Post by Onyango Oloo on Feb 21, 2015 10:26:44 GMT 3
First, a news story carried by the Canadian Broadcasting Corporation on February 20, 2015:
Greece has reached an agreement with its European creditors that will extend its bailout for four months as it attempts to rework terms of the debt repayment.
Eurogroup chairman Jeroen Dijsselbloem said at a press conference in Brussels that Greece had given an “unequivocal commitment to honour their financial obligations” to creditors.
On Monday Greece is to present a list of reform measures, which must then be approved by the major creditors — the EU, the European Central Bank and the International Monetary Fund. The national governments of the 19 eurozone members must also ratify the terms.
Greece has agreed not to take any measures that might prevent it from meeting repayment terms, and to fully fund any new spending measures from internal funds.
Those commitments give EU lenders a measure of control over Greek policy making, but they also give the new government breathing room.
"Tonight was a first step in this process of rebuilding trust," Dijsselbloem said at a news conference. "We have established common ground again to reach agreement on this statement."
Greece had asked for a six-month extension of the bailout while it worked to turn around its moribund economy, but EU members insisted on four months.
The deal followed make-or-break talks between Greece and eurozone finance ministers.
They began more than three hours late, delayed as German Finance Minister Wolfgang Schauble and his Greek counterpart Yanis Varoufakis worked out a fresh compromise text.
Varoufakis says the deal means Greece won't have to cut pensions and will have more control over how it manages its money.
"We are no longer going to be following a script that has been given to us by external agencies," he said.
At the same time, Greece's new government has to explain by Monday what policies it's going to introduce while borrowing this money.
"We're going to work night and day between now and Monday in conjunction with the institutions to come up with something," he said.
The main task for newly elected Greek Prime Minister Alexis Tsipras will be to get the Greek electorate and radical members of his Syriza Party to accept the terms, analysts said.
Tsipras swept to power last month on a pledge to ease the budget belt-tightening and reorganize the €240 billion ($340 billion) bailout debt.
Will the Greeks like the deal?
Analysts in Athens are already describing the concessions made by the Greek government as "politically poisonous."
Any reforms will have to be endorsed by the Greek parliament.
The talk of an apparent breakthrough has helped the euro rally and U.S. stock markets to turn positive.
The Greek government was effectively just a week away from having to fend for itself, as its debt deal with the EU expires Feb. 28.
Friday's emergency Eurogroup meeting, which included International Monetary Fund managing director Christine Lagarde and European Central Bank president Mario Draghi, is the third in just over a week. Financial markets have been gripped by the precarious negotiations.
"It has been a laborious but eventually constructive process," Lagarde said after the meeting.
Without any further support, Greece faced defaulting on its debts and an exit from the euro, a scenario that would likely devastate the Greek economy, at least in the short-term, and generate renewed uncertainty for the global economy.
NEXT, an op-ed piece published in the New York Times THREE DAYS PREVIOUSLY:
No Time for Games in Europe
By YANIS VAROUFAKIS, the Finance Minister of Greece
February 16, 20015 ATHENS—I am writing this piece on the margins of a crucial negotiation with my country’s creditors — a negotiation the result of which may mark a generation, and even prove a turning point for Europe’s unfolding experiment with monetary union.
Game theorists analyze negotiations as if they were split-a-pie games involving selfish players. Because I spent many years during my previous life as an academic researching game theory, some commentators rushed to presume that as Greece’s new finance minister I was busily devising bluffs, stratagems and outside options, struggling to improve upon a weak hand.
Nothing could be further from the truth.
If anything, my game-theory background convinced me that it would be pure folly to think of the current deliberations between Greece and our partners as a bargaining game to be won or lost via bluffs and tactical subterfuge.
The trouble with game theory, as I used to tell my students, is that it takes for granted the players’ motives. In poker or blackjack this assumption is unproblematic. But in the current deliberations between our European partners and Greece’s new government, the whole point is to forge new motives. To fashion a fresh mind-set that transcends national divides, dissolves the creditor-debtor distinction in favor of a pan-European perspective, and places the common European good above petty politics, dogma that proves toxic if universalized, and an us-versus-them mind-set.
As finance minister of a small, fiscally stressed nation lacking its own central bank and seen by many of our partners as a problem debtor, I am convinced that we have one option only: to shun any temptation to treat this pivotal moment as an experiment in strategizing and, instead, to present honestly the facts concerning Greece’s social economy, table our proposals for regrowing Greece, explain why these are in Europe’s interest, and reveal the red lines beyond which logic and duty prevent us from going.
The great difference between this government and previous Greek governments is twofold: We are determined to clash with mighty vested interests in order to reboot Greece and gain our partners’ trust. We are also determined not to be treated as a debt colony that should suffer what it must. The principle of the greatest austerity for the most depressed economy would be quaint if it did not cause so much unnecessary suffering.
I am often asked: What if the only way you can secure funding is to cross your red lines and accept measures that you consider to be part of the problem, rather than of its solution? Faithful to the principle that I have no right to bluff, my answer is: The lines that we have presented as red will not be crossed. Otherwise, they would not be truly red, but merely a bluff.
But what if this brings your people much pain? I am asked. Surely you must be bluffing.
The problem with this line of argument is that it presumes, along with game theory, that we live in a tyranny of consequences. That there are no circumstances when we must do what is right not as a strategy but simply because it is ... right.
Against such cynicism the new Greek government will innovate. We shall desist, whatever the consequences, from deals that are wrong for Greece and wrong for Europe. The “extend and pretend” game that began after Greece’s public debt became unserviceable in 2010 will end. No more loans — not until we have a credible plan for growing the economy in order to repay those loans, help the middle class get back on its feet and address the hideous humanitarian crisis. No more “reform” programs that target poor pensioners and family-owned pharmacies while leaving large-scale corruption untouched.
Our government is not asking our partners for a way out of repaying our debts. We are asking for a few months of financial stability that will allow us to embark upon the task of reforms that the broad Greek population can own and support, so we can bring back growth and end our inability to pay our dues.
One may think that this retreat from game theory is motivated by some radical-left agenda. Not so. The major influence here is Immanuel Kant, the German philosopher who taught us that the rational and the free escape the empire of expediency by doing what is right.
How do we know that our modest policy agenda, which constitutes our red line, is right in Kant’s terms? We know by looking into the eyes of the hungry in the streets of our cities or contemplating our stressed middle class, or considering the interests of hard-working people in every European village and city within our monetary union. After all, Europe will only regain its soul when it regains the people’s trust by putting their interests center-stage.
Greece has reached an agreement with its European creditors that will extend its bailout for four months as it attempts to rework terms of the debt repayment.
Eurogroup chairman Jeroen Dijsselbloem said at a press conference in Brussels that Greece had given an “unequivocal commitment to honour their financial obligations” to creditors.
On Monday Greece is to present a list of reform measures, which must then be approved by the major creditors — the EU, the European Central Bank and the International Monetary Fund. The national governments of the 19 eurozone members must also ratify the terms.
Greece has agreed not to take any measures that might prevent it from meeting repayment terms, and to fully fund any new spending measures from internal funds.
Those commitments give EU lenders a measure of control over Greek policy making, but they also give the new government breathing room.
"Tonight was a first step in this process of rebuilding trust," Dijsselbloem said at a news conference. "We have established common ground again to reach agreement on this statement."
Greece had asked for a six-month extension of the bailout while it worked to turn around its moribund economy, but EU members insisted on four months.
The deal followed make-or-break talks between Greece and eurozone finance ministers.
They began more than three hours late, delayed as German Finance Minister Wolfgang Schauble and his Greek counterpart Yanis Varoufakis worked out a fresh compromise text.
Varoufakis says the deal means Greece won't have to cut pensions and will have more control over how it manages its money.
"We are no longer going to be following a script that has been given to us by external agencies," he said.
At the same time, Greece's new government has to explain by Monday what policies it's going to introduce while borrowing this money.
"We're going to work night and day between now and Monday in conjunction with the institutions to come up with something," he said.
The main task for newly elected Greek Prime Minister Alexis Tsipras will be to get the Greek electorate and radical members of his Syriza Party to accept the terms, analysts said.
Tsipras swept to power last month on a pledge to ease the budget belt-tightening and reorganize the €240 billion ($340 billion) bailout debt.
Will the Greeks like the deal?
Analysts in Athens are already describing the concessions made by the Greek government as "politically poisonous."
Any reforms will have to be endorsed by the Greek parliament.
The talk of an apparent breakthrough has helped the euro rally and U.S. stock markets to turn positive.
The Greek government was effectively just a week away from having to fend for itself, as its debt deal with the EU expires Feb. 28.
Friday's emergency Eurogroup meeting, which included International Monetary Fund managing director Christine Lagarde and European Central Bank president Mario Draghi, is the third in just over a week. Financial markets have been gripped by the precarious negotiations.
"It has been a laborious but eventually constructive process," Lagarde said after the meeting.
Without any further support, Greece faced defaulting on its debts and an exit from the euro, a scenario that would likely devastate the Greek economy, at least in the short-term, and generate renewed uncertainty for the global economy.
NEXT, an op-ed piece published in the New York Times THREE DAYS PREVIOUSLY:
No Time for Games in Europe
By YANIS VAROUFAKIS, the Finance Minister of Greece
February 16, 20015 ATHENS—I am writing this piece on the margins of a crucial negotiation with my country’s creditors — a negotiation the result of which may mark a generation, and even prove a turning point for Europe’s unfolding experiment with monetary union.
Game theorists analyze negotiations as if they were split-a-pie games involving selfish players. Because I spent many years during my previous life as an academic researching game theory, some commentators rushed to presume that as Greece’s new finance minister I was busily devising bluffs, stratagems and outside options, struggling to improve upon a weak hand.
Nothing could be further from the truth.
If anything, my game-theory background convinced me that it would be pure folly to think of the current deliberations between Greece and our partners as a bargaining game to be won or lost via bluffs and tactical subterfuge.
The trouble with game theory, as I used to tell my students, is that it takes for granted the players’ motives. In poker or blackjack this assumption is unproblematic. But in the current deliberations between our European partners and Greece’s new government, the whole point is to forge new motives. To fashion a fresh mind-set that transcends national divides, dissolves the creditor-debtor distinction in favor of a pan-European perspective, and places the common European good above petty politics, dogma that proves toxic if universalized, and an us-versus-them mind-set.
As finance minister of a small, fiscally stressed nation lacking its own central bank and seen by many of our partners as a problem debtor, I am convinced that we have one option only: to shun any temptation to treat this pivotal moment as an experiment in strategizing and, instead, to present honestly the facts concerning Greece’s social economy, table our proposals for regrowing Greece, explain why these are in Europe’s interest, and reveal the red lines beyond which logic and duty prevent us from going.
The great difference between this government and previous Greek governments is twofold: We are determined to clash with mighty vested interests in order to reboot Greece and gain our partners’ trust. We are also determined not to be treated as a debt colony that should suffer what it must. The principle of the greatest austerity for the most depressed economy would be quaint if it did not cause so much unnecessary suffering.
I am often asked: What if the only way you can secure funding is to cross your red lines and accept measures that you consider to be part of the problem, rather than of its solution? Faithful to the principle that I have no right to bluff, my answer is: The lines that we have presented as red will not be crossed. Otherwise, they would not be truly red, but merely a bluff.
But what if this brings your people much pain? I am asked. Surely you must be bluffing.
The problem with this line of argument is that it presumes, along with game theory, that we live in a tyranny of consequences. That there are no circumstances when we must do what is right not as a strategy but simply because it is ... right.
Against such cynicism the new Greek government will innovate. We shall desist, whatever the consequences, from deals that are wrong for Greece and wrong for Europe. The “extend and pretend” game that began after Greece’s public debt became unserviceable in 2010 will end. No more loans — not until we have a credible plan for growing the economy in order to repay those loans, help the middle class get back on its feet and address the hideous humanitarian crisis. No more “reform” programs that target poor pensioners and family-owned pharmacies while leaving large-scale corruption untouched.
Our government is not asking our partners for a way out of repaying our debts. We are asking for a few months of financial stability that will allow us to embark upon the task of reforms that the broad Greek population can own and support, so we can bring back growth and end our inability to pay our dues.
One may think that this retreat from game theory is motivated by some radical-left agenda. Not so. The major influence here is Immanuel Kant, the German philosopher who taught us that the rational and the free escape the empire of expediency by doing what is right.
How do we know that our modest policy agenda, which constitutes our red line, is right in Kant’s terms? We know by looking into the eyes of the hungry in the streets of our cities or contemplating our stressed middle class, or considering the interests of hard-working people in every European village and city within our monetary union. After all, Europe will only regain its soul when it regains the people’s trust by putting their interests center-stage.
head of the IMF said they lacked "clear assurances" in key areas.
O god! –-As for smuggling, I am of mixed feelings. Rumours has it the greek equivalent for this word is ''trade''. Banning trade 
would be suicidal for anybody meseems! Pass.
don?