Tsipras bewildered with Berlin’s humiliating demands; ECB expects political sign to refinance the Greek banks

In the sidelines of Sunday’s Eurosummit the Greek Prime Minister Alexis Tsipras met with the German Chancellor Angela Merkel, the EU Commission President Jean-Claude Juncker and the French President Francois Hollande. (EC Audiovisual Services, Date: 07/07/2015).

At the sidelines of Sunday’s Eurosummit the Greek Prime Minister Alexis Tsipras met with the German Chancellor Angela Merkel, the EU Commission President Jean-Claude Juncker and the French President Francois Hollande. (EC Audiovisual Services, Date: 07/07/2015).

The Greek indecisiveness and procrastination and the deep division of the euro area countries, with Germany upholding an intransigent position have led to the humiliation of Athens, during the Saturday and Sunday late night meetings of the Eurogroup (the council of the 19 ministers of Eurozone) and the Eurosummit (the 19 heads of Eurozone state and government council). Late on Sunday afternoon the Eurogroup transmitted its recommendation to the 19 leaders in a document containing a direct threat for a Grexit.

Earlier on Saturday during the first session of the Eurogroup Wolfgang Schäuble, the German minister of Finance, infamous in southern Europe, went as far as to tell his colleague Euclid Tsakalotos, the newly appointed Greek minister of Finance, that his country doesn’t really belong to Europe. Tsakalotos was also told that the Athens government is unreliable and irresponsible and has first to deliver what it promises and then get a new loan of around €83 billion. The Eurogroup decided that to mend this Greece has to pass in the Parliament during the next three days a number of key reforms concerning the pension system, the VAT rates, the privatization effort etc.

Eurosummit after the Eurogroup

After the Eurogroup it was the turn of the 19 leaders of the Eurosummit to put their Greek colleague Alexis Tsipras to the asphyxiation test. During the afternoon and later on yesterday night the Greek Prime Minister was summarily threatened with a disorderly Grexit. In view of that he was forced to accept an additional long list of humiliating ‘prior actions’ leading directly to more austerity. He only rejected to transfer Greek assets of a value of €50 billion to a company in Luxembourg as a security that Greece will comply with the terms of a possible new (third) Memorandum of Understanding between the country and its creditors (2010, 2012, 2015)

Last Friday or rather early on Saturday morning though, the Greek government had already passed a far reaching austerity and reforms package in Parliament. The package was then instantly submitted to the country’s creditors as a token of the government’s willingness to apply more unpopular and painful measures in order for the country to stay in Eurozone and continue receiving financial support. In doing so, Prime Minister Alexis Tsipras went as far as to actually dent the unity of his own party, the left wing SYRIZA which he had led to a momentous victory in the 25 January election.

Country above SYRIZA

A number of 17 SYRIZA deputies including two government ministers and the Parliament Speaker denied their backing to Tsipras’ new package of measures. Another 15 SYRIZA deputies signed a document informing the PM that they are not going to vote for the individual draft laws while applying the new program. SYRIZA has 149 deputies and has formed a government coalition with a junior partner, the ANEL right wing nationalistic party with 14 deputies. The latter deputies firmly back Tsipras’ options.

At the end, the proposal was passed with a resound majority of 251 votes in a house of 300 with the solid backing of all the opposition parties at the exception of the Communist Party and the fascist Golden Down group. The major opposition party, New Democracy, the socialist PASOK and the center-left Potami (River) party soundly backed the new sacrifices in order for Greece to stay put in the Eurozone.

Backing from the opposition

On top of that, those three parties have promised Tsipras more backing during the coming weeks when the individual measures will be brought to Parliament by the competent ministers. This backing will be needed this week while Alexis Tsipras returns from Brussels with a difficult agreement in his bag. A number of key measures have to be promulgated in the next three days.

In short, Tsipras has consciously decimated his own party in order to keep Greece in Eurozone with the votes of the opposition. This is exactly what the European Sting anticipated on Thursday 9 July. The relevant passage was: “As things stand now in Tsipras’ left-wing governing party, the SYRIZA, its extreme left deputies are expected to vote down this eventual third austerity program. However, the new plan can be approved in the legislative with a massive vote from the opposition parties”.

Yet Greece stays in Eurozone

Yet, Berlin and some other capitals still refuse to recognize the willingness of Athens to deliver the needed changes in a number of key sectors like the pension system, taxation, the product markets, structural issues and the public administration. On the other side of the table, France and Italy plus Spain and some other Eurozone countries stand firm in their support for Greece to stay in the euro area under conditions of course. Apparently, Paris has emerged as a strong pole standing firm against Germany’s austerity and fiscal orthodoxy policies.

The French President Francois Hollande has ‘adopted’ in a way the young Prime Minister Alexis Tsipras’ proposal for a groundbreaking reshuffle of the Greek economy. If Hollande manages to convince the German Chancellor Angela Merkel that Greece has submitted a realistic and painstaking economic program and at the same time make sure that Tsipras delivers, then France will again gain its position as the ‘political academy’ of the EU.

A weekend to be remembered

During this weekend past, the 19 ministers of Finance in the Eurogroup and the heads of state and government of the euro area in the Summit of the Eurogroup have been wrangling between them around the above mentioned lines. The EU Council had also announced a meeting of the 28 EU leaders for Sunday but this one was canceled. Eurozone is going to resolve its internal problems within the family. Even from Saturday night it became apparent that there was no need to change the Treaties so the 28 leaders had nothing to do. This was translated into the exclusion of a Grexit.

As expected, both the Eurogroup and the Eurosummit didn’t conclude on an all-embracing agreement with Greece on the base of Tsipras’ proposal. The country’s partners raised the issue of confidence about the implementation of a possible overall agreement and longed for a short term solution. Greece has a burning liquidity and debt servicing problem, with the Greek banks closed and the banking system at the brink of total collapse.

As a result, an omnibus accord between Greece and its creditors has been divided into a short term bridging arrangement – which is to take care of the burning immediate problems – and the long term Memorandum of Understanding, the third between the country and the troika of creditors the EU, the ECB and the IMF.

Hopefully the final communiqué of the Eurosummit is going to transmit a sign to the ECB that an overall agreement is in view and thus the central bank can restart financing the Greek banks.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

European Solidarity Corps: three years on

Fisheries: Commission proposes measures to conserve stocks of deep-sea species in the North-East Atlantic

The vehicles of our future

DPRK reports ‘little progress’ since historic June 2018 summit with US

Can we put a price on clean air? Yes, we can

4 ways the way we make things can change for a sustainable world

To achieve the Great Reset, we will need more than just the actions of the powerful

UN human rights chief denounces grave ‘assaults’ on fundamental rights of Palestinian people

Vegetarianism is good for the economy too

China’s Ambassador to the EU Zhang Ming wishes to Brussels a Happy 2019 Year of the Pig

Draghi: A bridge from Brussels to Berlin

Fostering intergenerational solidarity and cooperation through age-friendly environments: the right answer to Europe’s demographic challenge

Trump’s Russophiles under investigation, Europe remains ‘en garde’

Healthcare’s a human right, not ‘a privilege for the rich’ UNAIDS argues at Davos

Celebrating the Customs Union: the world’s largest trading bloc turns 50

A woman would have to be born in the year 2255 to get equal pay at work

UN rights chief ‘alarmed’ by upsurge in attacks against civilians in Syria’s Idlib

No way out for Eurozone’s stagnating economy

Refugees in Greece: MEPs demand solidarity, warn about impact of health crisis

Is Britain to sail alone in the high seas of trade wars?

“Move fast, build to last: Europe’s new generation” – op-ed by Ursula von der Leyen, President of the European Commission

Guterres underscores UN role in achieving a free, secure Internet

Technological innovation can bolster trust and security at international borders. Here’s how

Why Eurozone urgently needs the ECB to print and distribute at least €500 billion

EU opens a third antitrust file against Google

EU Copyright Directive: Google News threatens to leave Europe while media startups increasingly worry

Why strive for Industry 4.0

The EU can afford to invest trillions in support of employment

FROM THE FIELD: What do you want to be when you grow up? One day I will…

Importance of Mental Health and keeping it together in a Pandemic 

The scary EU elections result and the delayed Council’s repentance

Who is responsible for public health? The tendencies and its benefits –or not– on Health Education around the world

Social Committee teaches Van Rompuy a lesson

Can the US-Iran rapprochement change the world?

Women still struggle to find a job, let alone reach the top: new UN report calls for ‘quantum leap’

Tuesday’s Daily Brief: sexual violence in conflict, a malaria vaccine trial, updates on Libya, Ebola in DR Congo, Sri Lanka and Mali

Japan to invest in euro values

Central Mali: Top UN genocide prevention official sounds alarm over recent ethnically-targeted killings

EU finally agreed to cut roaming charges in 2017 but criticism is always there

New EU rules to thwart money laundering and terrorist financing

Merkel: Nationalism and egoism must never have a chance again in Europe

Charles Michel advocates a strong Europe that acts where it can add real value

How technology can help us achieve universal healthcare

OECD sees global growth slowing, as Europe weakens and risks persist

This is what happened to CO2 emissions in the EU last year

EP supports local authorities fighting the effects of the pandemic

Bilbao’s city parks offer brain-training games for the elderly

Coronavirus: Pandemic alert should be trigger for countries to do more against COVID-19

A Sting Exclusive: “Delivering on the Environmental Dimension of the new Sustainable Development Agenda”, Ulf Björnholm underscores from UNEP Brussels

10 ways regulators need to change in 2020

Three of the world’s hardest-hit nations are preparing to end their lockdowns

UN condemns attack on Ebola treatment centre in DR Congo which left doctor dead, two others injured

How one change to shipping goods could change the way we live

European Commission adopts rules to ensure a smooth transition to its next President and the next College of Commissioners

These technologies are playing a major role at the Cricket World Cup

Trump’s Pandemic Failure: A Missed Opportunity

EU summit compromise: positive step for recovery, inadequate in the long-term

Fighting for minds of youth in Latvia

A healthy human future depends on healthy oceans. Here’s why

US-China trade war at point of no return: Washington’s demands go beyond tariffs

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s