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Op-Ed: Greece’s Syriza government cannot get its act together

As usual, Tsipras, the prime minister, appeared optimistic about negotiations with creditors on the debt burden and other conditions of the bailout including privatizations and layoffs in the public sector. At his first cabinet meeting on Wednesday Tsipras said: “..our priority is to support the economy, to help it get going again. We are ready to negotiate with our partners in order to reduce debt and find a fair and viable solution.” Late on Tuesday, Greek officials said that the sale of a 67 percent stake in the main port of Piraeus had been halted. On Wednesday the new energy minister claimed that the government would freeze restructuring and sale of the country’s main utility company that is state-controlled.

These privatizations are all part of the plan of these bailouts to provide investment opportunities for capital by privatizing everything possible and turning state utilities into centers of profit. The minister for public-sector reform also announced that some of the thousands of layoffs imposed as part of the bailout terms would be reversed. All of these actions are in accord with Syriza’s platform. Late on Wednesday Deputy Prime Minister Yiannis Dragassakis claimed that the initial comments were made due to inexperience: “We have new ministers who are assuming such duties for the first time, and a society where a dynamic of such expectations has been created. The Greek government is interested in attracting investors.”

The earlier announcement had caused Greek stocks to plunge particularly banks but the repudiation helped the banks gain back some ground: Alpha Bank A.E. shares rose 18.1 percent at 1:02 p.m in Athens Thursday, after falling as much as 30 percent on Wednesday. National Bank of Greece, which also touched a limit down of almost 30 percent yesterday, rose 12.3 percent this morning.
Perhaps those in the know are trading on these announcements and making a considerable amount of money.

After visiting a war memorial to Greek resisters slaughtered by the Nazis in 1944, Tsipras’ next move was to receive as his first foreign visitor, the Russian ambassador. He then criticized an EU statement on new sanctions against Russia. Tsipras complained that Greece had not been consulted and Greece opposed the statement. On his blog, the new finance minister, Varoufakis, explained Greece’s problem with the EU announcement of further sanctions: “The problem was that he, and the new Greek government, were never asked. So, clearly, the issue was not whether our new government agrees or not with fresh sanctions on Russia. The issue is whether our view can be taken for granted without even being told of what it is!” Energy Minister Panagiotis Lafazanis said that Greece was against sanctions and “had no differences with Russia”. When Greece attended a meeting of EU foreign ministers on Thursday, lo and behold, Greece supported extending the present economic sanctions although, prompted by Greece and several other countries, the ministers delayed even tighter sanctions for now: European Union foreign ministers extended existing sanctions against Russia on Thursday, holding off on tighter economic measures for now but winning the support of the new left-leaning government of Greece, whose position had been in doubt.
So far Syriza looks to be the cave-in party.

Perhaps the next step will be to find a way to avoid a debt write off. This article suggests that a write off is not necessary and likely not forthcoming in any event. The EU officials give no sign that they are willing to make changes to the bailout conditions except perhaps for extending the payment period or “kicking the can down the road.” This keeps Greece under the thumb of the EU lenders even longer. Jyrki Katainen, a top EU economic official said:. “The real economy hasn’t changed after the elections. The situation is still the same. I don’t expect that many changes from our part.” He is right. There is still unemployment of over 25 percent overall and over 50 percent for youth. There is widespread misery among pensioners, decaying public services, and lack of hope. There is also a huge rise in hatred against immigrants resulting in the growth of reactionary parties such as Golden Dawn. Why would one ever expect changes in the bailout conditions with conditions such as this? Notice that in the appended video Tispras makes no mention of debt write off or even austerity conditions imposed upon Greece.

UPDATE: Tsipras has changed course again, no doubt sending shivers down the spines of Troika officials. Finance Minister, Yanis Varoufakis, says that Greece will not negotiate with the Troika but only EU leaders: On the troika, Mr Varoufakis said “we have no intention of co-operating with a three-member committee whose goal is to implement a programme whose logic we consider anti-European”. Just how that would work remains to be seen assuming EU leaders even agree to such a process. Perhaps Tsipras, will announce that it is all a misunderstanding due to Varoufakis being inexperienced.

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