Greece, euro zone creditors reach accord on loan

[Bosonic]

Source: Reuters

Euro zone finance ministers reached an agreement on Friday to extend heavily indebted Greece's financial rescue by four months, officials on both sides said.

"It's done. For four months," one said.

An agreement removes the immediate risk of Greece running out of money next month and possibly being forced out of the single currency area. It provides a breathing space for the new leftist-led Athens government to try to negotiate longer-term debt relief with its official creditors.

European Union paymaster Germany, Greece's biggest creditor, had demanded "significant improvements" in reform commitments by Athens before it would accept an extension of euro zone funding.

Read more: http://www.reuters.com/article/2015/02/20/us-eurozone-greece-idUSKBN0LO0O620150220?utm_source=twitter

---

Eurogroup statement on Greece

[geek tragedy]

1. Interesting. They agreed to kick the can down the road, which is at least agreement

on something.

[Jackpine Radical]

2. Kicking the can down the road is exactly what Greece needs now.

The Germans blinked.

The can-kick is a clear if small victory for the Greeks.

[geek tragedy]

4. Now's the tough part.

We'll see if the ability to work together continues.

[Jackpine Radical]

5. I have a feeling that Tsipras & Co. have a very sophisticated idea

of what they are doing. They just bought some time to make their next move.

When it comes down to it, for some reason I have more confidence in Tsipras than I can readily justify on any sort of objective grounds.


Personally, I'm taking this whole Greek thing, and the likely upcoming Podemos victory in Spain, as wonderful experiments to watch & learn from. Podemos in particular may provide some useful models for us.

[geek tragedy]

10. I think we in the US sometimes realize how lucky we have it in terms of austerity.

Despite all the nonsense about deficit commissions, debt panic, etc etc at the end of the day we managed to steer clear of European-style austerity policy. There was definitely a risk it would happen, between the sequester and fiscal cliffs and the debt ceiling hostage taking, but we escaped. Our economy still has substantial structural issues, but we didn't choose to implode despite the Very Serious People imploring us to do so.

Merkel and Obama had a pretty significant disagreement on this.

Tsipras has a poor hand, but he's playing it pretty well.

[libdem4life]

25. If only they had a cash printing press and national debt of immense, unsustainable size.

We'd have experienced "austerity" years ago without it.

I believe they have to manage their actual money and balance budgets, ultimately.

But between Tsipras and Varoufakis they've got a fighting chance and seems they are playing it well. And, even better, Europe handled it without the US interfering.

[FLPanhandle]

13. I can't see any victory in this for the Greeks

Sure, the Greeks will spin it as a small win (they have to), but it's a complete capitulation to the bankers and Germany.

They wanted 6 months with no restrictions, they got 4 with no only the 2012 conditions but have to submit additional "strong" reforms (ie austerity) Monday in order to even get the 4 months of money.

Sure they tossed in a few words like allowing the Greeks some "flexibility" but that is just window dressing.

[jwirr]

3. The first thing the new leader of Greece needs to do is raise taxes on the rich. They got into their

mess the same way we did. And they need to get out of it the same way we need to get out.

[snooper2]

7. first thing they need to do is start collecting the taxes already owed

[jwirr]

9. That to.

[Berlin Expat]

6. So, here's the terms of the Greece/EU deal

• Greece will submit its reforms proposals to the eurozone presented on Monday. These will be reviewed be the Troika and form the starting process for the programme.

• Greece will be allowed flexibility within the agreement. Greece will commit to:

• "strong committment to a broad structural of reforms" and will not reverse on its fiscal targets.

• The Greeks will commit to November 2012 agreement to meet its existing fiscal budget surplus targets.

• The request for a 6-month extension has been overturned for a 4 month deal.

• The Eurozone will also grant an extension of EFSF funds for Greek banks for the four months.

http://www.telegraph.co.uk/finance/economics/11424343/Greece-crunch-eurozone-meeting-live.html#disqus_thread

I'm thinking the Greeks got screwed. Just not quite so brutally this time; the Germans used Vaseline this time.

Four months from now, we'll be here again.

[socialist_n_TN]

12. Yep. Greece blinked. The Thessoloniki (sp?) pact that Syriza.......

got elected on has gone the way of the Dodo and the same Trioka program that felled every Greek government in the last 7 years will fell Syriza. Next step, when Syriza cannot raise the standard of living of the average Greek worker, is Golden Dawn because "socialism" failed. Even though Syriza was NOT socialist. Syriza was Keynesian in it's approach.

There is nothing new under the sun. Popular front coalitions like Syriza and Podemos are NOT new. They have been tested in the crucible of history before and ALWAYS fail because they try to accommodate capital rather than confront it.

[PoliticAverse]

8. "For four months" - gives those in charge more time to prepare for the inevitable. n/t

[closeupready]

11. Ha. The Germans NEED Greece, and more importantly, they need them to REMAIN part of the EU.

And if the cost is painful, well, consider that a kind of war reparation; i.e., the Germans and their toxic culture circa the 1930's (and the events that followed) helped persuade the civilized world that a pan-European institution was needed in order to help keep peace (i.e., keep the Germans DOWN). So I blame at least 50% of this predicament on the Germans.

[FLPanhandle]

14. How?

The Germans don't need Greece. Greece is only part of the EU in the first place due to political reasons, not economic reasons.

I think the Germans would be quite happy to see the Greeks leave.

[jeff47]

15. Because if the Greeks leave, why would others stay?

Germany is currently screwing over every other economy in the EU in order to wildly miss Germany's inflation target.

If Greece leaves, other countries currently getting screwed over are likely to decide the costs outweigh the benefits. And leave. Causing more economic pain upon those who remain, helping to push even more countries out until the entire experiment collapses.

[TooPragmatic]

17. But leaving could cause a lot more pains

Most countries could take a very bad hit if they would leave the Euro because the Union does provide some form of stability. And lenders like the fact that countries can't just start printing new money when the economy goes under. And nobody wants to tank the entire EU project since it has made lives in Europe a lot better.

So if Greece were to be kicked out, it wouldn't lead to a exodus from the Euro. But at the same time no one wanted Greece to leave. Other countries just wanted to show Syriza that everyone has to go by the rules. People seem to give Germany a much bigger role than it actually has. This is partly because it is still easy to blame Germans for much of the woes. Germans get attention mainly because it is the biggest individual country. But similar and even harsher opinions about Greece can be heard from other eastern and northern countries. Germany just attracts more attention.

I wonder how has the ECB been able to loosen monetary policy so much eventhough German Bundesbank has been against it? Because Germany ultimately doesn't call the shots. It's a convenient scapegoat for other politicians to use when things are bad.

And to be clear, I don't disagree with you that the EU has flaws and it currently favours Germany. But that is also because Germany did it's employment reforms over a decade ago and Germany has kept salary growth low to benefit its exports. But it's equally the case that many other countries never did those reforms and are suffering because of that.

When one reads about Greece before the crisis it reminds me of a news story about a Russian elevator repair man who at the end of the soviet union lost his job. He had worked in an apartment complex for 25 years where they didn't even have any elevators. If Greece would have started reforms earlier and when economies where still better off, the crisis could have been avoided by education programs and jobs projects.

I'm guessing that Greece will get some better terms. Other European governments want Greece to work for those conditions and that Greece isn't in a position to demand changes on it's own. But I also hope that whatever kind of deal is reached, Greece will be allowed to have more say in how It balances the budget and that some welfare projects can get more funds.

[socialist_n_TN]

21. You used the word "reforms" several times to describe.....

what other countries have done and what Greece should do. I'm curious about those "reforms". Are they weakening worker protections? Weakening any sort of help for the Greek people suffering under this austerity? Are these "reforms" merely more of the same neo-liberal bullshit and "trickle down" economics of Reagan and Thatcher? Because it sure sounds like it.

Syriza should have gone to the Greek people and said, "We don't want to take this deal, but we need your support for what we WILL have to do." And then see how much popular support they had. Instead they negotiated a back room deal with pretty much the same fucking conditions that brought down every Greek government since 2008. Next step Golden Dawn.

[TooPragmatic]

23. Greece doesn't need weaker labor laws

Greece government should have implemented labour reforms long before the crisis. Afterwards some where useful, but high unemployment and poor job opportunities have made the job market so bad that workers in Greece do have a very weak position and some of the collective bargaining rights should be brought back.

One of the biggest problem before the crisis where low production, government clientage, high corruption rate and overall bad governance. Having lots of people working for the government without doing anything productive on a large scale caused a lot of financial crisis. And in the resulting redundancies many lost their jobs who had worked productive fields.

But don't just assume I'm some sort of typical right winger who puts all faith in the markets. I'm probably to the right of many in DU, but I still consider myself a moderate leftist, but I also recognise that markets do provide checks and benefits to the society as a whole. The same way as governments need to provide safety and security from harmful market practises. Both have governments and markets need to work in order to provide benefit to the people. Most countries do operate this balance imperfectly and reforms and changes are constantly required to bring balance. And sometimes compromises are required to create long term stability. And the people isn't always the best authority to make ultimate decisions when it comes to governing and decision making. That's why I'm a small r republican and favour representational democracy.

Syriza didn't have the option of dragging this much longer because not making a deal yesterday could have made the situation so bad that they would've had to impose capital controls and more hardship for the people. Most Greeks didn't want the deal that they got but they also wanted to keep the Euro. So assuming that Greeks opposed the deal no matter what is not a given. Syriza made promises that were way too unrealistic and they need to accept that improvements need to be gradual and can only come through good and open governance so that the creditors can trust a Syriza lead government. And I think that Greeks are smart and don't think that a Golden Dawn lead government would do a whole lot worse.

You probably disagree with me on most of what I wrote here, but I hope that you understand that I have a very nuanced position and I too am only writing what I think is best for the people.





http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_319755.pdf

[socialist_n_TN]

24. No doubt that I'm going to disagree with you. Capitalism........

is not compatible with democracy especially when it (capitalism) is in crisis. I'm in favor of democracy. You can't play the capitalist's game and expect to win or even break even. They have rigged it more than the House in Vegas.

Syriza should have begun the process of nationalizing the banks, including an immediate freeze on withdrawals over, say 100 Euros, a day from any account, until they have a handle over who owns what and where and whether they've actually paid taxes or not. Also capital controls should have been instituted. I would have then expropriated any amounts over a certain level and used the expropriated funds to reopen the factories and workspaces that have been closed due to "not enough profit" and, of course, reopen these productive workplaces under worker control. I would have then begun the process of nationalizing industries involving the well being of the people and attempting to set up a world trade bloc with as many leftish governments as possible. These moves even though difficult would have shown the Greek people that Syriza had their back and the world would have seen what the population of the country actually thought about those acts.

It's not too late for Syriza to make a left turn away from accommodation with capitalism, but this deal cut in secret and kowtowing to the banker capitalists, will make that left turn more difficult AND pretty much guarantees that Golden Dawn is the big winner in the next elections, IF Syriza doesn't make that left turn.

[Yo_Mama]

19. I think the Germans would prefer that the Greeks are forced out in order

to prevent countries like Portugal, Spain and esp. Italy from rebelling in their turn.

Greece is small, and the Germans would get stuck with a lot of debt if Italy backed out, for example.

So first Crete was crucified, and now Greece.

[pampango]

16. Krugman: It looks like a defeat for Greece - but only if the Greeks accept it as one.

OK, we have an agreement re Greece, according to which … what?

We do have four months of funding, plus what looks like an agreement not to hold Greece to fiscal targets for right now in the face of probably fiscal deterioration. The question is what strings were attached.

Greece seemingly gave a lot of ground on the language: the stuff about fiscal adjustment in line with the November 2012 Eurogroup is back in, which Germany will presumably claim represents a commitment to stay with the 4.5 percent primary surplus target. But Greece apparently is claiming that the agreement offers new flexibility, which means that it will assert that it has agreed to no such thing.

So we’re in a weird place: this looks like a defeat for Greece, but since nothing substantive was resolved, it’s only a defeat if the Greeks accept it as one; which means that nothing at all is clearly resolved. And that’s arguably a good outcome — time for Greece to get its act together.

http://krugman.blogs.nytimes.com/2015/02/20/delphic-demarche/?_r=0

[MFrohike]

18. It's a surrender

Unless Tsipras and Varoufakis can somehow create a miracle, they've managed to agree to the same conditions as their predecessors. For all the effort of some pundits to argue otherwise, it's a defeat. The press release made it quite clear that no independent action to change the status quo is allowed. This simply makes Greece's status as a colony of Germany and the EU an unvarnished reality.

[quadrature]

20. 4 more months of the dead walking ...

end the suffering.

[roamer65]

22. 4 months buys time to get drachma printed and ready.

If I were Greece, I'd be getting the new currency ready. When Podemos wins in Spain, the euro is toast.