Greece writhes

From ekathemerini:

Greek Prime Minister Alexis Tsipras is set to begin a bruising week by clearing out party rebels opposed to an austerity package that will have to go through parliament within days, people close to the government say.

With Greece’s future in the eurozone in the balance and European partners demanding immediate action to rebuild broken trust and prove his commitment to reform, the 40-year-old leftist prime minister cannot afford to wait.

To convince creditors to start talks on a third multibillion euro bailout package, Greece will have to pass laws by Wednesday night to cut spending, toughen value added tax, overhaul pension systems, change bankruptcy rules and advance privatizations.

However a mini-rebellion of lawmakers on Friday laid bare tensions in the ruling SYRIZA party. The revolt saw 17 deputies from the government benches withhold support in a vote to authorise bailout negotiations, leaving Tsipras reliant on opposition parties to pass the measure.

Dealing with the consequences of that revolt will provide a clear signal of how determined Tsipras will be in pushing through the reforms European partners are demanding.

Whether cooperation with opposition parties leads to a full-scale national unity government, with seats in the cabinet is still unclear but the change has left the future of the radical leftwing government in doubt. The government has 162 seats in the 300 seat parliament.

Among the most prominent rebels, Energy Minister Panagiotis Lafazanis, leader of the so-called “Left Platform” within SYRIZA and Deputy Labour Minister Dimitris Stratoulis, a former unionist and a fierce opponent of pension cuts, are expected to be sacked, people close to the government say.

The uncompromising speaker of parliament, Zoe Constantopoulou, who also defied Tsipras and abstained from the vote, would require a no confidence vote to be replaced but the other rebels would be expected to resign their seats, the same people say.

Under a SYRIZA party agreement, deputies are supposed to resign their seats if they publicly disagree with government policy although there is nothing to stop them refusing to stand down and holding on to their seats as independents.

So, Tsipras clears the decks for his great sell out. But, from The Economist’s Tom Nuttal, he is apparently still trying:

Capture

If I were Germany and wanted Grexit I would double the $50 billion figure (these are the public assets to be transferred to the Luxembourg company for liquidation when the Eurogroup says so).

Grexit or violence or both is surely imminent.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. “If I were Germany at this point I would double the $50 billion figure”. Anyone who’s ever bought an asset with a Sitting Tenant or a Reluctant Vendor knows what that means. So, yes, violence, one way or another

  2. The Greek “Choice”: Hand Over Sovereignty Or Take Five Year Euro “Time Out” | Zero Hedge

    http://www.zerohedge.com/news/2015-07-12/greek-choice-hand-over-sovereignty-germany-or-take-five-year-euro-time-out

    How Fascist Capitalism Functions: The Case Of Greece | Zero Hedge

    http://www.zerohedge.com/news/2015-07-12/how-fascist-capitalism-functions-case-greece

    The Latest Out Of Europe: “Pretty Steady Level Of Shittiness” | Zero Hedge

    http://www.zerohedge.com/news/2015-07-12/latest-out-europe-pretty-steady-level-shittiness

  3. The ECB has given Greece 2 choices ..Slavery or Poverty… If they were smart they would take a 3rd..FREEDOM.

    • Mate good article. However I have come to the conclusion that Greece is much like the Gold Coast, in that their primary source of income is tourism, (they have shipping as well but the Baltic index is underwater) should tourism stop, both go the wall.
      I was amazed to see the number of tourists stranded in Bali, whereas once a time they probably would have come here, and despite what you hear, this place is struggling. Should terrorism upset Geek tourist trade, the place goes under water.
      IN the evolving economies there is no place for the likes of Greece, and possibly a limited outcome for the Gold Coast, as they depend on disposable income, in globally tough times.
      For a more complete review of what is going on over there read the following. WW
      http://ec.europa.eu/economy_finance/publications/european_economy/2015/pdf/ee1_en.pdf

    • SoMPLSBoyMEMBER

      Thanks Glissom!
      I get why ‘odious’ debt is legally called ‘odious debt’. The magnitude of what has been engineered and the astonishing profitability by those who created this ‘legal’ theft will surely be the cause for its eventual collapse. I suspect that some will prefer to keep the status quo but many more will interested in seeing it stopped.

  4. Greece’s eurozone future uncertain as Germany steps up pressure – FT.com … google search title if blocked …

    http://www.ft.com/intl/cms/s/0/8681a02a-287d-11e5-8613-e7aedbb7bdb7.html#slide0

    Eurozone leaders have failed to break the deadlock in the Greek crisis in all-night talks as Germany piled the pressure on Greece to implement bold reforms and accept a high level of external economic supervision in return … read more via hyperlink above …

  5. Marathon Talks: Greece and Europe still divided over bailout … CNN Money … VIDEO …

    http://money.cnn.com/2015/07/12/news/economy/greece-bailout-europe-conditions/

    Greece was told Sunday it wouldn’t get the massive bailout it urgently needs unless it commits to much deeper economic reforms and shows it can deliver them

    Greek Prime Minister Alexis Tsipras, arriving for talks in Brussels with the leaders of the other 18 countries that use the euro, said he was ready to compromise.

    Whether that will be enough to get the money flowing again soon, secure Greece’s membership of the euro and allow its banks to reopen, remains unclear. … view and read more via hyperlink above …

  6. So so sad. Tsipras is a traitor to his people. I just cannot understand how they cannot use the example of Iceland as a template. They are so obsessed with being a member of the only shrinking trade union in the world.