out a maximum of 60 Euros a day and are forbidding any wire transfers out of Greece.
You know where they're getting the money to do that ? They're taking it from people's safe deposit boxes.
I don't understand what any of this means. The greek problem existed before the debt crisis? Isn't the greek problem the debt crisis?
Also, it is not true that the rest of Europe has weathered the debt crises ok. The peripheral European economies have mostly been performing very poorly.
so you might have a point.Well the news is usually uncannily predictive
Guy Verhofstadt said:1. End the clientelist system in Greek politics i.e. party cronyism and rewarding loyalists with jobs.
2. Downsize the public sector
3. End privileges - privileges of the military, the orthodox Church, the Greek islands and the political parties.
You need to come forward with your reform pacakge, it is not a chicken or egg situation.
Pitella said:We socialists will never except Grexit, ever!
manfred webb said:what if eurozone countries had own referendums so don't have to keep shovelling cash to Greece?
Rather than holding referenda, other member states have got on with reforms and fiscal consolidation your rule has been catastrophic.
Don't lie to people, debt cut won't hurt bankers, it will hit nurses in Slovakia and public officials in Finland
Nigel Farage said:If you have got the courage you should lead the Greek people out of the eurozone with your head held high.
Yes it will be tough for the first few months, but with a devalued currency and friends all over the world you will recover.
There is a new Berlin Wall and it is called the euro.
I don't understand what any of this means. The greek problem existed before the debt crisis? Isn't the greek problem the debt crisis?
Also, it is not true that the rest of Europe has weathered the debt crises ok. The peripheral European economies have mostly been performing very poorly.
The Greek people don't want to leave the Euro, but they won't take any more of Europe's lethal medicine either.
Well, it IS mostly the fault of the banks and creditors, so blaming them makes a lot of sense.
I don't own a Che Guevara flag and have no interest in ever doing so.
Austerity IS the problem.
A growing greek economy would be far more capable of paying off any debts, but austerity has led to a great depression in Greece.
I figured I would respond in the same format as you.....
OK, that made me laugh.One big issue I see here is that Greece may become a hub for Isis and other terrorists. What better to use as a switching station than a place with people who look like you, a nation not really all that threatening, and then with money you could just hop to any nation you want.
Your analysis of Spain is grossly wrong. Where not uninfluenced by the US origin crisis, they'd created their own real estate bubble to the point of insanity and it finally burst. The Spanish crash was to the far larger extent of own making.This problem is someone else's fault. There was no Eurozone debt crises until banks and financial institutions crashed the global economy and created one. Of the countries currently facing crises, only greece even had moderately high debt before the economic collapse (t was 107% of GDP). That is high, but not very dissimilar from many other countries whose economies are doing fine and have done fine in the past. In Spain, debt was 26% of GDP, which is very low, and the Spanish actually ran surpluses in the lead up to the collapse. Their crises is 100% created by outside institutions creating an economic collapse. Greece on the other hand had a larger role to play in their own downfall, but even so most of the blame lies at the feet of the financial institutions responsible for the collapse of the economy and the wealthy Eurozone countries that have imposed insane austerity measures on Greece. If those austerity measures hadn't been imposed, there is no way the Greek economy would have contracted by 25%. How can creditors expect a country to pay its debts, while imposing on that country measures, which lead to a 25% decrease in economic output. It is an impossible position Greece is in. It is bad economics. The only reason it is being done, is to protect the powerful (the creditors) and because there is a moral crusade under way to punish the Greeks for their failures, despite the fact that many of their problems are not of their own making.
I've pointed out elsewhere that management of the common currency is not decided in Athens and not by Greece alone. The same thing applies to whether a community of nations helps an ailing member out and how. I don't recall that the rest of Europe got to vote in that particular referendum, despite being affected by it.Of course considering the Democratic will of the Greek people would be cowardice in the mind of right wing sycophants for the powerful.
Since I said I'd respond again when something of sense comes, here goes.I think it's a wrong one. I've been watching masses of coverage and every time a Greek person, from politicians to professors to people in the street, they've said, "We got ourselves into this mess," more or less. The point is, the Troika have been digging them deeper into it with their failed solutions, not helping them dig themselves out.
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