From
by Costas Efimeros
«Europe trashed
democracy»
At the press conference following
Eurogroup yesterday, Paul Mason from Channel 4 asked Djisselbloem "What do
you say to the Greek people, whose democracy you’ve just trashed". Mason,
in an apparently well informed live broadcast one hour before the final deal,
informed his viewers that Greek banks faced the threat of ATM limits on
Tuesday. So what really happened in the last Eurogroup meeting?
================================
Before the Eurogroup meeting
scheduled for Friday evening, a preparatory meeting was held, attended by
Lagarde, Moscovici, Dijsselbloem, Draghi, Schaueble and Varoufakis. Although
the Greek and German finance ministers did not sit at the same table, both participated
in the discussion. The meeting had been called on the understanding that it's
purpose was to prepare a consensus text that would be the basis for the
discussion in Eurogroup, but we have information that the reality was somewhat
different.
According to a Greek official who doesn't want to be named, the Greek delegation were yesterday subject to outright blackmail. Our 'partners' informed us that if Eurogroup doesn't result in an agreement, on Tuesday the Greek government will be forced to implement capital controls. It seemed that they had taken the decision to strangle the Greek economy by cutting off funding to the banks through the ELA system. Furthermore, it seemed that the big Greek banks already knew this. Leaks from the ECB, after all, had suggested that they were preparing for a GREXIT.
Faced with this potential 'Cyprus' scenario, the Greek delegation made the decision to seek an agreement that would buy them some time (which in reality is all that yesterday's agreement got them, since it doesn't actually ensure the necessary cash flow).
Yanis Varoufakis insisted on deleting certain specific terms of the agreement regarding measures to be taken by the government, eventually agreeing that the Greek government would within 48 hours submit a technical report laying out Greece's proposals for zero financial cost reforms. Despite the statements of Dragasaki (the deputy prime minister) and Varoufakis about a list that is 'almost ready', which includes much of SYRIZA's pre existing reform programme, the truth is that the Troika (although we now call them 'the institutions') expects more concrete measures from Greece than the government is ready to put forward.
Following the marathon governmental ministerial council meeting today, it has become clear that completing this list will be very difficult and painful for the government given that the extension of the loan agreement effectively includes control over the legislative work of the government, raising insurmountable obstacles to the implementation of SYRIZA's reform programme.
Greece is in uncharted waters and the optimism of the finance minister about the 'almost certain yes' that they will receive about their list on Monday night might not be entirely justified. The government is banking on the idea that that the EU, ECB and IMF representatives wouldn't agree to Greece sending in their own proposals were they not willing to approve them, but it's not certain that the government will have enough funds to complete their reform programme. They will also need to find another 300 million euro without any outside assistance to cover their pre-existing commitments over the next 2 months. And all of this while the Bank of Greece informally says that more than 40 billion euros have left the country recently.
According to a Greek official who doesn't want to be named, the Greek delegation were yesterday subject to outright blackmail. Our 'partners' informed us that if Eurogroup doesn't result in an agreement, on Tuesday the Greek government will be forced to implement capital controls. It seemed that they had taken the decision to strangle the Greek economy by cutting off funding to the banks through the ELA system. Furthermore, it seemed that the big Greek banks already knew this. Leaks from the ECB, after all, had suggested that they were preparing for a GREXIT.
Faced with this potential 'Cyprus' scenario, the Greek delegation made the decision to seek an agreement that would buy them some time (which in reality is all that yesterday's agreement got them, since it doesn't actually ensure the necessary cash flow).
Yanis Varoufakis insisted on deleting certain specific terms of the agreement regarding measures to be taken by the government, eventually agreeing that the Greek government would within 48 hours submit a technical report laying out Greece's proposals for zero financial cost reforms. Despite the statements of Dragasaki (the deputy prime minister) and Varoufakis about a list that is 'almost ready', which includes much of SYRIZA's pre existing reform programme, the truth is that the Troika (although we now call them 'the institutions') expects more concrete measures from Greece than the government is ready to put forward.
Following the marathon governmental ministerial council meeting today, it has become clear that completing this list will be very difficult and painful for the government given that the extension of the loan agreement effectively includes control over the legislative work of the government, raising insurmountable obstacles to the implementation of SYRIZA's reform programme.
Greece is in uncharted waters and the optimism of the finance minister about the 'almost certain yes' that they will receive about their list on Monday night might not be entirely justified. The government is banking on the idea that that the EU, ECB and IMF representatives wouldn't agree to Greece sending in their own proposals were they not willing to approve them, but it's not certain that the government will have enough funds to complete their reform programme. They will also need to find another 300 million euro without any outside assistance to cover their pre-existing commitments over the next 2 months. And all of this while the Bank of Greece informally says that more than 40 billion euros have left the country recently.
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ο μαντουμανταδόρος-(Β.Π)
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