Greece crisis: Europe on edge over snap election

[beorhthelm]

Having spoken to my friends in both Athens and Crete today, they are all adamant that Merkel will blink first, and Greece will get what they want.

a commentry i read is that Merkel might want to blink, show some compasion in the role of benevolent leader of the EU, but the damn Greeks arent giving any leeway. they are negotiating for many concessions from a position of weakness, such as this insistance on a temporay loan now to cover a few months while the real negotiations can take place (the other parties are saying this is the only negotiations). on the other hand she probably doesnt have the final say. her own Finance minister is strongly opposing the Greeks, the Dutch EU finance bod isnt giving in, and the Italians, Spanish, Portugese governments are opposing the Greeks because they fear any weakness will see their local Syriza-a-likes gain power. the Greeks have to back down to get something. with the ECB QE ready now, the rest of the Eurozone can probably absorb a Grexit, it is frankly the least of their worries with deflation and economic stagnation all around.

i dont believe the point about leaving the EU is true, as there is no requirement for EU members to be in the Eurozone, only that new members join the Euro. as there's no official mechanism to leave the Euro, there cant really be any rules.

 

[Buzzer]

i dont believe the point about leaving the EU is true, as there is no requirement for EU members to be in the Eurozone, only that new members join the Euro. as there's no official mechanism to leave the Euro, there cant really be any rules.

I think the law is greyer than you have said.

While the silence of the exit clause on the procedures for the withdrawal of a euro area MemberState is, at first sight, understandable it has been criticised for threatening the stability of the euro as well as for the possibility that it might lead to a proliferation of ‘disaster clauses’ to cater for changes in the composition of the euro area. More importantly, the exit clause’s silence is problematic because it leaves room for speculation on the extent to which there is also a right of withdrawal from EMU and whether such withdrawal would necessarily be linked to a Member State’s withdrawal from the EU or could be independent from it.

http://www.ecb.europa.eu/pub/pdf/scplps/ecblwp10.pdf (page 28)

 

[Mellor 3 Ward 4]

Under European law as it stands, abandoning the euro probably also means leaving the European Union. A lawyer at the European Central Bank wrote in 2009 that "withdrawal from EMU without a parallel withdrawal from the EU would be legally impossible".

That's from the BBC website.

 

[beorhthelm]

I think the law is greyer than you have said.

it is the greyness thats the point, there isnt a clear, defined article that states if you leave EZ you must leave the EU. theres wiggle room for a exit to be negotiated while remaining in the EU.

 

[Buzzer]

it is the greyness thats the point, there isnt a clear, defined article that states if you leave EZ you must leave the EU. theres wiggle room for a exit to be negotiated while remaining in the EU.

Ah. I misunderstood. Apologies.

 

[beorhthelm]

I think the law is greyer than you have said.

it is the greyness thats the point, there isnt a clear, defined article that states if you leave EZ you must leave the EU. theres wiggle room for a exit to be negotiated while remaining in the EU. in the past many pro-europeans have said it cant be done mainly because they wanted to discourage the option, yet here we are and i dont recall any commentor recently state catagorically that Grexit means an exit from the EU. i believe there are a number of parties across Europe that want out of EZ while remaining in EU, which would be an odd position if it wasnt possible.

 

[cunning fergus]

Genuine question. Has he said anything at all to suggest that he is interested in our opting into the currency? It seems that our joining the Euro is completely off the table politically speaking. I don't imagine that even the pro-European LibDems are particularly trumpeting signing up to it right now.

That may ultimately be true, however I have yet to hear from Ed Miliband that it is a Labour Party policy to support Turkey's acessation to the EU.

He and his party are evidently working tirelessly to secure this situation (see below), accordingly given the prominence of UKIP and his decision to deny the UK electorate an EU referendum I think the UK electorate deserve to hear him make the case more publicly don't you?

http://ceftus.org/2012/07/04/message-from-ed-miliband/#.VOOzScqQGhA

Do you reckon this policy will be in their manifesto?

 

[jakarta]

it is the greyness thats the point, there isnt a clear, defined article that states if you leave EZ you must leave the EU. theres wiggle room for a exit to be negotiated while remaining in the EU. in the past many pro-europeans have said it cant be done mainly because they wanted to discourage the option, yet here we are and i dont recall any commentor recently state catagorically that Grexit means an exit from the EU. i believe there are a number of parties across Europe that want out of EZ while remaining in EU, which would be an odd position if it wasnt possible.

Just goes to show the arrogance of the Federalists doesn't it?

Under their way of thinking once you have signed up to the Great Leap Forward you couldn't possibly want to leave.....

 

[TomandJerry]

Prime ministerial aides were quoted in the Greek media as saying: “We are considering requesting a sixth-month extension of the loan agreement [but on the basis that] it is clearly distinguished it from the programme [of conditions] set out in the memorandum of understanding. We are not going to ask for an extension of the programme or memorandum. The Greek government won’t accept ultimatums.

”Greece was showing signs of buckling to intense pressure from its eurozone partners on Tuesday night as it prepared to seek an extension of a loan agreement for up to six months. Faced with a Friday deadline for agreeing to an aid package drawn up by its 18 partners in the single currency, Athens made the first concessions in the game of brinkmanship by admitting it would have to continue accepting financial support when the current bailout expires at the end of the month.

 

[Buzzer]

A few reasons why the Germans might have the hump with the new Syriza government:

The finance ministry in the new Greek government's very first decision was....creating 600 (yes, SIX HUNDRED) cleaning jobs within a single ministry. https://uk.news.yahoo.com/cleaning-ladies-first-winners-anti-222507234.html#Ul5XzmR

They're still not getting to grips with their pensions crisis with news that 4 in ten new pensioners who received their very first pension this month are under 62 and some as young as 51
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_16/02/2015_547339

And closing the tax loopholes that have made Greece a laughing stock when it comes to tax reforms across Europe? You'd think that this would be where Syriza could make some easy concessions to the EU and stick to their extreme left principles. Not so...Varoufakis has already ruled out ANY changes to the current VAT rates or rules.
http://www.capital.gr/tax/news_tax.asp?id=2094262

I don't think the Greek government is living in the real world if it thinks that creating public sector jobs and doing nothing to tackle the pensions and tax systems in their country is the way forward. It begs the question of why the EU should even consider assisting with this idea of a bridging loan if this is what the money will be spent on. Madness.

 

[TomandJerry]

Germany has rejected Greece’s proposal for an extension of its loans, saying that it fell short of the conditions expected by the rest of the eurozone.

The shock announcement from Berlin came just hours after Greece filed a formal request to its eurozone partners to extend its loan agreement, in the hope of averting a cash crisis.

Eurozone ministers are due to meet on Friday in an attempt to hammer out a deal. It will be their third attempt in 10 days to resolve a standoff that has sent jitters across the continent at the prospect of a messy Greek exit from the single currency.

The European commission had described the Greek proposal – widely seen as a climbdown on some of Greece’s key demands – as a positive sign that could pave the way for compromise.

But Germany said the Greek plan failed to meet eurozone ministers’ demands that Greece stick to its bailout programme – a set of demands laid out on Monday at an acrimonious meeting in Brussels that failed to end the deadlock.

“The letter from Athens is not a proposal that leads to a substantial solution,” finance ministry spokesman Martin Jaeger said in a statement.

 

[Buzzer]

Things go from bad to worse for Greece. 5 very good articles on the current situation:

Why the Greek plan so far has failed In a nutshell - they've gambled on the Eurozone caving in to popular support for their anti-austerity argument. The Germans, Slovaks, Finns and Spanish have all steadfastly refused to budge. "We will not be humiliated again in Europe" - err, don't count your chickens just yet.

Greek government could go down all guns blazing C4 article that speculates that the Greeks might just leave rather than admit defeat

Greek ministers defiant Telegraph article supporting the C4 position and speaks of Greek defiance and flat refusal to accept terms of austerity bailout.

Why Germany isn't bluffing Bloomberg article talks of German exposure to a Grexit and why the current situation is not necessarily bad news for German banks

Ordinary German attitudes to Greece Highly respected think-tank looks at German voter opinions. The Germans are firmly behind their government and show little sympathy with the Greeks. Undoubtedly not helped with Greek commentators, government and newspapers referencing the war.

It seems that leather jackets and wry witticisms may win the hearts of wet European liberals but when it comes to the people that matter, Varoufakis is not even getting past first base.

 

[Tom Hark Preston Park]

Greece never had a leg to stand on. OK they won their election on a populist vote, but that vote carries no weight whatsoever beyond their electoral boundaries. It's a total no-brainer, especially for Germans who refuse to play so much as a holiday water-polo match without a set of published and adhered-to rules. What on earth were they thinking?

 

[Simster]

All this talk of the Germans and whether or not they'll blink first: I really don't get it when this whole situation is akin to the Greeks playing poker with the EU, with a stack of two coins and a hand consisting of "9 high". They are in no position to be demanding anything from anyone and if they don't want to play ball then they will be screwed as nobody will lend them any money at all.
[MENTION=5200]Buzzer[/MENTION] and [MENTION=205]Tom Hark, Preston Park[/MENTION] are both spot on. The best the Greeks can hope for is to appeal to the EU's benevolent nature and assist them with a degree of flexibility. But when the new Greek government act like aggressive bell-ends and make no attempt to show any willing to curtail their problems, then there is no solution.

 

[TomandJerry]

"I think they’ve now reached a point where they will tell Greece: “if you really want to leave, leave”.

And I think they mean it because Germany, the Netherlands and others will be hard and they will insist that Greece repays back the solidarity shown by the member states by respecting the conditions."

When is the deadline for an agreement to be made?

"Eurogroup President Jeroen Dijsselbloem has given a brief statement before he chairs the meeting.

The eurogroup will start as soon as possible, but it’s quite complicated.

There is still reason for optimism but it is very difficult."

 

[Westdene Seagull]

All this talk of the Germans and whether or not they'll blink first: I really don't get it when this whole situation is akin to the Greeks playing poker with the EU, with a stack of two coins and a hand consisting of "9 high". They are in no position to be demanding anything from anyone and if they don't want to play ball then they will be screwed as nobody will lend them any money at all.
@Buzzer and @Tom Hark, Preston Park are both spot on. The best the Greeks can hope for is to appeal to the EU's benevolent nature and assist them with a degree of flexibility. But when the new Greek government act like aggressive bell-ends and make no attempt to show any willing to curtail their problems, then there is no solution.

I think you're somewhat under estimating what will happen to the Euro and the EU if there is Gexit. And that is very likely if the EU and Greece can't some to an agreement.

 

[Simster]

I think you're somewhat under estimating what will happen to the Euro and the EU if there is Gexit. And that is very likely if the EU and Greece can't some to an agreement.

Why? Do you believe the Euro will collapse when the weakest economy in the EZ pulls out?

 

[Westdene Seagull]

Why? Do you believe the Euro will collapse when the weakest economy in the EZ pulls out?

I believe currency investors will run towards the US Dollar or the UK Pound by pulling out of the Euro. More importantly, it will be a huge dent in the political credibility of the EU - and the EU absolutely hate being made to look bad so they will do almost anything to prevent it.

 

[Simster]

I believe currency investors will run towards the US Dollar or the UK Pound by pulling out of the Euro. More importantly, it will be a huge dent in the political credibility of the EU - and the EU absolutely hate being made to look bad so they will do almost anything to prevent it.

The Euro is already way over-valued so I'd expect that to happen whether or not Greece stays in. The proof of this is the ridiculous FX rate against the pound, and if that's not enough, you wait and see what happens when the Swiss finally pull the plug on the idea of artificially pegging their franc against it.

And this idea that it would be a dent to the political credibility of the EU is nonsense, IMO. If anything, it would be a wake up call - that a single currency can only work within broadly similar, converging economies.

 

[TomandJerry]

I doubt Greece will be able to ever pay off its debt to Europe, unless they write some off