The Greek Parliament is now just a rubber stamp. A German led Euro area has dictated to the Greek government. A comprehensive remodelling of Greek administration and justice is demanded, alongside major policy changes, a new wave of large cuts in public spending and tax rises. The lengthy list of requirements from the EFSF, the nominal creditor of Greece, is to be implemented in a hurry, with some of the programme a prerequisite for sitting down to try to reach agreement on new loans. Behind the EFSF lies some angry creditor states.
Some have rushed to presume that this is all now a done deal, that Greece will receive Euro 86 billion of new money, and peace can return to the Euro area and German-Greek relations. It is difficult to form such a conclusion if you read the full text of the “agreement”. The amount of money to be lent remains in question. There appears to be no reliable estimate of how much extra the Greek state will need to borrow, as it is likely tax revenues have fallen as a result of the latest crisis. There is no informed assessment of how much new capital and how many write offs the Greek commercial banks will need. The ECB is to study the Greek banks over the summer and assess the damage. There is marked reluctance by the Greek administration to find assets worth Euro 50 billion that can be sold for that much money.
The creditors are aware of this forced vagueness and match it with language demanding that Greece does conform to tight controls on its budget. They say “The Euro summit takes note of the possible programme financing needs of between Euro 82 billion and Euro 86 billion, as assessed by the Institutions. It invites the Institutions to explore possibilities to reduce the financing envelope, through an alternative fiscal path or higher privatisation proceeds.” If you took this to its logical conclusion there would have to be more spending cuts, more tax rises and more privatisation sales, at a time when most sensible commentators call in question the abilities of Greece to meet the targets needed to limit the new money to Euro 86 billion.
The Summit did ask the Greek government and the negotiators of the loans to “take into account the strongly deteriorated (sic) economic and fiscal position of the country during the last year”. Again this is a requirement on Greece to cut more and raise more tax at exactly the time that the economy’s output is probably falling badly thanks to the banking crisis. The EU likes ripping out the fiscal stabilisers during a recession, the opposite of policy followed in countries like the USA and UK with their own currencies where public borrowing is allowed to increase in a downturn.
The wide ranging reforms are to be assisted by EU technocrats and supervised by EU Monitors. The Greek Parliament has to legislate for Sunday trading, sales periods, pharmacy ownership, milk and bakery reform and to open “macro critical closed professions”. They are to undertake a “major overhaul of procedures and arrangements for the civil justice system”. This is on top of the much discussed higher VAT, pensions cuts and creating a properly independent Statistics authority.
Most crucial of all is the pledge of the Greeks to accept “introducing quasi automatic spending cuts in case of deviations from ambitious primary surplus targets…subject to prior approval of the Institutions”.
It is extraordinary that they had to accept this when the most likely reason for failing to hit budget targets will be a further collapse of revenues from poor economic performance.
It is a tragedy. I do not see that either side have been sensible or done well. A provocative Greek government with no feasible plan for growth has collided with a vengeful EU with no credible plan for growth. Between them they have badly damaged the banking system that is needed to finance the recovery. I wrote without seeing the books they would need Euro 100 billion to get by, when the official figure was Euro 53 billion. The official figure is now up to Euro 86 billion, though reluctantly. I still fear that when they tot up the damage to output, tax receipts , banking capital and loan losses by commercial banks it will be Euro 100 billion and still no permanent fix. Meanwhile the challenge is now on the Euro area protectors of Greece to show how their policy can work if they do go ahead with this damaging programme and these large loans.
July 15, 2015
Pretty much just as I said here a few days ago John. Breaking news, however, is that this very morning the IMF says that the plan cannot possibly work. So will the new rulers of Greece reconsider their position? Not a chance, they are hell-bent on destroying Greece and care not a jot about the people of that country.
The EU is entirely bereft of democracy and is now little more than a crazy shambles of once proudly independent nations who now hove to reach some form of consensus that satisfies no one.
July 15, 2015
The reports say the IMF will not be involved unless there are haircuts. Germany says no hair cuts and the IMF must be involved. Reports also say the EU will defy Osborne and demand that ALL EU states contribute and a vote based on QMV will take place.
Osborne left without making comment. When is going to cough up our taxes for this political nightmare? Better still when will he and Cameron wake up that the UK needs to be a free sovereign independent nation? Perhaps they should have had the courage to rally to prevent the spiteful behaviour towards Greece, object to the economic coup by the EU, speak out that ECB should have continued to provide liquidity to Greek banks, Cameron learns his lesson to get any agreement with the EU legally enforced or in treaty change! Even better invoke article 50 now to get a proper negotiated deal or even better still use article 50 and leave. They might listen to him rather then the quick chat over coffee where he was never going to get a deal (his real aim).
I note the very well paid celebrities want the gravy train BBC not to have cuts, there’s a thing.
July 15, 2015
“Reports also say the EU will defy Osborne and demand that ALL EU states contribute and a vote based on QMV will take place.”
On the face of it that would be very foolish, as it might just be the last straw for a sufficient number of Britons to swing the referendum towards leaving the EU … on the other hand, people might forget about it by the time of the referendum, and there will always be those taking the side of the EU and saying that it’s only right that we should contribute, and I’m always amazed at how many last straws some people will accept before they finally decide that this really is the last straw, and for many people the fear of all those millions of jobs lost if we “leave Europe” would hugely outweigh the minor problem of having to cough up the odd billion to help our “partners” in their time of need.
But as I say in one of my irritating “told you so” comments towards the bottom of the thread, this prospect of having to help pay for the Greek debacle through the EFSM could have been entirely averted if Cameron had made proper use of that “golden opportunity” to extract concessions which he had back in the autumn of 2010.
July 15, 2015
The latest wheeze seems to be that the ECB (which is legally prevented from funding the bailout) will guarantee individual countries’ contributions to the EFSM that will be used to fund the bailout.
Hence the UK will be asked to contribute on the understanding that repayment will be guaranteed by the ECB.
All the while everybody knows that the bailout will never be re-paid.
Much like when we “invested” in UK banks.
I trust Osborne WILL NOT agree to pay.
July 16, 2015
I question the legal validity of any guarantee scheme where activation of the guarantee would mean that the ECB, or the governments of other EU member states, would “be liable for or assume the commitments of” a defaulting EU member state, to borrow the wording in Article 125 TFEU in the EU treaties which says that they “shall not” do that.
I questioned that when eurozone states participating in the EFSF provided cross-guarantees to reassure investors in EFSF bonds that they would still be paid if some of them defaulted, and I question it again with this scheme.
July 15, 2015
I agree Dennis. I think it is becoming clear to even those die hard Tory supporters that Cameron did not want to renegotiate anything that is why he did not take advantage of the opportunity. It was pure choice to keep the UK in the EU on the same terms. His sham is about what can be spun and what scare stories he can come up with.
Although it took less than a day for the last promise by Cameron/Osborne to be broken. This on top of the the UK will not bail out either directly or indirectly Eurozone countries! Last comment in October that the UK will not pay the extra Ā£1.7 billion to the EU then did or the extra demand for our taxes from the EU in the budget, not mentioned by Osborne in parliament.
JR, could this latest extra EU demand for our taxes come from the proportion of the overseas aid budget that Cameron willingly gives away to the EU (Ā£2billion) spend? This is not small beer. Or at least from the remaining Ā£10 billion of overseas aid that is waistefully given away?
July 15, 2015
But will it persuade Cameron? š
July 15, 2015
JR, where does this leave Cameron’s alleged agreement he made with the EU that the UK would not be involved in bail outs? It certainly means the UK is involved despite false claims by both Cameron and Osborne, through IMF and EU demands for extra bail out money!
What this episode demonstrates is that the UK under Cameron has no control over what money the EU demands from the UK! This is our taxes! Where is a PM with a political back bone to say no you are not having our money? What about his comment about taking money with free will at QT in parliament today? There is no difference to the EUtaking money without taxpayers’ consent. The UK will help Geece twice, through IMF and money taken from ALL EU members, irrespective of any tokenism about its underwriting. We should not be part of it full stop.
July 17, 2015
@Hope
Insufficient voters supported that man. They were panicked by the SNP/Labour threat into voting for the Tories. We will all now pay the price.
July 15, 2015
This sounds a bit ranty.
Do not dismiss it.
The facts support Martyn G.
Recently Mr Verhofstadt spoke, on American TV, of how the EU is going to have one Treasury for the whole union.
The Spinelli Document speaks of a federal democratic Union to be in place by 2025. Already the Constitutional Congress is sitting. (It started on June 1 and will report by 2017).
Even Mr Barroso was saying the solution to the European problem is “More Europe”.
The move to one, integrated Europe has all been exposed by Dr Richard North and Christopher Booker in “The Great Deception”.
Shame nobody is listening.
July 15, 2015
Mike
Spot on. Well said
July 15, 2015
The EU is entirely bereft of democracy
because …?
July 15, 2015
Because national democracy tends to get in the way of the process of European unification, as noted among others by a French Foreign Minister, Claude Cheysson, some years ago:
“The Europe of Maastricht could only have been created in the absence of democracy.”
July 16, 2015
@Denis Cooper; French Foreign Minister, Claude Cheysson, [once noted] some years ago: āThe Europe of Maastricht could only have been created in the absence of democracy.ā
Except that the democratically elected governments of those countries that signed such treaties as Maastricht could have chosen not to (or obtained opt-outs to do so), than the electorate in those countries could have voted for democratically elected governments who would either demand changes to such treaties or leave the EU.
Not getting your own way, politically, doesn’t necessarily mean the result has been obtained undemocratically, it just means your opinions do not have the majority view.
July 16, 2015
Trust you to spring to the defence of politicians who are no better than the doorstep shysters they like to warn people about, Jerry. Are you by any chance a Liberal Democrat?
July 17, 2015
@Denis Cooper; You really don’t get this “democracy” thing do you. š
July 15, 2015
Because the EU;
– Has tried to topple a government.
– Has patched in unelected technocrats to effectively command an elected government (e.g. Italy).
– Does not accept the outcome of a referendum unless it meets its requirements and, as in the case of Greece realistically ignores the public will or, as in the case of Eire, insists that another referendum be held after enough propaganda and money has been put in to sway the vote to get the desired result.
I could go on but the only surprise is that so many people are apparently quite unconcerned at the loss their nationās sovereignty and have to do as they are told by an organisation basically ruled from the top by unelected commissioners. I am not in any way defending the Greeks and their financial train crash, much of this has been brought about by their own lack of will, butā¦ā¦
July 15, 2015
If the citizens of Athens witnessed the birth of democracy, the current inhabitants are witnessing its death.
The IMF intervention offers perhaps the last chance to end this farce – either by the Greek parliament rejecting these terms or by one or more parliaments elsewhere in the EZ rejecting them. Grexit must surely be the better outcome than the jackboot economics presently on offer.
July 15, 2015
PS the reference to pharmacies is curious. I understand that in Germany no one is allowed to own more than four pharmacy outlets. The effect of this has been to keep big pharmaceutical chains (such as Boots in the UK) out of the market. It is a subtle form of protectionism – under the radar as it were. The same arrangement apparently exists in Greece at the moment according a pharmacist interviewed on the BBC this am who is fearful that the proposed change will put her out of business. It looks as though double standards are at work. And who, I wonder, pushed for this particular example of economic micro management to be included in measures to save the EZ? Surely it is not corporatism at work again?
July 15, 2015
Oh yes it is oldtimer. Same with forced liberalisation of Greece’s Sunday trading laws. Germany appears to have the most restrictive Sunday trading laws in the EU, though I notice that this has now been devolved as Mr Cameron plans here. So much easier to exert corporate influence at the local level and play off one state/mayor against another.
July 15, 2015
More like a bunch of hyenas squabbling over a rotten carcus.
July 15, 2015
Yes, the EU, by using the Greek problems, have indeed taken a leap forwards in centralised EU governance even if it might not be a formal move towards a USoE, but then Greece (and its people) made it quite clear that they did not want a managed EZ exit and thus now need to live with the results.
More important though is what the EU now expects from the UK, especially in light of the latest IMF report, if there is anything else other than a “No we will not be involved” from the UK government should a request come for any sort of funds or guarantee for the ESM then sorry to say the political score card will read Cameron 0 – 1 UKIP with perhaps fatal results for 2020 when there is an even greater split in the political right and eurosceptic votes. If the EU protests about the UK’s non involvement in any ESM fund then let’s just bring that referendum date forward.
July 15, 2015
You are correct. But the UK will be involved if the IMF is involved. The IMF uses our taxes as well. Cameron’s original position was that the UK would not be involved in EU bail outs directly or indirectly. Clearly this was not true because of the IMF and he tried to get around his weasel words or be accuse of lying by loaning Ireland Ā£7 billion, presumably money the UK borrowed. The UK was involved and HE, true to form, rolled over belly up.
July 15, 2015
“Greece (and its people) made it quite clear that they did not want a managed EZ exit and thus now need to live with the results”
When did this happen, Jerry? I might have missed it.
They were warned that if the voted YES they would get more austerity and if they voted NO that would mean exit from the Euro. They voted NO.
How di they make it clear that they did not want a managed EZ exit? Was that a separate opinion poll or is that your interpretation of the referendum?
July 15, 2015
@matthu; “How di they make it clear that they did not want a managed EZ exit? Was that a separate opinion poll or is that your interpretation of the referendum?”
The Greek PM and government were telling their citizens and anyone else who bothered to listen in the run up to the referendum that whilst they did not want the them EU bailout deal they did not want to leave the EZ either, they were also telling people not to believe the EU. Then of course there were the media reports, by-way of “voxpop interviews”, with people in Greece who also expressed opinions that they did not want to exit the EZ.. The question that was put to the Greek electorate, by the Greek government, did not mention a EZ exit so the question could not about that, it is just that the EU tried a reinterpret the question so as to make it a ‘EZ exit’ question and thus bully Greece.
Nothing would have pleased the German finance minister more had the Greek PM asked for a managed exit from the EZ, as that was (according to reports) his favoured solution.
July 15, 2015
I’m sure I bow before the sophistication and profound technical know-how (or maybe just naivety) of the experts (maybe only specialists) spouting about these matters but for me they have to explain why it wasn’t obvious long ago that the debt had become unsustainable. The IMF have made themselves look idiots by only now noticing so late in the day that they all of a sudden believe in the “need” for debt “relief”. Given that there are I think only 11 million people in Greece and the debt is 100’s of billions how many billions did they think each individual could service and what relief would the creditors get for not getting their money back?
July 15, 2015
Postscript–Second billion hyperbolic but you’ll get the drift
July 15, 2015
This is going to sound really cynical, but here goes. When Greece joined the Euro, it suddenly found it could borrow at German rates and it went on a borrowing-funded spending spree. The money was put up by French and German merchant banks, in roughly the ratio 2/3 : 1/3.
When the crash of 2008/9 occurred, had Greece defaulted at that time it would have taken the French and German banking systems down, we would have had French and German ‘Lehman Brothers’ events.
The so-called “bailouts” ensured that Greece didn’t default at that time. Note that most of the “bailout” money did not go to the Greeks; it was used to immediately roll-over some of the debt. The IMF, under Dominique Strauss-Kahn, in flagrant breach of the IMF standard operating procedure, assisted in this process.
By now the “bailouts” have succeeded in transferring much of the Greek debt liability from the French and German banks and onto the taxpayer by way of the ECB and IMF. If Greece defaults now, it is mostly the ECB and IMF on the hook. The losses that French and German bankers will suffer are small enough to be withstood.
So to answer your question: it was obvious at the outset that the Greek debt position was unsustainable, but at the time the French and Germans couldn’t let Greece default as their banks couldn’t have withstood it. Now, thanks to the “bailouts” they can.
Their big fear is if Italy, Spain and Portugal follow suit, which they couldn’t withstand.
July 15, 2015
Absent write downs, very obviously the debt is not going to go down anytime soon, but on the other hand given that the interest rate on the debt is so low (and should be made lower or be deferred) I ‘m not sure I follow why write-offs would make much difference, certainly not as much as the IMF would belatedly have us believe.
July 15, 2015
Putting an end to the Extend and Pretend charade will have ramifications way beyond Greece.Those debts have counterparties;the whole system could disintegrate,particularly as once a realistic assessment of what Greece can ever re-pay is effected,who will be next?
July 15, 2015
Dr JR observes, ‘A provocative Greek government with no feasible plan for growth’. Yet one reads that former Greek Finance Minister Yanis Varoufakis continually asked his EMU inquisitors exactly how the measures the proposed would generate growth. Varoufakis has repeatedly made the point the Greek debt is so large it can never be repaid, a point with which the IMF concurs.
Of course the Greeks have been irresponsible, but the EU wanted them in the EU, and in the EMU at any price, except that the price is somewhat above expectations. One suspects the German Finance Minster keeps a copy of the Prussia State Debt Law of June 1820 in his brief case. This edict (there was of course no Prussian parliament at the time) severely limited the ability of the state to raise loans to finance essential infrastructure like the railway system. Either that or Schauble is a provincial accountant promoted beyond his capacity. But his mechanistic approach to a situation that went out of control five years ago is bizarre. As Varoufakis says, its the Treaty of Versailles redux in terms of demanding unrealistic reparations. There is clearly no set of state assets in Greece that can be sold for the value of the debts, either in whole or in part. So there is no point in confiscating Greek state assets and holding them in a German instrumentality as proposed. In short, the so-called agreement exacerbates the problems of both the EU and Greece.
Possession is nine-tenths of the law. It follows that the Greeks can physically resist EU attempts to raid Greece for assets. The Greeks have a competent air-force and navy, which they may need to use to keep EU predators at bay. They also need help in refloating the Drachma and re-opening their banking system so commerce can resume. With important bases in Cyprus, Britain has a vested interest in the stability of Greece. Will the UK act independently of the EU?
July 15, 2015
We should certainly be making more noise than we are doing against this situation. Unfortunately 99% of our politicians outside UKIP have been spoon fed propaganda and bad economics. Why aren’t our ambassadors and MEPs (other than UKIP ones) lobbying for a Grexit and return to the Drachma in Brussels and Washington? It is what the Euro politicians said would result from a No vote in Greece yet they have stopped that from happening.
July 15, 2015
Because they want us as a region of superstate called the EU.
July 15, 2015
Perfectly put. They will continue with the EU group think, extend and pretend, insanity that has caused so much needless damage. Making things even worse while destroying all semblance of any democracy.
July 15, 2015
Meanwhile Cameron has found yet another way to make British companies even less competitive. Forcing them to devote pointless time and money to publish their pay gap between men and women.
Anyone sensible and numerate, who has looked into this area knows perfectly well that the “gap” (where there even is one) is entirely due to different choices made (on average) by the two genders. If there were a large number of capable, hard working, motivated but underpaid women they would eagerly be taken up by the market as they would give a large competitive advantage to that employer. It is a total misunderstanding of how markets work to suggest otherwise.
Women, like it or not (on balance) choose different types of jobs, a different work life balance and even different subjects at GCSE and A levels at school. The market without idiotic intervention by government will adjust perfectly well to reflect supply and demand. Employers do not care who or what does the job, man woman or robot so long as it is done efficiently and cost effectively.
Women without children and younger women earn more than the average male already in most areas.
What is this socialist gene that drives Cameron and Osborne to make such silly, misguided and expensive policies?
July 15, 2015
Indeed. Apparently the pay gap is only really apparent above child-bearing age, not before women can have children and take years off work. I wonder why that is?
July 15, 2015
@LL; “Forcing them to devote pointless time and money to publish their pay gap between men and women.”
In this day and age of computer databases and spreadsheets is this really a burden upon any but the most basic and/or technophobic company, non of whom are likely to amongst those ‘forced’ to publish this information.
That said, I do think this sex-equality issue is getting a bit out of hand.
July 15, 2015
It still has to be done and paid for by someone, then perhaps potential legal challenges and associated costs. Someone has to read and interpret the new law and decide how to comply for a start, then directors have to consider it all. It is just more money And time down the drain and a distraction from the real business.
July 15, 2015
It follows the EU promotion of gender equality nonsense in June. They play the tune and Cameron dances.
July 15, 2015
Jerry
For those of us that actually run businesses this kind of abject nonsense is another productivity killer and cost raiser. We are already in the middle of trying to comply with the new paternal leave regulations, finding and implementing our auto enrolment staging dates, planning how the hell we’re going to comply with Osbourne s massive imposed wage rises. In order to comply with this directive and to make any sense a full analysis of hours worked, rates of pay, other benefits awarded, time off, full time equivalence etc etc will have to be undertaken in order to prove what we already know which is that actually in the vast majority of cases women are paid exactly the same rate as men.
July 15, 2015
@libertarian; Utter nonsense. Any half decent IT and HR department will already have such information to hand or be able to extract it quickly and cheaply (the same with the other so called problems you cite), no problems there. It’s just that some -usually the more ultra capitalist in nature- companies would prefer not to have to display their dirty washing in public with regards pay and differentials, not so much because it will show up sex equality problems but imbalances elsewhere.
You keep accusing me of wanting to go back the the 1970s, the way you have bleated on about the problems and costs of extracting statistical information from modern HR records anyone might think you and your company are already back in those early 1970s days, your company having nothing more than a Texas Instruments pocket calculator when it comes to IT!
July 15, 2015
It is amazing that the owners/managers/director find any time at all to run the profit raising side of their businesses, with all this endless garbage, inconvenience and costs endlessly flowing from government loons.
July 15, 2015
@Lifelogic; Funny how so many do though, perhaps they are just better “owners/managers/directors”, those who can – get on and do, those who cant – bleat on about “endless garbage, inconvenience and costs endlessly flowing from government loons”….
July 15, 2015
Do you mean that it is a complete coincidence that at the end of June the European Institute for Gender Equality (EIGE), together with the European Commission, launched the so-called 2015 Gender Equality Index?
Clearly the sudden interest in gender equality all stems from the EU and Cameron has to be seen to be playing his part so as not to rock the boat.
July 15, 2015
It is curious how certain issues seem to be promoted across our media simultaneously -all with an agreed line.See also women’s participation in traditionally male sports (football most obviously) and transgenderism (if that is the correct word) of late.Is there a secret Ministry of Information either here or in Brussels that dictates what the media WILL highlight?It certainly seems like it.
July 15, 2015
Scientists have identified this part of the TEU3.3 gene as the main root cause of this unfortunate condition:
“It shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child.”
July 15, 2015
Dear Lifelogic–As I keep saying, we are already looking beyond Equality to Identity. Motherhood (and Apple Pie) no longer exists and it is only a matter of time before children are produced by a mobile phone.
July 15, 2015
It is time wasting and pointless.
Stats from ONS show that between ages of 22 and 39 women earn considerably more than men and thus that there is no gender pay gap under 40. This despite time taken out of the workforce-having children.
The actual reversal of the pay divide (although the MSM still focus on the broad range including over 40s) is a direct result of educational reforms in the late 70s-early 80s where rote learning and disciplined repetitive teaching methods, more suited to hormone crazed boys, were binned. The more discursive, courswork based system now employed, is more suited to females and fails boys (who incidentally still do better in the sciences where factual/rote style learning is necessary).
Teenage boys need disciplined classrooms and plenty of physical education to burn off energy and surging testosterone. Males perform better in exams, coursework has diluted this. In attempting to redress the long -time imbalance of male dominance in education and the consequent salary dominance in the job market, social reformers went too far. When the current generation of upper management/ similar grade across business and industry retire, these tired, rabid arguments will be shown for the anti male arguments they really are.
This is just like The Green crap religion which had its genesis 30 years ago during a period of cooling, now there is no cooling but a huge industry has evolved to deal with an issue no longer relevant and is actually ‘costing’ society. The question is when the current management level retire who will fight to redress the current imbalance?
July 15, 2015
Sorry the last warming period 30 years ago not ‘cooling’.. obviously!!
July 15, 2015
LL, you really are a dinosaur. As pointed out by Jerry, any computerised accounting system can give you these statistics for a 1000-staff company in less than fifteen minutes. It will take longer to print the results than to dothe statistics to create the pie charts.
As for your comment about “anyone sensible and numerate”, I again beg to differ. I know of places of work where women, single, hard-working, never sick, never made it to the higher executive level, when their male colleagues, some not particularly bright sparks were called to these positions by a rather decrepit “chairman”.
So the question is : are you one of these “chairmen”?
July 15, 2015
Why clog up peoples’ time with providing silly statistics, though?
Do we need to determine next that the correct % of employees have brown eyes or buck teeth?
Where is this heading and why?
July 15, 2015
The great benefit is being a small company which totally ignores this cr-p we outsmart larger rivals just by being more efficient looking after customers whilst they look after their gender stats!
July 16, 2015
@Hef
Statistics of pay for comparable status will not show up the discrepancies you describe so they are really a waste of time even by your measure.
If women truly are suffering the way you outline better they man up and put themselves forward (after all confidence and presentation are crucial to senior roles) than be aided by this limp rag of a proposal.
July 15, 2015
I agree this is the most extraordinary drivel from a Conservative govt. the cost will not just be the admin cost of preparing and reporting these data (and fighting legal cases flowing from them) but the hidden cost to businesses of not hiring the people they think best suited to jobs in the interests of appointing enough women to appease this equality lobby.
Maybe we should see differentials published also – if we are to go down this route – for different ethnicities, abled vs disabled, straight versus gay, tall versus short and fat employees versus thin. Perhaps we should be consistent and regulate out all ‘discrimination’.
July 15, 2015
Since you raised this, LL, it reminds me of a dear, late friend of mine, a woman pilot who flew with the Air Transport Authority (ATA) delivering Spitfires, Hurricanes, Blenheims, Wellingtons etc to RAF airfields. Early on, and I think it was Atlee, decided that since they were doing exactly the same dangerous flying work as the male pilots, there should be equality of pay.
And so they were – my friend always claimed that it was the first time equality of pay had been applied and, I might add, was fond of the fact that back then she was laughing all the way to the bank.
Sorry if this is too far off topic, John……
July 15, 2015
By the time all the idiots involved realize you can’t get blood from a stone ordinary life in Greece will have ceased. Fascist bankers and their pet politicians will have utterly ruined the place and stolen everything. Central government whether it be national or EU is a destroyer of wealth and morality. How long will it take for people to wake up?
July 15, 2015
The simple fact is that trust on both sides has vanished.
The EU has no idea of the real depth of the financial crisis in Greece because the Greek government have no idea themselves, they are all guessing.
I can see lots of civil unrest talking place if this agreement is signed through by the Greek Government.
The only real solution which stood a chance, was for Greece to exit Euro, devalue and for the people to take the pain in one go, so that they could have a chance to rebuild their own future.
I will give it a couple of years before Greece are in need of more help, by which time the problem will be massive.
Leasing off an Island or two (similar to our once Hong Kong agreement) to the EU of Germany does not look such a silly idea now by comparison.
July 15, 2015
‘Leasing off an Island or two (similar to our once Hong Kong agreement) to the EU of Germany does not look such a silly idea now by comparison.’
The time for the Greeks to act reasonably is gone. the outrageous deal forced on Greece is justification enough for a policy of zero compliance and co-operation with the EU. At this stage the Greeks have nothing to lose by going in very hard against the EU. They’ll never see the money promised even if they comply.
July 15, 2015
There is probably oil/gas under those islands.
July 15, 2015
The civil unrest may not be very civil.
July 15, 2015
Alan
I can see lots of civil unrest talking place if this agreement is signed through by the Greek Government.
And some!!
July 15, 2015
It is somewhat reminiscent of the reparations imposed on Germany, mostly by France after WW1. Not in causes but in predictable outcome. This is going to end in tears because as yet the Greek people have not spoken. Through dreadful leadership over many years they are the innocent sufferers. What might arise to articulate their views could be very damaging to all concerned. I can think of little more condemning of our future involvement with the EU in any capacity other than trade, friendship and cooperation. It is also Cameron’s chance to change direction without loosing face, but is he that perceptive.
July 15, 2015
It is an astonishing situation and shocking to think that it is what the EU (through the Eurozone) is about in the 21st. century. It truly is an Evil Empire now.
I assume there is no truth to the notion that the conditions of the inevitable fourth bailout will see the abandonment of the Greek language in favour of German (and French too – in an effort to make someone feel they are still important in shaping Europe).
July 15, 2015
A phonetic Greek, with ‘normal letters’ would help. š
July 15, 2015
Greek politicians are living in cloud cuckoo land. I heard a ‘radical’ leftist Syriza MP argue that all Greece’s ā¬300bn or so debt should be written off – ie the taxpayers of the EZ countries should make a gift to Greece equal to approx ā¬1,000 per EZ citizen. Note that these leftist nincompoops are supported vocally by the UK left, eg by Jeremy Corbyn MP, increasingly likely to be Labour leader or at least a senior figure in the Labour Party. So Labour will go into the next election with their own Syriza-style policies on offer for the UK, complete with sympathy for………… organisations such as Hamas and Hezbollah.
I would have more sympathy with Greece if a Mrs Thatcher of Greece would emerge with support for leaving the euro and radical supply side reforms. At the moment Greece is arguing and voting for subsidy and will probably agree a deal but then drag their feet on implementing it.
July 15, 2015
But in 1953, the nascent West German state was in financial difficulties and had 50% of its debt written off by the Allied powers.
It seems the Germans are happy to accept forgiveness but not to forgive.
July 15, 2015
Yep , the parable of the unforgiving servant Matthew 18:21-35 is apt .
The Germans are getting too big for their jack boots again .
July 15, 2015
Although for much of the time immediately prior to 1953 Germany was a protectorate of the Allied Powers who restructured it extensively and so, I have seen it said, for the situations to be comparable, Greece would first have to submit to the extensive restructuring now proposed.
July 15, 2015
The Allies in 1953 were not extracting reparations from their German protectorate through deflationary measures. The EU proposed restructuring of Greece will force further contraction and unemployment where over 50% of youth are already jobless. The Greek Parliament must resist.
July 15, 2015
Well, it could be argued that the citizens of the other eurozone countries are just as culpable as the citizens of Greece, insofar as they elected the politicians who allowed the politicians elected in Greece to blag their country into the euro in the first place, and so they should pay the price for that. Except for the citizens of the countries which joined the euro after Greece had been allowed to join and who therefore had no say in that decision* – that would be people in Cyprus, Malta, Slovakia, Slovenia, and the three Baltic states being exempted from having to pay for the fatal mistake made by the politicians of the euro countries at that time, before their own countries joined the euro.
* Under Article 140 TFEU here:
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:12012E/TXT
it is only the states already in the euro who vote on whether a new state is ready to join the euro:
“The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro.”
and who then decide unanimously that it should proceed to scrap its national currency and adopt the euro:
“… the Council shall, acting with the unanimity of the Member States whose currency is the euro and the Member State concerned, on a proposal from the Commission and after consulting the European Central Bank, irrevocably fix the rate at which the euro shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the euro as the single currency in the Member State concerned.”
July 15, 2015
And Britain is expected to stump up a billion pounds towards the bailout even though we are not in the EZ. Of course after much huffing and puffing we will pay up.
We have unlimited funds for aid the EU and for paying immigrants but not for the public services which we use.
I hope that the Greeks default again and all the money is lost. Still Dave thinks it’s the bees knees to be a German Colony.
July 15, 2015
Ah, yes, Dave. Lets talk about him and his achievements in the past 5-6 years.
1. Takes direction from the unelected (word left out) Juncker, and the German Chancellor.
2. No longer has control over his own seat of power – ie. the HoC – because he is being played by a puppet by a woman who is not even an MP, and by a Party which is not representative of any constituency south of the border.
3. Has presided over the fastest and largest, and more importantly, unsustainable increase in the population in the history of the UK (despite his ‘cast iron’ promise.
4. Has bollocked other NATO countries for not spending enough on Defence, then conspires with his Chancellor to mess about with Budgets whilst ringfencing billions for foreign aid which he knows very well will be frittered away by dictators etc.
5. Is too spineless to do anything meaningful about radical elements in our society who wish us harm – monitoring the web won’t cut it; did anyone here need a computer to make them feel disenfranchised when they were young and impressionable? Christ – I could hate another country just for beating us at football when I was 15!!!
6. Has reneged on the British Bill of Rights.
7. Has reneged on his promise of fairness for England. Sorry Mr R, EVEL is crap – if it isn’t English MPs only from Stage 1 to the final passing, and excludes non-English Lords too, it’s not EVEL.
8. Is trying to engineer a Referendum which is supposed to be impartial. Why? No-one knows because he hasn’t got the balls to explain.
Still. Enough negatives.
On the plus side, he has legalised same-sex marriage. That was a success in as much as it divided his parliamentary party, annoyed much of the wider party, and annoyed a large chunk of the traditional Tory electorate. Not that I particularly care about it, for the record.
Oh – I forgot – he also ensured the EAW was pushed through Parliament.
If anyone else wants to add anything please feel free.
I’m currently writing Assessments for people who work for me. If I had to write Dave’s, it would probably read: Must do better.
etc ed
July 15, 2015
Thank you for your analysis. This is where you shine on this blog, reading the technical jargon thrown out by these quasi-euro-politicians and quasi-bankers and translating it into real currency for non-specialists.
This Euro project does appear to be heading for this century’s European nightmare. We need the US and ourselves to be strong against this monetary tyranny, though, and so far both Cameron and Obama seem to be pushing the creditors’ side of the argument. This MUST change – you will note only Farage has called for the Greeks to say No- Labour and Libdems are strangely silent. Where is Clegg and his “3 million jobs lost” mantra-perhaps in Greece, where he should have been spouting this all along?
July 15, 2015
This deal faces a couple of hurdles.
1. They don’t have the cash without borrowing from the EFSF, which is partly our money and which they agreed with Mr. Cameron not to use for bailing out Greece.
2. The IMF appears in some disarray and now says it will not back any deal that fails to restructure the Greek debt to make it sustainable.
As you say they have all been incompetent. Greece wants nothing to do with the IMF. Germany will not be involved without the IMF. Yet the IMF is the best friend of Greece if it forces through a properly structured deal.
July 15, 2015
I can understand the confusion, which was shared by an “expert” Sky reporter, but it’s the EFSM for bridging while the use of the ESM is arranged. The EFSF was set up by just the eurozone states, without any stated legal base in the EU treaties, and the UK is definitely not involved in that beyond winking at the illegality under the EU treaties and therefore also our national law. The EFSM is based upon the use, or abuse, of Article 122(2) TFEU, as I comment below in more detail. As late as March 2010 Merkel herself was explicitly saying that Article 122(2) TFEU could not be used for bailing out purposes, so it is not just opponents of the EU who say that it is abuse rather than legitimate use.
July 15, 2015
The EFSF lending facility has closed at the end of June. The EFSF has been absorbed by the ESM (same staff) which will run-off its obligations. EFSF was a Eurozone SPV (special purpose vehicle); the EFSM was the EU-wide SPV, also being absorbed into the ESM.
The IMF techies were saying a year back, that QE would not be effective at increasing aggregate spending. ECB has swapped circa ā¬500 billion so far and no signs of a lift off yet. The techies also said that Troika austerity, was doing permanent damage to households and small business in the EZ, while the Banks and the big corporates, had sent their money on holiday. The IMF management was having none of it, I wonder why š .
PS. How come the Greeks could organise a Grexit referendum in eight days. We surely could do the same with a Brexit yes/no?
July 15, 2015
Interesting factoid from the continent. There is about Ā£1,000 worth of cash notes in circulation in the UK per capita. In the Eurozone it is ā¬3,100 cash notes per capita. You can understand why the Greek Treasury particularly, has trouble getting its tax collected.
July 15, 2015
I don’t think you’re quite right about the EFSM:
http://ec.europa.eu/economy_finance/eu_borrower/efsm/index_en.htm
July 16, 2015
As I understand it Denis, since Oct 2012 the EFSF and EFSM are both in wind-down mode and will be absorbed into the permanent, EU-wide, ESM facility; but legally they both still exist. I assume that is why Dombrovskis is saying the EFSM is best option for a bridge loan to Greece.
As the EFSM is EU-wide and the Non-Euros don’t want to play the united Europe game, someone will have to insure the Non-Euros against loss. Not sure who that would be?
July 16, 2015
But I don’t think the EFSM is an SPV, I think that device first came in with the EFSF.
July 15, 2015
I just can’t see the rest of the citizens of Europe putting up with this farce. According to the IMF Greece is insolvent and will never pay her debts back. Tell us something we didn’t know!! Every layman in the country could have forseen this disaster coming so why have the banks and political leaders gone down this route? As for us having to stump up a billion – ludicrous! Surely this must send out a message to the electorate that we have to vote NO to Europe. How can Cameron still advocate staying in? How can anyone think it’s a good idea? Even if people don’t support UKIP they have to see that Farage and his team have been right in everything they said for a long time now.
July 15, 2015
We are being expected to pay a billion toward the Greek crisis when we have had austerity measures ourselves and as reported on Radio 4 this morning, we have no proper care for people with alzeimers who are being moved around the country for care away from their families and loved ones. Damn right we are resentful and many other countries will be too. I am fed up with our money being given away. If it’s not for foreign aid, its Greece. Also the news that our power stations are to be paid for back up is a disgrace. Dump the green agenda and build new, cleaner power stations. If this green crap is supposed to be implanted to save on carbon emissions then why are we going to use diesel for back up? You couldn’t make it up and all of this because of the daft, incompetent, idiots in Europe.
July 15, 2015
Sorry, meant to say implemented not implanted in my last post.
July 15, 2015
fedupsoutherner
Want to take a bet that we will be making a contribution to the bailout.
Remember the last demand for billions extra last year, with Cameron saying we would not pay under any circumstances.
We ended up paying a few months late, but pay we did.
The EU is like a giant money vacuum machine, that sucks the life out of its members.
July 15, 2015
The banks and political leaders have gone down the route they have because they are working to a very different agenda to that of the people of Europe.
The Euro is the means by which the EU in Brussels can control the member states. Cyprus and Greece being but the first to feel the effect. A country outside the Euro is much harder to control unless you have the political elite in your pocket. Control exists for the purpose of creating a United States of Europe. This is the agenda.
Nigel Farage has written an excellent condemnatory letter supposedly to The Telegraph today. Well worth reading. I ask the question, why is he the only unfettered voice in the UK exposing the horror of the EU. Every other party political voice appears muted by comparison in the UK. It would seem that misbegotten party loyalty merits greater importance than condemnation of our supplicant attitude to the EU.
July 15, 2015
Because the other leaders are Cameron. Everyone else is having leadership elections, though Lucas didn’t seem so bonkers as usual with her horror of what has happened
July 15, 2015
Nigel Farage’s address in Washington D C for The Heritage Foundation today will be well worth seeing when videoclip available on H F website. The summary of what he covered is on Breitbart London and on UKIP’s own website. Yet again he is at the forefront in terms of identifying the real problems and putting these across in a highly convincing and direct speech.
July 15, 2015
Every layman in the country could have forseen this disaster coming so why have the banks and political leaders gone down this route?
>
A mixture of idealism and this plan that foreign investors are going to get 50bn of public assets at knock down prices? A dangerous mix in which game theory does not seem to apply.
July 15, 2015
I only hope that this debacle concentrates UK minds on the endgame of the EU and the concentration of the power and assets. The way Merkel stated that she expected the Greek Parliament to rubber stamp the agreement is unbelievably presumptuous but it is good that people can now see the reality behind the screen.
zorro
July 15, 2015
I always did say that the Germans wouldn’t let the Greeks go and would demand their ‘beach huts’ in the sun….
zorro
July 15, 2015
Indeed, thankfully the Uk (thanks John Redwood) resisted the arm twisting of the Germans who badly wanted us to join the Euro insisting it would be good for us.
Why do they want to dominate and control Europe so badly…
Of course it’s got nothing to do with the legacy of WW2, appeasing wounded German pride that the Greeks are being made to suffer.
That would be a non PC thing to say and therefore cannot be true…
July 15, 2015
54 billion..do I have 55 billion …going once, twice..Greek democracy SOLD …Thank you Mrs Merkel.
Don’t mention the war!.
July 15, 2015
I’m sure you’re right. It’s highly unlikely the ā¬86 billion will be anywhere near the end of it. It is perfectly understandable that taxpayers in Holland and Germany aren’t happy.
The fundamental problem with the EZ is that countries can only stay within the SGP rules if they run big surpluses in the trade of euros. That way they have enough euros to prevent their economies falling into recession. But, of course this is at the expense of their euro trading partners who haven’t. Those euros have to come from somewhere.
Being a net exporter means running a surplus in the exchange of money (ie other countries’ IOUs ) but a deficit in the trade of real goods and services. The populations of the surplus countries are more likely to have a job but that deficit means they have a reduced standard of living in relation to the productive capacity of their economies.
The non-surplus countries are in that state of recession , or depression, even in the cases of Spain and Greece. Therefore the populations of these countries are much more likely to be unemployed.
The economies of the eurozone are running at way below their capacity and everyone, especially the young, is adversely affected. No-one ends up with a good deal.
July 15, 2015
All those responsible (in the EU, IMF and Greece) for this debacle need to be held to account and punished. Those in the EU will of course continue in office oblivious to all except their manic determination to destroy democracy and the nation state as the way to bring about their ever closer union and a country called Europe.
It’s very noticeable that the leaders of the main Westminster parties are keeping their heads down and this Greek tragedy seems almost non-existent to them. Not surprising as it shines a searchlight on the dictatorial organisation in which they are so determined to keep us enslaved.
July 15, 2015
Not seen any data on Greek interpersonal/ inter-business debt.
I have spoken with hundreds, probably more, ex-business people in Britain. ( Oh and they are still in that position )They gradually went out of business due to other businesses slowly finding difficulty in paying them for services rendered; their own businesses slowing and becoming less profitable and their own maxing out of loan facilities and credit cards to keep them afloat awaiting ” the green shoots of recovery”. I guess Greek business people must be at this stage and worse.
So in Greece, one can imagine most people have maxed out loan and card facilities, have already “sold their piano ” as we used to say in Yorkshire. Most people except if being lucky enough to have a job and having pensions paid through a bank actually will not be making a neat well-ordered German-like queue outside a bank simply because they do not not have and never had anything in a bank anyway.
EU/IMF/Foreign Finance Ministers/ negotiators obviously deal with macro issues. It is not that they have forgotten the man-in-the-street. He does not exist. Their mathematical equations compound and make at best a ghost of him.
Our literature and art warns us of overworked mathematics. The Ghost of Christmas Future. Karl Marx in his Communist Manifesto ” A Spectre is Haunting Europe ” and Mel Gibson with axe referred to as “A Ghost” in the movie The Patriot.
The EU may become frightened soon of things which go bump in the night.
July 15, 2015
It seems unlikely that the US will allow the IMF to engage in the latest bailout without substantial debt relief and we know that the Germans will find it almost impossible to get such a plan through the Bundestag. Where does this leave the plan ?
It’s clear that the “negotiations” held over the whole of last weekend were a complete waste of time given what the IMF are saying.
The fact that every head of state and finance minister had a copy of the IMF report before the negotiations even started tells us everything we need to know : All policies and decisions made in respect of the Eurozone are political and have no base in economic reality.
Obama and Cameron can shout as much as they like from the sidelines but it’s the taxpayers in countries like Finland, Netherlands and Austria who would have to stand the losses in the event of a write-off of Greek debts. Their leaders know they cannot sell that kind of deal to their parliaments, let alone their electorate.
It seems to me that the only way Greece can recover is through a default and a new life outside the Euro. Merkel and Co know this is the case – Wolfgang SchƤuble, her Finance Minister has been highly vocal on the subject but has been sidelined because EU politics, as ever, always usurp economic reality.
We can only hope for the sake of Greece that the latest intervention from the IMF might just result in common sense prevailing and Grexit will be the outcome.
July 15, 2015
With the EU in so much bad odour due to its hubris and arrogance whilst also being so incompetent in running its own business and currency, it is right to ask for Cameron to be put on the spot, now, to explain and particularise why it is a āgood thingā to be a member. The pro-EU lobby, of which Cameron as PM is the de facto leader, resorts to pointing out (often mendaciously) the disadvantages of withdrawing, yet fails to provide a considered and positive case for membership. All we hear are just airy and insubstantial assurances.
Just how bad do things need to become before the scales fall from Cameronās eyes?
July 15, 2015
The Greeks puff themselves up and talk about their pride and their dignity and claim ill-treatment, and yet at the same time they hang on to the skirts of the EU because they want more of the lovely Euroloot. They know they can’t repay the debt and I doubt if they have any intention of doing so in any meaningful way. They continue to string the EU along and as with alcoholics, they promise they will do better, but only if they get another drink first.
July 15, 2015
I am coming to the conclusion that it is pull up the drawbridge time for Greece and for them to tell the creditors they will get something back when we sort ourselves out using our own currency. It is only imports that will hurt them. using the drachma, prices will not rise internally and export businesses should boom. The banks have a lot to answer for but they could be re capitalised with drachma and let the euro creditors wait.
July 15, 2015
Somebody writing in the Guardian makes an interesting point, given that the IMF has now said that the debts of the Greek government are unsustainable:
http://www.theguardian.com/business/nils-pratley-on-finance/2015/jul/14/why-the-imf-should-not-aid-a-greek-bailout
“Yet IMF rules are supposed to be clear. The organisation only lends to a country when it can see a clear path back to debt sustainability. If the eurozone wonāt grant debt relief in advance, why should the IMF chip in its ā¬16.4bn contribution to the latest bailout? Surely it canāt.”
Well, of course it can, while Christine “We violated all the rules because we wanted to close ranks and really rescue the euro zone” Lagarde is in charge.
July 15, 2015
It is a fantasy, the end of Greek democracy for the undemocratic EU dream ends in disaster for us all. Please get us out of this nightmare.
July 15, 2015
This whole affair is a disaster area – as even the IMF have now admitted.
If Cameron is forced to give our money to this mess then all his claims about EU opt-outs will be seen to be worthless – so it will be a bit of a disaster area for him as well.
July 15, 2015
There is marked reluctance by the Greek administration to find assets worth Euro 50 billion that can be sold for that much money.
>
Thats the fantasy, its not going to happen.
July 15, 2015
The valuations were based on Athens stock market levels that will not be seen again for a long time. The 50 billion is another part of this “deal” that was based on wishful thinking and a refusal to face reality.
The only hope I can see is if the sane people at the IMF backed by the US and other board members have established control over Lagarde and insist on a classic properly structured IMF deal, preferably after Grexit. Which will not be easy for the Greeks but at least gives them some hope of a future – if they can realign their thinking to see it.
July 15, 2015
While also in the Guardian, somebody more notorious is so upset with what is now happening with Greece that he is turning against the EU and moving towards support for what he calls “Lexit”:
http://www.theguardian.com/commentisfree/2015/jul/14/left-reject-eu-greece-eurosceptic
“The left must put Britain’s EU withdrawal on the agenda”
“Progressives should be appalled by European Unionās ruination of Greece. Itās time to reclaim the Eurosceptic cause.”
Partly to counter the rise of nasty old UKIP, it has to be said.
July 15, 2015
It’s becoming increasingly difficult to follow every twist and turn of this saga. But two strands are apparent. Greece wants to stay in the Euro come what may. Germany appears to be the only country that thinks they should take a sabbatical.
Why was there no support from the rest of the Eurozone for the German position?
One explanation is the domino effect. If one country is allowed out, others will follow once they see there is life after the Euro.
It is not inconceivable that one of those countries would be Germany itself, fed up with being pilloried with the jackboot image.
If Germany goes the Eurozone is finished – as is the whole EU project.
Does the rest of Europe want a footloose and fancy free Greater Germany? A bit risky.
July 15, 2015
I donāt agree with those who say this is a coup. The Greek Parliament has the right to reject the deal. It has the right to call a referendum on the re-introduction of the Drachma.
We also have the choice of leaving the eu. If the eu breaks its pledge not to use the European Financial Stability Mechanism (thatās our money folks) to prop up Greece then the UK OUT campaign should have a lot more support.
However, this will be downplayed by the BBC, denying the OUT campaign the boost it deserves.
Instead it will fill the airwaves with a letter written by some luvvies (nearly all of them have taken public money via the licence fee) rejecting ācutsā to the BBC, the very same organisation that will no doubt be on the extremist IN side when it comes to the referendum.
One possible solution is every Ā£ BBC bias costs the taxpayer to be funded by real cuts to the BBC and returned to licence fee payers. In this case the BBC and its luvvies would be bankrupt within a week.
July 15, 2015
Perhaps you should read http://www.telegraph.co.uk/news/worldnews/europe/greece/11740686/Alexis-Tsipras-gambled-away-Greeces-future.-Now-he-must-make-amends.html
A very good article.
Mr Micawber’s dictum applies whatever currency a country uses.
July 15, 2015
An essentially party political article by a Greek politician who signed the first illegal bailout package in 2010, one of the old guard claiming that under his kind everything had been going very well until the upstart Syriza came into office five months ago, and see how they have wrecked it in so short a time! And it is worth reading the comments on his article, and on him, as well as just the article.
July 15, 2015
Are you Martin Schulz?
July 15, 2015
I cant agee it’s not a good article at all. Self justificatory rubbish from a former finance mister who agreed to bailouts that were always going to fail, ( see IMF papers).
If you believe the fiction that the collapse is all down to Syrzia and that the claimed nascent recovery would hold and debt relief was always on the table then I have some magic beans you might be interested in buying ..
The deal is appalling, satisfies no one and will ensure the losses are crystallised. The capititulation by Tspiras does not follow through on the previous positions held, but it is the logical conclusion of the voting down of a robust response to the strangulation of the Greek banking system by the ECB. This latter fact will ensure growth falls and debt to GDP rises to even more extreme levels.
July 15, 2015
I think it’s becoming painfully obvious to the peoples of Europe that politicians including British are the most stupid and intellectually challenged in the world. We have the IMF now telling us Greece cannot ever pay off her debt. Every man, woman and child new that but not of course the EU finance ministers.
Today we have the boss of National Grid telling us to expect power cuts as reserve this winter is down to 1.5%. This doesn’t take into account any breakdowns or unscheduled maintenance.
Still we go ahead and close down our coal fired stations whilst Germany builds them apace.
Very much a case of do as I say, not do as I do, with the Tutonic lad EU.
And Dave still thinks it’s the best club in the world.
July 15, 2015
Don’t worry Ian, we’ve still got the wind farms. I’m sure that they will help to keep the lights on especially when there is no wind. What I want to know is what happened to the commitment to reduce carbon emissions???? Wind farms and renewable energy was supposed to be brought in to address this problem and yet we hear they are going to use diesel generators (providers of this to be paid an extortionate amount) so how is this going to reduce anything?? It makes a mockery of the whole policy especially when Germany is burning more coal than ever because their renewables policy is just as useless as ours. Another European disaster.
July 15, 2015
Great to see you anti- this EFSM usage but it is exposing your leader’s double dealing with the EU and the British people to a wider audience!
You STILL think this EU referendum will be free and fair???
July 15, 2015
John, I thought that was the whole point of the political Euro currency and ever closer union, that Brussels at every turn takes power from national parliaments bit by bit with a one way ratchet, until they are little more than town councils. This has happened in the UK ever since Ted Heath took us into the EEC and a big step forward in the erosion of our sovereignty was the Single European Act signed by Margaret Thatcher which made our laws subservient to European ones that spawned and are part and parcel of the EU.
We will be locked in and IMO will probably join the Euro after some token minor renegotiations by David Cameron followed by a referendum which will give him IMO the mandate to do so as a totally committed EU federalist. FCO 130/1048 spells out things very plainly and how the Eurosceptic wing of the Conservative party have a vital roll to play as the ‘useful fools’ and cover for giving away our sovereignty and democracy to faceless, unaccountable European politicians, all at great expense to our pockets to just rub more salt into the wound.
You can fool some people some of the time, but don’t expect fool all of us all the time.
IMO you are wrong is saying that Greek democracy has been crushed as there is always the alternative of Greece leaving the Euro, adopting the Drachma and defaulting, which is the classic route for over indebted countries to quickly recover with Iceland being the most recent example. They also have the right to invoke Article 5 of the Lisbon treaty and leave the EU. It is almost inevitable that this will have to happen anyway, it is just a case of how much further can kicking and bailing in of Greece by EU taxpayers the EU can get away with when the current new deal of three years expires (if it lasts that long). The only thing I would like to be is a fly on the wall when the Greeks tell the German government that they are not honouring the TARGET2 agreement and the Germans will have to absorb those losses!
The way the EU plays fast and loose with democracy, sovereignty and accountability may seem a trivial matter to the Conservative party and the other EU member governments and Brussels, but it is having serious and ever more onerous effects on all EU countries, where the French / German over regulation socialist axis is making the EU less and less competitive with a shrinking percentage of world trade. Where several EU countries are members of the exclusive 20/50 club as the bar is raised on this through inflation and faster growth by other more dynamic economic areas like the US and parts of Asia, we will see the EU countries that are members drop out as more and more unaccountable regulation and socialism make the whole of the EU area relatively poorer and all of us more and more impoverished.
Full democratic accountability is an absolutely essential requirement to create the right conditions for wealth creation to flourish, without it we can all see the results in mainland Europe of mainly economic stagnation and long depressions through over regulation, over taxation and too many government deficits and ever increasing sovereign debts.
Greece maybe the crisis point at the moment, but Portugal will be next with Ireland, Italy, Spain and France all in the frame for their lack of competitiveness, growth and government debts. If the EU can’t cope with Greece and handle the problems in a sensible way, how is it going to cope with the rest?
July 15, 2015
A few years ago I was cluttering up this blog with comments listing EU treaty changes which Cameron should have demanded in return for agreeing to the EU treaty change that Merkel had demanded in the autumn of 2010, to provide a clear legal base in the treaties for the eurozone states to set up a permanent bailout facility, later to be called the European Stability Mechanism.
For example, here on October 5th 2011:
http://johnredwoodsdiary.com/2011/10/05/protecting-the-single-market/
And what was the sixth item on that list?
“6. To help prevent any repetition of its disgraceful abuse in the future, Article 122 TFEU to be returned from qualified majority voting to unanimous decision making, so that the UK and every other country will once again have the right to veto its activation.”
Instead Cameron chose to get a mere political agreement, a promise by other EU leaders that they and their successors would not abuse that article to force the UK to contribute to any future eurozone bailouts, a promise which he has falsely claimed is legally binding when it is not in fact legally binding on those who made it, or on their successors.
As we are now seeing when the EU Commission seriously proposes to reactivate the EFSM based on abuse of that article to provide bridging finance for Greece, and Osborne is having to search round for allies to try make sure that the proposal is voted down.
Apart from the immediate possibility that we will be on the hook for up to ā¬1 billion to tide Greece over until the ESM loans come through, there is another, and much more important implication here – that if we have a rushed referendum on the promise of EU treaty changes at some point in the future, rather than on actual agreed, finalised EU treaty changes which would be ratified by all of the other member states once we had agreed to stay in the EU on that new basis, the so-called “Danish option”, we may later find that the promise is not kept as we had been led to expect when we voted.
July 15, 2015
It appears that Brussels is still proposing to pay for the Greek bridging loan from the EU-wide European Financial Stability Mechanism despite a specific protest from Britain that it would breach the written assurances David Cameron has from other EU members that Britain would not be called upon to contribute to any EZ bailouts.
It seems that they are so desperate to shore up Greece that they will do anything including breaking a written agreement with Britain in order to do so. The excuse being used is that the agreement was only a “Political Pledge” so EU Lawyers are advising that it can be broken !
Proof if any were needed that whatever the outcome of the Cameron “renegotiation” we cannot rely on any “Political Pledge” or “Promise” of future treaty change, even if it were in writing.
Events of the last three weeks have surely made Cameron’s task of winning a Yes vote in the referendum infinitely more difficult.
July 15, 2015
During one of the earlier Eurozone bailout debacles I clearly remember Mr Cameron or Mr Osborne, publicly offering advice and comment, and being told in no uncertain terms to
“Shut up and mind your own business, as you are not a Eurozone member and this does not concern you.”
And now they want our money; to which Parliament has to say “No” and mean it.
No taxation without representation .
Eurozone Ministers have been quick to accuse the Greeks of being untrustworthy, yet they have the barefaced audacity to openly renege on their own promises about the use of the EFSF, branding themselves as opportunistic liars in the process. There is now no law in the Eurozone, because events have shown that there is no Treaty or promise that will not be broken if it suits the politicians to do so.
This does of course raise problems when it comes to our “Renegotiation” because any promises that the EU might make about present or future Treaty change or policy, are now clearly utterly worthless and deserve only to be treated with peals of ribald laughter.
However; a week is a long time in politics, and given that the Head of the IMF is French, it is possible that the change of stance of the IMF regarding debt forgiveness is not unconnected with the state of the French economy.
By the time we come to the referendum, there is no way of knowing what shape the EU will be in; that it will be in worse shape is certain, because a prognosis is formed by the extrapolation of past events.
Just how long can this farce continue?
July 15, 2015
As i have been saying since the last recession – the real problem is Italian banks, the total of bad loans has continued to rise in Italy. According to Italyās banking association ABI, non-performing loans amounted to 193.7 billion euro in May, 25.1 billion more than in the same month in 2014. This is the highest level since 1996. Italian bad loans and debt is rising continuously. Though Ireland and Slovenia have a higher debt per GDP than Italy the underperformance of Italian loans has been growing continuously with no sign of abaitment.
July 15, 2015
In spite of the “meanness”of the other 18 countries Greece still prefers the euro. Obviously ( to me understandably) Greece has a huge lack of credibility: In 2010 it committed to privatise state assets for a total of ā¬50 billion by 2015. How much did they privatise? ā¬3.2 billion. Was that Greece keeping its commitment? Not by a long shot.
July 15, 2015
From the Telegraph;
“Mr Junckerās decision to tear up a binding written agreement given to Britain in 2010 that the European Financial Stability Mechanism would never again be used to rescue the Eurozone has further soured relations with David Cameron, who now doubts whether he is able to trust him.”
So who is it who can’t be trusted?
Under the circumstances, pointing the finger at the Greeks for being untrustworthy is perhaps a little unwise when EU politicians have made it clear that they will break their word and ignore treaties whenever it suits them, without the slightest shame or hesitation.
Perhaps it is time for the UK to start having a rather looser understanding of EU law too. We need to play by the same rules as everybody else.
July 16, 2015
@NickW: Who cannot be trusted? The Daily Telegraph, simple.
Actually, it CAN be trusted . . . to often give a skewed and biased representation of events, at least in my experience.
July 16, 2015
@Nick: What Mr Juncker did do was making ā¬35 billion available for investment in Greece. I hope your DT reported this on its front page.
July 15, 2015
What a terrible mess constructed by politicians who have an agenda that does not clearly focus on how to resolve the crisis.
The Germans are clearly interested in reforming the Greek economy without the consent of the people whilst Tsipras and Co., are more concerned with a panicked deal to get themselves off the hook and, in doing so seem to actually have impaled themselves on it even more securely.
What to do?
If you have no control over interest rates, exchange rate or money a Central Bank is unnecessary. Likewise there is no real need for domestic money banks.
Therefore, the first thing the Greeks should do is to pass an emergency retrospective law
that gives small and medium depositers a preferred position in the liquidation of Banks.
Once done the banks should be left to survive or fail.
The Greek government should declare a protracted default on all debts and invite creditors to reschedule on terms that will allow the Greeks to service them in the future without further damaging the economy but with the Greeks remaining in the Euro.
Now, absolutely nobody will lend money to the Greek government and that is good news. The UK had to manage such a situation after the last war and it is something the Greeks will need to do also.
Their government will have no alternative but to downsize and to do so quickly.
To accommodate the large number of people coming to the market without employment the government should rescind the minimum wage and allow the market to find it’s own level.
The Greeks have a very good potential labour force and it is highly likely that they will find inward investment rising quite robustly as overseas companies start to take advantage of the cheap labour.
Lending the Greek government more money is a total nonsense as is debt forgiveness, both of which send entirely the wrong message.
July 15, 2015
The Greek referendum was meaningless in that it didn’t spell out the consequences of the NO vote. Logically it should have asked if the Greeks were prepared to accept the EU demands or leave the Euro. And so they voted for the impossible.
As it is, even if the Greek Parliament accepts the EU terms, will they actually carry them out? Will they reduce state employees salaries and pensions? Personally I doubt it. If they hand over any state assets, as proposed, what is to stop some future government from nationalising them?
Greece got into the Euro under false pretences, the other members must have known this, but political imperative took precedence over logic and common sense. The “solution” is the same, as the desire to keep Greece in the Eurozone continues to defy logic and common sense. The EU and the Euro must take precedence under all circumstances.
Let’s hope we don’t have to pay the billion demanded by Juncker although if we do it will provide us with yet another reason to vote OUT in the referendum.
July 15, 2015
The EFSF and ESM – lost track of the/their reorganisation – but its sort of smoke and mirrors with capital of hundred of billions but not subscribed in full. However the reality here is that whatever route is taken its pain for the Greek people either way. In my view their best option is to depart the EZ rather than be in hock to it forever. In this way when Greece starts to recover all the upside is theirs. Yes its going to be painfull but I get the impression that the Greek are more mutual and could work as a nation to turn things round. As for the Ā£86b – think again and don’t forget that the Greek Government were raiding every possible source of cash to keep things going – like pension funds.
July 15, 2015
I have no wish to read the full agreement.I am quite happy with your interpretation. So Germany rules OK . We know Germany wants to lead Europe ..we heard the ‘ you’ve got to be in it to win it ‘ arguments, but we have to look at geography , history and the song ‘Time after Time.’ I know things change but it takes a lot of kow towing and subservience to change the mighty tidal drift and we hope there will never be violence again to prove a point, but the impulse still remains in collective psychology.The impulse is not revered.
Plato said of and in the name of Socrates ” I don’t think that it is true to say that where there is fear there is also reverence. It seems to me that there are plenty of people who fear disease and poverty and any number of misfortunes, and who, in spite of fear, feel not the slightest reverence for what they fear.” whereas Nietzsche said ” One has to think this matter thoroughly through to the bottom and resist all sentimental weakness:life itself is essentially appropriation , injury , overpowering of the strange and weaker , suppression , severity , imposition of one’s own forms, incorporation and, at the least and mildest , exploitation.
July 15, 2015
This has the fingerprints of Washington all over it .
Obama complains too much .
The Germans are there to take the blame .
What did poor little Greece do to deserve this ? Have they somehow got caught up in the crossfire of the illogical U.S. economic war on Putin’s Russia ?
July 16, 2015
Quite right – it does have Obama’s fingerprints on it !
Someone had to tell Merkel and Co to get their act together. The Americans can’t rely on Cameron or Legarde to tell the Eurozone leaders how to sort it. In any event, she’s part of the same EU elite that caused the problem in the first place !
The IMF report was almost certainly produced at the insistence of the Americans within the organisation. How Merkel and Co could spend a whole weekend ignoring it and coming up with a totally inefective “deal” that wasn’t a “deal” at all is quite beyond me.
Now they seriously expect the IMF to contribute to the third bailout. I can’t see how the organisation can when it has stated so clearly that it cannot work without debt write-offs.
July 15, 2015
What CAN’T happen, WON’T happen.
Greece can’t pay its debts. Anyone with a couple of functioning braincells has known that for several years.
Yet the EU will continue to pour money into the bottomless pit, in order to preserve its single currency disaster zone.
And now the UK is back on the hook, since the deal Cameron has bragged about so regularly ” I negotiated a British opt-out from bailing out the EU” has been unilaterally scrapped by the EU.
Yet this pathetic joke of a Prime Minister is still determined to keep us in the EU and under the control of the Kommisars.
July 15, 2015
The Greeks will be punished until they leave the Euro, that’s probably the most logical explanation to this “friendly” and “neighborly” and “sympathetic” list of demands.
Tsipras is not Sophocles, that’s for sure.
July 15, 2015
Who do you think you are kidding Mrs Merkel ?
July 15, 2015
So, what you going to do Mr Redwood, when the bill arrives and the UK, being good obedient little Europeans, pays up the Ā£1 billion.
Sit back quietly and give Mr Cameron your fulsome support as usual?
Reply Propose we do not pay and amend the 1972 Act accordingly
July 15, 2015
Reply to reply:
“Treasury sources say that the UK would consider the use of the European Financial Stability Mechanism to provide a bridging loan of around ā¬7bn (Ā£5bn) to Greece to keep it afloat in the coming weeks – but only if an indemnity is provided to protect Britainās cash.”
July 15, 2015
Fair enough, but when your colleagues roll in behind the PM when he pays up anyhow, where stand you then?
Reply I am against paying a penny to Greece under this new proposal and will remain against! Look at my voting record on EU matters.
July 16, 2015
I appreciate your voting record.
I fail to appreciate how, time and time again, we are shafted by the EU under the leadership of Cameron and Osborne, and you can shrug it off and carry on. whilst the rest of us are aghast.
It’ll be the same with the farcical renegotiation.
July 16, 2015
Reply to Reply
Mr redwood,
If “we” don’t pay, what REAL recourse or sanction can the EU actually put on us?
Reply Fines, with9olding payments etc – which is why I suggest doing it be Act of Parliament and then refusing their jurisdiction on this matter
July 16, 2015
Can “they” really make a fine stick?
Surely we can withhold more than they can…
Rhetorical of course…
July 15, 2015
Mrs. Merkel, unlike the IMF, has no doubts that Greece will be paying back all outstanding and future loans.
Greece will be selling its islands, ports, marinas, beaches etc. etc ed.