In the most bizarre day since the start of the Greek crisis, a welter of conflicting news reports left Greeks and observers like esnl reeling.
The bombshell beginning the day was an announcement from a German newspaper that the Greek coalition had won its desideratum, a two-year extension of the time needed to implement those draconian cuts demanded by the IMF/EU/ECB Troika.
Accompanying that declaration was another: The cuts were a done deal.
Accounts filled the paper and virtual pages of the world’s press and media sites and were bandied about on the airwaves.
Yet by the time the day was over, both accounts had been denied by all three members of the Troika, even though they’d also been confirmed by the Greek finance minister following the Troika’s denials.
More specifics of the cuts emerged, as did more signs of division within the coalition government headed by Prime Minister Antonis Samaras.
The German money minister really sent Greek heads spinning, first by by declaring he’d be ready to fund a third Greek bailout, then by demanding that Greeks cede control over the nation’s borrowing and surrender all tax cash collected bailout funds into a eurobankster-controlled escrow account. And on the subject of banks, Greek bank employees are on strike today.
In other news, Golden Dawn has added a new category to its target list, non-citizens attending Greek universities, while Golden Dawn itself is being targeted, with three of its most thuggish parliamentary delegates stripped of immunity for prosecution for their violent actions.
Oh, and some crooks tried to steal a bridge before the Troika could.
But we’ll begin with a two-part video on Greece from The Real News Network, first on the impacts of the austerity measures already imposed:
And following up with a report on the increasing radicalization of Greek politics:
For more reports from The Real News Network, see here.
German paper reports: Greece wins a delay
Spiegel reports on the source of the report on the extension:
Süddeutsche Zeitung is reporting that Greece’s international creditors have agreed to grant the heavily indebted country two more years to reduce its budget deficit below the 3 percent maximum allowed by European Union rules. While not citing sources beyond a draft version of a “Memorandum of Understanding,” the paper also reports that Athens will additionally be given a breather on deadlines for labor market reform, energy policy reform and privatization efforts.
It is unclear whether the draft deal seen by the Süddeutsche is the same paper that news agency Reuters claims also to have seen. The news agency is also reporting on Wednesday that Greece and its lenders are moving towards a deal that would give Greece two additional years, until 2016, to reach its target of achieving a “primary budget surplus” of 4.5 percent of gross domestic product (GDP). A “primary budget” does not include interest payments on debt.
Berlin officials have been quick to deny the Süddeutsche report, saying that no agreement has been finalized. Steffen Kampeter, a state secretary in Germany’s Finance Ministry, insisted that no decision will be made until a report from the troika — made up of the European Commission, the European Central Bank and the International Monetary Fund — is completed. “Anything prior to that is reading tea leaves,” he told German radio on Wednesday morning.
Read the rest.
Confirming the original German report was the Greek Finance Minister.
Andy Dabilis of Greek reporter has the details:
Finance Minister Yiannis Stournaras told journalists a deal had been agreed with PASOK Socialist chief Evangelos Venizelos and Democratic Left head Fotis Kouvelis and with international lenders, with the package set to go before the government-controlled Parliament by the end of the week, the newspaper Kathimerini said.
Stournaras told Parliament that Greece had won more time to meet its fiscal targets and to reduce its deficit from 9.3 to 3 percent. He didn’t say how long the reprieve would be but media reports indicated it was the two years, until 2016, that Samaras had hoped for, although it’s unsure how Greece would be funded after 2014. Stournaras said without the extension the spending cut and tax hike plan would have reached nearly $24 billion.
Read the rest.
Troikarchs deny extension claims
The first two denials came from the boss eurobankster, followed by the European Union’s top money man.
European Central Bank President Mario Draghi on Wednesday said that progress is being made over how to assist crisis-stricken Greece.
Answering a reporter’s question after he appeared before the German Parliament, in the wake of a Greek minister saying an extension had been granted by the troika of the EU, ECB and IMF, Draghi said: ‘’Progress has been made but there are things which need to be defined. I can’t comment on rumors”.
A spokesman for European Economic and Monetary Commissioner Olli Rehn echoed Draghi, saying: “ Substantive progress has been made in the talks with the Greek government but there remain pending issues before an accord at a technical level can be concluded”.
Draghi and Rehn were responding to a report from Greece’s Skai TV that Athens had obtained a two-year extension from the troika on the deadlines to hit the targets set in conditions for international aid it needs to avoid a default.
Read the rest.
The IMF then joined in the denials.
From Agence France-Presse:
The International Monetary Fund announced Wednesday that there had been progress in talks with Greek authorities but no agreement on Greece’s economic performance under an IMF-EU rescue program.
“There has been progress in recent days, but some outstanding issues remain to be agreed upon to reach full staff-level agreement. Furthermore, financing issues will be discussed between the official lenders and Greece,” an IMF spokesperson said.
The brief IMF statement confirmed the European Union’s insistence earlier in the day that there was no deal, after Greece’s finance minister announced he had agreed on a new austerity package with the IMF, the EU and the European Union and won more time to fix the debt-crippled nation’s finances.
Read the rest.
Germany says no money till report card’s done
The folks with their hands on the purse strings appear to have been the folks who scotched the deal.
While nobody’s saying it officially, that’s the conclusion we draw from this paragraph from a report by Lefteris Papadimas and George Georgiopoulos of Reuters:
European paymaster Germany said the EU would only decide on the matter after receiving a report on Greece’s progress from the ‘troika’ of lenders – the European Commission, the European Central Bank (ECB) and the International Monetary Fund – while ECB President Mario Draghi said no final decision had been made.
Read the rest.
But even if Greece flunks, can the Troika afford not to dish out the latest €31.5 billion bailout tranche?
From Helena Smith of The Guardian:
“Even if the troika give us a negative report what are they going to do? Are they really going to not give us the installment ( to keep Greece’s debt-choked econony afloat) two weeks before the US elections with everything that entails – default, bankruptcy, global market turmoil,” asked one senior Greek official.
“These labour reforms will turn our country into Bangladesh. They have no fiscal benefit and will actually derail the adjustment program. The political system will collapse if we impose them. The Troika is demanding that we commit suicide which is why we believe this is a matter that should be solved on a political level by the PM and not here in Athens with the troika.”
More details emerge on Troika-demanded cuts
They’re draconian, as expected.
The Guardian lists some of the austerian measures included in the package:
- Maintaining the emergency solidarity levy until 2018 – this is an increase in personal taxation of up to 5% that was introduced last year.
- Lowering the number of income tax bands to three or four, from eight at present.
- Big cuts to the public payroll: with 20,000 civil servants leaving in 2013, and a further 5,000 in 2014
- Increasing the retirement age by 2 years, from 65 to 67
- Increase in interest on deposits from 10% to 15% in 2014.
- Eliminating various tax exemptions
- Increasing taxes on farmers.
- Retroactive reductions from 1 August 2012 to “special payrolls”, on a sliding scale from 2% to 35%.
- A huge cut in the the number of associate professors from 15,226 to 2,000.
- Increasing urban traffic ticket prices by 25%, from March 2013.
- Remove special seasonal unemployment benefit payments.
Keep Talking Greece hones in on two measures certain to increase public outrage at both the Troikarchs and the coalition government:
And when you think ‘you’ve seen everything’, Greece’s lenders are always good for one or two additional surprises. Electricity bills will go up by 40% and public transport fares will increase by 25%. Yes. In times of harsh austerity, where many households struggle to make ends meet and the new austerity package will force millions deeper in despair.
Electricity bill hikes will affect private households and small enterprises making use of ‘low voltage electricity’. The hikes of total 40% will be implemented in two or three steps and are expected to go in effect in Janurary 2013.
Public Transport Fares
Hikes will be at least by 25%. Cheap tickets for buses, tram and trolley will go up to 1.50 euro (from 1.20 today) and for Metro or combined for all public transport means will go up to 1.75 euro (from 1.40 today).
The public transport hikes will have to be implemented by March 2013.
Coalition divisions center on labor “reforms”
Once upon a time, the word “reform” was assumed to mean changes in government policy that enhanced its ability to serve its citizens.
In these days, when Orwellian language dominates public discourse, “reform” means changes in government structure designed to increase its ability to serve Continue reading