The cuts package is coming down to the wire, with coalition leaders meeting today to add the finishing touches. One of Prime Minister Antonis Samaras’ own legislators has been kicked out of the party for threatening a no vote, and the finance minister is using a desperate sales pitch: Pass it or you’ll starve. The last remaining stumbling block, labor rights, appears to have been resolved.
Meanwhile, there are hints from the North that another haircut may be in the works, created through a bit of clever semantic engineering, and even the German finance minister is waffling his way to acceptance of the inevitable.
Another rightist party is joining Golden Dawn in calling for resignations in hopes to triggering a new election, and they asked the leftist Syriza to join them, a move that was quickly rejected. Syriza’s also hitting out at a coalition call to force the sale of homes previously exempted.
An Orthodox cleric who has been calling for tolerance and speaking out against Golden Dawn is drawing death threats, austerity measures are leading to environmental devastation, and a blog posts the europol agenda.
Samaras calls for Tuesday cuts session
Fighting to hold his increasingly shaky coalition together, New Democracy head and Prime Minister Antonis Samaras is meeting Tuesday with his coalition partners in what he hopes will result in a final decision on the Troika-demanded cuts package.
From Andy Dabilis of Greek Reporter:
With his coalition government splintering, Greek Prime Minister Antonis Samaras will meet his coalition partners on Oct. 23 for talks on trying to finalize a $17.45 billion spending cut and tax hike package that has been stalled for months, delaying the release of critical funds from international lenders.
Samaras, the New Democracy Conservative leader, will meet PASOK Socialist Evangelos Venizelos, who is facing defections and a challenge to his new leadership over his support for austerity measures, and Democratic Left head Fotis Kouvelis, who is also facing opposition for his backing of more pay cuts, tax hikes and slashed pensions. All three leaders had vowed ahead of the critical June 17 elections to resist austerity measures but have reneged on their promises.
Samaras said he must get agreement from his partners and the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is putting up $325 billion two bailouts.
The package then will go to the Parliament the government controls, although the Prime Minister already has ejected one party member for failing to back him and the other coalition partners are facing growing opposition as well. Nikos Stavrogiannis, was dismissed from the New Democracy parliamentary group after saying he would vote against the measures because they were “unfair, harsh and ineffective.” Stavrogiannis hit back saying he could no longer follow ND’s “Ovidian transformations.”
But Samaras expels one of his own
The prime minister has expelled one of his own members of parliament after the legislator announced he couldn’t vote for the austerity measures Samaras is so desperate to enact.
Nikos Stavrogiannis, a New Democracy legislator representing Fthiotida, got the boot after raising the threat to cast his vote against measures he deemed “unfair, harsh and ineffective.”
While the expulsion removes him from the ranks of the prime minister’s party, he remains in the legislature as an independent.
From the Economic Times:
“My conscience does not allow me to vote for measures that devastate the weakest members of society,” Stavrogiannis told the Real News newspaper in an interview published on Saturday.
The expulsion of Stavrogiannis, who remains in parliament as an independent, underscores Samaras’s hard line on deputies publicly undermining his pledge to push through the cuts to restore Greece’s credibility among lenders.
“Obviously we do not see eye to eye with Mr Stavrogiannis,” the government’s spokesman, Simos Kedikoglou, told Greek television on Monday, confirming the expulsion.
“The vast majority of us have realised that there is an imperative national duty that we must serve, that we must put the national interest above everything else.”
Using starvation as a sales pitch
The coalition’s getting desperate to convince wavering lawmakers of the necessity to enact the Troika-demanded cuts.
The latest rhetorical gambit: Pass them or people will starve.
From Keep Talking Greece:
He is getting more and more dramatic every time he speaks in the Greek Parliament. Finance Minister Yiannis Stournaras does not miss a chance to praise the benefits of the upcoming austerity measures package – or tsunami.” The cost for the country would be infinite, if we do not take the tranche of 31.5 billion euro,” he said on Monday adding “that if we do not take the tranche, people will starve…”
Yiannis Stournaras refrained to determine who are exactly the people who will starve…
Thank God, the majority of Samaras’ coalition government MPs will vote in favor of the 13.5 billion euro austerity measures for the shake of the 31.5 billion euro loan tranche to be used to banks recapitalization and payment of outstanding state debts. If the austerity package will give another hard kick to low- and middle incomers, that’s a story belonging to a different book of Greece economic depression history….
Labor issues formed the last stumbling block
And the coalition is about to throw in the towel, though the Troika has made some concessions.
“Restructuring” always means destroying the power of organized labor, and that’s what the coalition has agreed to do.
From Athens News:
The government is nearing agreement with the troika of international lenders on the thorny issue of changes to the labour regime, according to statements made by Labour Minister Yiannis Vroutsis on Sunday afternoon after a meeting of the government’s economic staff with prime minister Antonis Samaras.
Vroutsis appeared optimistic on the final outcome of the deliberations, although he avoided reference to details or to the content of the ministry’s electronic correspondence with the EC-ECB-IMF troika of lenders.
According to labour ministry sources, the Greek side appears to have ‘saved’ the three-year salary maturities until the completion of the mid-term programme. The troika maintains that the three-year maturities were abolished with the signing of the second memorandum, which calls for the replacement of the national collective labour agreement with a minimum salary.
The ministry bases its position on the Cabinet Act of February 22 which provides for a reduction of the minimum wage by 22 percent and by 25 percent for young people under 25 years of age “until completion of the fiscal adjustment programme”.
The same Act also stipulates that salary maturity benefits, and benefits for children, university studies and hazardous work will be maintained after the expiry of the collective labour agreements, while all other benefits will be abolished.
So collective bargaining has been abolished, and the minimum wage slashed, with the greatest cuts for the nation’s young, half of whom simply can’t find work.
Sleight of hand accounting in the works?
Austerity won’t work if an economy has been utterly destroyed. After all, the purpose is to keep cash flowing for the private sector investors.
And sometimes the devastation already inflicted by previous rounds of “restructuring” is so great that investors have to take some losses — “haircuts” in investorese.
Now it looks like another haircut is in the works, though it’s carefully concealed behind a clever bit of semantic persiflage.
Euro-zone countries are considering a proposal that would see Greece cut its debt by buying back bonds held by private creditors at a discount, says Wall Street Journal.
According to the report, the exercise, one of a number of options being studied, could persuade the International Monetary Fund to sign off on a loan payment desperately needed by the debt-laden country and keep Greece’s bailout on track for the medium term, two officials with direct knowledge of the discussions said Thursday.
One of the officials said the plan, originally floated in the middle of last year but dropped, was being promoted by the European Central Bank. The ECB declined to comment.
The bonds would be bought at a discount from private bondholders by the Greek government, but it could then deduct 100% of their face value from its total debt, making its debt appear more sustainable compared with the size of its economy.
More from A. Papapostolou of Greek Reporter:
Talks would have to take place with debt-holders to see if they would accept such a price for their Greek paper.
A spokesman for the Finance Ministry declined to comment directly on the report on Sunday, saying Germany was waiting for a report into Greece’s progress in meeting bail-out conditions by the country’s “troika” of international lenders.
“We don’t want to engage in speculation,” he added.
Last week European Central Bank Executive Board member Joerg Asmussen made the same suggestion about the Greek government buying back its own debt.
And then there’s the inconsistent German
German Finance Minister Wolfgang Schäuble has been flip-flopping on Greece, first openly hinting that the Grexit — the departure of Greece from the euro — was no big deal, then reversing course, then tossing out more ambiguous statements.
Spiegel looks at his history of rhetoric twists, concluding with the latest twists on the covert Greek debt haircut now being floated:
Schäuble is torn between taking responsibility for European policy and taking domestic political factors into account. He knows that saving the euro is going to cost more money, but he also fears resistance within the center-right coalition government in Berlin and among the German people. This explains why he sometimes takes one position or another.
This was also the case when Jörg Asmussen, the German representative on the ECB Executive Board, revived the plan to create a repurchase program for Greek sovereign debt while in Tokyo. Under the plan, the Greek government would borrow money from the euro bailout fund, the European Stability Mechanism (ESM), money it could then use to repurchase old bonds at the current rate. Greek government bonds are currently valued at about 25 percent of face value. In other words, with every euro it borrowed Athens could take €4 of old debt off the market.
The idea had hardly been floated before Schäuble was behaving as though he were hearing about the proposal for the first time. He should have known better, because his people have been working on the same type of program for some time and have already developed concrete ideas. They’ve calculated that with a commitment of €10 billion ($13 billion), Greece’s debt burden could, in an optimal scenario, be reduced by €40 billion.
But to achieve this outcome, talks would first have to be held with the biggest investors to ensure that they would truly settle for receiving only a quarter of their claims. Experts at the German Finance Ministry hope that once the operation is over, Greece will almost be in a position to borrow money on the markets again. But that would require Schäuble to explain yet another change of position.
Another party calls for resignations
Golden Dawn has already threatened mass resignations from the legislature in an effort to force a snap election to unseat the Samaras coalition.
Now a second party on the right has floated the same idea — and called for a party of the left to join them.
Independent Greeks leader Panos Kammenos on Sunday suggested that SYRIZA and Independent Greeks MPs should resign ahead of a vote on the austerity measures in Parliament and trigger snap elections.
“We will fight this battle in and outside Parliament. But we can stop the measures as well as the country’s and the Greek people’s surrender, by triggering elections,” Kammenos said in an interview on Sunday.
Greece’s conservative-led coalition government is currently negotiating a new austerity package with the troika of foreign creditors. The package is set to include more wage and pension cuts.
Independent Greeks, a right-wing populist party, control 20 seats in Parliament after winning 7.5 percent of the vote in the June general election. Left-wing SYRIZA, which is Greece’s main opposition party, has 71 deputies.
According to parliamentary rules, 60 or more MPs have to resign and their replacements refuse to take their positions before Parliament can be dissolved and new elections held.
Syriza quickly rejected the proposal, as Keep Talking Greece reports:
SYRIZA rejected Kammenos’ proposal n Monday with the argument that snap polls will take place only for the seats of the resigned MPs but that the government will continue to exist.
Syriza hits proposal to auction off homes
Under existing Greek law, first homes worth less than €200,000 can’t be auctioned off for failure to pay mortgages.
It’s important to note that in Greece, as in most other European countries, the borrower’s obligations to the lenders don’t end with foreclosure — so the home may be gone because of late payments but the obligation remains.
Now the Samaras government is proposing to change the law to allow the auctioning of previously exempted homes, and Syriza is hitting back.
From Athens News:
Syriza MP Dimitris Stratoulis has strongly criticised a statement by New Democracy MP Makis Voridis in favour of auctioning mortgaged first homes with a legal value of less than 200,000 euros, saying it is “a murderous political proposal”.
Speaking on Athina 9.84 radio station, Stratoulis said that if such a measure is taken, “the country’s 40,000 homeless, brought about by the politics of the memorandum, will become hundreds of thousands”.
Voridis on Saturday had stated that he is in favour of abolishing a prohibition by law to auction mortgaged first homes with a legal value of less than 200,000 euros.
Speaking on Real FM, Voridis said he does not know what the government’s plans are, but added that at some stage these debts must be paid. “Whether we’ll do it in a year’s time, or in six months or eighteen, this has to be done,” he said.
The law in question has been in place for the past three years to protect those with real estate loan debts.
Orthodox cleric threatened by thugs
It’s because he had the courage to speak out against the xenophobic rhetoric and violence of neo-Nazi Golden Dawn thugs.
From Andy Dabilis of Greek Reporter:
A Greek Orthodox Church leader said he has been receiving threatening phone calls after speaking out against the neo-Nazi Golden Dawn party that is on a rampage against immigrants, gays, Leftists, Capitalists and those it considers blasphemers.
The party rose from obscurity to gain 18 seats in Parliament this year on an anti-immigrant, anti-bailout, ultra-religious platform and has been tied to a number of assaults.
Metropolitan Pavlos of Siatista, a town in West Macedonia, said the calls have warned him that, “We shall burn that commie,” an apparent reference to Communists, who Golden Dawn, an extremist right-wing party, sees as one of the many enemies it believes is undermining Greece. There have reportedly been many threats made against the church, whose officials said they believe are coming from Golden Dawn and other ultra-nationalists who want all immigrants out of Greece and have a “Greece for Greeks” ideology.
Prime Minister Antonis Samaras, leader the of the New Democracy Conservatives, also supports tossing out illegal immigrants and has not denounced Golden Dawn, although one of its Members of Parliament has been stripped of immunity for allegedly being involved in assaults against immigrants.
More from Ekathemerini:
The church has reportedly received numerous complaints and warnings from what appear to be supporters of Golden Dawn and nationalist activists.
Metropolitan Pavlos of Siatista last week criticized Golden Dawn after members of the Greek far-right party protested against the premiere of Terrence McNally’s Corpus Christi in Athens.
In an interview with Imerisia newspaper on Sunday, the metropolitan described Golden Dawn as “uncivilized,” adding that the party’s acts “have nothing to do with ancient Greek civilization nor the Gospel.”
“We all have to take a clear stand on the Golden Dawn issue… We have to preach the word of God, which has nothing to do with the acts committed by members of Golden Dawn,” the metropolitan said.
Restructuring leads to environmental devastation
Here’s one that’s hardly surprising, given that we’re seeing the same thing here in the United States: The invocation of crisis as justification for destroying hard-won environmental protections.
From Harry van Versendaal of Ekathemerini:
Nongovernmental organizations are warning of an “unprecedented environmental rollback” in Greece as green policy, perennially on the back burner, has suffered a hefty blow as a result of the nation’s financial meltdown.
More controversially, several civil society groups allege that in a number of instances, the authorities have used the brutal debt crisis as a pretext for easing laws and regulations meant to protect the natural environment.
“A series of very disturbing developments indicate that the environment is already being called on to pay a significant part of the soaring Greek debt,” said Theodota Nantsou of the World Wide Fund for Nature (WWF) in Athens.
“As a result of the economic turndown and the resulting structural adjustment and austerity policies, Greece has witnessed an unprecedented environmental rollback,” she said.
Here in California, developers have been stripping away tat the California Environmental Quality Act, justifying their legislative agenda under the guise of so-called “green” development designed to increase urban density and ease the way for corporateers in the “green technology” sector [who are also given tax breaks as part of the package].
The europol agenda in a nutshell
What more to say?
Call it Austerity for Dummies.
From Keep Talking Greece:
Euroland Check List
1) Pass toxic debts on to households (✓)
2) Save Zombie financial institutions (✓)
3) Buy time for the capital mobile to escape (✓)
4) Currency overlords to enforce payment on those who can’t ship money out (in progress - Germany shocks EU with fiscal overlord demand)
5) Protest - encourage infighting (North/South, Greeks, German, garlic, migrants) (✓) and blame the alien next door (✓) Local media (✓).
6) Compensate for bad investment decisions (in fact don’t mention them) by lowering wages (✓) and
7) Export led growth to the alien next door ( Newly discovered planet is just 4.4 light-years).
8) EZ implodes. Neo-nazis try to take over but Eurocrats save the day with the EZ superstate (Progress (✓) Risky, but they want a superstate too ).
8b) EZ unrest (IMF riot variation). Peace-keeper role – expelled rowdy non- complying members (nearly there).
9) Members say “we are not Greece” (✓) & sign up for the Super State. Blame populism and democracy for the crisis and praise Technocrats for restoring order …..
10) and launch to loud cheers, Le Grand European Investment plan – the ESA’s mission to Mars.