Happy Birthday iglinavos Blog

blogI would like to thank all followers of the blog and @iGlinavos on Twitter for your support. A special thanks goes to all who participate on discussions on the blog.

I launched the blog on 6.1.2015 as a diary of my views on Greece and its troubles, and as a forum for discussion with people around the world. 201 posts after, I am pleased that this effort has attracted interest.

This past year has been fascinating for the blog and the #GrexitDailyNews section within it. I will do my best to keep it up and I hope you will keep coming back to discuss with me.

grexit daily news

@iGlinavos

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The Greek Election Result

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20 September 2015  — The Election Result (Prediction)


prediction

To παρών γράφημα βασίζεται σε εντελώς προσωπική άποψη με βάση ανάλυση της πολιτικής κατάστασης. Περιέχει πληροφορίες που δημοσιεύτηκαν ήδη στα ΜΜΕ πρίν την Παρασκευή 18.9.15

This is my prediction for the election result of 20.9.15. This is not based on anything secret, polling not in the public domain, or anything like that. It is based on reading the polls over the last 2 weeks carefully and evaluating trends. I have been paying attention to what people are saying, as opposed to what they report to pollsters on the phone and this is my conclusion. Polls have been wrong in the Greferendum, in the recent UK election and in many other cases. They are wrong now.

I think the damage done to Syriza by its rapid change from anti-austerity to bailout proponent is being under-estimated. Despite their poor polling I expect the party of Mr Lafazanis to come third. Golden Dawn and KKE I believe will come in slightly better than usual, but not significantly so. I think Pasok will perform better, but Potami and ANEL will fare much worse. I believe that despite the latest polls, ND will scrape through and will have the task of trying to form a new government on Monday. This will not be easy as a large proportion of the vote is likely to go to small parties that will not reach the 3% threshold for parliamentary representation.

There is a good chance I am wrong of course, but there is always the chance I am right.

@iGlinavos

Grexit Daily News – 13 August 2015

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13 August 2015  — The ‘real’ Left is here !!!


¡Hasta la Victoria Siempre!, Vive la révolution and Allahu Akbar to everyone. I greet you with the magnificent news that Comrade Lafazanis is to launch a new ‘anti-memorandum’ party.

I have been waiting for these news for a while now. After the original Anti-MOU party, New Democracy became government and started implementing austerity, after the de-rigueur Anti-MOU party Syriza became government and brought us ‘Bailout 3: The Return’, the country was gagging for a novel party to take the mantle of the anti-memorandum fight.

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Lafazanis proclaims to be the genuine expression of the glorious OXI vote of the Greferendum. He is to lead the ‘I want to have my cake and eat it’ camp of the glorious, revolutionary left in Greece. He surely will have at the forefront Kostantopoulou, Lapavitsas and I am guessing Yanis Varoufakis, unless this grouping is a little too low brow and old style ‘workers in caps’ stuff for Yani.

I do hope that this split in Syriza and the upcoming election will allow political parties to stop the BS and come clean in front of the Greek people. Is there a party that can ‘negotiate’ better? No! We tried this with ND, tried it with Syriza and we are where we are, with a new Bailout.

The only point of new political formations (pretending to be the ‘real’ left, the banana-republic heart of Syriza) is to argue for a return to the Drachma.

Lafazanis needs the courage to campaign for the Drachma. Kostantopoulou with her Adolphian rhetorical skills needs the courage to campaign for the Drachma. Lapavitsas needs to stop bifurcating and explain what a return to the Drachma means.Yanis…. I don’t know what Yanis is trying to do.

The others, ND, PASOK (whoever is left), Potami need to join forces (as Hugo Dixon keeps arguing in fact) and run on a Euro platform.

Is this pro-austerity? Is this pro-subjugation? It is life vs BS, this is what it is.

Life under the Drachma will be unimaginably worse. Life under the Drachma run by the couch-revolutionaries of the likes of Lafazanis will make North Korea seem efficient.

No more BS, we need an election so the people can take ownership of this mess and admit to the problem (even without seeing a solution). Election as Catharsis.

By the way, why doesn’t the Syriza splinter faction join KKE? Oh, they are still Euro-communists. I see. Makes sense. We should not confuse the Judean People’s Front with the People’s Front of Judea

russian-revolution-H

@iGlinavos

Grexit Daily News – 6 August 2015

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6 August 2015  — Turkeys to begin their ‘Vote for Xmas’ campaign


In case you thought #GrexitDailyNews has gone away on holiday, you were wrong! So long as there is a threat of Grexit this newsletter will stick around. Is there still a threat of Grexit you may say? So long as ‘Bailout 3: The Return’ is not signed, we are clearly not out of the woods. One could argue that there is no exiting these woods, even after the new MOU is signed. Maybe, but we are not even there yet. Do protracted negotiations and deadlines ring a bell? Supposedly if agreement on the new Bailout is not reached within the next 72hrs we will miss the 20.8.15 deadline, so new ‘interim’ funding in the region of 6-7 billion will need to be arranged so more time is bought for talks.

If I had a penny for every time a Greek deadline has been missed, I would have an account in Switzerland by now.

It seems very likely that Syriza is about to split. The so-called Left Platform has made it clear that they will not play ball and vote for a new MOU. The schizophrenic attitude of not voting for laws, yet supporting the government (how?) cannot and will not continue much after the end of the summer. Tsipras is running out of time as it is and cannot make it for a couple more months without a Parliamentary majority. He will call an election soon. The question is who will run in this election and on what platform?

Greece cannot have another fake vote on having its cake and eating it, Greferendum style.

The election will need to be fought by coalitions of parties, or forces, that have to clearly back remaining in the Euro or returning to the Drachma. Everything else is pointless, and in any case unlikely to attract much public interest. If the election is not fought on Grexit questions, then what will it be on? Vote for someone (who?) who will negotiate (LOL) with the creditors a better (double LOL) deal?

The Autumn election will bring out the turkeys as both options on the Grexit debate are ruinous

The Pro-Euro camp will ask turkeys to vote for Christmas arguing that continued austerity, cooperation with the Quadroika and endless recession will keep Greece nominally in the Euro and theoretically part of the European family.

The Pro-Drachma camp will ask turkeys to vote for another type of Christmas where the whole nation is united in poverty and has to undergo a lengthy adjustment run by the likes of Lafazanis, Kostantopoulou and it seems Yanis.

This turkey will vote for the Euro-Version of Christmas, but I can bet you we will keep having this discussion, and you will keep receiving this newsletter for some time to come.

turkeys

@iGlinavos

Grexit Daily News – 28 July 2015

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28 July 2015  — Should we all kick Varoufakis while he is down?


Today has been a bad day for Yanis Varoufakis. After the revelation of contingency planning for a parallel currency or IOUs or a Drachma precursor, almost the entirety of international and Greek media have homed in on Yanis. Is this correct and should we pursue Yani now to eliminate him politically or even indict him? There have been some private suits against him already alleging criminal offences.

It should be clear to everyone reading my blog that I am hugely disappointed in Varoufakis and I did state at the time of the Greferendum that we will probably live to see the leadership of the current government brought before a special court at some point in the future, if events led to chaotic Grexit.

Nonetheless, this smells a bit like a witch-hunt and I will tell you why. The opposition has been on Varoufakis case for a while now, and it has been hugely helped by Yanis (and his team’s) habit of branding all dissenters as ‘Internal Troika’. For all the protestations of seeking dialogue, Yanis has done a fair bit of insulting people, rather than engaging with them. Anyway, Syriza members (there have been many today, including ministerial colleagues) turning on Varoufakis too smells of opportunism.

How convenient would it be to marginalise Varoufaki and accuse him of everything, absolving Syriza in general and Tsipras in particular. Even though I do not want to see Varoufaki emerge as a leader of some new anti-austerity coalition, I do not want to see Tsipra emerge as the ‘virgin’ in this sordid affair either. It was Tsipras who went to announce the criminal Greferendum and he is ultimately responsible both for the failed ‘negotiations’ and the chaos that followed the end of the programme and the imposition of capital controls.

If we agree that Varoufakis should not (politically) survive this, we should concede that neither should Tsipras.

Also, special courts and criminal accusations never end well, for anyone. There might be things of a criminal nature Varoufakis is responsible for, predominately due to ignorance and arrogance, but his faults are political and ought to be judged as such.

Anyone old enough to remember the 1989 indictment of Andreas Papandreou to the Special Court should get what I mean.

The country did not come out of the ‘Catharsis’ judicial experiment feeling cleaner.

Let us not be distracted from the serious problems of our economy and country by engaging in another round of ‘court drama’.

Menios_Koutsogiorgas-eidiko_dikastirio

@iGlinavos

Grexit Daily News – 23 July 2015

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23 July 2015  — “I am become death the destroyer of worlds”

It has been a while since I posted an entry on GrexitDailyNews. I was waiting to see how the agreement on Bailout III will be received internally and externally.

It is safe to say there is little joy and little hope that any resolution to the Greek problem is in sight. I have addressed this in various ways in the last few days, even trying to see things slightly more optimistically (see here).

What I want to focus on today is the apocalyptic effect capital controls are having on the economy. It is needless to say how damaged the economy became since the election, due to the almost total disinterest of the government while it was valiantly negotiating win our ‘enemies’.

Capital controls are killing economic activity. In an environment where manufacturing is entirely dependant on the import of raw materials the inability to make external payments means production has stopped. Weeks after the introduction of controls there is no mechanism in place to authorise payments.

The significantly reduced cash flow and the vertical drop in consumer sentiment are chocking the life of any SME still in operation. Capital controls will stay in place for a long while, as bank balance sheets are significantly impaired. Certainly they cannot be lifted before the banking resolution legislation comes into effect in January. Does anyone seriously think that there will be any solvent businesses left if this keeps up for a few more months?

You know all this already, so why do I bother saying it again? The reason is I am angry. Angry that we keep fighting over VAT increases for the islands and tax cuts for farmers while the economy is dead. Angry that we keep listening to the ‘democratic’ rants of this fiend Kostantopoulou and the soviet nonsense of Lafazanis. Angry that we have to watch Varoufakis become the standard bearer of fantastical revolutions. Angry that we have to watch that dangerous fantasist Kammenos fly around the country spouting nonsense.

When Tsipras caused the uncontrolled bank run that necessitated capital controls by announcing the Greferendum, he became our Oppenheimer, the destroyer of our world.

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@iGlinavos

Grexit Daily News – 14 July 2015

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14 July 2015  — J’accuse Varoufakis


We have a deal, but we do not have a solution. The Eurozone-Summit has agreed after a marathon session to begin negotiations on a third bailout for Greece yesterday morning. In the ugly events of this weekend, the gloves came off. Schäuble asked openly for what he wanted all along (Grexit), France and Italy admitted that Grexit means Euro-disintegration and Tsipras admitted that he failed. Juncker said there were no winners and no losers in this deal. On the contrary, I would say

There are no winners, only losers

An interesting development has also been the emergence of Prof. Varoufakis as a leader-in-waiting of a revamped anti-austerity/anti-memorandum movement. Varoufakis admitted that he wanted to ‘own’ the OXI of the referendum and push for rupture. He told us that there was some Grexit contingency planning at the ministry. Of course there should have been some contingency planning for a Plan B (or Z), it would be silly to suggest otherwise. The problem is that these admissions negate everything Varoufakis has been telling us so far.

Varoufakis has no claim to the anti-austerity mantle

Varoufakis carries such significant responsibility for the disastrous outcome of this government of horrors of the last 6 months, that the idea of him now emerging as a leader of anti-memorandum protests is an affront to every Greek and every thinking person out there. Not everything is due to Varoufakis of course, and his removal at an earlier point may not have fundamentally changed the trajectory of events. What I am arguing here however is that Varoufakis made things worse and does not deserve to come out of this pretending to be some sort of anti-austerity super hero.

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Let us take a short trip down memory lane and revisit the Professor’s achievements. Varoufakis met meet Mario Draghi, the ECB president, in Frankfurt on 4.2.15 hoping to persuade him to maintain liquidity to Greece’s banking sector even after the country’s EU bailout programme was due to expire at the end of February. To avoid squeezing Greece’s already tight liquidity situation any further, Draghi needed to agree with Varoufakis not to pull the plug on Greece by changing the collateral rules. In this Varoufakis failed (see here). You could choose to blame Draghi for this, or you could blame Varoufakis.

After the programme was extended with the Eurogroup 20.2.15 agreement, Varoufakis was supposed to send a list of detailed measures that would allow the completion of the review (ending the second bailout agreement) and permit the disbursement of funds. Varoufakis did indeed send a list of proposals. It was the famous document promising tourist tax inspectors and revenues through the taxation of online gambling (see here). This was not accepted (surprise suprise). Who shall we blame for this? I am thinking Varoufakis.

By Mid-March it was obvious we were heading for an impasse. My impression was that Varoufakis would have to face another Eurogroup showing dire fiscal results. The deflationary-recession dynamic seemed intractable. The inability to seriously fund measures to addresses the humanitarian crisis was already making this trend worse. I presumed that the Eurogroup would respond to this in the usual way, by demanding fiscal consolidation measures including pension and wage reductions. I expected that Varoufakis would pull the nuclear card and threaten a referendum on Grexit. Then either the Germans blink or all hell would break loose (see here). All hell did break loose but later on in July!

On 19 March Tsipras had a leaders meeting (see here) that led to the following realisations:

  1. A significant fiscal gap was developing (primary surplus gone) due to abysmal tax collections and arrears.
  2. There were no money coming from the Bailout Package till an evaluation took place.
  3. Greek commercial banks could not draw liquidity from the ECB to purchase Greek Bonds, as they were no longer accepted as collateral by Draghi.
  4. The Greek commercial banks could not draw ELA liquidity to purchase state Bonds because a) ELA was kept at minimum levels and used to cover losses from a slow motion bank run in progress and b) the ECB was about to formally prevent the BoG from allowing credit lines to be used for the purchase of state bonds.
  5. The interim bailout extension agreement did not allow Greece to use the bank bailout fund for other purposes (meaning for its liquidity needs).
  6. There would be no interim aid or credit lines from the ‘ex’ Troika so long as Greece did not present a package of structural reforms.

By the middle of April, I had lost all hope that a ‘good’ deal could be achieved. I urged Varoufaki to finish this protracted negotiation and sign whatever there was on the table before things got worse. It was vital at that point (see here) to secure the release of the bailout money and after the immediate liquidity problems are addressed, I urged the government to resign and call an election. The reason for an election was that Rupture and Grexit needs to be an explicit choice. The people must choose whether to become a German protectorate to maintain a semblance of normality, or to revert to emerging economy norms with living standards akin to 1970s. There were no good choices, but the choice was not Varoufakis’ to make.

There were hints in May that we were heading for a referendum. It turns out that Varoufakis was a supporter of this idea all along. But this referendum was not to be about Euro-membership as one would think (see here). If the referendum would not be about Euro-membership, what would it be on? Alexis Mitropoulos (Parliament’s deputy chair) proposed (in May) a referendum (taking Euro-membership as a given) on whether the Greek public would like continued support from the lenders on their terms, or on Syriza’s terms. Effectively, this is like going to a restaurant and having a poll on whether to pay for your lunch or not. This would be laughable if it were not serious. Mitropoulos’ farcical idea shows why the government was considering a referendum:

A referendum aimed to legitimise rupture and blame the Europeans for the consequences, absolving Syriza.

I said mid-May (see here) that for all the grand rhetoric on Red Lines and Electoral Promises and Mandates, Syriza had managed to back itself into a corner and blackmail itself into submission. Like Mel Brooks’ sheriff, it was threatening to shoot itself in the hope the likes of Schaeuble blink and pay up. They would not, and did not eventually. By that point anyway the liquidity situation had become so critical (see here) that the government had to turn out the pockets of the entire public sector and state sponsored enterprises to get together the funds to pay pensions and public sector salaries. This served to hide the internal default that was taking place. There was anecdotal evidence of state suppliers, contractors, various types of employees going unpaid. While Syriza was preaching against the lenders vowing to default on the ECB and the IMF to protect the Greek workers it was already failing to pay large proportions of people dependant on state disbursements. I wondered, whether it was a good idea to avoid a credit event in May, yet spark a run on the banks if people panic? People did panic of course.

Varoufakis tells us now that he had a team in the Ministry looking at Grexit. Why didn’t he ask Lapavitsas who has been working on the details of a Grexit scenario for years? Perhaps he did not (or is not telling us about it) because as Lapavitsas is bound to have discovered, before Grexit leads to recovery it will entail years of chaos. I kept asking (see here) but got no response: How does the left faction and all those prideful Greeks intend to deal with the effects of Grexit? What will the government do with the banks? How will it buy essentials, how will it pay salaries and pensions post default? It was time to cut the nonsense about Greece’s geopolitical significance and talk specifics. Specifics never appeared.

By mid-June it became clear (after the breakdown of negotiations with creditors) that Athens has planned its strategy taking a page off Abu Bakr al-Baghdadi’s book. The strategy it seems was to blackmail the Europeans by threatening to blow up the Euro. This was less ‘Kougki’ (blowing oneself up, rather than capitulate) and more ISIS, blowing oneself up and everyone around you. The problem was that there would be no happy ever after, rivers of milk and virgins for Greece if this type of grandstanding resulted in a disorderly default and Grexit. I kept saying (see here) that Varoufakis was right to complain that the ‘programme’ was wrong and recessionary. Nonetheless, he was right in his analysis but wrong in his approach. This is not an all or nothing game, a deal would allow improvement in the future. All this kougki nonsense had to stop, I said, unless of course Varoufakis has come to Lapavitsas side and wanted Grexit. His support for the referendum showed that he DID want Grexit.

Varoufakis did manage to do one thing at the end of June. He sent a comprehensive set of measures to the Eurogroup, measures that were rejected by the IMF as being too recessionary (see here)! Why was the package so hard? One could argue that this was because 5 months have been lost haggling, with the result that the economy deteriorated, so that more effort was needed to ensure that the target of a (even reduced) primary surplus is achieved. The end result was that this was a package that was clearly antithetical to what Syriza stands for. A package that could maybe get a deal with the creditors, but it satisfied no-one. Considering Varoufakis comments of the last couple of days, on wonders whether that was a serious proposal, or was it designed to provoke confrontation and a Syriza revolt (as it did)?

On June 26 Tsipras announced his criminal referendum, with the support and encouragement of Varoufakis. This vote was not on Tsipras’ laughable suggestion that we should vote on a non existent, not available, foreign language, unintelligible technical set of documents. The vote was on choosing whether the country should seek its future as part of Europe or whether it should degenerate into some sort of Balkan soviet, run by fanatics and ideologues that set out to exterminate the very people they seek to save. I argued (see here) that

believing Tsipras (about the ‘Greferendum’) is equivalent to joining a cult. You think your pride is winning and your sovereignty is ascertained, while you are being robbed and raped.

I went on TV to decry the farcical referendum and offered a post arguing that (see here) Varoufakis was lying to the people. Greece would not stay in the Euro if the vote is NO. The banking collapse that would follow would necessitate the issuance of IOUs that will fundamentally undermine the country’s position in the Euro. The bank closures were the fault of Mr Tsipras who caused a bank run with his referendum announcement. For Varoufakis, the country’s place in the EU is non-negotiable, yet leaving the EU is the only way to leave the Euro which Varoufakis himself will need to ask for in order to recapitalise the banking system, I said.

The only reason this did not come to pass, was the agreement achieved on Monday. An agreement that is a nightmare for the country, but the only alternative to a chaotic Grexit for which Varoufakis has no preparation at all. Let me reiterate:

Varoufakis did not cause Greece’s problems, but made them worse and risked the destruction of everything. He does not deserve to emerge as the OXI champion of virtue.

The fact that he chose to spend last weekend with his family in Egina, rather than show his face and vote his mind in Parliament further negates any claims to higher-moral ground. I feel personally betrayed by his months in office, believing as I had that he would achieve something sensible and good.

Greeks should listen to Varoufakis no more, he had his chance, he failed us

game over

@iGlinavos