All your democracy are belong to us
by Tom Sullivan
This is breaking about 4 a.m. EDT.
Greece reaches a deal with creditors after all-night summit:
Euro zone leaders clinched a deal with Greece on Monday to negotiate a third bailout to keep the near-bankrupt country in the euro zone after a whole night of haggling at an emergency summit.
"Euro summit has unanimously reached agreement. All ready to go for ESM programme for Greece with serious reforms and financial support," European Council President Donald Tusk announced on Twitter, referring to the European Stability Mechanism bailout fund.
However the tough conditions imposed by international lenders led by Germany could bring down Prime Minister Alexis Tsipras' leftist government and cause an outcry in Greece. Even before the final terms were known, his labour minister went on state television to denounce the terms.
The deal would create a fund for repaying Greek debt from privatizing unspecified state assets.
Details now trickling out (via the Guardian, 5:34 a.m. EDT):
Here are the key points:* carry out ambitious pension reforms and specify policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause or mutually agreeable alternative measures by October 2015;
* adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit I recommendations, including Sunday trade, sales periods, pharmacy ownership, milk and bakeries, except over-the-counter pharmaceutical products, which will be implemented in a next step, as well as for the opening of macro-critical closed professions (e.g. ferry transportation). On the follow-up of the OECD toolkit-II, manufacturing needs to be included in the prior action;
*on energy markets, proceed with the privatisation of the electricity transmission network operator (ADMIE), unless replacement measures can be found that have equivalent effect on competition, as agreed by the Institutions;
*on labour markets, undertake rigorous reviews and modernisation of collective bargaining, industrial action and, in line with the relevant EU directive and best practice, collective dismissals, along the timetable and the approach agreed with the Institutions. On the basis of these reviews, labour market policies should be aligned with international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth;
*adopt the necessary steps to strengthen the financial sector, including decisive action on non-performing loans and measures to strengthen governance of the HFSF and the banks, in particular by eliminating any possibility for political interference especially in appointment processes.
And on top of that, Greece will also establish a new fund to sell off valuable assets to help repay its new bailout, and refinance its banks.
Or as the statement put it:
*develop a significantly scaled up privatisation programme with improved governance; valuable Greek assets will be transferred to an independent fund that will monetize the assets through privatisations and other means. The monetization of the assets will be one source to make the scheduled repayment of the new loan of ESM and generate over the life of the new loan a targeted total of €50bn of which €25bn will be used for the repayment of recapitalization of banks and other assets and 50% of every remaining euro (i.e. 50% of €25bn) will be used for decreasing the debt to GDP ratio and the remaining 50% will be used for investments.
Yves Smith at Naked Capitalism writes:
The cost of Greece avoiding a Grexit is submitting to becoming an economic serf of the Eurozone, subject to even more draconian austerity than was ever on the table before.
The announced agreement is only the first step. Greek Prime minister Alexis Tsipras still has to sell the deal to parliament members who already voted against a less onerous proposal.
The Greek people themselves are left wondering what happened to their 'No' vote.
As details slipped out last night that Greece would be required to "surrender fiscal sovereignty" to avoid fiscal collapse, the twitter hashtag #ThisIsACoup exploded globally in a sign of protest and solidarity with Greece:
The draconian list of demands eurozone leaders handed to the Greek government in return for a European bailout has inspired a social media backlash against Germany and its hawkish finance minister, Wolfgang Schäuble.
Just a couple:
"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." - John Adams (1735-1826) #ThisIsACoup
— Erin Gibson (@gibblertron) July 13, 2015
#ThisIsACoup. Stripping a country of its assets to sell them to financial industry = modern colonialism.
— Hendrik Wagenaar (@spiritofwilson) July 13, 2015From the London Telegraph:
Nigel Farage, the leader of the UK Independence Party and, lest it be forgot, a member of the European parliament, has urged Greeks to take to the streets in protest at the deal.
He said:
Quote If I were a Greek politician I would vote against this deal. If I were a Greek 'no' voter I would be protesting in the streets. Mr Tsipras's position is now at stake. This conditional deal shows that national democracy and membership of the eurozone are incompatible."
Greek finance minister Yanis Varoufakis plans to publish an article Thursday in Die Zeit, reports Business Insider, that gives his view of the negotiations' backstory:
"Five months of intense negotiations between Greece and the Eurogroup never had a chance of success," Varoufakis writes.
"Condemned to lead to impasse, their purpose was to pave the ground for what [German finance minister] Dr [Wolfgang] Schäuble had decided was 'optimal' well before our government was even elected: That Greece should be eased out of the Eurozone in order to discipline member-states resisting his very specific plan for re-structuring the Eurozone."
Varoufakis adds that, "This is no theory" because he says Schäuble told him this was the plan.
Varoufakis wrote in the Guardian on Friday that the Schäuble's plan all along was "to put the fear of God into the French."
In the Eurozone, people are pawns. Democracy is a sham. Here endeth the lesson.