Category Archives: Syriza

27/2/15: Of a momentary surrender and a longer fight: Greece v Eurogroup

Couple more earlier comments on Greek situation for print edition of Expresso, 31.12.2015 pages 8-9 and online, February 22, 2015.

English version of some of the comments:

# In which points did Greek delegation change its position?

Last night Eurogroup saw significant changes to the Greek Government position vis-a-vis the current bailout. Firstly, the Government has now abandoned its elections promises to achieve a debt write down and end the agreement with the Troika. Instead, the old agreement has been extended until the end of June on the basis of Greece committing to full implementation of the original Master Financial Assistance Facility Agreement (MFAFA) and, thus, Memorandum of Understanding (MOU). The dreaded austerity programme remains in place, despite the Greek Government claims to the contrary. The dreaded Troika is still there, now referenced as Institutions. Secondly, Greece failed to secure control over banks recapitalisation funding. A major point of Government plans was to use of some of these funds for the purpose of funding public investment and/or debt redemptions. This is no longer an option under the new bridging Agreement. Thirdly, the Greek Government failed to secure any concessions on the future programme. The Eurogropup conceded to allow the Greece to present its proposals for the future pos-MOU agreement, but any proposals will have to be with the parameters established by the current programme.

# In which points Germany change its hard position?

So far, Germany and the Eurogroup conceded nothing to the Greek Government. The much-discussed references in the Eurogroup statement that allow for some flexibility on fiscal targets, principally recognition of the economic conditions in computing the target primary surplus for 2015, is not a new concession. Under the MOU, present conditions were always a part of analysis performed to establish deficit targets and the current programme always allowed for some flexibility in targets application. Crucially, Greece went into the negotiations with two objectives in sight: reduction in the debt burden and reduction in the austerity burden. The fist objective was abandoned even before last night's Eurogroup meeting. The second objective was severely diluted when it comes to the Eurogroup statement and the bridging programme. There are no concessions relating to the future (post-June 2015) programme. In a sense, Germany won. Greece lost.

# What do you expect for the list of reforms to be presented on Monday?

We can expect the Greek Government to further moderate its position before Monday. The new set of proposals is likely to contain request for delays (not abandonment, as was planned before) of privatisations, a request for the primary deficit target for 2015 to be lowered to around 2-2.5% of GDP, and a request to allow for some of the past austerity measures to be frozen, rather than reversed, for the duration of 2015. The Greek Government is likely to present new short term growth strategy based on a promise to enforce more rigorously taxation, set higher tax rates on higher earners, in exchange for using the resulting estimated 'savings' to fund public spending and jobs programme. The final agreement on these will likely be in the form of a temporary programme, covering 2015, and possible extension of this programme will be conditional on 2015 debt and deficit dynamics. Beyond Monday, however, a much more arduous task will be to develop a new programme. In very simple terms, Greece still requires a debt restructuring to cancel a significant quantum of current debt. This now appears to be off the table completely. As the result, any new agreement achieved before June 2015 will be inadequate in terms of restoring Greek economy to any sustainable growth path. Both Greece and Europe, today, are at exactly the same junction as two weeks ago: an insolvent economy is faced with the lenders unwilling to recognise the basics of financial realities.  

27/2/15: Running out of cash: Greece heading into March

My comments to Portuguese Expresso on Greek agreement:

Unedited version here:

"Over the next four months, Greece is facing significant debt redemption pressures. In March, EUR5.83 billion of T-bills and IMF loans maturing and requiring a re-financing. Between now and the end of April, Greece will require to roll over EUR8.1 billion of T-bills and refinance EUR2 billion worth of IMF loans.

Currently, Greece has no money to cover its debt maturity redemptions in March and it is quite questionable if the country can find cash, outside the Programme extension facilities agreed last week but are yet to be ratified by the Eurogroup members and the Institutions, to do so in the markets. Currently Greek 10 year bonds are priced at 65.354, with a yield of 9.23% and rising. This suggests there is unlikely to be significant appetite in the markets to cover a substantial issue of new debt by Greece. At the same time, internal reserves available to the Government are virtually non-existent, especially given the rate of tax receipts deterioration in recent months. December 2014 tax revenues were 14 percent below target, January 2015 tax revenues fell 20% below target, implying a monthly shortfall close to EUR1 billion. In all likelihood, shortfall was at least as big in February as the new Government was tied up in negotiations with the Troika and deposits fled from the banks.

The key problem is that Greece has no option when it comes to delaying repayment of the above funds. IMF is the super-senior lender of last resort and T-bills markets are the bloodline for the Greek Government. Failing to redeem maturing T-bills will be a disaster for the country. In short, Syriza urgently needs to secure new funds to cover these redemptions."

EU sanctions meeting

by Alexander Mercouris

As Eric Kraus has pointed out there is complete confusion in the media today about how to spin the latest EU sanctions decision.  Did Syriza fold as per Reuters and Bloomberg.  Or did the meeting expose growing splits within the EU as per the Financial Times and the London Times.

The best answer is that nothing definite was decided at the latest EU Council meeting but Syriza did manage to put a marker down.

I go back to my piece about Syriza for Russia Insider (  Whether one likes the fact or not, for Syriza relations with Russia are not the priority.  Syriza does not agree with the sanctions, but its overriding priority is Greece's own economic crisis.

Given that this is so, it is simply unrealistic to expect a very young government in the very first days of its existence to provoke a crisis within the European Union that pitches it against the Commission, Germany, Britain and France, risking a deeper crisis in Greece and putting in jeopardy its own existence, on an issue that for Greeks is of only peripheral importance.  

What Syriza did on Thursday was all that in the circumstances it could realistically do: apply a soft brake on the sanctions train.  

The European Council meeting was convened by Mogherini, the EU's "foreign minister", following demands from the EU hardliners led by Donald Tusk (who now nominally chairs the European Council when it meets at heads of government level) who have been calling for a strong EU response to the breakdown of the ceasefire and the ongoing NAF offensive, which has resulted in the capture of Donetsk airport and the gradual encirclement of the Debratselvo pocket.  It also took place against a drumbeat of orchestrated hysteria following the shelling in Mariupol.  Prior to the meeting Tusk said that he was not interested in a meeting that was purely declamatory.

That however is what Tusk got.  What came out of the meeting was essentially declamatory.  

The Greeks insisted on a belligerent paragraph directed against Russia being removed from the text of the final EU statement and postponed any further decision on further sanctions to a European Council meeting on 12th February 2015, which will take place at heads of government level.  In return they agreed to an extension of the limited sanctions against specific Russian companies and individuals that came into force in March, but not for a full year (as the hardliners apparently wanted) but only for 6 months (to September 2015).  

These sanctions are a serious matter for the individuals concerned, but they are not critical for Russia. 

This is not the outcome that either the Russians or the EU hardliners led by Tusk had wanted, but it gives time and space for Syriza to sort out its own position and make whatever alliances within the EU it can, both on the critical debt question and on the less critical question of sanctions.  

The next test will come at the European Council meeting on 12th February 2015 which Tsipras himself will attend.  As of now it is looking unlikely that the EU will impose further significant sanctions on Russia at that meeting.  Syriza is opposed to such sanctions but more importantly some of the other EU states are not keen on them either.  They now known that one EU government - that of Greece - is strongly of that view, which is likely to make their opposition still stronger.  To what extent more sanctions can be prevented at the meeting on 12th February 2015 will depend on the extent to which Syriza is able to play on the doubts of these other EU states.  Significantly Syriza did manage to play successfully on these doubts at the meeting on Thursday, when it received the discrete support of several other EU states.

The big test however will be when the sectoral sanctions come up for renewal in July.  That is the key decision upon which the future of the sanctions ultimately depends.

I would add that by July - and even more by September when the sanctions that were extended on Thursday come up for renewal - we will also have a better idea of the prospects for a Podemos victory in Spain.  

If Podemos does win in Spain, then the entire calculus changes with Syriza having one of the big EU countries as an ally.  I hardly need say that Spain carries immeasurably more weight within the EU than does Greece.  A Podemos government in Spain can afford to go it alone on sanctions and defy the other big powers in the EU.  A Syriza government cannot.

In my opinion Thursday's decision was the best that could be expected in the circumstances.  As I said the big decisions are still to come.  It would be of no benefit to Russia, Greece or Syriza if Syriza had provoked a crisis in the EU on Thursday on a question of extending the least important sanctions, which caused a dramatic escalation of the economic crisis in Greece, which in turn meant that Syriza was either swept from power in Greece or was unable to make independent decisions when the big decisions come up in July.  

I would finish by again repeating what I said before in my Russia Insider piece and here.  

Greece is a small and economically very weak country.  For its people the sanctions are not the priority.  The economic crisis is.  That is why they voted for Syriza:  to solve the economic crisis, not to get the sanctions on Russia lifted.  On the sanctions issue people should not expect more from Syriza than it promised or can realistically deliver.

The limits of what can be expected from the SYRIZA government

by Wayne Hall

The above analysis of the politics of SYRIZA and its government does not say anything that is untrue, but it leaves out of account a number of points that are relevant in estimating the political potential of the new Greek government.

For a start, SYRIZA does not touch on any taboo “conspiracy theory” issues, such as 911 and/or the militarization of climate. They have systematically and resolutely refused to engage any of them. They line up with the side of the climate debate that attributes all anomalous “natural” phenomena to “global warming” (of course the other side of that debate is also manipulated).

On Ukraine and Russia there are also limitations to what they can say or do. The senior member of SYRIZA most committed to policies not hostile to Russia, Nadia Valavani, who was foreign policy spokesperson before the election, has now been assigned to economic issues.

Giulietto Chiesa, the journalist and former Europarliamentarian who, I would say, has a “Vineyard of Saker” political orientation , tried to work with SYRIZA in Greece and its equivalent in Italy but has been, and is, treated like a persona non grata by them. I don’t think there is anything personal about this. It is a reflection of political differences.

SYRIZA has continued the traditional Greek “the enemy of my enemy is my friend” orientation towards the Kurds, which in the new post-ISIS geopolitical environment involves a convenient alignment with American and international policies of border changes at the expense of Turkey. Greek and Turkish geopolitical interest are arguably converging, with the two countries having more potential common interests than diverging interests. Of course this is a complex issue but categories of “left wing” and “right wing”, while not entirely irrelevant, also probably do not have as much importance as is attributed to them by SYRIZA.

On the subject of “empowerment of citizens’ participation”, SYRIZA’s declared politics deserve more rigorous thought than they are getting. “Citizens’ participation” in a context of corporate mass media control is no guarantee of politics that are in the objective interests of citizens. It can be a Trojan horse facilitating imposition of policies by foreign-controlled NGOs. Possible first steps towards dealing with this problem have been put forward and discussed to a very limited extent but the discussion has not acquired any traction within SYRIZA. SYRIZA’s policies in this area are as vague as they are in other parliamentary parties.