Greece caves in a bit – but not enough for Germany

Thursday 19 Feb 2015
by Paul Mason at The Guardian 

Various market analysts were tweeting that Greece had “blinked” in its stand-off with the eurozone authorities, and that it was all over bar the shouting. But it’s more complicated – as the German finance ministry immediately noticed.19 greece w Greece caves in a bit but not enough for Germany

What Yanis Varoufakis caved in on was, first, recognition that the old bailout deal was binding on Greece. However the words were: “binding vis-a-vis its financial and procedural content”. That was caveat number one.

On the fiscal surplus demanded by the troika, it says Greece will “attain appropriate primary fiscal surpluses” and that the fiscal targets for 2015 take into ACCOUNT the present economic situation. That is code for saying the mandated 4 per cent fiscal surplus is no longer binding.

Read more: Leak and counter-leak – how not to achieve a Greek deal

The third area of unclarity was over how much of Syriza’s programme they were going to be allowed to implement. Varoufakis says: “Any new measures be fully funded while refraining from unilateral action that would undermine the fiscal targets, economic recovery and financial stability.”

Eagle-eyed lawyers will have spotted that all other forms of unilateral action remain possible, and that without a monitoring authority sitting closely next to Greek ministers, it’s all open to interpretation.

Finally, the Greek desire to review the current bailout deal “on the basis of the proposals of, on the one hand, the Greek government and, on the other, the institutions” – i.e. the EU/IMF.

After two attempts to craft a compromise, this one, with Varoufakis signature and a Hellenic Republic letterhead, would not have been written without the explicit support of Juncker and Dijsselbloem.

For ministers who have barely seen their own country for the past two weeks, it was a compromise wrought out of exhaustion and the implicit threat from the ECB to pull the plug on Greek banks as early as next Wednesday. It still left Greece a lot of room for manoeuvre to do its domestic programme, as all departures from the memorandum, which mandates the austerity programme of the old government, would become matters of interpretation.

However just as everyone was declaring Game Over, the German finance ministry briefed journalists it would reject the deal.

The POKER game is not over, therefore. And we will keep you posted.

Follow Paul Mason on Twitter and Facebook

– See more at:


One response to “Greece caves in a bit – but not enough for Germany

  1. Now we can see why we had two world wars against being ruled by the politicians of Germany and that German trade unions and individual German tourists apologise for what the German government is doing to Greece, through the EU government.

    The German government, through the EU government, do not care less about the UK’s starving (mostly in work and pensioners with only 3 per cent of benefits bill on the unemployed),
    even though the UN will return after the general election to continue its investigation into
    early deaths caused by UK’s welfare reform.

    The UK poor starve and freeze under austerity in the 6th richest nation on earth, when UK has nil EU debt.

    The Germans expect Greece to repay a debt caused by the EU.

    Where else would a nation build infrastructure and then demand the money back as a loan. Does Westminster do that from councils?

    Instead of a Grexit, is it time we had a Germanexit?

Leave a Reply

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

You are commenting using your 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