Greek PM calls new election

Written By: - Date published: 6:34 am, August 21st, 2015 - 51 comments
Categories: accountability, capitalism, class war, International - Tags: ,

A bold move by an administration in an impossible position:

Greek bailout: Alexis Tsipras steps down to trigger new elections

Prime minister announces his resignation and paves way for general election, with 20 September predicted as most likely date for a poll

Seven months after he was elected on a promise to overturn austerity, the Greek prime minister, Alexis Tsipras, has announced he is stepping down to pave the way for snap elections next month.

As the debt-crippled country received the first tranche of a punishing new €86bn (£61bn) bailout, Tsipras said on Thursday he felt “a moral obligation to place this deal in front of the people, to allow them to judge … both what I have achieved, and my mistakes”. ….

Read on for more in The Guardian.

51 comments on “Greek PM calls new election”

  1. Draco T Bastard 1

    Interesting…

    I wonder if Syriza will now campaign on dropping out of the Euro. It’s the only choice that Greece has to return to prosperity.

    • nadis 1.1

      They should but its unlikely. Recent poll had Tsipras with 68% approval rating. Greeks clearly want to remain in the Euro. Bailout money is flowing with the Bundestag passing the bailout plan, so short term all the good things are happening.

      This election is about strengthening Tsipras position. Syriza will most likely fracture and the hard left leave to form a new minor party with little electoral impact. Right now, campaigning for Euro exit is an electoral non-starter, and never has been a solution the Greeks would have embraced any time in the last 5 years.

      Personally I think Greece will eventually leave the Euro – sometime in the next 12-18 months. Eventually the Germans will lose patience with the lack of tax and bureaucratic reform in Greece, and the Greeks will finally refuse or be unable to meet Euro demands for reform. Syriza is just as bad as previous governments in terms of cronyism, favouritism and corruption. The real irony is the whole swag of EURO zone countries that are no richer than Greece that are exporting aid to Greece (Slovenia, Portugal, Malta, Slovakia, Estonia, Lithuania, Latvia)

      Devaluation is their only real chance to return their economy to sustainable policy settings but unless they can implement serious internal reforms they are more likely to be Zimbabwe or Venezuela story rather than an Iceland story. Devaluation only works if the entire econmy and particular it’s export sector is able to capture and invest the benefits. Aside from tourism, Greece has no export sector.

      Interesting that the IMF is still refusing any kind of role in Greece despite European pressure, until the Europeans allow a significant reduction in debt burden.

      • Colonial Viper 1.1.1

        Personally I think Greece will eventually leave the Euro – sometime in the next 12-18 months. Eventually the Germans will lose patience with the lack of tax and bureaucratic reform in Greece, and the Greeks will finally refuse or be unable to meet Euro demands for reform.

        The Greek crisis has been very profitable for German industry and the German economy as a whole. It has kept the Euro weaker increasing German export competitiveness, and kept Bund rates low saving the German Government a huge amount in interest payments.

        The latest bailout package passed with a large majority through the Bundestag.

        And German companies will now be running Greece’s airports.

        What’s not to like, from the German point of view?

        • nadis 1.1.1.1

          Germany has done well out of the Euro but that’s not Greece. It is because of any country that has lower productivity growth than Germany – i.e., all of them.

          Greece has nothing to do with keeping bund rates low – that’s entirely due to German creditworthiness and now QE. In fact Greece and other countries have profited significantly from piggybacking on Europe’s term structure. Only two countries (France and Germany) have a lower debt burden (in terms of interest cost/per gdp) than Greece. Spain, Ireland, Portugal and Ireland all pay MORE than Greece. The average term of Greece’s debt is 16.5 years.

          Europe is in a middle land that ultimately doesnt work for anyone – they either neeed to be more like the US or less like the US, but where they are now doesnt work. Here’s a good article

          http://www.bloombergview.com/articles/2015-07-13/europe-s-insane-deal-with-greece:

          • Colonial Viper 1.1.1.1.1

            Greece has nothing to do with keeping bund rates low – that’s entirely due to German creditworthiness and now QE.

            ?

            You talk as if the Greek crisis has not been a major issue affecting investor confidence in the Eurozone.

            • nadis 1.1.1.1.1.1

              no – i talk as though low bund rates have nothing to do with the greek crisis. They were low beforehand and low afterward.

              • Colonial Viper

                I really have had enough of your bullshit pretend knowledge.

                Why don’t you go argue with Forbes and the Wall St Journal:

                Germany has a national debt, just like just about every other country does. So, it must pay out interest to those who hold that debt. And one of the effects of the Greek debt crisis has been that people have deided they’d really rather not be holding either Greek or other eurozone periphery debt. And that they really would like to be holding Bunds, that’s the German government debt. More people buying something pushes up the price and with bonds that’s the same as saying that the yield falls. And that’s exactly what has been happening. On short term debt (bills) Germany has been paying pretty much nothing (0.05% and the like, in normal terms for bonds this is spit and no more) and a little more for 10 and 30 year bonds.

                Now of course this doesn’t change by one single iota the amount that Germany must pay in interest on bonds it has already issued. But they do mature, in stages, and the country then issues more bonds to repay those that are maturing (Germany hasn’t had a budget deficit for a few years now, so it’s not issuing any to cover an ongoing deficit, it’s just refinancing the old stock, even then it’s running that stock down). Those refinancing bonds pay the newer much lower interest rates. And the calculation is that the interest savings have been as above, 300 basis points or 3%.

                The exact numbers? No, I’m not going to chew through them and it’s not necessary for you to either. We can do a rough check on this. Germany expects to issue around €180 billion of bonds this year, the longer bonds will be rolling over longer bonds which carried much higher interest rates. The bills, the short term stuff, will be rolling over bills that have already been paying the very low interest rates. But just back of the envelope stuff, call that €1 trillion of bonds refinanced over 5 years and that 300 basis points lowering of the issuance yield. Yes, OK, we can see that €100 billion sounds about the right ballpark for the savings.

                More detail here:

                http://www.forbes.com/sites/timworstall/2015/08/11/despite-losing-tens-of-billions-of-e-germany-is-making-a-profit-out-of-the-greek-crisis/

          • Draco T Bastard 1.1.1.1.2

            Europe is in a middle land that ultimately doesnt work for anyone – they either neeed to be more like the US or less like the US, but where they are now doesnt work.

            You’re correct in that the Euro and Europe isn’t actually working for anyone but they most definitely do not need to be more like the US. Why would anyone want more poverty, more violence and generally more of all the negatives? Hell, from what I can make out it is Europe trying to be more like the US that is the problem.

        • Jones 1.1.1.2

          Why buy the cow when you can milk it for free? Greece will be exited from the Euro when they have nothing left to sell to the German bankers.

        • dukeofurl 1.1.1.3

          Didnt they start running the airports back in 41…

          They even pioneered the tourist trade by sending passengers by air to Crete.

  2. Paul 2

    I just hope Syriza offers a radical solution for the Greeks to free them from the tyranny of corporate rule.
    The appalling treatment of the Greeks by the European bankers may sadly see the extreme right getting a foot in the door, as desperate people go for extreme measures to solve their plight.

  3. Blue Horsehoe 3

    Latest example of the cartels ability to overthrow elected governments

    • nadis 3.1

      No – Tsipras is doing this for consolidation of control reasons and will get re–elected.

      • Blue Horsehoe 3.1.1

        YES – He has failed to prevent austerity being forced onto Greece

        I understand what you’re saying, and you are probably correct that is what Tsipras has done

        This outcome was not his choice, tells you his hand was forced

        • nadis 3.1.1.1

          Why not his choice? Tsipras wants a mandate to continue with bail out program. The way to get that mandate is to win an election. sounds like his choice to me.

          Greece has two obvious choices.
          1.Accept the bailout terms, stay in the Euro.
          2. Leave the EUR, accept transitional aid, stay in the EU. Restructure debt. Regain sovereign control over all of economy.

          Both choices are on the table – the majority of the Greek population and Greek politicians are choosing #1. It’s called democracy.

          What isn’t on offer is choice #3.

          3. All the good bits of #1, all the good bits of #2, none of the bad bits.

          • Colonial Viper 3.1.1.1.1

            Germany should listen to the IMF and massively haircut the amount that Greece owes, instead of deliberately forcing Greece’s economy to contract further.

            • Gosman 3.1.1.1.1.1

              The majority of the German electorate it seems don’t want to give the Greek government a haircut it seems. At least there isn’t any major grass roots pressure in Germany demanding that their politicians do so.

              Syriza’s major mistake was to assume that simply having the Greeks vote for something like this the other nations of the Eurozone would agree. It suggests a degree of naivity or stupidity on their part that would be laughable if it didn’t have such a tragic outcome for the Greeks themselves.

              • dukeofurl

                The NSA would have been reading their internal communications and tipped off the Germans – too keep them sweet after they were sprung doing the same to Merkel.

                Syriza should have borrowed the GOP tactics in congress. Shut it all down, paralyse the complete EU system and the only comprise is every demand met.

  4. Gosman 4

    You are aware that Tsipras is likely to campaign FOR the reform programme he has signed up for aren’t you?

    I find the irony of an anti-Austerity party going to the polls to seek a mandate for austerity simply amazing.

    • Colonial Viper 4.1

      A small country of 12M is being crushed underfoot by the financial powers of Europe. What you see now is the outcome the financial powers of Europe wanted.

      What’s amazing about that? Just a simple variation of the standard Economic Hitman debt/economic extortion routine.

      • Gosman 4.1.1

        I keep telling you, and you keep ignoring it, Greece is free to reject the bail out terms and conditions. They will fall out of the Eurozone (and possibly the EU) and their economy will suffer much more than it is currently in the short term. They have that option but Syriza doesn’t want to take that for some reason. Why do you think that is?

        • Colonial Viper 4.1.1.1

          The Syriza electoral mandate was to stay in the Eurozone. Many Greeks still seem to want to stay in the Eurozone at any cost to their fellow countrymen.

          • Gosman 4.1.1.1.1

            That is correct. And the only way to stay in the Eurozone is to accept the conditions imposed by the other Eurozone members. It is quite simple. The only way the Greeks could hope to ‘vote’ against austerity is if the other nations took pity on them and gave in to the demands for more money without the same sort of strings attached. The Northern European members (more importantly the majority of their electorates) weren’t convinced by that argument. Syriza failed to end Austerity because the constinuency they had to convince wasn’t the ones that voted them in.

            • Colonial Viper 4.1.1.1.1.1

              The only way the Greeks could hope to ‘vote’ against austerity is if the other nations took pity on them and gave in to the demands for more money without the same sort of strings attached.

              Don’t be an idiot Gosman. Varoufakis and Tsipras weren’t asking the Eurogroup for “pity” – they were asking the Eurogroup for terms and conditions which would actually allow the debt to be paid back by growing the Greek economy.

              • Gosman

                Except the other nations didn’t trust the Greeks to do what they said they were going to do. The main reason for this is probably the Greek track record at following through on economic reforms. Billions of Euro’s have been transfered to the Greek state in the past (and continue to do so) from the rest of the EU. Instead of building a dynamic and productive economy the Greeks seem to have squandered much of this. Syriza’s reform programme was insuffiently detailed to convince the other nations that their new proposed way should be financed by them.

                • dukeofurl

                  LIke what reforms?

                  Oh yes, they have a closed market for pharmacys, which must be owned by a pharmacist and they cant own more than one.

                  WHich is exactly the situation in NZ.

                  Another reason for the government deficit spending was the high proportion of GDP spent on defence, up to 5%. Thats what belonging to Nato does to a country

          • Draco T Bastard 4.1.1.1.2

            The Syriza electoral mandate was to stay in the Eurozone.

            That was the electoral mandate several months ago. Things may have changed since then.

        • Draco T Bastard 4.1.1.2

          They will fall out of the Eurozone (and possibly the EU) and their economy will suffer much more than it is currently in the short term.

          Actually, I figure they won’t if they do it right.

          • Gosman 4.1.1.2.1

            Yeah but your ideas on economics are so radical not even the Socialists in places like Venezuela or Cuba follow them. It is unlikely the Greek government would do something along the same sort of lines.

            • Draco T Bastard 4.1.1.2.1.1

              Yes, it’s a major problem when reality is considered radical.

            • dukeofurl 4.1.1.2.1.2

              And your (Gosman) ideas are so impractical that when you get a neo-liberal MP, like Seymour, he has to disavow his policies as unworkable and give their constituents what they want.

    • Blue Horsehoe 4.2

      Gossip seems to be pleased with the crushing of humanity, death and misery

      DICK

      • Gosman 4.2.1

        No, I am truly applalled that the inevitable result of Big Government policies coupled with corruption and incompetence has led the Greeks to such economic ruin. I am merely pointing out (and have been dooing so since before Syriza was elected the first time) that the Greeks have little choice given their desire to keep being part of the Eurozone and EU.

        • Colonial Viper 4.2.1.1

          “Big Government” is not the issue: the issue is a financial system reliant on debt, and on debt to fund more debt.

          • Gosman 4.2.1.1.1

            Where did the money from the debt go C.V? Answer that question before you blame the financial system. If it went to rich prick Greek corporates then the Greek State should just take over the assets of these companies to recoup it. Syriza isn’t doing that for some reason.

            • Blue Horsehoe 4.2.1.1.1.1

              You have no fucken idea where the ‘money’ went either dickhead, despite your make believe financial nous

              Stop pretending the Greeks are in control, they clearly are not

              Hey look, the worlds under hundreds of Trillions on fiat debt

              Where did the ‘money’ go

              Knob end

              • Colonial Viper

                The answer to Gossie is quite clear: most of the money from that debt went to the 1%, and went to repay French and German banks as well as the French and German Government.

                • Blue Horsehoe

                  Yes, it is very clear where the money has gone

                  That gossip continues to pretend otherwise while smearing his shit around, reflects poorly that his handle has not managed to be permanently banned yet

                • Gosman

                  Then the Greek government should be demanding the 1% should give the funds back. Why isn’t Syriza asking for the money back or seizing the 1% Greek Assets?

                  • Colonial Viper

                    Syriza has no ability to seize bank accounts or financial portfolios held in Switzerland, the Caymans or Bermuda.

                    The Greek Government operates by rule of law, not by arbitrary expropriation.

                    Further, the Greek oligarchs still wield massive power in the country.

                    • Gosman

                      It isn’t arbitary expropriation. These funds were attained by corrupt methods (that is the only conclusion that can be reached from your position). They are therefore the ill gotten gains of crime and can be forfeited to the State. Even right wingers like me agree with that. As for them being in Tax havens like the Cayman islands (which I suspect you have no evidence for this) the Greek Government should be shouting this from high heaven. Given the fact the rest of the Eurozone would love it if the Greeks could finance their own budget themselves they would have a hiuge amount of support in applying pressure on these tax havens.

          • Gosman 4.2.1.1.2

            This is where both you and I will be in total agreement. If the debt that Greek State built up was corruptly used to line the nests of the rich and powerful then the Greek government now should use all in it’s power to make sure these people pay and their assets are seized. I see very little in the way of the Greeks doing this. Instead I see silly calls for multi-billion compensation from Germany for WWII, They should tackle the issues in your own country before they try to get money from others.

            • Colonial Viper 4.2.1.1.2.1

              The Greek government has no power to seize bank accounts held in Switzerland, Bermuda or the Caymans.

              Instead I see silly calls for multi-billion compensation from Germany for WWII, They should tackle the issues in your own country before they try to get money from others.

              Why? Germany should repay its debts if it is not willing to forgive debt like it was forgiven.

              • Gosman

                Forget them not having the power to do so. They are not even calling for the funds to be given back. Also these individuals are largely based in Greece. The Greek authorities could arrest them or at least seize their Greek assets. They are not even doing that.

                • Colonial Viper

                  The Syriza Government is not a government of pirates or bandits, Gosman.

                  But let’s get to the point – the Eurogroup have refused to give Greece reasonable and economically rational terms and conditions.

                  And Greece will pay a heavy price for its lack of negotiating power and leverage.

                  • adam

                    Greece does have one piece of leverage, and it’s quite a big piece of leverage. Crete and the NATO base there. That base means that NATO forces can fly pretty much all over the middle east and into south Russia.

                    Gosman, you need to look where a lot of this money from all the loans has/is going – do a google search – you may be shocked. Maybe not. I don’t know your opinion of spending that amount of money, on a portion of the state?

                  • Gosman

                    Demanding illegally attained funds be returned to the State (essentially what they are doing with Germany over the Nazi Debt) is not acting like a pirate.

                    I believe you can’t face the fact that the money did not go to the 1% like you believe but was actually spent quite legitimately by the Greek Government on things such as over staffed Hospitals and generous pension schemes.

                    Because it doesn’t fit your meme of “evil” Bankers and Rich Pricks screwing the nation you create this fiction of the funds being hidden away in overseas bank accounts in tax havens. The cognitive dissonance between your position and reality is wide indeed.

            • Tricledrown 4.2.1.1.2.2

              Goldman predatory practice’s lead by Goldman Sachs and its credit ratings lackies of bribing politicians bankers to load up Greece with debt it could never repay.
              Why not sure and arrest these companies.
              It won’t happen the head of Goldman Sachs Europe who was behind this corruption was made The Eurozone finance minister!
              Which suggests their is corruption at a much higher level.
              Lagarde Strauss Kahn and other world bank IMF officials found to be corrupt.
              Corruption is the problem.Greek politicians were wined and dined by these corrupt officials on the super yatchs of non taxpaying Greek tycoons.

              • Gosman

                Again I will ask you some simple questions.

                Where did the funds from this debt go?

                Why isn’t the Syriza government demanding the people who received it pay it back?

                • dukeofurl

                  So debts are never written off ?

                  Pleeeese. If all the local Banks didnt write off debt and forever kept it on their books waiting for payment- it would sink them.

                  Do you think the banks that lent money to the buyout for TV3 will ever get their money back? A quick visit to the company’s office ( electronically speaking) and it disappears and a new company rises from the ashes ( leaving IRD in the lurch as well!!!)

                  Then we start on US and UK banks…. but I dont have the time.

                  Then there’s GM, ….where did the money go you ask ….or not

                  If only you ran your beady eye over accepted capitalist practices

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