Showdown in Greece; EU Gives Deadline on Signatures; Samaras Won't Sign, Sends Letter Instead, Seeks Policy Changes

Mish's Global Economic Analysis,

22 November, 2011

European officials have had enough of the technocrat leadership in Greece. They have given a week for Antonis Samaras, the leader of New Democracy party, and member of the coalition to sign a document saying he will support the European Union debt plan.

He says he will support the plan (with modifications). The EU wants a signature now, with no changes.

Does a Signature Even Matter? 

Other than pigheadedness on behalf of the EU, does a signature even matter? Why? The next government can easily vote to undo whatever this government does. Will Samaras remain in power? Is his signature binding on the next parliament (or even this one)?

I will have more questions in a moment but first consider a couple of articles.

EU Gives Deadline on Signatures

Ekathimerini reports EU sets deadline for signatures

"European officials insisted on Tuesday that party leaders in Greece’s coalition government must provide written guarantees expressing their commitment to a new European Union debt plan before a Eurogroup summit next Tuesday to unlock crucial rescue funding. But center-right New Democracy appeared unmoved and the right-wing Popular Orthodox Rally (LAOS) -- the third party in the coalition -- appeared to harden its stance against the country’s creditors.

"Sources in Brussels told Kathimerini that the EU decided to send Athens the ultimatum after talks between European Commission President Jose Manuel Barroso and New Democracy’s vice president Stavros Dimas, who is also foreign minister, failed to secure a shift in the stance of ND president Antonis Samaras, who has refused to offer written guarantees to Brussels, saying his word should be enough.

"Eurogroup chief Jean-Claude Juncker, who received Greek Prime Minister Lucas Papademos in Strasbourg, said he hoped party leaders would fulfill EU demands by Tuesday. “Would there be no cross-party agreement, that disbursement of course could not take place,” Juncker said, referring to an 8-billion-euro loan without which Greece faces default next month.

"There was pressure from elsewhere too. Dutch Finance Minister Jan Kees de Jager said his country would bar further aid unless Samaras changes his tune. “We want to see a signature from Mr Samaras… otherwise, as far as I am concerned, they will get no money. Absolutely not.” But ND spokesman Yiannis Michelakis indicated that ND’s leader was unmoved. “I have nothing to add on the issue of the signature that is being asked of Samaras,” he said.

"Meanwhile the leader of LAOS, Giorgos Karatzaferis, shifted from his earlier suggestion that he would do “everything necessary” to secure crucial loans, saying that instead of signing a letter, he would write an article outlining his commitments in his party’s newspaper".

Samaras Won't Sign, Sends Letter Instead

Athens News reports Samaras won't sign, EPP letter published

"As the pressure mounts on the major Greek party leaders to provide written support for the October 26/27 eurozone deal, New Democracy (ND) president Antonis Samaras has reiterated his stance that he will not sign such a statement.

"ND party spokesman Yiannis Mihelakis stressed on Tuesday that he has nothing further to add on the issue of Samaras' signature over commitments requested by the EC-ECB-IMF 'troika'. Mihelakis added that Samaras has made specific statements saying he backs the October 26 EU summit agreement, adding that no request has been made on behalf of the European Union as regards the ND leader’s signature. 

"In the letter, Samaras underlines the fact that he supports Prime Minister Lucas Papademos and the targets of fiscal adjustment but notes that “certain policies have to be modified”.

Policy Changes?

Who blinks first? Samaras or the EU?

While pondering that question, consider this logic from my friend Bran who every day sends me links like those above.

Bran writes ...

"Imagine a US bill launched by the Democrats affecting international shipping. Suppose the bill gets a mixed vote and passes. 

"Along come the Chinese who are part beneficiaries of the bill and they then insist not just the President sign it, but also demand the head of the Republican party to do so, or they will not abide by their reciprocally enacted legislation".

Just imagine that setup and tell me how Speaker of the House John Boehner or Senate Minority Leader Mitch McConnell might react.

Even if the Congressional leaders did sign such a document, would it be binding on the next Congress?

In the case of Greece, elections will be held early next year (supposedly). With all these demands and all this political posturing, one has to wonder.

I for one hope Samaras holds firm and does not sign. The quicker the Eurozone blows up, the better it will be for everyone