Greek Referendum on IMF/Troika deal

[jaichind]

ECB to meet today to figure out what is next for ELA.  This entire crisis is leading up to the ECB being projected as the bad guy.  The the next explosion would be for ECB not to extend ELA.  Of course the main reason why it will have to end ELA (by law) is that the Greek bonds that is being used by Greek banks as collateral needs to be valued downward due to non-payment by the Greek government. But most Greeks will not understand this.  They will just see the big bad ECB pulling the plug on their economy.

[🦀🎂🦀🎂]

Fun fact for people arguing Greece should cut it's military spending because 2% of GDP is too high: that 2% is actually the minimum acceptable spending level per the terms of their NATO membership treaty

Yeah, but aside from the U.S. and UK, Greece is like the only country that takes that damn mandatory spending seriously. Seems a bit weird to tie itself in knots over the magic 2% when completely stable countries like Canada flaunt it as a matter of course.

The disturbing future that Tsipras doesn't want for Greece is to look like Serbia: insular, nationalistic and angry.

[Filuwaúrdjan]

Well the reason for that is the influence of the military in society and the fact that a pro-military far-right party is the junior coalition partner currently.

[Simfan34]

Fun fact for people arguing Greece should cut it's military spending because 2% of GDP is too high: that 2% is actually the minimum acceptable spending level per the terms of their NATO membership treaty

Yeah, but aside from the U.S. and UK, Greece is like the only country that takes that damn mandatory spending seriously. Seems a bit weird to tie itself in knots over the magic 2% when completely stable countries like Canada flaunt it as a matter of course.

The disturbing future that Tsipras doesn't want for Greece is to look like Serbia: insular, nationalistic and angry.

Of course, they are the ones in the right here. The US is forced to take spending seriously because the rest of them don't. And some people have the nerve to suggest we should bail the Greeks out!

[Filuwaúrdjan]

Nonsense, you'd spend a fycktonne on your military budget no matter what. Official American irritation on this point largely stems from the fact that lower military budgets for allies mean that they are less likely to be buying America arms.

[Simfan34]

Even going from 4% to 3.5% would be an improvement.

[jaichind]

Looks like the result of the Merkel-Hollande meeting is that Merkel says that Greece must bring precise proposal tomorrow. Read: Tsipras better show up with exact details on what austerity measures he will implement and in return we might disuses some debt write-downs in the future linked to these austerity measures being implemented. 

[jaichind]

ECB adjusts the haircuts for ELA for Greece. This is to reflect the qualify downgrade of Greek bonds as a result of recent events.  ELA for Greece is maintained at 6/26 level.  So in other words, no extra money for Greece.  So unless there is some sort of deal tomorrow or wed which would change ECB's haircuts for ELA Greece is looking at a complete collapse of its financial system later this week.

[Torie]

ECB adjusts the haircuts for ELA for Greece. This is to reflect the qualify downgrade of Greek bonds as a result of recent events.  ELA for Greece is maintained at 6/26 level.  So in other words, no extra money for Greece.  So unless there is some sort of deal tomorrow or wed which would change ECB's haircuts for ELA Greece is looking at a complete collapse of its financial system later this week.

Is the term "complete collapse" another way of saying immediate Grexit?

[ag]

Dombrovskis, the Latvian-born EU vice president responsible for the EUR, indicated that the vote had “complicated” the work of the creditors and had left the Greek government in a weaker, not stronger, negotiating position.  He also indicated that a write-down of Greece’s debt mountain is now “off the table."

I mean, this is the guy, who, as the Latvian PM, mercilessly deflated his own country to get into euro.  He, probably, has zero sympathy to Tsipras.

[ag]

ECB adjusts the haircuts for ELA for Greece. This is to reflect the qualify downgrade of Greek bonds as a result of recent events.  ELA for Greece is maintained at 6/26 level.  So in other words, no extra money for Greece.  So unless there is some sort of deal tomorrow or wed which would change ECB's haircuts for ELA Greece is looking at a complete collapse of its financial system later this week.

Is the term "complete collapse" another way of saying immediate Grexit?

It is also the manner in which it is going to be done. They cannot, possibly, reopen the banks issuing actual euros. They may not even have enough cash to much longer continue giving out the 60 euro a day, they are doing now. They will have to start issuing iou's as provisional currency. But, I am afraid, nothing is ready for that.

[jaichind]

ECB adjusts the haircuts for ELA for Greece. This is to reflect the qualify downgrade of Greek bonds as a result of recent events.  ELA for Greece is maintained at 6/26 level.  So in other words, no extra money for Greece.  So unless there is some sort of deal tomorrow or wed which would change ECB's haircuts for ELA Greece is looking at a complete collapse of its financial system later this week.

Is the term "complete collapse" another way of saying immediate Grexit?

Maybe.  The banks will simply run out of money, even at 60 EUR per person.  They could drag it out a day or two by reducing that to 20 EUR a day.  So for the system not to collapse they need to issue some sort of currency which is not EUR.  They can do some sort of IOU based on assets of the banks.  Except for the loan portfolio of the banks are so poor, especially after the post Jan 2015 election downturn, that the net assets of banks are way negative.  So perhaps the Greek government can issue IOUs.  This could be the road to Grexit but not necessary if this only lasts a few days when they can then unwind this once they get their hands on some EURs from ECB.  This just adds pressure on Tsipras to pull come up with something tomorrow.

[Torie]

ECB adjusts the haircuts for ELA for Greece. This is to reflect the qualify downgrade of Greek bonds as a result of recent events.  ELA for Greece is maintained at 6/26 level.  So in other words, no extra money for Greece.  So unless there is some sort of deal tomorrow or wed which would change ECB's haircuts for ELA Greece is looking at a complete collapse of its financial system later this week.

Is the term "complete collapse" another way of saying immediate Grexit?

It is also the manner in which it is going to be done. They cannot, possibly, reopen the banks issuing actual euros. They may not even have enough cash to much longer continue giving out the 60 euro a day, they are doing now. They will have to start issuing iou's as provisional currency. But, I am afraid, nothing is ready for that.

Who is going to accept IOU's as currency, other than the government itself? I mean, would I sell a suit to someone in exchange for Greek IOU's? In fact, I think during this unpleasantness, I would just shut my clothing store down, and take a vacation on the Dalmatian coast or something, assuming I have a foreign bank account. One would think anyone with half a brain, to the extent they had it, would have put most of their money other than that needed for short term needs in foreign bank accounts long ago.

[jaichind]

Who is going to accept IOU's as currency, other than the government itself? I mean, would I sell a suit to someone in exchange for Greek IOU's? In fact, I think during this unpleasantness, I would just shut my clothing store down, and take a vacation on the Dalmatian coast or something, assuming I have a foreign bank account. One would think anyone with half a brain, to the extent they had it, would have put most of their money other than that needed for short term needs in foreign bank accounts long ago.

The same old way all governments since the history of man imposed it currency on its population.  "All taxes paid to the government must be paid in IOU currency form."   This will give it some legitimacy.  Yes. most people with any real liquid assets in large amounts escaped months ago. 

[ag]

ECB adjusts the haircuts for ELA for Greece. This is to reflect the qualify downgrade of Greek bonds as a result of recent events.  ELA for Greece is maintained at 6/26 level.  So in other words, no extra money for Greece.  So unless there is some sort of deal tomorrow or wed which would change ECB's haircuts for ELA Greece is looking at a complete collapse of its financial system later this week.

Is the term "complete collapse" another way of saying immediate Grexit?

It is also the manner in which it is going to be done. They cannot, possibly, reopen the banks issuing actual euros. They may not even have enough cash to much longer continue giving out the 60 euro a day, they are doing now. They will have to start issuing iou's as provisional currency. But, I am afraid, nothing is ready for that.

Who is going to accept IOU's as currency, other than the government itself? I mean, would I sell a suit to someone in exchange for Greek IOU's? In fact, I think during this unpleasantness, I would just shut my clothing store down, and take a vacation on the Dalmatian coast or something, assuming I have a foreign bank account. One would think anyone with half a brain, to the extent they had it, would have put most of their money other than that needed for short term needs in foreign bank accounts long ago.

Government employees will have to. Soup kitchens, possibly.

That is why this is collapse.

[Antonio the Sixth]

Looks like the result of the Merkel-Hollande meeting is that Merkel says that Greece must bring precise proposal tomorrow. Read: Tsipras better show up with exact details on what austerity measures he will implement and in return we might disuses some debt write-downs in the future linked to these austerity measures being implemented.

There'd better be something concrete on this side though, otherwise it will not be an actual negotiation, but a shameless diktat.

[© tweed]

They may not even have enough cash to much longer continue giving out the 60 euro a day, they are doing now.

eh, they would have lowered it to 20 Euros if they were in imminent danger of running out of cash.  it'll only be a couple more weeks now before final negotiations collapse, and the so called "IOUs" or New Drachma era begins.

[© tweed]

also, I don't buy Yanis' official reasoning for leaving his MiniFinance post.  does anyone?

[jaichind]

also, I don't buy Yanis' official reasoning for leaving his MiniFinance post.  does anyone?

Not really.  I find it hard to believe that EU will say, we will give you a easier deal if  Varoufakis is gone.  It is much more structural then that.  I think he left on his own so he can keep his role of heroic martyr.  Now the hard painful part will begin for Greece where you will have to pay the piper one way or another.   Varoufakis figured he bail out right before that.  This way, weeks or months from now when Greece is in real difficult economic hardship people would say "if only Varoufakis stayed on ..."

[jaichind]

Looks like the result of the Merkel-Hollande meeting is that Merkel says that Greece must bring precise proposal tomorrow. Read: Tsipras better show up with exact details on what austerity measures he will implement and in return we might disuses some debt write-downs in the future linked to these austerity measures being implemented.

There'd better be something concrete on this side though, otherwise it will not be an actual negotiation, but a shameless diktat.

As much I do not want to agree with you, I do agree to some extent.  The EU always claimed that they will accept some debt write-offs if Greece shows that it made some progress on structural deficits. If so this is a good time to put that in writing.  Something like "If Greece does X, Y, Z by date A, B, C, then the debt write-off in terms of extending maturities on the debt will occur at time G."  Of course I never got why Tsipras focused so much on debt writeoff.  The fact is the interest rates are quite low so total debt is not the real short term problem.  Think Japan, whose net debt to GDP is around 140% but does not have any short term fiscal crisis.  The reason besides the debt being in Yen is also that the coupon rates are so low it does not make that much of a difference.  I totally agree this is a medium and long term problem but to take Greece to the breaking point for this never made sense to me.

[ag]

They may not even have enough cash to much longer continue giving out the 60 euro a day, they are doing now.

eh, they would have lowered it to 20 Euros if they were in imminent danger of running out of cash. 

They will.

[© tweed]

  I think he left on his own so he can keep his role of heroic martyr.  Now the hard painful part will begin for Greece where you will have to pay the piper one way or another.   Varoufakis figured he bail out right before that.  This way, weeks or months from now when Greece is in real difficult economic hardship people would say "if only Varoufakis stayed on ..."

I agree with this, except for the last part, I don't think anyone will be that dumb.  I suspect Yanis knows what a calamity Grexit will be and doesn't want his name associated with it.  if this is NOT the result of a personal break with Tsipras I can see him acting as a secret, "unofficial advisor.."

[🦀🎂🦀🎂]

He resigned because game theory people.

[Sir John Johns]

Results by municipality:



Not much blue and nothing really surprising.

The best municipality for the Yes was Filothei-Psychiko (71.61%), a rich suburb of Athens which voted heavily for the ND back in January (IIRC this was ND's best municipality).

Best municipality for the No was Icaria (79.51%), the well-known KKE stronghold where 11.04% of ballots casted were invalid. Second best municipality for the No was Aspropyrgos (79.2%), an industrial suburb of Athens where both Syriza and Golden Dawn polled very well in January.

[Simfan34]

He resigned because game theory people.

That's what his statement seemed to imply. Of course it's nonsense, but it's certainly a nice change from the "spend more time with my family" your people are so fond of employing.

I don't actually see the point in firing him, personally. To me it appears painfully clear that it is all over now, and that everyone is playing along with some pointless charade where all sides apparently pretend (or have deluded themselves into thinking) that some kind of agreement is possible.

The Greeks ought to spend every available minute working towards the reintroduction of the drachma. The Europeans ought to spend their time preparing for Grexit. Apparently, however, they all seem to be seeing something I don't.

Varoufakis will, of course, be all right. He'll sell a lot more copies of his book, write another, probably try to challenge Piketty for the title of "Most talked-about leftwing economist", get a column in some paper- the Times, perhaps, go on the conference circuit, and end up with a cushy visiting professorship somewhere. None of which, of course, will pay in drachmae. Probably won't do too many paid talks, though- neither the left-wing nor the iconoclastic thing to do.