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RECESSION GREECE CYPRUS
How well Hillary Clinton knew that #Greece would no way make it, just by signing the first #Memorandum. What the FBI emails reveal , what does she promises to Greece now
Why Greece must stick with Tsipras @atsipras
Enjoy the “genuine Greek feeling” script of Alex, we picked it up around the web, and just learned about the BY site Byline, a one-stop crowdfunding and media outlet platform where journalists and quality bloggers reach readers directly.
one of the comments :…
antoniathefirst
22 hours ago
Hi Alex, I really enjoyed reading this it was like conversation
.”……how it is terribly strange how fascist party Golden Dawn were jailed when New Democracy, the dominant right-wing party needed votes and released when they would take votes from disillusioned SYRIZA voters. About how breakaway faction Popular Unity’s Plan B seemed to have the depth and detail of a primary school essay: “What did you do on your summer holidays, Panayiotis?” – “I took Greece out of the Euro and it all went very well.”About how eight months of opposition seem to have wholly cleansed public memory of four decades worth of sins. Well, this Odyssey couldn’t be without its Lotus-Eaters.
Those who say SYRIZA cannot make a difference should ask the thousands of families that now qualify for free electricity. The thousands of mothers who now have a solidarity credit card to buy food. The children of migrants, born in Greece, who are now recognised as Greek citizens. To them it makes a difference.I find myself thinking, if Greece weren’t bankrupt… If the same regressive neoliberal old parties, now vying for our vote, were governing the country in perfect circumstances, where money was abundant… What would they be doing?
To them the memorandum is convenient cover. To Tsipras it is a – perhaps insurmountable – obstacle. They are not the same. They couldn’t be more different.
They have Amygdaleza, we have Eleonas. Fear versus hope. That is the only, the giant difference.
Read more on Alexis Andreou aricle,
GET GREECE BY A GLANCE ON OUR SPECIAL COVERAGE ON greek2m.org PAGES , and refresh in a few moments your knowledge about Greece’s Politis thsi year . How did we arrive here ,,,
VISIT OUR COVERAGE ON gree2m.org, the 1OO+ Rainy days of Alexis Tsipras PAGE
the Close that Deal martyrdrom days for Greece, since late April 2015
A Brave NO Greece , the proud #greferendum
This is the #BordersNoControl, ISIS found on Lesvos, Xclusive by Greek2m
Philanthropy to be sustainable?.. could be, by the tycoons for #Greece
Philanthropy in Ancient Greek means then Love of human , and was the purpose of life of the civilized man
Philanthropy to be sustainable?.. could be, by the tycoons for #Greece.
This is the Greek Proposal to the Eurozone (full text in English)
Τhe Greek Proposal to the Eurozone (full text in English).
The Greek proposal to the Eurozone (full text) includes what the Greek government is proposing in reforms and cuts. A condensed version of the proposal in Greek is here.
1. 2015 supplementary budget and 2016-19 MTFS1
Adopt effective as of July 1, 2015 a supplementary 2015 budget and a 2016–19 medium-term fiscal strategy, supported by a sizable and credible package of measures. The new fiscal path is premised on a primary surplus target of (1, 2, 3), and 3.5 percent of GDP in 2015, 2016, 2017 and 2018. The package includes VAT reforms (¶2), other tax policy measures (¶3), pension reforms (¶4), public administration reforms (¶5), reforms addressing shortfalls in tax collection enforcement (¶6), and other parametric measures as specified below.
2. VAT reform
Adopt legislation to reform the VAT system that will be effective as of July 1, 2015. The reform will target a net revenue gain of 1 percent of GDP on an annual basis from parametric changes. The new VAT system will: (i) unify the rates at a standard 23 percent rate, which will include restaurants and catering, and a reduced 13 percent rate for basic food, energy, hotels, and water (excluding sewage), and a super-reduced rate of 6 percent for pharmaceuticals, books, and theater; (ii) streamline exemptions to broaden the base and raise the tax on insurance; and (iii) Eliminate discounts on islands, starting with the islands with higher incomes and which are the most popular tourist destinations, except the most remote ones. This will be completed by end-2016, as appropriate and targeted fiscally neutral measures to compensate those inhabitants that are most in need are determined. The new VAT rates on hotels and islands will be implemented from October 2015.
The increase of the VAT rate described above may be reviewed at the end of 2016, provided that equivalent additional revenues are collected through measures taken against tax evasion and to improve collectability of VAT. Any decision to review and revise shall take place in consultation with the institutions.
3. Fiscal structural measures
Adopt legislation to:
·close possibilities for income tax avoidance (e.g., tighten the definition of farmers), take measures to increase the corporate income tax in 2015 and require 100 percent advance payments for corporate income and gradually for individual business income tax by 2017; phase out the preferential tax treatment of farmers in the income tax code by 2017; raise the solidarity surcharge;
·abolish subsidies for excise on diesel oil for farmers and better target eligibility to halve heating oil subsidies expenditure in the budget 2016;
·in view of any revision of the zonal property values, adjust the property tax rates if necessary to safeguard the 2015 and 2016 property tax revenues at €2.65 billion and adjust the alternative minimum personal income taxation.
·eliminate the cross-border withholding tax introduced by the installments act (law XXXX/2015) and reverse the recent amendments to the ITC in the public administration act (law XXXX/2015), including the special treatment of agricultural income.
·adopt outstanding reforms on the codes on income tax, and tax procedures: introduce a new Criminal Law on Tax Evasion and Fraud to amend the Special Penal Law 2523/1997 and any other relevant legislation, and replace Article 55, ¶s 1 and 2, of the TPC, with a view, inter alia, to modernize and broaden the definition of tax fraud and evasion to all taxes; abolish all Code of Book and Records fines, including those levied under law 2523/1997 develop the tax framework for collective investment vehicles and their participants consistently with the ITC and in line with best practices in the EU.
·adopt legislation to upgrade the organic budget law to: (i) introduce a framework for independent agencies; (ii) phase out ex-ante audits of the Hellenic Court of Auditors and account officers (ypologos); (iii) give GDFSs exclusive financial service capacity and GAO powers to oversee public sector finances; and (iv) phase out fiscal audit offices by January 2017.
·increase the rate of the tonnage tax and phase out special tax treatments of the shipping industry.
By September 2015, (i) simplify the personal income tax credit schedule; (ii) re-design and integrate into the ITC the solidarity surcharge for income of 2016 to more effectively achieve progressivity in the income tax system; (iii) issue a circular on fines to ensure the comprehensive and consistent application of the TPC; (iv) and other remaining reforms as specified in ¶9 of the IMF Country Report No. 14/151.
On health care, effective as of July 1, 2015, (i) re-establish full INN prescription, without exceptions, (ii) reduce as a first step the price of all off-patent drugs to 50 percent and all generics to 32.5 percent of the patent price, by repealing the grandfathering clause for medicines already in the market in 2012, and (iii)) review and limit the prices of diagnostic tests to bring structural spending in line with claw back targets; and (iv) collect in the full the 2014 clawback for private clinics, diagnostics and pharmaceuticals, and extend their 2015 clawback ceilings to 2016.
Launch the Social Welfare Review under the agreed terms of reference with the technical assistance of the World Bank to target savings of ½ percent of GDP which can help finance a fiscally neutral gradual roll-out of the GMI in January 2016.
Adopt legislation to:
·reduce the expenditure ceiling for military spending by €100 million in 2015 and by €200 million in 2016 with a targeted set of actions, including a reduction in headcount and procurement;
·introduce reform of the income tax code, [inter alia covering capital taxation], investment vehicles, farmers and the self- employed, etc.;
·raise the corporate tax rate from 26% to 28%;
·introduce tax on television advertisements;
·announce international public tender for the acquisition of television licenses and usage related fees of relevant frequencies; and
·extend implementation of luxury tax on recreational vessels in excess of 5 meters and increase the rate from 10% to 13%, coming into effect from the collection of 2014 income taxes and beyond;
·extend Gross Gaming Revenues (GGR) taxation of 30% on VLT games expected to be installed at second half of 2015 and 2016;
·generate revenues through the issuance of 4G and 5G licenses.
We will consider some compensating measures, in case of fiscal shortfalls: (i) Increase the tax rate to income for rents, for annual incomes below €12,000 to 15% (from 11%) with an additional revenue of €160 million and for annual incomes above €12,000 to 35% (from 33%) with an additional revenue of €40 million; (ii) the corporate income tax will increase by an additional percentage point (i.e. from 28% to 29%) that will result in additional revenues of €130 million.
4. Pension reform
The Authorities recognise that the pension system is unsustainable and needs fundamental reforms. This is why they will implement in full the 2010 pension reform law (3863/2010), and implement in full or replace/adjust the sustainability factors for supplementary and lump-sum pensions from the 2012 reform as a part of the new pension reform in October 2015 to achieve equivalent savings and take further steps to improve the pension system.
Effective from July 1, 2015 the authorities will phase-in reforms that would deliver estimated permanent savings of ¼-½ percent of GDP in 2015 and 1 percent of GDP on a full year basis in 2016 and thereafter by adopting legislation to:
·create strong disincentives to early retirement, including the adjustment of early retirement penalties, and through a gradual elimination of grandfathering to statutory retirement age and early retirement pathways progressively adapting to the limit of statutory retirement age of 67 years, or 62 and 40 years of contributions by 2022, applicable for all those retiring (except arduous professions, and mothers with children with disability) with immediate application;
·adopt legislation so that withdrawals from the Social Insurance Fund will incur an annual penalty, for those affected by the extension of the retirement age period, equivalent to 10 percent on top of the current penalty of 6 percent;
·integrate into ETEA all supplementary pension funds and ensure that, starting January 1, 2015, all supplementary pension funds are only financed by own contributions;
·better target social pensions by increasing OGA uninsured pension;
·Gradually phase out the solidarity grant (EKAS) for all pensioners by end-December 2019. This shall be legislated immediately and shall start as regards the top 20% of beneficiaries in March 2016 with the modalities of the phase out to be agreed with the institutions;
·freeze monthly guaranteed contributory pension limits in nominal terms until 2021;
·provide to people retiring after 30 June 2015 the basic, guaranteed contributory, and means tested pensions only at the attainment of the statutory normal retirement age of currently 67 years;
·increase the health contributions for pensioners from 4% to 6% on average and extend it to supplementary pensions;
·phase out all state-financed exemptions and harmonize contribution rules for all pension funds with the structure of contributions to IKA from 1 July 2015;
Moreover, in order to restore the sustainability of the pension system, the authorities will by 31 October 2015, legislate further reforms to take effect from 1 January 2016; (i) specific design and parametric improvements to establish a closer link between contributions and benefits; (ii) broaden and modernize the contribution and pension base for all self-employed, including by switching from notional to actual income, subject to minimum required contribution rules; (iii) revise and rationalize all different systems of basic, guaranteed contributory and means tested pension components, taking into account incentives to work and contribute; (iv) the main elements of a comprehensive SSFs consolidation, including any remaining harmonization of contribution and benefit payment rules and procedures across all funds; (v) abolish all nuisance charges financing pensions and offset by reducing benefits or increasing contributions in specific funds to take effect from 31 October 2015; and (vi) harmonize pension benefit rules of the agricultural fund (OGA) with the rest of the pension system in a pro rata manner, unless OGA is merged into other funds.
The consolidation of social insurance funds will take place by end 2017. In 2015, the process will be activated through legislation to consolidate the social insurance funds under a single entity and the operational consolidation will have been completed by 31 December 2016. Further reductions in the operating costs and a more effective management of fund resources including improved balancing of needs between better-off and poorer-off funds will be actively encouraged.
The authorities will adopt legislation to fully offset the fiscal effects of the implementation of court rulings on the 2012 pension reform.
In parallel to the reform of the pension system, a Social Welfare Review will be carried out to ensure fairness of the various reforms.
The institutions are prepared to take into account other parametric measures within the pension system of equivalent effect to replace some of the measures mentioned above, taking into account their impact on growth, and provided that such measures are presented to the institutions during the design phase and are sufficiently concrete and quantifiable, and in the absence of this the default option is what is specified above.
5. Public Administration, Justice and Anti Corruption
Adopt legislation to:
·reform the unified wage grid, effective 1 January, 2016, setting the key parameters in a fiscally neutral manner and consistent with the agreed wage bill targets and with comprehensive application across the public sector, including decompressing the wage distribution across the wage spectrumin connection with the skill, performance and responsibility of staff. (The authorities will also adopt legislation to rationalise the specialised wage grids, by end-November 2015);
·align non-wage benefits such as leave arrangements, per diems, travel allowances and perks, with best practices in the EU, effective 1 January 2016;
·establish within the new MTFS ceilings for the wage bill and the level of public employment consistent with achieving the fiscal targets and ensuring a declining path of the wage bill relative to GDP until 2019;
·hire managers and assess performance of all employees (with the aim to complete the hiring of new managers by 31 December 2015 subsequent to a review process)
·introduce a new permanent mobility scheme applied by Q4 2015. The scheme will promote the use of job description and will be linked with an online database that will include all current vacancies. Final decision on employee mobility will be taken by each service concerned. This will rationalize the allocation of resources as well as the staffing across the General Government.
·reform the Civil Procedure Code, in line with previous agreements; introduce measures to reduce the backlog of cases in administrative courts; work closely with European institutions and technical assistance on e-justice, mediation and judicial statistics
·strengthen the governance of ELSTAT. It shall cover (i) the role and structure of the Advisory bodies of the Hellenic Statistical System, including the recasting of the Council of ELSS to an advisory Committee of the ELSS, and the role of the Good Practice Advisory Committee (GPAC); (ii) the recruitment procedure for the President of ELSTAT, to ensure that a President of the highest professional calibre is recruited, following transparent procedures and selection criteria; (iii) the involvement of ELSTAT as appropriate in any legislative or other legal proposal pertaining to any statistical matter; (iv) other issues that impact the independence of ELSTAT, including financial autonomy, the empowerment of ELSTAT to reallocate existing permanent posts and to hire staff where it is needed and to hire specialised scientific personnel, and the classification of the institution as a fiscal policy body in the recent law 4270/2014; role and powers of Bank of Greece in statistics in line with European legislation.
·Publish a revised Strategic Plan against Corruption by 31 July 2015. Amend and implement the legal framework for the declaration of assets and financing of the political parties and adopt legislation insulating financial crime and anti-corruption investigations from political intervention in individual cases.
Moreover, in collaboration with the OECD, the Authorities will:
·Strengthen controls in public entities and especially SOEs. Empower the Line Ministries to perform robust audit and control inspections to supervised entities including SOEs.
·Strengthen controls and internal audit processes in high spending Local Government Institutions and their supervised legal entities.
·Strengthen controls in public and private investment cases funded either by national or co-funded by other sources, public works and public procurement (e.g. in health sector, SDIT).
·Strengthen transparency and control processes and skills in tax and customs authorities.
·Assess major risks in the public procurement cycle, taking in consideration the recent developments (Central Purchasing and e-Procurement: KHMDHS and ESHDHS) and the need to have a clear governance framework. Develop strategy according to the assessment(Q4 2015)
·Implement strategy to mitigate public procurement risks.(Q1 2016)
·Assess 2 specific sectors, Health and Public Works in order to understand the existing constrains related to corruption and waste risks and propose measures to address them. Develop and implement strategy. (Q4 2015)
6. Tax administration
Take the following actions to:
·Adopt legislation to establish an autonomous revenue agency, that specifies: (i) the agency’s legal form, organization, status, and scope; (ii) the powers and functions of the CEO and the independent Board of Governors; (iii) the relationship to the Minister of Finance and other government entities; (iv) the agency’s human resource flexibility and relationship to the civil service; (v) budget autonomy, with own GDFS and a new funding formula to align incentives with revenue collection and guarantee budget predictability and flexibility; (vi) reporting to the government and parliament; and (vii) the immediate transfer of all tax- and customs-related capacities and duties and all tax- and customs-related staff in SDOE and other entities to the agency.
·on garnishments, adopt legislation to eliminate the 25 percent ceiling on wages and pensions and lower all thresholds of €1,500 while ensuring in all cases reasonable living conditions; accelerate procurement of IT infrastructure to automatize e-garnishment; improve tax debt write-off rules; remove tax officers’ personal liabilities for not pursuing old debt; remove restrictions on conducting audits of tax returns from 2012 subject to the external tax certificate scheme; and enforce if legally possible upfront payment collection in tax disputes.
·amend (i) the 2014–15 tax and SSC debt installment schemes to exclude those who fail to pay current obligations and introduce a requirement for the tax and social security administrations to shorten the duration for those with the capacity to pay earlier and introduce market-based interest rates; the LDU and KEAO will assess by September 2015 the large debtors with tax and SSC debt exceeding €1 million (e.g. verify their capacity to pay and take corrective action) and (ii) the basic installment scheme/TPC to adjust the market-based interest rates and suspend until end-2017 third-party verification and bank guarantee requirements.
·adopt legislation to accelerate de-registration procedures and limit VAT re-registration to protect VAT revenues and accelerate procurement of network analysis software; and provide the Presidential Decree needed for the significantly strengthening the reorganisation of the VAT enforcement section in order to strengthen VAT enforcement and combat VAT carousel fraud. The authorities will submit an application to the EU VAT Committee and prepare an assessment of the implication of an increase in the VAT threshold to €25.000.
·combat fuel smuggling, via legislative measures for locating storage tanks (fixed or mobile);
·Produce a comprehensive plan with technical assistance for combating tax evasion which includes (i) identification of undeclared deposits by checking bank transactions in banking institutions in Greece or abroad, (ii) introduction of a voluntary disclosure program with appropriate sanctions, incentives and verification procedures, consistent with international best practice, and without any amnesty provisions (iii) request from EU member states to provide data on asset ownership and acquisition by Greek citizens, (iv) renew the request for technical assistance in tax administration and make full use of the resource in capacity building, (v) establish a wealth registry to improve monitoring.
·develop a costed plan for the promotion of the use of electronic payments, making use of the EU Structural and Investment Fund;
·Create a time series database to monitor the balance sheets of parent-subsisdiary companies to improve risk analysis criteria for transfer pricing
7. Financial sector
Adopt:
(i) amendments to the corporate and household insolvency laws including to cover all debtors and bring the corporate insolvency law in line with the OCW law;
(ii) amendments to the household insolvency law to introduce a mechanism to separate strategic defaulters from good faith debtors as well as simplify and strengthen the procedures and introduce measures to address the large backlog of cases;
(iii) amendments to improve immediately the judicial framework for corporate and household insolvency matters;
(iv) legislation to establish a regulated profession of insolvency administrators, not restricted to any specific profession and in line with good cross-country experience;
(v) a comprehensive strategy for the financial system: this strategy will build on the strategy document from 2013, taking into account the new environment and conditions of the financial system and with a view of returning the banks in private ownership by attracting international strategic investors and to achieve a sustainable funding model over the medium term; and
(vi) a holistic NPL resolution strategy, prepared with the help of a strategic consultant.
8. Labour market
Launch a consultation process to review the whole range of existing labour market arrangements, taking into account best practices elsewhere in Europe. Further input to the consultation process described above will be provided by international organisations, including the ILO. The organization and timelines shall be drawn up in consultation with the institutions. In this context, legislation on a new system of collective bargaining should be ready by Q4 2015. The authorities will take actions to fight undeclared work in order to strengthen the competitiveness of legal companies and protect workers as well as tax and social security revenues.
9. Product market
Adopt legislation to:
·implement all pending recommendations of the OECD competition toolkit I, except OTC pharmaceutical products, starting with: tourist buses, truck licenses, code of conduct for traditional foodstuff, eurocodes on building materials, and all the OECD toolkit II recommendations on beverages and petroleum products;
·In order to foster competition and increase consumer welfare immediately launch a new competition assessment, in collaboration and with the technical support of the OECD, on wholesale trade, construction, e-commerce and media. The assessment will be concluded by Q1 2016.The recommendations will be adopted by Q2 2016.
·open the restricted professions of engineers, notaries, actuaries, and bailiffs and liberalize the market for tourist rentals ;
·eliminate non-reciprocal nuisance charges and align the reciprocal nuisance charges to the services provided;
·reduce red tape, including on horizontal licensing requirements of investments and on low-risk activities as recommended by the World Bank, and administrative burden of companies based on the OECD recommendations, and (ii) establish a committee for the inter-ministerial preparation of legislation. Technical assistance of the World Bank will be sought to implement the easing of licensing requirements.
·design electronic one-stop shops for businesses through analysing information obligations businesses have to comply with, structuring them accordingly and helping to design a project on developing the necessary ICT tools and infrastructure (Q3 2015). Setting up the institutional & co-ordination structure, identification of the business life events to be included, identification and mapping of information obligations & administrative procedures and training of officials (Q4 2015). Launch (Q1 2016)
·adopt the reform of the gas market and its specific roadmap, and implementation should follow suit.
·take irreversible steps (including announcement of date for submission of binding offers) to privatize the electricity transmission company, ADMIE, or provide by October 2015 an alternative scheme, with equivalent results in terms of competition, in line with the best European practices to provide full ownership unbundling from PPC, while ensuring independence.
On electricity markets, the authorities will reform the capacity payments system and other electricity market rules to avoid that some plants are forced to operate below their variable cost, and to prevent the netting of the arrears between PPC and market operator; set PPC tariffs based on costs, including replacement of the 20% discount for HV users with cost based tariffs; and notify NOME products to the European Commission. The authorities will also continue the implementation of the roadmap to the EU target model prepare a new framework for the support of renewable energies and for the implementation of energy efficiency and review energy taxation; the authorities will strengthen the electricity regulator’s financial and operational independence;
10. Privatization
·The Board of Directors of the Hellenic Republic Asset Development Fund will approve its Asset Development Plan which will include for privatisation all the assets under HRDAF as of 31/12/2014; and the Cabinet will endorse the plan.
·To facilitate the completion of the tenders, the authorities will complete all government pending actions including those needed for the regional airports, TRAINOSE, Egnatia, the ports of Pireaus and Thessaloniki and Hellinikon (precise list in Technical Memorandum). This list of actions is updated regularly and the Government will ensure that all pending actions are timely implemented.
·The government and HRADF will announce binding bid dates for Piraeus and Thessaloniki ports of no later than end-October 2015, and for TRAINOSE ROSCO, with no material changes in the terms of the tenders.
·The government will transfer the state’s shares in OTE to the HRADF.
·Take irreversible steps for the sale of the regional airports at the current terms with the winning bidder already selected.
How Creditos knew the FUTURE IMPOSSIBLE MADE FOR #GREECE, and the confessed #GreekFiasco
On his last statement for the Sunday Referendum, on Friday 03/07, Alexis Tsipras emphasized on the IMF’s report for Greece’s dept, that was finally revealed by the Internationay Monetary Fund officialy, after it was leaked when it had been provided to the German MP’s by the German Parliament
“Yesterday an event of major political importance happened,” Tsipras said. “The IMF published a report on Greece’s economy which is…”
…” great vindication for the Greek government as it confirms the obvious – that Greek debt is not sustainable.”
The fund published a draft of its latest analysis of Greece’s public debt yesterday, detailing a litany of factors that “render the debt dynamics unsustainable.” That’s a bureaucratic way of saying that there’s no chance that the country’s lenders will ever be repaid in full, commented the Quarz on Thursay, under the title Cant Pay, won’t pay
The International Monetary Fund conceded a point on Thursday that the Athens government has long been making, the NYT on Friday, 02/07 wrote :
Without some reduction in the country’s staggering debt load, Greece has little hope of a sustained economic recovery.
The report is likely to stoke tensions with Greece’s European creditors at a critical moment, just ahead of a Greek national referendum on Sunday over whether to accept a bailout package that Mr. Tsipras has opposed — in part because it does not contain debt relief. By essentially concluding that any new bailout deal for Greece must include debt relief, the I.M.F., whether intentionally or not, turned up the pressure on Europe to acknowledge that point, the NYT wrote on July 3. lose
Varoufakis: the Close the Banks blackmail
“They have Closed our banks as to blackmail the Greeks for a Yes to a deal without dept restructuring, while dept is definitely not sustainable”
This is was what the “Take it or Leave it” Ultimatum for Greece was about, handled by President Tusk, said Yiannis Varoufakis,talking on the State Televion News, on July 1, hours after a leak of an IMF document to a German newspaper that was proving, indeed, that Greece’s dept was admitted not to be sustainable
the IMF leaked document provided to the German MPs
A senior I.M.F. official said the organization released the report Thursday because elements of it were leaking out.. This was what the leaked document was saying
Even if Greece accepted all of the austerity measures demanded by its main creditors, the Troika, it still would not be able to make ends meet by 2030,
according to IMF estimates revealed in a set of documents obtained by a German newspaper.
The most optimistic scenario shows that Greece would face an unsustainable debt in 2030 even if it agreed to the package of tax increases and spending cuts proposed by the European commission, the European Central Bank and the IMF in exchange for a five-month €15.5bn loan from its creditors.
These prospects were outlined in six documents that were part of the “final” proposal offered to Greece by the three main creditors on Friday. The papers were obtained by the German newspaper Süddeutsche Zeitung and seen by The Guardian.
The estimates provide support for Greece’s decision not to accept the bailout deal. They prove that for Greece to survive economically, it needs real debt relief measures, not austerity reforms.
According to the IMF, Greece would be unable to sustain a debt level of 118% of GDP. In 2012, the organization said that 110% of GDP is the highest debt threshold the country could take on.
Currently the country’s debt level amounts to 175% of GDP, and that percentage could easily rise if the country were to slip into recession.
The documents stressed that
even if Greece posted stellar economic growth for 15 years, the debt level would still be higher than 110% of GDP,
adding that Greece had no chance of meeting that target.
Even if the economy managed to maintain a growth rate of 4% a year for the next five years, the national debt level would only decline to 124%.
“It is clear that the policy slippages and uncertainties of the last months have made the achievement of the 2012 targets impossible under any scenario,”
one of six secret documents, titled the Preliminary Debt Sustainability Analysis for Greece, stated.
There are also mentions of much needed “significant concessions,” but no specifics are revealed.
The files were reportedly sent to all German MPs for review and approval, but were never voted on since Greek Prime Minister Alexis Tsipras rejected the proposal and called for a referendum.
Other documents reveal further details about the proposed deal.
For example, there is a description of how Greece would eventually gain access to €15 billion. The plan was to consist of five separate tranches beginning as soon as June.
They were said to cover Greece’s immediate financing needs, with 93% of the money going towards paying the cost of maturing debt.
Other details were about reforms Greece should be forced to implement if it were to accept the proposal.
The debate over pension reforms was particularly heated. The documents show that the three creditors wanted substantial reform, including changes to early retirement penalties and the phasing out the solidarity grant (EKAS).
Late on Tuesday evening, Greece became the first developed country to default on its international obligations, after the IMF confirmed that it had failed to receive the €1.5 billion debt payment from Athens that was due by the end of June 30.
IMF spokesman Gerry Rice said in a statement that Greece had asked for a payment extension earlier on Tuesday and that the Fund’s board would consider it “in due course.”
This was largely expected by the markets. Greek Finance Minister Yanis Varoufakis had warned earlier that Greece would not be able to make its IMF debt payment on time.
the Nobelist Stiglitz: “It is Europe’s attack on Greek Democracy”
…”In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.
It’s not about the money, said Columbia Business School’s resident Nobel laureate. It’s about forcing Greece to buckle under.”
It is hard to advise Greeks how to vote on 5 July. Neither alternative – approval or rejection of the troika’s terms – will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country – one that has sold off all of its assets, and whose bright young people have emigrated – might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.
By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.
I know how I would vote.
by pointing to two articles, Bloomberg View columnist Clive Crook, shed light on late June to the other view of Greek drama, Grexit and Greek dept: to the Greek fiasco:
IMF Managing Director Christine Lagarde has the nerve to call for “adults in the room,” as though she finds this all rather trying and her patience is finally wearing thin, wrote Karl Whelan, a professor of economics at University College Dublin, who crisply explains, underlined Clive Crook, why it’s wrong to blame Greek Prime Minister Alexis Tsipras and Syriza for the mess.
[S]he seems to have forgotten that the IMF were supposed to be the adults in the room for discussions on Greece from 2010 onwards. But rather than adopt an approach consistent with their usual policies, the European-led IMF decided that European countries deserved the opportunity to be saddled with particularly high burdens of debt to the official sector.
Europe, it turns out, has gained very little from European influence at the top of the IMF. The rest of the world should learn from the Greek fiasco that former European politicians can no longer be trusted with the leadership of this crucial institution.
Since Takis Rouliotis revealed in Parliament the Greek dept unsustainable by the IMF reports, It took less than one month for the IMF to publicly confess it, -after five years of bleeding austerity and five months of negotiations made impossible for Tsipras govt –
How ,When and Why the IMF report for the unsustainable of the Greek dept was started to be revealed
(from our earlier story on greek2m.org)
Panayiotis Roumeliotis, Greece’s former envoy to the IMF during the critical years of IMF memorandum, said on the public hearing before the “Debt Truth” Committee in the Greek Parliament on Monday June 17, that according to official IMF report, Greece’s debt was “obviously shown not to be sustainable”.. “and so its board had to change its Statute to be able to fund the country”
“They made wrong calculations and overly optimistic estimations,” Roumeliotis told the committee, adding that “responsibility weights not only on our country, which didn’t do what should have been done, but also our partners.”
“If debt restructuring had taken place then [in May 2010], the ‘haircut’ needed would be just 30 pct … which would provide some breathing space to the Greek economy and wouldn’t require a violent fiscal adjustment,” he added.
” But there were secret meetings on that period of 2010, Panagioti Rouleotis revealed, between Germany’s and France’s top Banking Heads and the IMF, in order to delay Greece’s debt restructuring, as it was oficially revealed by then to the IMF executives, Roumeliotis said , so as the two countries’ Banking economy to be saved, but not the Greece’s economy, at all”…
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