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    What Is Next For Greece After The "No" Vote Landslide?

    By trkingmomoe on Mon, 07/06/2015 - 2:44am |

    According to MSM, Europe is in shock following the Greek "No" vote on Sunday. Euro has taken a fall in trading.  Summits are being called to discus what is next. 

    To deal with the liquidly problems in the Greek banks;

    “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago,” was the quote attributed to FinMin Yanis Varoufakis on Sunday, after the victorious “no” vote.

    http://www.infobalkans.com/2015/07/05/varoufakis-hints-parallel-currency-cites-california-s-past-iou-scheme 

    This Balkans News Site took time to explain the history of a California-style IOU.  You can see the influence that James Galbraith has made on the Greek Finance Minister, Yanis Varoufakis over the last 4 years advising him. 

    The script will enable commerce to continue.  People will be able to be paid and use the script to pay bills and purchase items.  This will stop the flow of Euro's from the banks.

    All the party leaders in Greece will meet this morning; 

    Prime Minister Alexis Tsirpas met with the President of the Hellenic Republic, Prokopis Pavlopoulos, to ask for a meeting with Greece’s party leaders tomorrow. The meeting will take place on Monday morning.

    “Greece was and will be an integral part of the European Union” Pavlopoulos said during the meeting and added that Greece is fully willing and wanting to stay in Europe and the Eurozone.

    Tsipras had announced his intention to meet with Pavlopoulos on this matter earlier during his televised speech on the NO vote result. The prime minister hopes to get the recommendations of the other party leaders ahead of the negotiations. The meeting is also an effort to promote unity within Greece, which Tsipras called for earlier today and in the days leading up to the referendum.

    http://greece.greekreporter.com/2015/07/05/pm-tsipras-calls-greek-party-leaders-emergency-meeting-ahead-of-negotiations

    This came up on my Wordpress Reader from Varoufakis Blog

    Today’s referendum delivered a resounding call for a mutually beneficial agreement between Greece and our European partners. We shall respond to the Greek voters’ call with a positive approach to:

    • The IMF, which only recently released a helpful report confirming that Greek public debt was unsustainable
    • The ECB, the Governing Council of which, over the past week, refused to countenance some of the more aggressive voices within
    • The European Commission, whose leadership kept throwing bridges over the chasm separating Greece from some of our partners.

    Our NO is a majestic, big YES to a democratic Europe.

    http://yanisvaroufakis.eu/2015/07/06/our-no-is-a-majestic-big-yes-to-a-democratic-rational-europe/

    He follows up with a second blog with his resignation of Finance Minister;  For several day rumors if there was a Yes voter he would resign but this is a surprise.  EU must not want to him be part of the next negotiations. 

    Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.

    I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.

     http://yanisvaroufakis.eu/2015/07/06/minister-no-more/

     

    Comments

    I would add 'what is next for Europe?' While one can find similar cases, this is an unique situation because of European Union, of which Greece is a member (i.e. they use the same Euro as does Germany and the others). Obviously it seems there will be "negotiations." Yet I don't think anyone setting at the table will know exactly what outcome they are negotiating for. They are going to try to figure out the possibilities, and they didn't want Varoufakis disrupting their delicate search in the darkness. 


    by Elusive Trope on Mon, 07/06/2015 - 10:36am

    He is still part of the Parliament.  He actually holds the most votes and is still powerful.  He is also a Economics Professor in Athens. He is now going to play a back seat roll because he scares the Bejessue out of the Eurogroup and they won't negotiate with him.  Another words he is the smartest kid in the room.  


    by trkingmomoe on Mon, 07/06/2015 - 10:56am

    From the viewpoint of someone with no background in economics

    Greece has to stay in the EU. Leaving the EU opens the doors for other to exit at any whim

    The Euro gets down graded no matter what they do to Greece making other currencies more expensive for Europeans.Europeans have to pay more for foreign goods.

    Because Greece leaving the Union is more harmful than Greece staying, a deal will be worked out.

    Germany has lost the argument that austerity works,


    by rmrd0000 on Mon, 07/06/2015 - 11:06am

    You are correct on this.  There will be a deal with better terms then all this austerity. I think the deal was offered just before the vote.  This will probably pave the way for better terms with other countries that are suffering.  The Troika is going to have to face the fact that they are going to have to right down some debt in the Euro. 


    by trkingmomoe on Mon, 07/06/2015 - 11:33am

    I didn't know that Tsipris Syriza is in power because it formed a coalition with the far right, led by Panos Kammenos who is now Defense Minister, and who threatened to flood Europe and Germany with immigrants and Jihadists if they don't bail Greece out again.

    Panos Kammenos

    This article calls Tsipris a charming demagogue. Excerpt:

    ...Zoe Konstantopoulou, the speaker of the Greek parliament, her face a mask of fanaticism, as she gave a raised fist salute to her ground troops....Konstantopoulou, along with the orthodox Marxist wing of Syriza led by Panagiotis Lafazanis, the energy minister, do not envisage a Greece of structural reforms in return for soft loans from the foreign creditors. Their vision, which one businessman dubbed “Lafazanistan”, is a fully nationalised economy in which all key institutions can be made subordinate to their extremist political narrative.

    There is no majority in Greece for their programme, which means a hard default on Greece’s debt pile and a return to the Drachma, so the referendum was framed as a question of national pride. Will you vote for humiliation and surrender, or defiance and a better deal? The last part of that is a cruel deception that will start to unravel with nationalisation of Greece’s systemic banks as early as next week.

    These look like very hard people to make a deal with, and no wonder doctors and educated Greeks with skills are leaving for greener pastures.

    Greece was expanding at a 2% rate when Tsipris took office, with unemployment falling,  now it is in steep decline. See Hitting the Ground Running Backwards, the Economist from Feb. It is of course, the modus operandi of demagogues to exploit crises, lie and "appeal to the lowest common denominator of a large segment of the population" ('surrender' 'national pride' 'flag waving' etc) to increase their grip on power, while finding an outside target to blame for economic collapse.

    It would seem a very hard pill to swallow to keep Greece in the Euro, although perhaps Tsipris isn't as much an ideological zealot or demagogue as he has seemed over the months of negotiations. Maybe he represents politics as usual in Greece.


    by NCD on Mon, 07/06/2015 - 12:51pm

    For Greece, it's an endurance test.  The ECB seems out to punish by withdrawing support for the local banks.  If the technocrats use this as a chance to teach a lesson to populist movements within Europe, then we are in for quite a show...


    by Michael Maiello on Mon, 07/06/2015 - 4:41pm

    It seems to be what they have been trying to do since this new government took office. They started to only let money drip into the banks since first part of February.  They are trying to push out the left leaning party with it's coalition. 


    by trkingmomoe on Mon, 07/06/2015 - 5:46pm

    There is mention now of  humanitarian aid for Greece, food fuel medicine as the economy may soon seize up completely. Greece imports all it's fuel and about 1/2 it's food. 


    by NCD on Mon, 07/06/2015 - 5:40pm

    Humanitarian aid has been flowing into Greece for months. The technocrats over played their hand last week with seizing up the Greek banks thinking that would force a yes vote.  All it did was push the voters to the left.  The worst has already happened to liquidly in the economy. 


    by trkingmomoe on Mon, 07/06/2015 - 6:13pm

    An interesting take on it from Vox, suggesting the European Union should finish reforming itself, and that "the end result could look something like the United States."


    by barefooted on Mon, 07/06/2015 - 6:12pm

    That has been the criticism of the EU from the beginning that they did not go far enough with their reforms.  


    by trkingmomoe on Mon, 07/06/2015 - 6:24pm

    Momoe, you are going to think this trivial, BUT I HAVE NEVER HAD TWO HEAD LINES AT THE SAME TIME, THE ENTIRE TIME I HAVE BEEN AT THIS BLOG!

    And I do not believe anyone else has witnessed this either. hhahaha

    This is great.

    This is a big deal to me.

    Good blog.


    by Richard Day on Mon, 07/06/2015 - 10:33pm

    OT: There you are.  I was worried that you had computer trouble. 

    This summer is turning out to be a pivotal or water shed point.  That is were these numbers come from.  There is plenty of push back going on against the conservative coalition in this country.  Then there is this little country push back against the big banks of Europe shedding light on all the structural problems with the Euro. Keep an eye on China's stock market. It went down 30% in the last couple of weeks.  It still has to fall another 80% to be where it was a year or so ago.  Some bubbles are popping over there. 

    I had two on the masthead this spring when I was introducing the women in Democratic Party. I think your computer was on the blink then.  

    Lookie another orchid.  It is hot here and humid here and they love it. 

     

    DSCN2012

     


    by trkingmomoe on Mon, 07/06/2015 - 11:44pm

    No computer probs, my son is here with his entire family for a week.

    I get to seem him and his family three days this week, last day on Friday/Saturday.


    by Richard Day on Tue, 07/07/2015 - 1:45am

    That is really nice.  Hug the babies for me. 


    by trkingmomoe on Tue, 07/07/2015 - 1:59am