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I
liked this comment on Varoufakis' blog:
Dear
Yani,
Tonight, by voting against this odious 3rd memorandum, you honorably fell on your political sword. In spite of what others think, I think that this is the most admirable choice. You will not leave unscathed, but it’s better to lose something to save something greater. Yanis, walk away, nay RUN. As I mentioned in my last post, there is nothing more base and animal than politicians.
You are a brilliant scholar and economist, and now, (for a historian romantic like myself) the modern-day Belisarius, who fought to liberate the lands from the Teutonic invaders!
In ancient times, this is exactly how legends were born!
Cheers!
The
Euro-Summit ‘Agreement’ on Greece – annotated by Yanis
Varoufakis
15
July, 2015
The
Euro Summit statement (or Terms of Greece’s Surrender – as it
will go down in history) follows, annotated by yours truly. The
original text is untouched with my notes confined to square brackets
(and in red). Read and weep…
[For a pdf copy click here.]
Euro Summit Statement Brussels, 12 July 2015
The Euro Summit stresses the crucial need to rebuild trust with the Greek authorities [i.e. the Greek government must introduce new stringent austerity directed at the weakest Greeks that have already suffered grossly] as a pre- requisite for a possible future agreement on a new ESM programme [i.e. for a new extend-and-pretend loan].In this context, the ownership by the Greek authorities is key [i.e. the Syriza government must sign a declaration of having defected to the troika’s ‘logic’], and successful implementation should follow policy commitments.
A euro area Member State requesting financial assistance from the ESM is expected to address, wherever possible, a similar request to the IMF This is a precondition for the Eurogroup to agree on a new ESM programme. Therefore Greece will request continued IMF support (monitoring and financing) from March 2016 [i.e. Berlin continues to believe that the Commission cannot be trusted to ‘police’ Europe’s own ‘bailout’ programs].
Given the need to rebuild trust with Greece, the Euro Summit welcomes the commitments of the Greek authorities to legislate without delay a first set of measures [i.e. Greece must subject itself to fiscal waterboarding, even before any financing is offered]. These measures, taken in full prior agreement with the Institutions, will include:
By 15 July
- the streamlining
of the VAT system [i.e. making it more regressive, through rate
rises that encourage more VAT evasion]and the broadening of the tax
base to increase revenue [i.e. dealing a major
blow at the only Greek growth industry – tourism].
- upfront measures
to improve long-term sustainability of the pension system as part of
a comprehensive pension reform programme [i.e.
reducing the lowest of the low of pensions, while ignoring that the
depletion of pension funds’ capital due to the 2012
troika-designed PSI and the ill effects of low employment &
undeclared paid labour].
- the safeguarding
of the full legal independence of ELSTAT [i.e.
the troika demands complete control of the way Greece’s budget
balance is computed, with a view to controlling fully the magnitude
of austerity it imposes on the government.]
- full
implementation of the relevant provisions of the Treaty on
Stability, Coordination and Governance in the Economic and Monetary
Union, in particular by making the Fiscal Council operational before
finalizing the MoU and introducing quasi-automatic spending cuts in
case of deviations from ambitious primary surplus targets after
seeking advice from the Fiscal Council and subject to prior approval
of the Institutions [i.e. the Greek
government, which knows that the imposed fiscal targets will never
be achieved under the imposed austerity, must commit to further,
automated austerity as a result of the troika’s newest failures.]
- the adoption of
the Code of Civil Procedure, which is a major overhaul of procedures
and arrangements for the civil justice system and can significantly
accelerate the judicial process and reduce costs [i.e.
foreclosures, evictions and liquidation of thousands of homes and
businesses who are not in a position to keep up with their
mortgages/loans.]
- the transposition
of the BRRD with support from the European Commission.
This decision would be taken subject to national procedures having been completed and if the preconditions of Article 13 of the ESM Treaty are met on the basis of the assessment referred to in Article 13.1. In order to form the basis for a successful conclusion of the MoU, the Greek offer of reform measures needs to be seriously strengthened to take into account the strongly deteriorated economic and fiscal position of the country during the last year [i.e. the Syriza government must accept the lie that it, and not the asphyxiation tactics of the creditors, caused the sharp economic deterioration of the past six months – the victim is being asked to take the blame by the on behalf of the villain.]
The Greek government needs to formally commit to strengthening their proposals [i.e. to make them more regressive and more inhuman] in a number of areas identified by the Institutions, with a satisfactory clear timetable for legislation and implementation, including structural benchmarks, milestones and quantitative benchmarks, to have clarity on the direction of policies over the medium-run. They notably need, in agreement with the Institutions, to:
- carry out
ambitious pension reforms [i.e. cuts] and specify policies to fully
compensate for the fiscal impact of the Constitutional Court ruling
on the 2012 pension reform [i.e. cancel the
Court’s decision in favour of pensioners] and to implement
the zero deficit clause [i.e. cut by 85% the
secondary pensions that the Syriza government fought tooth and nail
to preserve over the past five months] or mutually agreeable
alternative measures [i.e. find ‘equivalent’
victims] by October 2015;
- adopt more
ambitious product market reforms with a clear timetable for
implementation of all OECD toolkit I recommendations [i.e.
the recommendations that the OECD has now renounced after having
re-designed these reforms in collaboration with the Syriza
government], including Sunday trade, sales periods, pharmacy
ownership, milk and bakeries, except over-the-counter pharmaceutical
products, which will be implemented in a next step, as well as for
the opening of macro-critical closed professions (e.g. ferry
transportation). On the follow-up of the OECD toolkit-II,
manufacturing needs to be included in the prior action;
- on energy
markets, proceed with the privatisation of the electricity
transmission network operator (ADMIE), unless replacement measures
can be found that have equivalent effect on competition, as agreed
by the Institutions [i.e. ADMIE will be sold
off to specific foreign vested interests at the behest of the
Institutions.]
- on labour
markets, undertake rigorous reviews and modernisation of collective
bargaining [i.e. to make sure that no
collective bargaining is allowed], industrial action [i.e.
that must be banned] and, in line with the relevant EU
directive and best practice, collective dismissals [i.e.
that should be allowed at the employers’ whim], along the
timetable and the approach agreed with the Institutions [i.e.
the Troika decides.]
On the basis of these reviews, labour market policies should be aligned with international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth [i.e. there should be no mechanisms that waged labour can use to extract better conditions from employers.]
- adopt the
necessary steps to strengthen the financial sector, including
decisive action on non-performing loans [i.e.
a tsunami of foreclosures is ante
portas]
and measures to strengthen governance of the HFSF and the banks
[i.e.
the Greek people who maintain the HFSF and the banks will have
precisely zero control over the HFSF and the banks.],
in particular by eliminating any possibility for political
interference especially in appointment processes. [i.e.
except the political interference of the Troika.]
On top of that, the Greek authorities shall take the following
actions:
- to develop a
significantly scaled up privatisation programme with improved
governance; valuable Greek assets will be transferred to an
independent fund that will monetize the assets through
privatisations and other means [i.e. an East
German-like Treuhand is envisaged to sell off all public property
but without the equivalent large investments that W. Germany put
into E. Germany in compensation for the Treuhand disaster.]
The monetization of the assets will be one source to make the
scheduled repayment of the new loan of ESM and generate over the
life of the new loan a targeted total of EUR 50bn of which EUR 25bn
will be used for the repayment of recapitalization of banks and
other assets and 50 % of every remaining euro (i.e. 50% of EUR 25bn)
will be used for decreasing the debt to GDP ratio and the remaining
50 % will be used for investments [i.e. public
property will be sold off and the pitiful sums will go toward
servicing an un-serviceable debt – with precisely nothing left
over for public or private investments.] This fund would be
established in Greece and be managed by the Greek authorities under
the supervision of the relevant European Institutions [i.e.
it will be nominally in Greece but, just like the HFSF or the Bank
of Greece, it will be controlled fully by the creditors.] In
agreement with Institutions and building on best international
practices, a legislative framework should be adopted to ensure
transparent procedures and adequate asset sale pricing, according to
OECD principles and standards on the management of State Owned
Enterprises (SOEs) [i.e. the Troika will do what it likes.]
- in line with the
Greek government ambitions, to modernise and significantly
strengthen the Greek administration, and to put in place a
programme, under the auspices of the European Commission, for
capacity-building and de-politicizing the Greek administration [i.e.
Turning Greece into a democracy-free zone modelled on Brussels, a
form of supposedly technocratic government, which is politically
toxic and macro-economically inept] A first proposal should
be provided by 20 July after discussions with the Institutions. The
Greek government commits to reduce further the costs of the Greek
administration [i.e. to reduce the lowest
wages while increasing a little the wages some of the
Troika-friendly apparatchiks], in line with a schedule agreed
with the Institutions.
- to fully
normalize working methods with the Institutions, including the
necessary work on the ground in Athens, to improve programme
implementation and monitoring [i.e. The Troika
strikes back and demands that the Greek government invite it to
return to Athens as Conqueror – the Carthaginian Peace in all its
glory.] The government needs to consult and agree with the
Institutions on all draft legislation in relevant areas with
adequate time before submitting it for public consultation or to
Parliament [i.e. Greek Parliament must, again,
after five months of short-lived independence, become an appendage
of the Troika – passing translated legislation mechanistically.]
The Euro Summit stresses again that implementation is key, and in
that context welcomes the intention of the Greek authorities to
request by 20 July support from the Institutions and Member States
for technical assistance, and asks the European Commission to
coordinate this support from Europe;
- With the
exception of the humanitarian crisis bill, the Greek government will
reexamine with a view to amending legislations that were introduced
counter to the February 20 agreement by backtracking on previous
programme commitments or identify clear compensatory equivalents for
the vested rights that were subsequently created [i.e.
In addition to promising that it will no longer legislative
autonomously, the Greek government will retrospectively annul all
Bills it passed over the past five months.]
The Euro Summit takes note of the possible programme financing needs of between EUR 82 and 86bn, as assessed by the Institutions [i.e. the Eurogroup conjured up a huge number, well above what is necessary, in order to signal the debt restructuring is out and that debt bondage ad infinitum is the name of the game.] It invites the Institutions to explore possibilities to reduce the financing envelope, through an alternative fiscal path or higher privatisation proceeds [i.e. And, yes, it may possible that pigs will fly.] Restoring market access, which is an objective of any financial assistance programme, lowers the need to draw on the total financing envelope [i.e. which is something the creditors will do their utmost to avoid, e.g. by ensuring that Greece will only enter the ECB’s quantitative easing program in 2018, once quantitative easing is… over.]
The Euro Summit takes note of the urgent financing needs of Greece which underline the need for very swift progress in reaching a decision on a new MoU: these are estimated to amount to EUR 7bn by 20 July and an additional EUR 5bn by mid August [i.e. Extend and Pretend gets another spin.] The Euro Summit acknowledges the importance of ensuring that the Greek sovereign can clear its arrears to the IMF and to the Bank of Greece and honour its debt obligations in the coming weeks to create conditions which allow for an orderly conclusion of the negotiations. The risks of not concluding swiftly the negotiations remain fully with Greece [i.e. Once more, demanding that the victim takes all the blame in behalf of the villain.] The Euro Summit invites the Eurogroup to discuss these issues as a matter of ugrency.
Given the acute challenges of the Greek financial sector, the total envelope of a possible new ESM programme would have to include the establishment of a buffer of EUR 10 to 25bn for the banking sector in order to address potential bank recapitalisation needs and resolution costs, of which EUR 10bn would be made available immediately in a segregated account at the ESM [i.e. the Troika admits that the 2013-14 recapitalisation of the banks, which would only need a top up of at most 10 billion, was insufficient – but, of course, blames it on… the Syriza government.]
The Euro Summit is aware that a rapid decision on a new programme is a condition to allow banks to reopen, thus avoiding an increase in the total financing envelope [i.e. The Troika closed Greece’s banks to force the Syriza government to capitulate and now cries out for their re-opening.] The ECB/SSM will conduct a comprehensive assessment after the summer. The overall buffer will cater for possible capital shortfalls following the comprehensive assessment after the legal framework is applied.
There are serious concerns regarding the sustainability of Greek debt [N.b. Really? Gosh!] This is due to the easing of policies during the last twelve months, which resulted in the recent deterioration in the domestic macroeconomic and financial environment [i.e. It is not the Extend and Pretend ‘bailout’ loans of 2010 and 2012 that, in conjunction with GDP-sapping austerity, caused the debt to scale immense heights – it was the prospect, and reality, of a government that criticized the the Extend and Pretend ‘bailout’ loans that… caused Debt’s Unustainability!]
The Euro Summit recalls that the euro area Member States have, throughout the last few years, adopted a remarkable set of measures supporting Greece’s debt sustainability, which have smoothed Greece’s debt servicing path and reduced costs significantly [i.e. The 1st & 2nd ‘bailout’ programs failed, the debt skyrocketing as it was always going to since the real purpose of the ‘bailout’ programs was to transfer banking losses to Europe’s taxpayers.] Against this background, in the context of a possible future ESM programme, and in line with the spirit of the Eurogroup statement of November 2012 [i.e. a promise of debt restructure to the previous Greek government was never kept by the creditors], the Eurogroup stands ready to consider, if necessary, possible additional measures (possible longer grace and payment periods) aiming at ensuring that gross financing needs remain at a sustainable level. These measures will be conditional upon full implementation of the measures to be agreed in a possible new programme and will be considered after the first positive completion of a review [i.e. Yet again, the Troika shall let the Greek government labour under un-payable debt and when, as a result, the program fails, poverty rises further and incomes collapse much more, then we may haircut some of the debt – as the Troika did in 2012.]
The Euro Summit stresses that nominal haircuts on the debt cannot be undertaken [N.b. The Syriza government has been suggesting, since January, a moderate debt restructure, with no haircuts, maximizing the expected net present value of Greece’s repayments to creditors’ – which was rejected by the Troika because their aim was, simply, to humiliate Syriza.] Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and in a timely manner [N.b. Which can only happen after a substantial debt restrucuture.] Provided that all the necessary conditions contained in this document are fulfilled, the Eurogroup and ESM Board of Governors may, in accordance with Article 13.2 of the ESM Treaty, mandate the Institutions to negotiate a new ESM programme, if the preconditions of Article 13 of the ESM Treaty are met on the basis of the assessment referred to in Article 13.1. To help support growth and job creation in Greece (in the next 3-5 years) [N.b. Having already destroyed growth and jobs for the past five years…] the Commission will work closely with the Greek authorities to mobilise up to EUR 35bn (under various EU programmes) to fund investment and economic activity, including in SMEs [i.e. Will use the same order of magnitude of structural funds, plus some fantasy money, as were available in 2010-2014.] As an exceptional measure and given the unique situation of Greece the Commission will propose to increase the level of pre-financing by EUR 1bn to give an immediate boost to investment to be dealt with by the EU co-legislators [i.e. Of the headline 35 billion, consider 1 billion as real money.] The Investment Plan for Europe will also provide funding opportunities for Greece [i.e. the same plan that most Eurozone ministers of finance refer to as a phantom program].
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