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European Agreement Sets Up Third Greek Bailout
An anonymous reader writes: Euro zone leaders have reached a deal that will attempt to resolve Greece's financial crisis. The deal sets up negotiations for the country's third bailout, and will require the Greek government to give up significant autonomy in financial matters. Experts have estimated that Greece could require almost $100 billion to stabilize once again. While this will be a significant cost to taxpayers in other European countries, the economic repercussions of letting Greece default on its debts would be much greater. "The agreement will call for Greece to raise taxes in some cases, parepension benefits and take various other measures meant to reduce what critics see as too much bureaucracy and too many market protections that keep the Greek economy from operating efficiently. ... Despite the agreement, Greek banks are expected to remain closed this week. The banks are acutely short of cash and Greek depositors may soon find it difficult to withdraw even small sums from ATMs."
A very important link was left out: the agreement text (PDF).
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Read it, it is only 7 pages long and, although it mentions other documents, the gist of it is there.
Commenting on the agreement without reading it is engaging in mindless speculation colored by your own misconceptions and ideological leaning
Oh, who am I kidding, this is slashdot, nobody RTFA.
There are some pretty serious questions about the honesty of Greek officials in reporting the implementation of previous reforms. This is one of the factors that has lead to the near total lack of trust in Tsipras and the Greek government.
Debt relief does not appear to be permanently off the table, but Germany, along with some other EZ members (notably Finland) want to see verifiable evidence of significant reforms, and not just Greek negotiators saying one thing to EZ officials and then going home and saying and doing quite different things.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Yes, why not. Play by play below, italicizes are my asides. Sorry but no TL;DR of the TL;DR, it was hard enough to summarize the whole thing.
1st paragraph: asks Greece to keep their promise this time.
To be read with German accent as it was most likely added by Germany. It echoes the statement by Merkel this weekend that says "The most important currency has been lost and that is trust".
2nd paragraph: tell Greece it is either both ESF and IMF or nothing.
Meaning Greece will most likely have to agree to another set of measures imposed by IMF.
3rd paragraph, pages 2 and 3, first item on page 4: sets the first measures to be taken and its deadlines.
Some must be voted into law by 15 July (72 hours after the meeting) and some by 22 July, next week. They are more or less the same measures that triggered the referendum last week but with a notable absence: cuts in the military
pages 4 and 5, aditional measures:
- model for privatization.
Instead of going to the public coffers it will go to a fund (managed by Greece, supervised by Europe). The assets (estimated 50B) will be split: 50/25/25. 50% to recapitalize the banks, 25B to repay loans, 25B for investiments.
- model for the supervision: all draft legislation will be subject of their (EU and IMF) consult and agreement. Greece has until 20 July to ask to be helped.
- reversal of anti austerity legislation: all of them, except the humanitarian crisis bill, must be reexamined and either reversed or replaced by an equivalent measure.
SOP for "troika" (as in group of three, EU, ECB and IMF) technicians to become the fourth power in the country during the program duration. Happened in Portugal and Ireland
end of page 5: states that Greece will need between 82 and 86B, unless it can collect more taxes or privatize better. 7 of those billion euros are needed before 20 July and 5 more before mid August. Also states that greece needs to "clear its arrears" to IMF and Bank of Greece
Sibling post has it right, this part is "Greece, pay denbts"
page 6: states that Greece either accepts the deal or banks won't reopen. Also, that it is syriza's )and whoever was its predecessor) fault by easing the policies during the last 12 months and that Eurozone can reconsider "longer grace and payment periods" but that will be "no haircuts"
Again, "Greece, stop screwing up, pay denbts, all of it"
page 7: states that if Greece accepts the deal the deal will go forward. Also, that in the next 3-5 years 35B will be mobilized to fund investment and economic activity (including SME) via EU programmes
This must be the concession Tsipras is talking about, 35B for investment including small and medium-sized entrerprises not counting towards the loan but via EU investment.
Debtor's prison isn't what you think it is. You're thinking of usury, which is where someone is in essence kept as a slave by increasing their debt at a faster rate than the payments are made. Debtor's prison was intended (remember, intended, in actuality it didn't work out) to provide debtors with either skills so they could exit and fix their debt issue, or it was intended to protect the debtor from creditors permanently in return for the debtor providing the necessary basic labour for his upkeep (eg: Running enough of a farm to feed himself).
No.
Debtor's prison worked by putting the indebted person into jail to squeeze friends, family, and business associates to come up with money to get them out.
What was the Greek government thinking? that the EU will just give more money without asking for more responsible measures.
Why not? They've done exactly that twice already. Three times, if you count Euro adoption in Greece, which actually was the first Greek bailout. Yes, the agreements came with some "austerity," but the Greeks back-pedaled, slow-walked and lied about much of that, the predicted economic recovery in Greece never materialized and the rest of Europe looked the other way while all this went on.
If this deal goes down the same things will happen and we'll be right back here in three odd years with Greece another umpteen billion in debt, the money run out and herds of negotiators holding press conferences. Eventually this circus will happen in the midst of a recession in Germany and the appetite for throwing more money into Greece will be gone.
Greece isn't going to become a productive, disciplined society of tax-paying citizens and honest public officials in the next 1000-ish days. Not even if the books were wiped clean tomorrow.
Debt sucks. It's terrible and it's why some (too few) people think peace-time deficits are next to criminal. Tax-cut-and-spend RINOs and borrow-and-spend dhimmicrats are putting us in the same position as Greece.
Maw! Fire up the karma burner!
Totally agree. However, back in the day when Greece was allowed in the EURO (not EU), their obvious unsuitability was waived by France and Germany (under loud protest from the Netherlands and the Finns). It's appalling to see the German politicians ride the moral high-ground after:
1. Allowing the Greeks in the euro in 2001 in the first place when it was obviously a bad fit (same holds for Italy)
2. Breaking the stability pact in 2003 when it was convenient for them, opening the floodgates
3. Profiting immensely from the increased export that was fueled by ill-advised loans to a corrupt elite in the Southern nations
4. Bailing out the banks wrt Greece and offloading the Greek debt on the European population at large
5. Pointing the German anger at a foreign nation to hide their shenanigans
From my point of view it's a very sinister game that's being played here and the European project has failed. The Germans in particular seem to be incapable of taking responsibility for their actions and have stooped to a very dangerous form of demagogy. Let's stop this farce.
The only way for Greece to recover is to leave the monetary union. They can remain a member of the EU without using the euro as their currency, the UK is an example of that; but every story you read in the mainstream media implies otherwise, which simply isn't true.
It isn't just the UK; only 19 of the 28 member states of the EU use the Euro currency. Ones that don't include Denmark, Czech Republic, Romania, and Sweden. According to Wikipedia, however, it does seem that most of these are obliged to switch to the Euro when certain conditions are met; the only countries which have specifically opted out are UK and Denmark. But I do think it's interesting that very few eastern European EU nations have adopted the Euro so far (and instead, a couple of non-EU eastern European nations like Montenegro have unilaterally adopted it). If you look at the map, Greece kinda stands alone as a Euro user in that region, with only Cyprus (EU), Montenegro (non-EU) and Kosovo (non-EU) also using it.
His party didn't win he election with full majority and is part of a coalition. His coalition partner, Panos Kamennos, is both the founder of the right wing party that allows the coalition to govern and also the Defence Minister.
"Failed state" California sends more money to the federal government both in total and as a percentage of what it gets back than "flourishing Texas", although neither of them are net takers. http://wallethub.com/edu/state...
Rhode Island is not a net taker either. That isn't exactly what you were trying to measure but if Cali didn't have to subsidize a bunch of other states then its finances would look better, which by the way is in surplus for 2015.