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July 7, 2015

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Greek crisis prompts FYROM to push for NATO membership

Greece’s growing political and economic problems have its small neighbor FYROM sensing an opportunity to push hard for joining NATO, a move that has been stalled for years thanks to Athens’ opposition because of disputes over FYROM’s name.

Defense Minister Zoran Jolevski told POLITICO his country would be prepared to apply to join NATO using the ungainly name “Former Yugoslav Republic of Macedonia,” which is insisted on by Greece.
     “All NATO member countries recognized that Macedonia had by that point met the NATO membership criteria,” said Jolevski. “Unfortunately our southern neighbor added one more criterion to that summit, the name.”
Greece argued that its northern neighbor should instead be called New Macedonia or Upper Macedonia, whereupon Macedonia sued Greece at the International Court of Justice and won in 2011. But its moment had passed.

The alliance’s formal position is that the country “has to find a mutually acceptable solution with Greece to the issue over its name before it can be invited to join NATO.” But with Greece in meltdown, FYROM sees a chance to break the stalemate by announcing that it’s willing to join NATO as FYROM, while pointing out that its forces have served alongside NATO forces in Iraq, Afghanistan, and Bosnia-Herzegovina.

Read more at: Politico


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OPINION: Why the West badly needs a one-eyed negotiator with the Greeks - Geopolitics getting very messy

Greece is isolated and chock full of Fifth Columnists, and the creditors are multiply divided. In the article below, the Slog -which has always supported SYRIZA- discusses the options and argues that, without a bold step from the EU now, everyone involved in this mess will have only tears for souvenirs at the end of it. 

(The Slog) - I’m thrilled that the Greek people stepped up to the Referendum plate. But in the cold light of a Monday dawn, all of us who want a free, varietal and democratic Europe must ask ourselves, “Has anything changed?”

I doubt very much if it has.

The likes of Draghi, Schauble, Dijesslbleom and Juncker have shown over and over again the disdain they have for Citizen Democracy. At every point in the last twenty years when member States have rejected neoliberal proposals, the European Commission has simply parked them, and put the result down to ‘a mistake’ by the People. It’s the way of the world today: when the UK Parliament threw out David Cameron’s proposal to bomb the crap out of hugely dispersed Islamist radicals, his reaction was not to reconsider: he hauled the Party Whips into his office and demanded to know why they had failed to deliver the vote he wanted.

What the elites lack today is the ability to reflect. They see only a risibly chosen goal, and a self-inflicted deadline before which they must reach it. Concern about whether the destination is Los Angeles or Auschwitz remains absent.

Juncker, Dijesslbleom and Draghi in particular are too far beyond accountability.

Merkel may hold an elective position, but she is firmly established as the Mutti in the Vaterland. Similarly, while thinking Germans regard Schauble as something of a neolithic liability, the Bild-reading knuckle-draggers hail Wolfie as a hero.

The only thing any of them fear is what the US State Department, Pentagon and Wall Street think. And at the moment, those American elites are nervous bordering on very unhappy. Fears of Greece mixing with "the wrong sort of people" are strong enough to override any half-baked claptrap about neoliberal eonomics: the dwindling contacts I still enjoy in the Land of the Free tell me consistently that Russian trade deals, and Chinese investments in – or bailout funds for – Greece represent major nightmares among Washington’s wonks.

The Americans are already dismayed and angry about the AIIB’s rapid success in recruiting developed World exchequers. The Ukraine adventure has been a disaster.

The growing idea of a PetroRouble fills Wall Street with horror. And perhaps above all, the thought of losing Mediterranean Europe to Russian ports and non-euro currencies is abhorrent to those three generations of US diplomats who, since 1945, have endeavoured consistently to ensure that Europe is their creature… with a Dolleuro to seal the deal if necessary.

My hunch is that the eurogroupe clowns will continue to stonewall, apply illegal pressure to the ordinary Greek populace, and perhaps even pose in public media as a reasonable bunch of chaps waiting for a "reasonable" Greek proposal. But left to themselves, when something is proposed, they will give out with the usual “interesting but it doesn’t go far enough” crap designed to load yet more homework onto the Greek government.

Given that this is what they’ve done since February 2Oth, what is there in this democratic mandate for SYRIZA that might make Troika2 change tack? Resistance contagion remains the key thing the EU want to stop. They will not be able to do so, but they don’t accept that.

On Sunday night the rumours did not augur well: BoG Governor Stournaras seems to be the favourite PM candidate for those who wish to effect regime change in favour of technocratic government. Some were saying earlier in the day that if there was a YES majority, SYRIZA would resign and then Stournaras would be helicoptered in without an election. Others felt this was more likely in the event of a NO victory.

Dutch hairdresser and failed Gouda transplant Jerry Drivelbloke said, “I take note of the outcome of the Greek referendum. This result is very regrettable for the future of Greece.” So no glimmer of light there. The so-called professional analysts are still saying that Grexit is inevitable, and prior to resigning, Varoufakis continued to assert that it is impossible. But Frances Coppola explained, in a masterly piece last Saturday, how de jure Grexit could be forced upon the Greeks by more ECB financial bullying.

Draghi’s the name, and breaking the law’s his game. In fact, this may be the point at which we finally discover which side Dragula is on…. if any. I have an instinct that, mad though the State Department is these days, the US elites will have an attack of the vapours if the eurogroupies start metaphorically bombing the Greek banks. Not only will Wall Street be near-catatonic with fear about that option, State will see it as an invitation for Putin to step in… and Fifi Lagarde will rightly point out that, while the ECB can take any hit with impunity, the IMF can’t.

This is where the geopolitics get very messy indeed.

Putin can offer some help (in return for bases) but he’s not exactly flush at the moment: Saudi-American oil price manipulation has seen to that. And Vlad the Lad may well shrink, in the post-Ukraine environment, from winding up the White House any further. We will, I’m sure, get lots of bluster from the Russian leader… but not much in the way of hard cash.

(Lest we forget, Russia’s finance minister said last week that Russia had not offered Greece the chance to become a member of the New Development Bank that is being created by the BRICS group.)

The Chinese are potentially a much bigger threat to American hegemony, but the last three weeks have shown that they’re somewhat distracted by a stock market heading for the sewer. So far, Beijing has remained politely detached about the Greek standoff, but there may be a clue in Deputy Chinese Foreign Minister Cheng Guoping’s statement to journalists, following the OXI victory, “I believe the Greek economy will turn round, and the economic crisis will be appropriately handled. Whether or not it can be appropriately handled will not only have an important impact on Greece and its people, but will have an important impact on the world too”.

So then – no hectoring or lecturing, generally positive… but a slight hint at the end that US buccaneering would have potential ramifications.

The truth is, China has a massive export demand shortfall at present, and needs an unstable EU, like Evangelos Venizelos needs to put on a few more kilos.

In short, a SYRIZA-led Greece may well find itself isolated, broke and eased out of the eurozone in fairly short order; and that prospect won’t be helped by the number of ruthlessly pro-EU corporacats plotting against the Administration… from the BoG via the media all the way through to the murkier parts of the Civil Service.

Last week, I understand there was a flurry of extended phone calls between Barack Obama and Angela Merkel. Things have moved on a long way from Geithner’s bold (and hotly denied) 2010 plan to encourage amputation of Greece by the EU… following which Israel and Greece would work for Wallington Street together on the exploitation of undersea rare metals and energy in Greek waters.

Merkel’s learning from that episode was that she’d rather chew glass than leave the Greeks free to bargain outside the EU – although her ‘finance’ minister Wolfgang Strangelove holds the opposite view.

Thus I’m led inexorably to the conclusion that the two leaders (who have worked well together before) share a desire to avoid further complications and resolve the issue in a way acceptable to both sides. Similarly, Mutti has phoned Tsipras direct when the occasion demanded it, and has of late been distancing herself from Schauble and Dijesslbleom.

Finally, like most of us, she still distrusts Mario Draghi.

I’ve been posting for two months now about the obvious fissures in Troika2’s United Front when dealing with Athens. The ECB, the EC, the Eurogroupe, the IMF, Berlin, Frankfurt, Germany and France are all, to one extent or another, at odds with each other in a bewildering 3D game of noughts and crosses. Mainly, what we’re seeing is the standard outcome in all authoritarian States from Imperial Rome and Stalin’s USSR via Nazi Germany to Maoist China: the power-mad in a frenzy of power-grabs.

Only two people in Europe are above this: Merkel and Draghi. The unaccountable Draghi has the upper hand at the moment – ultimately he alone can control how much currency all the ezone States do or don’t get – but whatever his motives are, or his ideal end game might be, one thing Supermario is not going to do is take on the US.

In the kingdom of the Blind, the one-eyed Man is king. Except in this case, it’s a woman. There’s an emergency eurozone Summit Tuesday night; before which Frau Doktor Merkel will meet with Francois Hollande to mark his card.

Yanis Varoufakis was saying he expected negotiations to resume between Athens and ‘the creditors’ immediately, but that was purely for effect: with no deal on the table from either side there’s nothing to talk about… and nobody will do any talking of substance until Wednesday at the earliest. And of course, Yanis himself has now gone: it’s hard to see that as anything other than mutual sacrifices prior to a deal… will Drivelbloke be the next for the chop?

SYRIZA must of course continue the illusion of being responsible people trying to be flexible and go through the proper channels. But there is a reality behind the facade: it being far too early yet for Greece to throw in its lot with BRICS (so far, there’s been no invite from that quarter anyway) a strapped Russia or distracted China, there is only one way for the impasse to be removed: Obama needs to kick Draghi’s arse, while Merkel needs to sit on Wolfgang and tell Drivelbloke to STF up – or else. Then Geli needs to go back to the square she was on six weeks ago, and hammer out a face-saving deal direct with Tsipras.

It wouldn’t be the first time she’d taken charge, there are political risks for her in this course of action, it would really represent more can-kicking, and none of it will make a jot of difference in the end: resistance contagion is out of the laboratory and spells the end of the euro. But Angela Merkel will always be a big-canvas thinker.

The next ‘final answer lies, primarily, with her.

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White House urges Greece and EU to come to a compromise ASAP

The White House called on both the Greek government and European leaders to come to some sort of compromise on Monday night, so that Greece remains a member of the Eurozone. At the same time the American government underlined the importance of resolving the Greek crisis because this will benefit both Europe and the US.

Speaking to reporters, White House spokesman Josh Ernest, said that despite the significant differences, all sides recognize the importance of Greece remaining a member of the Eurozone but said he recognized that the solution to this challenge only involves Greece and its creditors.

Meanwhile, reports said that US Secretary of Treasury Jack Lew contacted Prime Minister Alexis Tsipras and newly-appointed Minister of Finances Euclid Tsakalotos on Monday night, and urged them to resume talks immediately. Lew said that he hopes that Greece will carry out the difficult, yet necessary, fiscal and structural reforms that will eventually promote growth and finally stabilize the debt within the Eurozone.
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Juncker wants Tsipras to explain the Greek vote - Slams Varoufakis (VIDEO)

While speaking before the European Parliament in Strasbourg on Tuesday, President of the European Commission Jean-Claude Juncker urged all sides to come to an agreement with Greece. He said that the result of the referendum in Greece must be clarified, since Greek citizens voted "NO" to a document that was not on the negotiating table, and which did not reflect the text debated during the negotiations.

He also criticized the previous SYRIZA negotiating team (under Yianis Varoufakis) of braking off talks, and slammed the statements by Varoufakis, who accused the EC of “terrorizing” the Greek government.

Juncker stressed that he is against a ‘Grexit, but revealed that there are many forces in Europe who are so frustrated with everything that has happened over the last few months that they are now actually supporting this idea. He nonetheless supported the opinion that the role of the European Commission is urge all sides -even those who want a Grexit- to come to some sort of a compromise. He said that the negotiations will continue, with respect to the vote of the Greek people, but underlined that at the moment the ball is in Greece’s court.



July 6, 2015

Varoufakis Resigns From Post - BREAKING

Greek Finance Minister Yanis Varoufakis apparently resigned from his post following Sunday's night's historic referendum which voted against accepting creditors' terms for a bailout. He said that the reason for his resignation was to help the Greek government to come to better terms with Greece's lenders. His statement was published on Twitter.

Here is the complete statement by Varoufakis:

The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage, Yanis Varoufakis has published.

Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore, essential that the great capital bestowed upon our government by the splendid NO vote be invested immediately into a YES to a proper resolution – to an agreement that involves debt restructuring, less austerity, redistribution in favour of the needy, and real reforms.

Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.

I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.

And I shall wear the creditors’ loathing with pride.

We of the Left know how to act collectively with no care for the privileges of office. I shall support fully Prime Minister Tsipras, the new Minister of Finance, and our government.

The superhuman effort to honour the brave people of Greece, and the famous OXI (NO) that they granted to democrats the world over, is just beginning
Sources - Reuters, Skai Tv Greece, enikos

July 5, 2015

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Greek Referendum Vote 2015 - LIVE BLOG

Check in every so often for latest updates on the Greek referendum. Updates are made presented in chronological order. Please allow a few seconds for live blog app to load.



July 3, 2015

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Deep inside ‘’Plan-Z’’ and the GREXIT Manual - EXCLUSIVE REPORT

During the June elections in 2012, and with most of the global economic elite flying to Los Cabos, Mexico, for the annual Group of 20 summit, a small group of top EU officials stayed at their desks ready to activate "Plan Z". According to the Financial Times, these officials were led by EU economic commissioner, Olli Rehn. European Central Bank chief, Mario Draghi, remained in Frankfurt and Jean-Claude Juncker, the Luxembourg prime minister who headed the eurogroup of finance ministers, was also on call. Confused? What is Plan Z... "Plan Z" is the name given to a 2012 plan to enable Greece to withdraw from the eurozone in the event of Greek bank collapse. It was drawn up in absolute secrecy by small teams totalling approximately two dozen officials at the EU Commission, the European Central Bank and the IMF.  To prevent premature disclosure no single document was created, no emails were exchanged, and no Greek officials were informed. The plan was based on the 2003 introduction of new dinars into Iraq by the Americans and would have required rebuilding the Greek economy and banking system ab initio, including isolating Greek banks by disconnecting them from the TARGET2 system, closing ATMs, and imposing capital and currency controls. The following analysis, by our correspondent Vasilis Tomaras, Managing Partner @ Aidelco Consulting, exposes this plan, by comparing it to the "Leaving the Euro: A Practical Guide and the Wolfson Economic Prize".

Exclusive to HellasFrappe
By Vasilis Tomaras
Managing Partner @ Aidelco Consulting


The prospect of leaving a monetary union –or the Eurozone- which Greece was never suited to join in the first place, is not anything new since this question has been looming on the news for several years now. What was meticulously kept out of the media, however, was a secret plan to enable Greece to withdraw from the Eurozone in the event of a banking collapse. This exercise was drafted under cloak and dagger and in a complete isolation vacuum by representatives from the European Central Bank, International Monetary Fund, Euro Working Group and European Commission. The plan is known as Plan-Z.

Background

When former Greek premier George Papandreou announced the holding of a referendum on October 31st 2011, on a question which to date is still unknown, few doubt that the underlying enigma was a straightforward YES or NO the Euro. This referendum was swiftly shelved and three days later, Papandreou stepped down, and soon after that he was replaced by a technocrat.

Since the beginning of the Greek crisis in 2009, whispers and gossip in the halls of power has been non-stop as to what the impact on the European and Global economy would be should Greece leave the Eurozone. This speculation was further reinforced by George Papandreou’s mothballed referendum.

 Purpose and Participants

According to Pieter Spiegel, who first exposed this story in one of his many articles in the Financial Times, the plan was drawn up by small team of around two dozen experts overseen by Jörg Asmussen, Thomas Wieser, Marco Butti and Poul Thomsen of the European Central Bank, European Commission, Euroworking Group and the International Monetary Fund respectively.
     "Work on Plan Z began in earnest in January 2012, largely overseen by four men. Jorg Asmussen, a German who had joined the ECB executive board that month, was assigned by Mr Draghi to head a Grexit task force within the central bank. Thomas Wieser, a long-time Austrian finance ministry official, was appointed permanent head of the "euro working group" of finance ministry deputies and helped co-ordinate work in Brussels with Mr Buti. And Poul Thomsen, a Dane who had headed the IMF's Greek bailout team since the onset of the crisis, provided input from the fund in Washington.
     "Efforts to keep information from leaking from the small teams around the four men were extreme for the same reason Mr Trichet had banned such planning: public discovery could be enough to cause the kind of panic that would force them to put their plan into action.
     "According to one participant, no single Plan Z document was ever compiled and no emails were exchanged between participants about their work. "It was totally fire-walled even within [the institutions]," said the official. "Even between the teams there was fire-walling." A decision was made not to involve Greek officials out of fear of leaks.
     "Their firewalls worked. During a dinner between Jose Manuel Barroso, the commission president, and Ms Merkel at the chancellery in Berlin less than two weeks before the Greek vote, Ms Merkel asked for reassurance from Mr Barroso that a plan was in place in case Greece rejected bailout conditions and Grexit ensued."  (www.euro2day.gr)
Work was done in complete secrecy in Brussels, Frankfurt and Washington. No minutes were kept, no single documents were created, no mails were exchanged and No Greek officials were informed.


Quite interestingly, the plan was executed in such secrecy that not even German Chancellor Angela Merkel knew about it. This can be confirmed by the fact that at an official dinner two weeks before the Greek elections in 2012, she asked the then head of the European Commission Manuel Barroso for a plan be drafted to prepare for a potential exit from the common currency in case Greece rejected bailout conditions. Barosso subsequently informed her that such a plan was already in motion and offered to present it her. Merkel, however, refused to take it, claiming that under German law, only the German Bundestag could request such documents. According to German legislation, even if there was one German official involved in the drafting of the plan, full disclosure of the plan in German Parliament would have been obligatory.

The Financial times says that this secretive plan consists of 20 pages with detailed actions on how to create a new financial system from the very beginning. FT says that the plan is based on scenarios consolidated from the experiences gained in Argentina and the introduction of the New Iraqi Dinar from the Americans in 2003.

(Trivia: The title ''Plan-Z'' was the name given to the Top-Secret secret re-equipment program of the Kriegsmarine (German Navy) By Hitler just before WWII in contravention of the Versailles Treaty.)



Leaving the Euro: A Practical Guide and the Wolfson Economic Prize

‘’Plan Z’’ was never published. Economics is a science that is chiefly influenced by circumstance and school of thought. A separate study, that is well known and has won the Wolfson Economic Prize titled ‘’Leaving the Euro: A Practical Guide’,’ was drafted by the London based think-tank Capital Economics. This report claims that the most realistic scenario for euro break-up is that one or more of the weaker peripheral countries will leave the euro-zone, introduce a new currency which then falls sharply, and default on a large part of their government debt. Other forms of break-up are possible but this report centers on the departure of a single weak member.

As such, we can safely assume that ‘’Plan Z’’ has many aspects of this study in it.

• Potential long term division of the current Euro into a ‘’hard’’ and ‘’Soft’’ Euro. The implications when one weak country, like Greece leaves the Eurozone and implements its own currency - Analysis conclude that an ‘optimal currency area’ known as the northern Bloc would be concluded by countries with compatible economic dimensions (Germany, Austria, Netherlands, Belgium and Finland). By extension, there is a strong possibility that the peripheral Southern states break away and either adopt their own domestic monetary structures and policies or form a monetary union between themselves.

• Bank run in face of pending Banking failure: This has been happening in Greece in various degrees from 2011. We saw the climax in late June 2015.

• Implementation of Capital Controls: To further stem outflow of capital. We saw this happening in Greece this past week.

• ‘’Bail-in’’ (bank deposit haircuts): The next step is Bail-in, commonly known as haircut which will mostly affect the average investor. Under the Euro, deposits of up to 100.000 EUR are protected under EU Directive 49. Under a new currency, this protection may not apply to the smaller deposit holder. Even if it did, technically speaking 80% of Greek bank deposits is currently under 20.000 EUR. Practically speaking, only small deposit accounts will be available for haircut pooling and may be executed in contravention of Directive 49.

Devaluation and redenomination outlook: Leaving the Euro will comprise of two events. 
  • Currency conversion and redenomination of wages and prices.
  • Change in the exchange value of the currency. In the case of Greece, that change results in depreciation
• Devaluation: Should Greece exit the Eurozone, devaluation is the only swift adjustment mechanism that would stimulate GDP by boosting exports and improving long-terms sustainability of debt. This in itself carries evident dangers for Greece as the country doesn’t have a large production capability. Since even basic products are imported, this will have a profound painful adjustment impact on inflation, hence the purchasing ability of the people.

• Management and decision making process during implementation: How to plan in secret, the legal and constitutional implications involved and management of relations with other countries, including those In the Eurozone.

• Surviving without cash: On the day the New Greek Drachma is declared, all bank deposits, bonds, other instruments and assets are redenominated in that currency. An exchange market will commence and the exchange rate would fall well below conversion rates announced by authorities, 50% by conservative estimates. All this is accomplished electronically and without physical coins and notes. A great proportion of transactions will be made within the framework of a modern ‘’cashless’ society, ie credit-debit cards, cheques, e-bank orders and IOU’s.

• Wider Capital Controls: Disconnecting the Greek Banking system from the European TARGET2 Interbank processing system may not be the only capital control measure. More stringent capital controls could be imposed. Resident households and businesses may be forbidden to acquire foreign assets without clearance. Investing overseas and holding bank foreign accounts may be forbidden or severely limited and foreign businesses operating in Greece may be forbidden from repatriating profits severely effecting foreign investment potential. Just a matter of example, exchange Controls (which are very similar to capital controls) were introduced in South Africa as a temporary measure in 1961. Five decades later, a close version of the original structure is still in force.

• Default under foreign and domestic devaluation: In the case of external devaluation, the effect is immediate. Internal devaluation has a gradual build up over time effect. Monies owed to the ECB and other institutions will be denominated from Euro to Drachma and then devaluated immediately afterwards, this will further decrease debt- service ability, therefore default under soft currency which is worse.

• Negotiated debt restructuring: This was attempted under the umbrella of the Euro. Under a national currency, redenomination and devaluation alone is sufficient to make the debt further unsustainable. Negotiated debt restructuring will be inevitable and the scale of such a scenario is unclear. In any case, negotiated debt restructuring will put Greece at a disadvantage should the negotiations be conducted under a soft currency like the New Greek Drachma.

• Liquidity after Euro Exit and default: for a country like Greece that has difficulties funding their expenditures through tax revenues and other streams, has been downgraded by credit agencies and is locked out of capital markets, a combination of negotiated debt restructuring, potential debt reduction, devaluation and possibly further spending cuts will be needed as tools to re-establish and regain fiscal policy credibility in order to re-enter the markets.

• Real Wages: The depreciation of the new currency will have profound effects on real wages. To make the effect as small as possible, wages will have to be frozen for some time to compensate. Real wages effected by inflation could fall anywhere between 5%-20%.

• Bank loans: Since bank loans were taken in Euro’s, redenominated values will remain in Euro’s. Greece may insist that private sector’s international debt be redenominated into the new National currency, but is unlikely to achieve this. This means a sharp rise in domestic value of private bank debt.

• Property prices: Greek property will become more attractive for foreigners bearing hard currency. If foreign demand is strong enough, property prices will rise sharply making property purchase less attainable for average Greek people.

• Social unrest and disorder: There are two very prominent examples of financially fuelled political unrest in recent history. One was the Argentinian events of 2000 and the Albanian Ponzi scheme collapse of 1997 which sparked a rebellion to such an extent that not only led to the toppling of a democratically elected government (in both cases) but also operation Silver Wake, where United States military intervention was mobilized to evacuate their citizens from Albania. A report from Barclays expects that this sudden economic collapse in Greece would "aggravate social unrest".


IOBE and NBG reports

The truth is that Capital Economics and the creators behind Plan-Z are not the only think tanks and centers of influence who think the effects of abandoning the Euro will have grave repercussions to the average people. According to statements by Greek think-tank Foundation for Economic and Industrial Research (IOBE), a new drachma would lose half or more of its value relative to the euro. This would drive up inflation, and reduce the purchasing power of the average Greek. At the same time, the country's economic output would drop, putting more people out of work where one in five is already unemployed. The prices of imported goods would skyrocket, putting them out of reach for many.
     “On 29 May 2012 the National Bank of Greece warned that "[a]n exit from the euro would lead to a significant decline in the living standards of Greek citizens." According to the announcement, per capita income would fall by 55%, the new national currency depreciate by 65% vis-à-vis the euro, and the recession which Greece has been in for five years would deepen to 22%. Furthermore, unemployment would rise from its current 22% to 34% of the work force, and the inflation, which is currently at 2% would soar to 30%.
      "Renowned Greek ‘’analyst Vangelis Agapitos has estimated that inflation under the new drachma would quickly reach 40 to 50 per cent to catch up with the fall in the new currency's value. To stop the falling value of the drachma, interest rates would have to be increased to as high as 30 to 40 per cent, according to Agapitos. People would then be unable to pay off their loans and mortgages and the country's banks would have to be nationalised to stop them from going under, he predicted.” (www.zerohedge.com)
Secrecy Vs. Openness

One of the core elements in a GREXIT, further demonstrated in how Plan Z was conducted, is secrecy. Keeping the people in the dark with as little disclosure for as long as possible is key in minimizing the disruptive effects of a GREXIT (capital flight, fall in asset prices, bond yields, speculation etc).

Examples of how secrecy triumphed over openness in managing radical fiscal change policies are the Sterling’s exit from the European Exchange Rate Mechanism in 1992, the breakup of the Czech-Slovak Monetary Union following the political fragmentation of Czechoslovakia in 1992 and the more recent rapid adoption of a brand new currency by South Sudan after it’s break-off from Sudan.

Although non-disclosure is by definition frowned upon, further side effects of non-disclosure explained in Capital Economics study is the exclusion of cross-party consensus, reduced public confidence in their governments, civil unrest and households’ inability to plan going forward.

Saving Vs. Amputation

There are two streams of thought right now on how to handle the Greek crisis. One of them is shared by leaders such as German Chancellor Merkel and French President Hollande and it conceives the idea that Greece be nursed back to fiscal health within the EU/EZ. The other stream of thought expressed by the likes of the German Finance Minister Wolfgang Schaeuble calls for quote- ‘’the amputation of Europe’s infected limb – Greece – to stop the sickness from spreading’’ - unquote.

The cost of transition

Given the complexity of the Greek issue and the fact that there is no precedent, accurately quantifying the impact in Dollars and Cents, it is difficult at this stage to estimate the cost (some experts say 500 Billion to the European economy, others cite twice that amount). It is my opinion that Europe and world economic forces, through studies like Plan Z, are much better prepared to contain the damage within Greece with minimum spillage outside its borders.

 The years after

The below content is my own thoughts to the above and outside of the scope of Plan-Z, Capital Economics’ handbook and the experts quoted.
In all fairness, one has to also look at possible advantages the adoption of a national currency may have on the economy and the people of Greece.

• The country’s heavy industry - tourism will be boosted as visitors bearing hard currency will find Greece difficult to resist as a budget holiday destination. The spike in visitors will in itself provide conditions for supporting infrastructure (more airports, ports, Marinas, golf courses etc).

• With infrastructure projects come jobs. Of course, one has to bear in mind the artificial construction boom bubbles of China and Turkey, where their governments have to keep creating infrastructure projects, some useless, and to the detriment of the taxpayer just so keep unemployment figures low.

• Since devaluation and inflation will render exports much more expensive under a National Currency, it will most likely provide a stimulus for Greece to expand its domestic industrial output. This will boost exports in the long run, providing of course the Government provides incentive policies and a favourable taxation environment.

• National sovereignty on the political stage can be exercised more freely without mass intervention from Brussels. This has to be done with caution as under our own steam, we may not have the EU support mechanisms and Veto powers. The Greek government has to take this into consideration in view of loose ends such as FYROM, Cyprus, EEZ, just to name a few.

• Monetary and Fiscal sovereignty on the economic stage can also be exercised without great intervention from Brussels. Of course, becoming the master of your fiscal and monetary policy has a cost due to the fact the economic support mechanisms currently in place will no longer be accessible (ESPA, Erasmus, agricultural subsidies, EFSF, ELA).

On the other hand, Greek citizens have to realize, and accept, that the road to this development will be paved with generations of adversity and hardship. It will be full of decades of isolation, inflation, devaluation, interest rate spikes, fall in living standards, speculation, business flight, social and civil unrest and even more austerity.  But the most important loss of all will be all the European political and economic support mechanisms the people of Greece acquired over 20+ years with great sacrifice.

Sources:

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BREAKING - Tsakalotos admits on camera that Greece risks a rift with Europe (VIDEO)

Alternate Minister of International Economic Relations and main bailout negotiator Euclid Tsakalotos appeared on SKAI tv on Friday morning where he explained that the referendum was called in order to avoid snap elections. Tsakalotos noted that the best course of action would have been to hold a referendum a month earlier. He basically admitted that had the government submitted its agreement proposal in Parliament, it would not have passed, and this would have triggered national elections immediately (or within a three week period). He then said that Greece is risking a rift with Europe by selecting to hold the referendum but stressed that he could not support a ‘yes’ verdict if it came out Sunday.

Tsakalotos also ruled out the possibility of bail-in on Greek deposits.
     "We had a package that we did not believe in. We had a choice to bring it to Parliament and not to pass it. In my view, it would not have been accepted by SYRIZA, and the government, but it would not be accepted, so the government would fall.... and then we would have had three weeks for elections which are much more difficult to manage from a bank holiday with only five working days. So we had the choice to go to referendum where the referendum would be only eight days so that the people could decide."
When asked what differences obstructed them to sign the agreement he said: "We told them that we could not sign something that said sign this and if you are obedient children by October we will look into the issue of the debt again." He then said that there were also differences on the issues of proposed reforms -mostly in the public sector- as well as the return of collective worker contracts.

When asked whether there is a possibility of haircut on Greek bank deposits, Tsakalotos argued that such an event would not occur, and then he cited ECB chief Mario Draghi, who commented that the central bankers cannot solve Greece’s political problems.

HellasFrappe will be posting the relevant video with Tsakalotos' statements as soon as it goes viral on YouTube, but if you want to see the video now, then simply click on the source link below.

Source - http://www.skai.gr/news/politics/article/284997/tsakalotos-pairnoume-to-risko-gia-mia-rixi-me-tin-europi-i-diapragmateusi-apetuhe/




July 2, 2015

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Declaration of 246 Economics Professors at Greek Universities on Referendum & Importance of YES Vote

The following declaration, which is signed by 246 professors of Economics Schools and Universities across  Greece, and which was first published on kathimerini, explains why they are going to vote YES at this Sunday's referendum.
     By this declaration, we want to express our great distress about the latest developments in our country. We strongly believe that, at this crucial point, it is of paramount importance to avoid excesses, to show national cohesion, to preserve our position in the Eurozone and the EU, and to regain our credibility in the international community. Further, the fiscal consolidation program, drawn jointly with our EU partners and other creditors like the IMF, should be characterized by the lowest possible recessionary consequences and the highest possible level of social protection, aiming at growth and job creation in the private sector as soon as possible. The prolonged political uncertainty has led the economy to a renewed recession, has reversed the decline in unemployment, has lowered tax revenue and has widened the fiscal gap.
     Taking into account that the proposals of our creditors and the Greek government were converging until last Friday, we believe that what is really at stake in the coming Referendum, irrespective of the precise formulation of the question, is whether Greece will remain, or not, in the Eurozone and, possibly, whether it will remain in the EU itself.
     The funding of the Greek economy by Eurozone countries was suspended last weekend after the Greek government abandoned the negotiations at a time when no alternative funding opportunities seem to be available. We are already at the first stage of a very slippery process that, if not urgently reversed, will lead to a chaotic debt default and exit from the Eurozone. Bank closures and capital controls (that had been so far avoided throughout the deep crisis) constitute only the first rupture from the Eurozone and the EU itself
     We believe that the recessionary consequences of debt default and exit from the Eurozone, especially in such a chaotic and superficial way, will be much worse than the effects of a painful compromise with our EU partners and the IMF. A disorderly break of our country from the core of Europe will have disastrous economic, social, political and geopolitical consequences.
     Short-run consequences: Bank closures, cut in the value of deposits, sharp decline in tourism, shortages of basic consumer goods and raw materials, black market, hyperinflation, firm bankruptcies and a big rise in unemployment, rapid fall in real wages and the real value of pensions, deep recession and serious problems in the functioning of public health care and defense, social unrest.
     Medium-term consequences: international isolation of the country, no access to international capital markets for several years, low growth and anemic investment, high unemployment combined with high inflation rates, suspension of the flow of EU structural funds, significant decline in the standard of living, poor provision of basic public goods and services.
     All these developments should not have happened after 5 years of big sacrifices by the Greek people, and a tremendous fiscal adjustment, right at the time when the economy was starting to recover, with favourable expectations for further easing in the terms of our public debt obligations. They should not have happened in a period when the European economy is returning to positive growth rates and other peripheral euro countries start growing and reducing unemployment. They should not have happened in a favorable time for further EU integration that will benefit the South and when the ECB facilitates growth with excess liquidity and zero interest rates.
     Leaving the Eurozone, especially with this chaotic and superficial way, would likely lead to a process of leaving the EU too, with unpredictable and disastrous consequences for the national security and the democratic stability of our country.
     For all these reasons, Greece must remain in the core of the EU, which is the Eurozone.
     For all these reasons, our unequivocal answer to the real question of the referendum is: YES. Yes, to Europe.
  1. Adam Αntonis University of Ioannina
  2. Aggelidis Timotheos University of Peloponnese
  3. Alexakis Christos University of Pireaus
  4. Alexakis Panagiotis Athens University
  5. Anagnostou Aggeliki University of Thessaly
  6. Andoniou Fabio University of Ioannina
  7. Andronikidis Αndreas University of Macedonia
  8. Androutsopoulos Ion Athens University of Economics and Business
  9. Androutsopoulos Κonstantinos Athens University of Economics and Business
  10. Apergis Νikolaos University of Pireaus
  11. Apostolopoulos Thodoros Athens University of Economics and Business
  12. Argouslidis Paris Athens University of Economics and Business
  13. Arvanitis Stelios Athens University of Economics and Business
  14. Atsalakis George Polytechnic of Crete
  15. Avlonitis George Athens University of Economics and Business
  16. Balios Dimitris Athens University
  17. Ballas Apostolos Athens University of Economics and Business
  18. Baltas Georgios Athens University of Economics and Business
  19. Baltas Nikolaos Athens University of Economics and Business
  20. Basiakos Ioannis Athens University
  21. Bellou Victoria University of Thessaly
  22. Benos Nikos University of Ioannina
  23. Benos Theofanis University of Pireaus
  24. Billias Ioannis Athens University of Economics and Business
  25. Bitros Georgios Athens University of Economics and Business
  26. Blavoukos Spyros Athens University of Economics and Business
  27. Bourantas Dimitris Athens University of Economics and Business
  28. Bourantonis Dimitris Athens University of Economics and Business
  29. Bournova Eugenia Athens University
  30. Brisimis Sofoklis University of Pireaus
  31. Chalamandaris George Athens University of Economics and Business
  32. Chalkias Ioannis Athens University of Economics and Business
  33. Charitakis Nikos Athens University
  34. Chletsos Michael University of Ioannina
  35. Chlomoudis Kostas University of Pireaus
  36. Chortareas George Athens University
  37. Chouliaras Asteris University of Peloponnese
  38. Christopoulos Dimitris Panteion University
  39. Christopoulou Sofia University of Macedonia
  40. Christou George Athens University of Economics and Business
  41. Damianos Dimitris Agricultural University of Athens
  42. Dedoulis Manolis Athens University of Economics and Business
  43. Delipalla Sofia University of Macedonia
  44. Demoirakos Efthymios Athens University of Economics and Business
  45. Demos Antonis Athens University of Economics and Business
  46. Demousis Michalis University of Patras
  47. Dialla Violetta Athens University
  48. Dimeli Sofia Athens University of Economics and Business
  49. Dimitriadi Zoi University of Macedonia
  50. Dotsis Georgios Athens University
  51. Doukidis Georgios Athens University of Economics and Business
  52. Drakos Anastasios Athens University of Economics and Business
  53. Economides George Athens University of Economics and Business
  54. Economidou Claire University of Pireaus
  55. Economou Athina University of Thessaly
  56. Efstratoglou Sofia Agricultural University of Athens
  57. Eleftheriou Kostas University of Pireaus
  58. Fountas Stylianos University of Macedonia
  59. Gaganis Chrysovalantis Univiversity of Crete
  60. Gatsios Konstantinos Athens University of Economics and Business
  61. Genakos Christos Athens University of Economics and Business
  62. Genius Margarita University of Crete
  63. Georgiou Andreas University of Macedonia
  64. Georgoutsos Dimitrios Athens University of Economics and Business
  65. Giaglis Georgios Athens University of Economics and Business
  66. Giamouridis Daniel Athens University of Economics and Business
  67. Giannakopoulos Nikos University of Patras
  68. Giannelis Dimitrios University of Pireaus
  69. Giannelis Νikos University of Crete
  70. Giotopoulos Ioannis University of Peloponnese
  71. Glavinis Panayotis Aristotle University of Thessaloniki
  72. Griva Krina University of Ioannina
  73. Hassid Josef University of Pireaus
  74. Hatziantoniou Damianos Athens University of Economics and Business
  75. Hatzipanayotou Panos Athens University of Economics and Business
  76. Hatzis Aristides Athens University
  77. Iatridis George University of Thessaly
  78. Ifantopoulos Ioannis Athens University
  79. Indounas Konstantinos Athens University of Economics and Business
  80. Ioannidis Antonis Athens University of Economics and Business
  81. Ioannidis Stavros Panteion University
  82. Ioannou Georgios Athens University of Economics and Business
  83. Iordanoglou Chrysafis Panteion University
  84. Ireiotis Nikolaos Athens University
  85. Kainourgios Dimitris Athens University
  86. Kalamboukis Theodoros Athens University of Economics and Business
  87. Kalogirou Ioannis Metsovio Polytechnic University
  88. Kalyvitis Sarantis Athens University of Economics and Business
  89. Kammas Pantelis University of Ioannina
  90. Karagiannis Ioannis University of Macedonia
  91. Karamanis Konstantinos Athens University of Economics and Business
  92. Karaveli Eleni Athens University of Economics and Business
  93. Karkalakos Sotiris University of Pireaus
  94. Kasimatis Konstantinos Athens University of Economics and Business
  95. Katranidis Stelios University of Macedonia
  96. Katsimi Margarita Athens University of Economics and Business
  97. Kavousanos Emmanouil Athens University of Economics and Business
  98. Kazakos Panos Athens University
  99. Koen Sandra Athens University of Economics and Business
  100. Kollias Christos University of Thessaly
  101. Konstantinou Panagiotis Athens University of Economics and Business
  102. Konstantopoulos Panos Athens University of Economics and Business
  103. Kontouli Maria University of Peloponnese
  104. Korliras Panagiotis Athens University of Economics and Business
  105. Kosteletou Nikolina  Athens University
  106. Kostis Kostas Athens University
  107. Kotsios Stelios Athens University
  108. Kottaridi Konstantina University of Pireaus
  109. Koundouri Phoebe Athens University of Economics and Business
  110. Kouretas Georgios Athens University of Economics and Business
  111. Kritikos Manolis Athens University of Economics and Business
  112. Kyriazidou Katerina Athens University of Economics and Business
  113. Kyriazis Nikolaos University of Thessaly
  114. Kyriazis Dimitris University of Pireaus
  115. Kyritsis Ioannis Aristotle University of Thessaloniki
  116. Kyrkillis Dimitris University of Macedonia
  117. Ladi Stella Panteion University
  118. Lekakos Georgios Athens University of Economics and Business
  119. Leledakis Georgios Athens University of Economics and Business
  120. Leventakis Ioannis Athens University of Economics and Business
  121. Liargovas Panagiotis University of Peloponnese
  122. Liaropoulos Lykourgos Athens University
  123. Loizidis Ioannis Athens University of Economics and Business
  124. Lolos Sarantis Panteion University
  125. Louri Eleni Athens University of Economics and Business
  126. Louridas Pangiotis Athens University of Economics and Business
  127. Malevris Nikos Athens University of Economics and Business
  128. Malliaris Petros University of Pireaus
  129. Matsagganis Manos Athens University of Economics and Business
  130. Mergos Giorgos University of Athens
  131. Metaxas Theodoros University of Thessaly
  132. Miaouli Natasha Athens University of Economics and Business
  133. Milliou Chrisovalantou Athens University of Economics and Business
  134. Mylonas Nikolaos Athens University
  135. Mylonidis Nikos University of Ioannina
  136. Nikas Christos University of Macedonia
  137. Nikolaou Ioannis Athens University of Economics and Business
  138. Nikoleris Theodoros Athens University
  139. Nikolopoulos Andreas Athens University of Economics and Business
  140. Nikolotsa Daphni University of Crete
  141. O’Donnel Owen University of Macedonia
  142. Pagkratis Spiros Athens University of Economics and Business
  143. Pagoulatos Giorgos Athens University of Economics and Business
  144. Palis Thanos Aegean University
  145. Palivos Theodoros Athens University of Economics and Business
  146. Panagiotopoulou Lida Athens University of Economics and Business
  147. Panagiotou Dimitris University of Ioannina
  148. Panagopoulos Andreas University of Crete
  149. Pantelides Theologos University of Macedonia
  150. Papachristou Giorgos Aristotle University of Thessaloniki
  151. Papadakis Vassilios Athens University of Economics and Business
  152. Papadamou Stephanos University of Thessaly
  153. Papadimitriou Stratos University of Pireaus
  154. Papadopoulos Hrisoleon Aristotle University of Thessaloniki
  155. Papadopoulos Konstantinos Aristotle University of Thessaloniki
  156. Papalexandri Nancy Athens University of Economics and Business
  157. Papanastasopoulos Giorgos University of Pireaus
  158. Papandreou Andreas Athens University
  159. Papapanagos Harris University of Macedonia
  160. Papastathopoulou Polina Athens University of Economics and Business
  161. Papathanassiou Iason University of Macedonia
  162. Papavasiliou Nikolaos Athens University of Economics and Business
  163. Papoulias Dimitris Athens University
  164. Paraskevopoulos Christos University of Macedonia
  165. Pasiouras Photis Polytechnic of Crete
  166. Patronis Vassilios University of Patras
  167. Patsouratis Vassilis Athens University of Economics and Business
  168. Pechlivanos Lampros Athens University of Economics and Business
  169. Peka Oikonomou University of Pireaus
  170. Pelagides Thodoris University of Pireaus
  171. Petrakis Manolis University of Crete
  172. Petridou Evgenia Aristotle University of Thessaloniki
  173. Philippopoulos Apostolis Athens University of Economics and Business
  174. Pittis Nikitas University of Pireaus
  175. Polemis Michalis University of Pireaus
  176. Pollalis Ioannis University of Pireaus
  177. Pournarakis Efthimios Athens University of Economics and Business
  178. Pragidis Ioannis Democritus University of Thrace
  179. Pramatari Katerina Athens University of Economics and Business
  180. Psaltopoulos Dimitris University of Patras
  181. Psarianos Jacob University of Thessaly
  182. Psillaki Maria University of Pireaus
  183. Raikou Katerina University of Pireaus
  184. Repas Panagiotis Panteion University
  185. Repoussis Panagiotis Athens University of Economics and Business
  186. Riginos Michalis Athens University
  187. Rigopoulou Eirini Athens University of Economics and Business
  188. Roumanias Kostas Athens University of Economics and Business
  189. Sakellaris Ploutarxos Athens University of Economics and Business
  190. Sakellis Yiannis Panteion University
  191. Samitas Aristides Aegean University
  192. Sarris Alexandros Athens University
  193. Sartzetakis Efthimios University of Macedonia
  194. Sideropoulos Moissis Aristotle University of Thessaloniki
  195. Siourounis Grigoris Panteion University
  196. Siris Vasilios Athens University of Economics and Business
  197. Sklavou Helen Athens University of Economics and Business
  198. Sklias Pantelis University of Peloponnese
  199. Skordile Sofia Harokopio University
  200. Skountzos Theodoros University of Pireaus
  201. Skouras Athanassios Athens University of Economics and Business
  202. Skouras Dimitris University of Patras
  203. Skouras Spyros Athens University of Economics and Business
  204. Soderquist Klas Athens University of Economics and Business
  205. Sorros Ιoannis University of Pireaus
  206. Sotiropoulos Dimitris  Athens University
  207. Spinellis Diomidis Athens University of Economics and Business
  208. Spyrou Spyros Athens University of Economics and Business
  209. Stamatopoulos George University of Crete
  210. Stathakopoulos Vlasios Athens University of Economics and Business
  211. Stavrakoudis Athanassios University of Ioannina
  212. Symeonidis Spyros University of Ioannina
  213. Tarantilis Christos Athens University of Economics and Business
  214. Tatsos Nikos Panteion University
  215. Thalassinos Lefteris University of Pireaus
  216. Thomadakis Stavros Athens University
  217. Thomakos Dimitrios University of Peloponnese
  218. Tinios Plato University of Pireaus
  219. Topaloglou Nicholas Athens University of Economics and Business
  220. Toumpis Stauros Athens University of Economics and Business
  221. Tragaki Alexandra Harokopio University
  222. Tsakanikas Angelos Metsovio Polytechnic University
  223. Tsakiris Nikos University of Ioannina
  224. Tsakloglou Panos Athens University of Economics and Business
  225. Tsamourgelis Ioannis Aegean University
  226. Tsintzos Panagiotis Democritus University of Thrace
  227. Tsionas Efthymios Athens University of Economics and Business
  228. Tsipouri Lena Athens University
  229. Tsiritakis Emmanuel University of Pireaus
  230. Tsoukalis Loukas Athens University
  231. Tzavalis Elias Athens University of Economics and Business
  232. Tzelepis Dimitrios University of Patras
  233. Tzionas Ioannis University of Macedonia
  234. Tzouvelekas Vangelis University of Crete
  235. Vakola Maria Athens University of Economics and Business
  236. Varsakelis Νikos Aristotle University of Thessaloniki
  237. Vassilatos Vaggelis Athens University of Economics and Business
  238. Veletzas Κostas University of Macedonia
  239. Venetis Ioannis University of Patras
  240. Vettas Νikolaos Athens University of Economics and Business
  241. Voudouri Irini Athens University of Economics and Business
  242. Xanthakis Manolis Athens University
  243. Xepapadeas Tasos Athens University of Economics and Business
  244. Zacharias Lefteris Athens University of Economics and Business
  245. Zopounidis Konstantinos Polytechnic of Crete
  246. Zoumboulakis Michalis University of Thessaly

*first published on kathimerini


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Greece in Complete Crisis - ANEL MPs To Vote YES - Karamanlis makes live statement - LIVE BLOG

Radical political developments are unfolding in Greece as we speak, HellasFrappe will be massing the reports all day and featuring them in this live blog. Please check back periodically for the newest updates.

19:30 - European Parliament President Martin Schulz said his faith in the Greek government had reached "rock bottom," and that he hopes it resigns after Sunday's referendum, AFP reported. He told German Handelsblatt business daily that "new elections would be necessary if the Greek people vote for the reform program and thus for remaining in the eurozone and Tsipras, as a logical consequence, resigns. - AFP

18:00 - With the front-page title " What will happen with Greek bank deposits ", financial weekly Agora reports when Greece’s bank will open and about capital controls. The paper reveals what will happen after Sunday’s referendum and what are the plans of the Greek government after referendum’s result. enikos




17:30 - "The 'No' vote in the referendum will restart the negotiation on Monday. Based on the unity of the Greek people and the rejection of the ultimatums, the Greek government will negotiate with better terms," government spokesman Gavriil Sakellaridis said on Thursday. Sakellaridis noted that "the Greek government has given a difficult battle so that pensions are not reduced" adding that five years of memoranda led to pensions cuts of 14 billion euros which, however, were not enough for creditors and the domestic troika. "As days go by, more and more people understand the reality. More and more break the fear, close their ears to the unprecedented propaganda, do not succumb to blackmail," he concluded. - ANA-MPA

16:55 - Britis lay more blame for the Greek crisis on the current and previous Greek governments rather than the ‘troika. In a recent poll 41% said Athens bears more responsibility for the current Greek debt crisis, versus only 11% who blame the troika. Another 29% say both parties are equally at fault while only 18% are unsure either way. This means roughly half of those with an opinion put at least half of the blame on Europe, but the vast majority actually blame Greece and the Greeks. - yougov.co.uk


16:50 - While speaking in Cotonou, Benin, French President Francois Hollande said on Thursday that Greece's creditors could get a new rescue deal quickly if Greek citizens vote 'YES' at this Sunday's referendum. The Associated Press quoted Hollande as saying that the "consequences are not the same if it's a yes or no. If it's the yes, even if it's on the basis of proposals that have already expired, negotiations can resume and I imagine be quickly concluded. We are in something of an unknown." - Associated Press 

16:30 - In an interview with the German TV channel ZDF, European Parliament President Martin Schulz noted Europe's willingness to help the people of Greece but stressed that Europe will not help the Greek government. "We are ready to help the Greek people, but we are by no means willing to help the Greek government," Schultz said, commenting on a decision by Athens to hold a national referendum on Sunday. He characterized the Greek government as being incapable of sticking to the agreements reached with international lenders. When referring to Prime Minister Alexis Tsipras, Schultz said his behavior is "dangerous and irresponsible". - TV channel ZDF 

16:00 - A GPO poll cited by euro2day.gr said 47 percent leaned toward a “yes” vote, an endorsement of austerity and the international bailout. The “no” camp, the government’s position rejecting those terms, was 43 percent. The margin of error in the survey of 1,000 people was 3.1 percentage points.  - euro2day.gr

15:35 - Independent Greeks (ANEL) MP Costas Damovolitis was apparently expelled by Defence Minister and leader of ANEL Panos Kammenos on Thursday, after Damovolitis said that he would vote YES at this Sunday’s referendum. Following the move, Kammenos said that "we are at war. If someone cannot bear the pressure he leaves”. Speaking earlier today on Greek radio, Damovolitis said he believed the referendum question essentially boiled down to choosing between the Euro and the Drachma and expressed his concern about the future. - ProtoThema

15:20 - Honorary chief of staff and former Minister of National Defense General Frangoulis Frangos also made a statement in favor of the YES vote on Thursday noting that noone is authorized (or has the right) to proceed with the destruction of Greece. He said that he is saddened with the "irresponsibility" of the present coalition government because it is ridiculing our homeland and the Greek people worldwide. He warned that we are being led to difficult paths with much uncertainty as well as to complete impoverishment  as a nation, as a result of the "criminal irresponsibility" of those who deceived a whole nation of people with false promises. He then called on all Greeks to vote YES at this Sunday's referendum.- defencenet

14:15 - Former Prime Minister Costas Karamanlis broke his silence on Thursday and in a televised statement urged Greeks to vote YES in this Sunday's referendum. He said: "Europe is our home, Greece is an undetachable part of Europe." "Those who, while well-intentioned, believe that by voting 'No' will achieve a stronger bargaining position are making a serious mistake...This vote will be interpreted as a choice of exit" from the euro. "On Sunday, we say 'Yes' to Europe, prudently and with respect for the sacrifices Greeks have made," he added. In his short intervention, Karamanlis said that, in tackling Greece's high debt, the European Union made mistakes that "have affected many fellow citizens." Any such mistakes, however, were overridden by the need to stay in "Europe's core", the Eurozone, beause an exit would have "an unthinkably higher cost".- Reuters, ANA-MPA, enikos


13:00 - Independent Greeks MP Vasilis Kokkalis has requested that Sunday’s crucial referendum be withdrawn, otherwise he will vote ‘yes’, he told ANT1 on Thursday morning. Kokkalis argued that he approved the referendum because he received assurances from government spokesman Gabriel Sakellaridis that capital controls would not come into effect. As such he appealed to the President of the Republic to call a council meeting of political leader and cancel Sunday’s critical referendum. Similarly, Independent Greeks MP Kostas Damavolitis sated that on the Athina 9.84 radio station that he will vote ‘yes’ on Sunday, claiming that that choice is between an agreement with painful measures or a rupture with Europe. Damavolitis estimated that the people will vote in favor of an agreement and expressed his doubts as to the negotiations that the government will be able to enter, should a ‘no’ vote prevail. A third Independent Greeks MP, Dimitris Kammenos, also announced that he would vote ‘yes’ on Sunday and called for the withdrawal of the referendum, which he explained is polarizing the Greek people. Kammenos, who made his announcement via his Twitter account, added that Greece’s position in Europe and the Eurozone are non-negotiable and called the Greek people to vote ‘yes’ in the referendum. Meanwhile Independent Greeks MP Nikos Mavraganis stated that while he will vote ‘no’ on Sunday, he argued that the referendum is “illegitimate”. Mavraganis added that "castles fall when they are based on Trojan horses" - ANA-MPA/ToVima

11: 00 - Minister of Finances Yanis Varoufakis announced that if the Greek people vote ‘yes’ in Sunday’s referendum, then he would resign and help anyone who is to succeed him. - Bloomberg

10:00 - Former Prime Minister and PASOK president Kostas Simitis issued a statement urging Greek citizens to vote ‘yes’ on Sunday, in order to ensure Greece’s Eurozone membership and prospects of growth. He said that a ‘no’ vote would result in further financial destabilization, suspension of funding, recession and chaos, as evident by the closed banks. - SKAI Tv

09:45 - It was announced that Prime Minister Alexis Tsipras will deliver a speech in Syntagma Square on Friday, in support of the NO vote. A pro-Europe demonstration has been scheduled to take place at the Panathenaic “Kaillimarmaro” Stadium in Athens at the same time. ANA-MPA

09:30 - President of the Republic Prokopis Pavlopoulos noted that remaining within the Eurozone is the only option for Greece, ahead of the critical referendum on Sunday. According to Mega Channel, Pavlopoulos argued that the referendum has meaning when it does not polarize and divide society. He also said that the euro is necessary not only to secure the financial stability of Greece, but for the country’s national survival. - SKai Tv

09:30 - Vice President of Parliament and SYRIZA’s parliamentary spokesman Alexis Mitropoulos asserted that Alexis Tsipras must stay on, even if the people vote ‘yes’ in the referendum, as it would be inconceivable for him to desert the Greek people in their toughest decision. He said that Tsipras must continue as Prime Minister in order to protect the people, who will have voted for a hard package of measures. Should the people vote ‘no’, he added, then the Prime Minister will enter negotiations without the hard package of measures.

09:30 - Earlier today, the head of the Karamanlis founation, Petros Moliviatis released a statement to the press stressing the dangers of a Grexit, and encouraged Greeks everywhere to vote YES at this Sunday's referendum because it secures the safety of this country. Readers of HellasFrappe should keep in mind that Petros Moliviatis is the same man who encouraged Costas Karamanlis to bridge ties with Russia and China, which brought extremly important investments to Greece. He is one of the best diplomats that Greece has ever known and his opinion not only has a heavy importance, it sends a loud message to all those who truly want the safety and welfare of this country.

 09:00 - Far-left SYRIZA minister Panagiotis Lafazanis wants ‘new agreement absolutely compatible with our program’, otherwise he says his government will promote "alternative plan". The exact nature of the plan wasn’t revealed by Energy Minister Panagiotis Lafazanis, who spoke to a Russian news site, Rossiya 24. Lafazanis, whose views express the extreme Left Platform within SYRIZA, warned that “if the dominant circles of Europe do not return the ELA after the referendum and the loud ‘no’ of the Greek people, then the government has a plan to deal with this situation.” Asked by the reporter for more details, Lafazanis, whose portfolio also includes the five-year-plan sounding “productive reconstruction” moniker, declined to expand. - ProtoThema/Rossiya 24



June 30, 2015

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BREAKING - New proposal by Juncker - SYRIZA may accept = Will there be a solution by midnight?

LIVE BLOG WITH LATEST UPDATES AT BOTTOM

A few hours before Greece is officially declared bankrupt, news reports are claiming that Prime Minister Alexis Tsipras finally decided to re-open the communication lines with Brussels, thus taking an initiative to once again work with Greece's creditors in the framework of find an agreement/solution. Things are developing quickly because if a solution is not found then Greece will officially default by midnight. The BIG NEWS, according to some news sites, is that this new agreement will not include the IMF.

The Greek negotiating team is currently in heavy deliberations at the Maximos Mansion under the chairmanship of Tsipras for this very reason.

This sudden twist in developments unfolded after European Commission president Juncker sent a new improved proposal in the early hours of Tuesday morning. The reports claim that the new proposal also includes a reference to the regulation of the Greek debt. This was brought about following efforts from officials in France, Germany and believe it or not from forces within Greece as well.

The same reports also stress that the government decided to change its stance when it realized the severity of the present situation as a result of the imposed bank controls.

It was also revealed that more and more voices from within SYRIZA also called on Tsipras to accept this newest proposal, or at least re-open a highway of communication with Greece's creditors, with the aim of mitigating any differences on both sides.

According to enikos, Deputy finance minister Dimitris Mardas became the latest official to call for a resumption of negotiations, although he set as a precondition a restructuring of the country's debt.
     "If we can resolve this issue, then the road to a discussion could reopen... this agreement, naturally, must create the impression that it is leading the country out of the crisis. Such a development is, even now, the preferred solution," Mardas wrote in online site tvxs.gr.
Syriza MEP Stelios Kouloglou, a former journalist and owner of tvxs.gr wrote in the same site that Greece should not reject outright the new proposal by European Commission president Jean-Claude Juncker.
     "The balance of power against the Greek government is overwhelming. In the present circumstances, the government is not called upon to achieve a resounding victory, but the best possible compromise, with the fewest possible losses."
Kouloglou also warned that if the "no" prevails in the referendum, as the government has called for, "a punishing response (by European political and economic rulers) will be adopted." In case of a "yes" result, "the government will be forced to resign."

Mardas' and Kouloglou's articles appeared a day after another Syriza MEP, Costas Chrysogonos, made a public a letter to prime minister Tsipras he said he wrote on March 19 and to which he never got an answer. In the letter, Chrysogonos warns Tsipras that he does not have a mandate to take Greece out of the eurozone and warned against "verbal escalation, which is a trap set by the other side."
     "A rupture with the creditors is an impossible choice and, should we try it, the result will return to its bailout trap under worse conditions, like a prisoner who tries to escape, fails and ends up in solitary confinement," Chrysogonos wrote Tsipras.
At this point anything can happen, but at least the government has decided to once again open the lines of communication with Greece's lenders. The only thing that is not in Greece's favor is time. Greece has until midnight to come to some sort of agreement, or it is GAME OVER.

Frappers, the news is still developing and we still do not know how this will swing. We also do not know if they will call a Eurogroup meeting this afternoon in order to seal this. All we can do is wait. (References, defencenet, iefimerida, enikos, protpthema, SKAI Tv, Kathimerini)

LIVE BLOG - HellasFrappe is following the story & updates will be posted throughout the day

UPDATE 13.35 local time -  One report from protothema said that “if Tsipras wants a solution he needs to send a letter to Juncker, Eurogroup Chief Jeroen Dijsselbloem, German Chancellor Angela Merkel and French President Francois Hollande stating that he accepts the proposal submitted by the three institutions on Sunday and start a campaign in favor of YES.”

UPDATE - 14.20 Local time - State Minister Nikos Pappas,on Tuesday at noon attempted to dispel the rumor that attempts to restart negotiations would scupper the July 5 referendum. Speaking in the Greek Parliament, Pappas said: "Let them dream on. Referendum as scheduled. Strong "no" by our people. A deal favorable to both Greece and Europe."

UPDATE 15:00 Local Time - As announced by the government, Alexis Tsipras held talks with European commission president Jean-Claude Juncker, European Central Bank president Mario Draghi and European Parliament president Martin Schulz on Tuesday but the subject of these talks was not released to the press.

UPDATE 15.15 Local Time - According to a report that was just released on defencenet, Tsipras will be leaving for Berlin or Brussels (or to both cities - it was not clarified) immediately -even today- in order to meet with German Chancellor Angela Merkel and Jean-Claude Juncker. According to the report, Tsipras proposed a viable solution to Juncker, in order to solve Greece's present financial problems. This new solution, has the signature of SYRIZA MP John Dragasakis and is reportedly going to be announced on ERT television on Tuesday night. The same report on defencenet claims that the Greek PM will seek to hold talks with Merkel - and French President Francois Hollande in the coming hours. Meanwhile, State Minister Alekos Flambouraris said that "if Greece's partners want a solution they should stop presenting old proposals as new." He also added that an agreement can only be reached if there are "no cuts in wages and pensions, if the collective work agreements are restored and if there is a settlement to the debt."  All indications show that our EU partners are retreating on the issue of debt rescheduling which is a good indication that a possible agreement will be reached.

UPDATE 16:15 Local Time - Finance Minister Yanis Varoufakis on Tuesday confirmed that Athens is not going to pay the 1.6 billion Euro installment to the IMF. When asked by AP about whether Greece will pay, Varoufakis said "no." His comment came amid speculation that Alexis Tsipras is trying to craft some sort of last-minute deal with creditors before the payment is due and before the European part of Greece's bailout comes to an end.

UPDATE 16:45 Local Time - (Ελεος ρε παιδια... ελεος!!) - Turkey said on Tuesday that it is willing to undertake Greece's 1.6 billion euro payment, or provide a zero interest loan in order to promote peace and solidarity among the two countries, while helping Greece to break the pressure of the IMF, Eurogroup and other creditors. - Daily Sabah

UPDATE 17:30 Local Time - HellasFrappe was spot on this morning when it reported this, because as always we trust our gut instinct... This story just came in from ANA-MPA, or the Greek state news agency - Greece’s government formally asked for a two-year bailout program from the European Stability Mechanism, according to a statement from the office of Prime Minister Alexis Tsipras. The request is to cover all of the country’s financial needs for the next two years, along with a debt restructuring plan, the Greek government said in the statement (in other words a third bailout worth 20+ billion euros). The government will continue negotiations seeking a “viable agreement” within the eurozone, it said. Already there are mixed reactions over the offer, one report on CNN described SYRIZA's offer as something that cannot even be discussed... leaving it to be understood that SYRIZA once again just wants to secure funds but apply no reforms. 

UPDATE 18:00 Local Time - Eurogroup chief Jeroen Dijsselbloem announced that a teleconference will take place tonight to discuss official request of Greek government received this afternoon. The ministers will have their conference only 5 hours before the European part of Greece's bailout program expires. "Extraordinary Eurogroup teleconference tonight 19:00 Brussels time to discuss official request of Greek government received this afternoon." enikos

UPDATE 18:20 Local Time - It was just reported by SKAI channel, and Naftemboriki that a group of far Left radicals from ANTARSYA (which support the SYRIZA party) interrupted an important meeting of the Athens Bar Association on Tuesday where more than 50 lawyers were there to discuss this Sunday's referendum. The protesters -who claim to respect democracy- bullied and verbally attacked the lawyers because they are not in favor of the NO vote at this Sunday's election and then the radicals forced the lawmakers to cancel the meeting. (This is just one more example of the type of democracy that Leftists support. Anyone who is against their ideology is wrong, a fascist, and undemocratic. They usually bully, belittle, insult and threaten anyone who disagrees with them.) As soon as HellasFrappe has the relevant video that was broadcasted on SKAI channel we will post it.

UPDATE 21:00 Local Time - Cuckoo!!! - A portion of the SYRIZA party, or it’s affiliated “Communist Trend” group, on Tuesday warned the government on the site www.marxismos.com not to “dare take a step back”, and at the same time demanded the immediate nationalization of banks, supermarkets, foodstuffs and pharmaceutical producers and even private health care units all across Greece! In other words... a return to Marxism (Double Cuckoo!!!). This obviously extreme element within SYRIZA also had the audacity to demand the expropriation of all Church property. Wait there is more, they also said they want the confiscated businesses and “means of production” to be passed to “workers’ control”. (Triple Cuckoo!!!)




June 29, 2015

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ANALYSIS - Greek Referendum Is More Con Than Democracy

The Greek parliament has approved a referendum to decide whether to accept the latest bailout terms offered by the country’s creditors. It will come too late and ask the wrong question.

This is a vote that Prime Minister Alexis Tsipras should have called at least a month ago -- if it were an honest effort to let the Greek people make a democratic choice on where their future lies, which it is not. As it is, the July 5 referendum will be so rushed as to be flawed in principle, and will come after the current bailout program expires. Indeed, it may come after Greece has already suffered a banking collapse.

The referendum is not, as Tsipras repeatedly claimed during his announcement, an expression of democracy in response to the “authoritarianism” of the creditors. His argument that the creditors must bend to the will of his election mandate has been preposterous from the start: In which debtor nation would voters not elect to have easier credit terms? And in what case has the International Monetary Fund or any creditor been answerable to the electorate of its client nation?

I’ve argued for Greece to hold a vote to clarify what its people want. It was necessary because Syriza lied during the campaign to get its representatives elected in January, by offering to end the bailout terms, keep the bailout and stay in the euro -- an option that, rightly or wrongly, was never available. Rather than produce a clearer mandate, though, this proposed referendum would continue Syriza’s subterfuge.

According to a draft cabinet proposal, the question on which Greeks would be asked to vote in just seven days’ time would be whether they want to accept the latest offer from the country’s creditors. This is a complex document that has yet to be translated into Greek and may well be void by Wednesday. It is clear from the language Tsipras used in describing that offer -- “blackmail,” “humiliation,” “ultimatum” -- which way he wants the vote to go.

Again, just as during the election campaign, Syriza officials are not mentioning what all this would mean for Greece’s place in the euro. They are maintaining the fiction that the question of accepting the bailout terms is quite separate from whether Greece defaults on its debt payments, sees its financial sector collapse and is forced to issue its own currency in one guise or another.

Not once in his address on the referendum did Tsipras mention the common currency. When the Associated Press asked Syriza cabinet minister Panagiotis Lafazanis whether the nirvana of reconstruction and progress he described as following from a “no” vote to the bailout would involve leaving the euro, he said: “It is you [the media] who pose this dilemma.”

This is populist dishonesty. It may be that by this point Greece would be better off defaulting and returning to the drachma (though I doubt it). And it may be that a majority of Greeks would make the choice to go it alone, rather than continue a dysfunctional relationship with the nation’s economic partners and creditors (although opinion polls suggest not). But the proposed referendum doesn’t ask those questions.

Tsipras and his party want this vote to legitimize their decision to default and exit the euro, most likely after that decision has already been made, without actually telling Greeks that this is the choice they are making. It gives further weight to my suspicion that Syriza’s erratic negotiating behavior for the last five months has been driven by a preference for default and exiting the euro they could not express, because the party had no mandate for it.

Greek voters should be told the honest truth about what they would be deciding on July 5, if the vote goes ahead at all after the likely chaos of the next week: a return to the bailout terms within the euro, or a default and a return to fiscal sovereignty outside it.

Read the whole story by By Marc Champion: Bloomberg View via ekathimerini

June 27, 2015

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Karamanlis breaks silence - Warns that “unwise choices" will have irreversible consequences on Greece

In a very rare public statement, former Prime Minister Costas Karamanlis on Saturday called on Greece to remain in the Eurozone. The former premier stressed that Greece's interests require participation in the Eurozone, adding that “unwise choices" will push the country "into an adventure” with unpredictable and possibly irreversible consequences.

Karamanlis, who has kept silent since he was overthrown by George Papandreou in 2009, underlined that the existence of imperfections within the EU do not take away from the value of this strategic orientation.

It will come as a surprise to many, but Karamanlis has been working closely with ND leader Antonis Samaras since early Saturday morning, or right after Prime Minister Alexis Tsipras' announcement for a referendum. As such, he held a long conversation with the President of the Republic Prokopis Pavlopoulos and presently he is in close contact with other European heads of state. As always, Karamanlis is using his diplomatic charisma to defuse tension across Europe.

The story is still developing. Please check back later for more.


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