Greece’s finance minister vows to shun officials from troika

[reorg]

Source: The Guardian

Yanis Varoufakis says new government will refuse to engage with auditors from the EU, the European Central Bank and the International Monetary Fund

The battle lines between Greece and its creditors were drawn in Athens as the Greek finance minister announced that the new government would refuse to engage with representatives of the country’s hated troika of lenders.

Standing his ground after talks in the capital with Jeroen Dijsselbloem, head of the eurogroup of EU finance ministers, Yanis Varoufakis said Greece would not pursue further negotiations with the body of technocrats that has regularly descended on the country to monitor its economy. Nor would it be rowing back on election-winning pledges by asking for an extension to its €240bn (£180bn) bailout programme. “This platform enabled us to win the confidence of the Greek people,” Varoufakis said, insisting that the logic of austerity had been repudiated by voters when the far-left Syriza party stormed to victory in Sunday’s election.

Greece has lost more than a quarter of its GDP, the worst slump in modern times, as a result of consecutive waves of budget cuts and tax rises enforced at the behest of creditors. Varoufakis and the new Greek prime minister, Alexis Tsipras, who also met Dijsselbloem on Friday, are adamant that the government will deal only with individual institutions and on a minister-to-minister basis within the EU. They have vowed to shun auditors appointed by the troika of the EU, the European Central Bank and the International Monetary Fund. ...

Read more: http://www.theguardian.com/business/2015/jan/30/greece-finance-minister-yanis-varoufakis-shun-officials-troika

---

Yanis Varoufakis took part in talks with Jeroen Dijsselbloem, head of the Eurogroup of EU finance ministers. Photograph: Simela Pantzartzi/EPA

http://www.dw.de/athens-shuns-troika-auditors-in-keeping-with-campaign-promises/a-18227205

[shenmue]

1. I hope this works

[JDPriestly]

2. Greece is playing a high stakes game.

The generals took over and were in charge in the early 1970s. So I wonder whether the Syriza coalition has secured itself with regard to the Greek military officers.

Beyond that, Western Europe cannot afford to risk the loss of control of the Greek portion of the Mediterranean. That is a trump card for Syriza and for Greece with any party in control of the parliament.

Look at this map.

https://www.google.com/maps/@44.7934773,24.0030126,5z

I'm not sure you can see it on there.

But anyway, note how Russia lies next to Ukraine. The name of the city Donetsk has been in the news a lot lately. That is Russia's, one of Russia's routes into the Black Sea. The Black Sea provides routes not only to Romania and Bulgaria but also to Turkey and ultimately across either a narrow strait or some land to the Mediterranean Sea.

The Mediterranean Sea leads to North Africa and Southern Europe and that means to Libya, Syria, Israel, and a lot of places in which the US has a definite military and economic interest. Russia competes with the US for influence in those areas. The entry to the Mediterranean is guarded by Turkey and Greece most of all.

Greece should be able to get what it wants. It is foolish to force economic distress on the Greek people. Very foolish. I don't think the US will stand for it in the end. Not if we are smart.

Syriza is a very left-wing party. Our politicians won't like it. But a military coup at this time could be very difficult to keep in place considering the world's politics.

It's a shame that our government did not reach out to help the Greek people quite some time go. We cannot lose our security in the Mediterranean. It's really vital to our country.

I believe that Gibraltar was one of the first nations with which we entered into a treaty.

Actually the treaty was with Morocco that controlled the Straits of Gibraltar.

And we entered into the treaty before we were really well recognized as a country.

http://www.weeklystandard.com/blogs/225-years-after-treaty-marrakech_648661.html

Helping the Greek people should be among our foremost concerns. We cannot lose free access to that part of the Mediterranean.

[Xolodno]

6. Greece is also part of NATO...

...What happens when a democratically elected government gets a coup? That makes things very difficult.

Greece just may exit the EU....what happens if they exit NATO? Their main issue is Turkey....also a NATO country. If Greece exits NATO and later they have an "entanglement" with Turkey....how many NATO members will honor the treaty?

And anyone who says "that won't happen" isn't naive....No...not by a long shot...naive is too gracious....they are a dumb ass, period. For example....Turkey has been thumbing its nose and poking the eye of the Greek Orthodox Church....the "First among equals" for a very long time, and have gone through great lengths to slowly eliminate it in Istanbul (Constantinople).

I seriously doubt many NATO allies (aside from the USA) will want to get involved in a dispute that transcends over a millennia. Oh and lets not forget something else...the new government has been a bit cozy with Moscow...while trying not to act like it.

So why in the hell would Russia give a rats ass about Greece? This is where I get called a Putinista. If Greece is successful in restoring itself to some semblance of normalcy (with the aid of Russia) and are out of NATO...they are going to be making a lot of noise about how Turkey is trying to eliminate a 1600 year old patriarchy with the Greek Orthodox Church (something that has been blunted due to the NATO alliance). If Greece is able to secure that the Patriarch of Constantinople (Istanbul) survives and continues. They are going to be singing the praises of Russia....and Russia gets more access to the Mediterranean.

If it fails....then they will sing the praises of Russia for trying uphold tradition....and a damn good chance the Patriarch of the Russian Orthodox Church becomes the de-facto "first among equals"....aka....the Patriarch of Moscow, the third Rome. People with no concept of history wont' get this....the politics of church and state still exist in portions of Europe...don't believe me? Look at the Republican Party in our own county that had a far better chance of secularization.

[JDPriestly]

7. Greece has a lot of cards to play.

This drama will continue for a while.

Germany doesn't want to give debt relief, but I would wager some sort of deal that is not called debt relief but that helps Greece significantly will be worked out.
The stakes are very high.

But I do recall the era of the generals in Greece. And I am quite aware of the war that followed WWII in Greece -- Truman's war against the Communists in Greece. The US is very interested in maintaining the integrity of Greece. We hsall see. There are a lot of possible futures for Greece.

It's a wonderful, beautiful country. The people are great.

[Xolodno]

9. I don't doubt one iota that its a wonderful and beutiful country..its on my bucket list.

But a lot of wonderful, beautiful countries with great people have been ruined with the "best of intentions" of the US government. I don't doubt Greece...I doubt the USA...particularly when more of its politics are now beholden to money.

I pointed out in another thread that Germany is in a pickle...the sanctions against Russia are starting to bite back, forgiving debt right now makes it very hard. As a Economic Professor once told me...get used to being depressed, because by becoming economist, you will know what the headlines really mean. Economies of nations are all interconnected....some heavily....some less. The cold war had the benefit of ignoring one side without repercussions, the Berlin wall wasn't just a physical barrier..it was also an economic one. That doesn't exist anymore even with some here on DU almost popping the champagne corks of a cold war's possible return....despite the fact "the evil empire" they love to hate...is impossible to return.

The US may be interested in maintaining the integrity of Greece....but right now, the track record on making the right decisions to do that has been very sub par.

[DeSwiss]

3. Fiat! Fiat! Fiat!

- It seemed so apropos.

K&R!




Don't Make Me Throw It!

[forest444]

4. This is the same troika that when Greece announced its intention to restructure bonds in 2010,

dragged out needlessly negotiations for two years - which was just long enough to give Goldamn Sachs and the other banksters enough time to unload their Greek bonds.

They mostly dumped them on Eurozone central banks, predictably; but guess who were the largest private buyers of Greek debt during this window of time:

vulture funds.

Mind you, their €3 billion in holdings (bought at 50% of face value, and with CDS insurance) is just 1% of the €325 billion or so outstanding. But with the right court ruling (probably in Germany), they could, courtesy of the precedent set by a senile (bribed?) Wall Street judge last year in the Argentina case, whine and stomp for 100%+ repayment and in the meantime stop payment to all other bondholders.

This would of course include Greek banks, pension funds, said Eurozone central banks, and probably more than a few U.S. investors. But that's OK, see, because bondholders don't count when you have the business press wrapped around your little finger yelling "deadbeat!!" whenever the targeted country is mentioned.

[reorg]

5. "It will spread across the entire Continent," Tsipras said.

... "The last two weeks weren't good ones for us," concedes one high-ranking government official in Berlin. An inexperienced but very self-confident anti-Merkel government is now steering the ship in Greece. The European Central Bank made the decision to purchase over a trillion euros in government bonds and other assets in the euro zone against Germany's will. And now, EU Commission President Jean-Claude Juncker, with the help of France and Italy, is seeking to loosen the euro Stability and Growth Pact. "Could it be that we're losing control right now?" asks one senior government official.

Perhaps. The Syriza election victory sends a message to the rest of Europe. It arouses hope in movements with similar political platforms in many European countries, including the Front National in France or Podemos in Spain.

In Portugal, the leftists parties -- the Socialist PS, the communist PC and the Marxist Bloco de Esquerda BE -- all celebrated Syriza's election victory. Many there hope it will alter the discourse in Europe and that proposals for a debt conference for the Southern European countries and for reconstruction plans for those countries hit worst by the debt crisis will be debated in Brussels.

At the same time, Tsipras' success could also strengthen the European leaders who hope to change current EU policies, even if they aren't interested in fulfilling Syriza's demands for a debt cut. Leading the pack are French President Hollande and Italian Prime Minister Renzi. Indeed, during Hollande's 2011 campaign, he at times sounded a lot like Tsipras. He said he wanted to "reorient Europe" and to liberate the people of Europe from "austerity". ...

http://www.spiegel.de/international/europe/greek-election-makes-euro-zone-exit-real-possibility-a-1015907.html

[bemildred]

8. No negotiations with terrorists. nt

[muriel_volestrangler]

10. However, he later said in an interview there's a misunderstanding; it's only *the auditors*

- the lower level bureaucrats who are in Greece overseeing the detailed implementation of the previous deal - that he won't work with. He still wants to set up a new deal with the ECB, IMF and European Commission, and the eurozone member states.

The Guardian, Reuters, the Financial Times the BBC (at first), and RT (so it wasn't just a British thing) all went with a story along the lines of 'no talks with the troika', and then the BBC interviewed him on Newsnight.

In the Newsnight video, at about 2:20, he is asked:

"And yet, you have said that you won't deal with the troika. Is that right - you will not deal with the institutions of your creditors?"
He replies:
"No, it is not. By the way, let me say something. You extended that quote - I was listening in on this windswept balcony on which I find myself - I was listening to you - with an earpiece that is coming out, constantly - I was listening to your report, and I have to tell you, I'm a great BBC fan. I've never listened to such an inaccurate report. I've never said that we're not interested in discussing with our creditors. Indeed, exactly the opposite, I said that we are very keen to enter into fruitful negotiations, discussions and deliberations with the European Central Bank, the IMF, the European Commission, every single member state of the eurozone in which we belong and rightfully find ourselves in. What we are not prepared to do is we are not prepared to carry on pretending and extending, trying to enforce an unenforceable programme, which, for 5 years now, has steadfastly refused to produce any tangible benefits.

"So, explain to us then, what that actually means, because you have called the whole construction 'rotten'. So will you deal with them as a body, because it's only as a body that they can help solve the debt, or will you not?"

"Of course we will. Today, I had a very fruitful meeting with Mr. Dijsselbloem, the head of the Euro group, and unfortunately, maybe I should have made my remarks in English, so that you wouldn't be lost in translation, my point was that we agreed(?) to hold discussions, and to find a commonly agreed solution to this problem, a new programme, a new agreememt, a new deal for Greece with our creditors. What we refuse to do, you see, the troika that you mentioned has 2 different levels. One is the troika of institutions which of course we are very keen to discuss with. But then, of course, there are representatives in Greece, who are very good people, but their purpose is to enforce and to oversee the implementation of a programme which in our view has completely and utterly failed."

"OK, let's deal with that. You want to reverse structural reform. You want to raise the minimum wage."

"No."

"No? Because that's what your manifesto said."

"Let's take one thing at a time. Not only do we not want to reverse structural reforms, we want to deepen them, make them more extensive. We've had enough as Greeks, of being in a country which needs so desperately reforms. It is not getting them. Greece has not been reforming over the last 5 years, it's been deforming, as a result of, sort of an implementation of a programme that is not dealing with the malignancies of the Greek economy."

"What about the privatisations of the ports? Are you going to go ahead with that, or are you going to reverse that?"

"Allow me to say one thing. Firstly, personally, and as a finance minister, I can assure you the particular investment in the port of Piraeus that has been unfolding in the past few years has my full support, and I would like to be part of an attempt to attract to this country forward directing investment that has a similar effect on raising productivity and competitiveness. But the privatisations that have mostly been pursued over the last few years have been a kind of fire sale in the middle of a deflationary process where essentially, assets that are potentially very valuable to this nation are being sold off during a deflationary crisis for peanuts, and even those peanuts are being thrown into a black hole of unsustainable debt."

[reorg]

12. like it says in the OP

and notwithstanding your failure to understand it:

Yanis Varoufakis says new government will refuse to engage with auditors from the EU, the European Central Bank and the International Monetary Fund ...

Standing his ground after talks in the capital with Jeroen Dijsselbloem, head of the eurogroup of EU finance ministers, Yanis Varoufakis said Greece would not pursue further negotiations with the body of technocrats that has regularly descended on the country to monitor its economy. Nor would it be rowing back on election-winning pledges by asking for an extension to its €240bn (£180bn) bailout programme. “This platform enabled us to win the confidence of the Greek people,” Varoufakis said, insisting that the logic of austerity had been repudiated by voters when the far-left Syriza party stormed to victory in Sunday’s election.

Greece has lost more than a quarter of its GDP, the worst slump in modern times, as a result of consecutive waves of budget cuts and tax rises enforced at the behest of creditors. Varoufakis and the new Greek prime minister, Alexis Tsipras, who also met Dijsselbloem on Friday, are adamant that the government will deal only with individual institutions and on a minister-to-minister basis within the EU. They have vowed to shun auditors appointed by the troika of the EU, the European Central Bank and the International Monetary Fund.

According to German TV station ARD they will arrive today in Paris to discuss the situation with France, on Monday they will continue on to London, on Tuesday to Rome. Currently not on the itinerary is a visit to Germany ...

German Finance Minister Wolfgang Schauble said Berlin is not willing to radically renegotiate current agreements.

[muriel_volestrangler]

13. But you can see by the replies here, and the other articles, that many thought he meant all the IMF

and ECB and European Commission. The headline that says "officials from the troika" has led many to think that meant "any officials from the troika", where he says he only meant some of the ones who work inside Greece.

[reorg]

15. No, I don't see that

This is the 'troika'

[div style="width:50%;"]

Spiegel article on troika (in German)

Wiki article (not available in English)

These three individuals (two Germans, one Dane) are the ones who decide and control if the agreed bailout conditions are being met, comment on ongoing legislative measures and advise on how and how quickly to lay off public employess, for instance. They were in constant contact with Greek authorities and legislators. And these three are the ones that the new government in Greece refuses to work with, IOW, it means the premature END of the 'troika' (whose task was going to end on February 28, anyway).

Who governs this land?” This historic quotation is attributed to former prime minister Konstantinos Karamanlis, who is rumored to have uttered this to his close confidant, the director of Greece’s secret service (KYP) Alexandros Natsinas, once he found out about the assassination of the left-wing member of parliament Grigoris Lambrakis in 1963, hinting at the possible existence of a parastate outside of his control.

We spontaneously posed this same question as well, when our magazine received an envelope which contained printouts of dozens of e-mails, which apparently have been exchanged between members of the troika, the Greek state, and the prime minister’s office. In these e-mails, whose authenticity was confirmed by virtue of the very events—and people—which they described, definitively prove, in a political context, what is already considered fact by Greek society: that Greece is governed by diktats issued by the troika, who bypass the democratically-elected government and impose decisions which are not only harmful for Greece, but which eliminate any semblance of Greece’s functional sovereignty. The legitimacy of these e-mails was also silently confirmed by the central figure named in these messages, both as a sender and as a recipient, as he has never responded to inquiries that we have submitted…

http://hotdoc.gr/article/4487/troika-staff-govern-greece-by-e-mail/

[muriel_volestrangler]

16. The troika is the 3 organisations, as the Wikipedia article says

"Die Organisationen der Troika" - and names several people, not just the 3 in your photo.

And as Varoufakis said, in my transcript: "the troika that you mentioned has 2 different levels. One is the troika of institutions which of course we are very keen to discuss with. But then, of course, there are representatives in Greece ...".

The replies in this thread aren't talking about a Greek refusal to deal with individuals, but the whole EC/IMF/ECB apparatus.

[FLPanhandle]

11. You don't talk like that unless you have another source of financing lined up

Given that Greece broke with the rest of the EU on Russian sanctions, it's pretty obvious they have worked out a backroom deal with Russia (and possibly China) to get money from them.

That will allow the Greeks to default on the EU loans, still have money to fund their budget deficit, and exit the EU. The Russians will gain Mediterranean influence (and maybe military bases) and have a proxy within the EU to stop further sanctions. Good deal for both.

[quadrature]

14. the side that backs down will lose face.

I don't see a way out of this.

the EU-ECB-IMF is going to
pull the plug