[Marxism] Tsakalotos, Lafazanis: Greece will not cross 'red lines' for Eurogroup

Dayne Goodwin daynegoodwin at gmail.com
Wed Apr 29 14:10:11 MDT 2015

Greece close to minimum agreement deal with creditors, says deputy PM
Yannis Dragasakis suggests deal will unlock delayed funds country
needs to avoid default as an interim solution only

by Nick Fletcher and Helena Smith
The Guardian, April 29

Greece could seal a deal with its creditors in early May, its deputy
prime minister said on Wednesday, as the country prepared a new list
of reforms and the European Central Bank provided more support to its
beleaguered banks.

But Yannis Dragasakis warned it was likely to be only a “minimum
agreement” to unlock the delayed funds Greece needed to avoid default.
He said: “Now we are going to a minimum agreement with actions that
can be taken immediately. But [in the long-term] not just any solution
will suffice. The solution has to be viable. After the interim
agreement a long discussion about the debt, primary surpluses,
investment and growth will follow.”

A eurozone official told Reuters time was running out to reach a deal
about releasing the emergency funds, which amount to €7.2bn (£5.2bn),
since the country needed to begin negotiating a third bailout
agreement before the current programme runs out at the end of June.
Otherwise it faced the prospect of default or having to leave the
eurozone. He said: “We are not talking about weeks any more, we are
talking about days.”

If the latest Greek proposals were approved, eurozone finance
ministers could endorse the deal at their next meeting on 11 May.
Greece’s creditors – the European Union, ECB and the International
Monetary Fund – are demanding economic reforms in exchange for more
bailout cash.

But the impasse could still prove difficult to break, since the new
reforms were not expected to offer any major new concessions even
though previous plans had been rejected. Due to be presented to the
Greek parliament this week, they are said to include measures to clamp
down on corruption and tax evasion, as well as tax and public
administration reforms and a delay in plans to raise the minimum wage.
But the Syriza-led government will continue resisting significant
changes to pensions or reforms of the labour market.

Euclid Tsakalotos, the Oxford-educated economics professor who now
heads the Greek negotiating team in the debt talks, said Greece had to
keep to its “red lines” on reforms and that any “areas of compromise”
should be within the “political plan” of the radical government, which
was elected on an anti-austerity ticket.

Greece is due to make a €200m payment to the International Monetary
Fund on Friday, with another €760m due on 12 May.

Meanwhile, Greek bank deposits fell to a 10-year low in March, as
savers continued to worry about the country’s finances and the
continuing impasse over releasing bailout funds.

They dropped 1.36% month on month to €138.55bn from €140.47bn, the
sixth monthly fall in a row albeit at a slower pace than in February.

But the European Central Bank reportedly raised the amount of
emergency liquidity available to Greek banks. It lifted the cap on
emergency liquidity assistance by €1.4bn to €76.9bn, after an increase
of around €1.5bn last week.
. . .

'We won't surrender': Firebrand Greek minister risks fresh schism with Europe
Syriza's radical Leftist energy chief warns Grexit will land a 'mortal
blow' to monetary union
by Mehreen Khan
The Telegraph, April 29

Hopes that a revamped Greek bail-out team would finally break a
two-month deadlock with creditors took a fresh blow on Wednesday, as
the Leftist government's firebrand energy minister pledged "no
surrender" to international lenders.

Highlighting a deep schism within the ruling party over Greece's
future in the single currency, Panagiotis Lafazanis said there could
be "no compromise" with creditor powers, who were seeking
"subordination and surrender" from his government.

"Our government will not bow down, neither will it surrender," wrote
Mr Lafazanis in a Greek newspaper. "Syriza will not accept an
agreement that would be incompatible to its radical commitments."

A popular figurehead of the party's radical Left Platform, Mr
Lafazanis attacked the Troika for "water-boarding" the Greek economy,
choking its people into submission.

"If our 'partners' and the IMF believe that they will blackmail us
using the refusal of financing as a weapon, and that they will
terrorise the Greek people forever using the 'bogeyman' of default and
of a national currency, they are woefully deluded."

The energy minister, who has ties with Moscow, has been one of the
fiercest critics of the Troika's plans to undercut Athens' promises to
address Greece's "humanitarian crisis" through raising wages and
pensions for the poorest.

He added the country could gradually get on its feet after a euro
exit, but warned monetary union would be "subjected to a grave and
mortal wound" should Greece be forced out.

The intervention comes amid hope that Athens was edging closer to
agreeing the basis for its reforms-for-cash programme, after a
two-month hiatus that has pushed the country towards insolvency.

A newly established Greek bail-out team, headed by Oxford-educated
minister Euclid Tsakalotos, was due to present a draft reform list to
officials in Brussels on Wednesday.

The appointment of the softly-spoken Marxist economist came after
Brussels had grown increasingly exasperated by the stalling tactics of
finance minister, Mr Varoufakis.

But insisting he was still at the forefront of talks, the "rock-star"
former academic said he remained "in charge of the negotiations with
the eurogroup".

Mr Varoufakis's comments came after he was attacked by a group of
self-styled anarchists at an Athens restaurant with his wife on
Tuesday night. The finance minister managed to emerge unscathed from
the episode, after group of hooded individuals threw glass objects at
the couple.

Stark new figures released on Wednesday showed that Greek bank
deposits had fallen to a 10-year low, as people were continuing to
pull money and assets out of the financial system.

Bank deposits fell by a further €2.5bn in March, with more than €26bn
having fled the country since December 2014.

Depleted deposits have been partially offset by ever-increasing
amounts of emergency bank funding (ELA) from the European Central
. . .

Greece prepares reform bill, lenders seek concessions
by Renee Maltezou and Jan Strupczewski
Reuters, April 29

(ATHENS/BRUSSELS) - Euro zone officials sought to wring policy
concessions from Greece on Wednesday to unlock urgently needed aid
after Athens said it would present a list of reforms for legislation
to show it is serious about implementing its promises.

The draft bill was not expected to include major novelties beyond
measures already discussed with EU and IMF lenders, but Athens is
hoping it will speed up slow-moving talks and permit at least an
initial deal to ease its searing cash crunch.

The reforms, including some privatisations and tax steps, were to be
outlined to senior euro zone finance ministry officials in Brussels on
Wednesday. They will be assessed in more detail when technical-level
teams from Greece and the lenders meet on Thursday, Greek government
officials said.

Despite lenders' scepticism, Greece's government is hoping an interim
deal can be struck before a May 12 payment of 750 million euros
(£541.2 million) to the IMF that Greek officials have suggested could
be difficult to make without more aid.

However, a senior euro zone official involved in the talks said that
to secure any deal, Greece would have to make a substantial concession
on at least one of three disputed issues - pensions, labour market
reform and taxation.

"We need to see a very significant policy move on the Greek side this
week to recreate confidence the process," the official said, speaking
on condition of anonymity.

"It could be pensions, it could be the labour market but ... they have
to pay the political cost. The Eurogroup wants to see that political
cost being paid."

The lenders have said a partial disbursement of frozen aid is not
possible until Greece has presented and implemented a full list of
reforms. Athens is hoping an initial deal will prompt the European
Central Bank to loosen restrictions that prevent Greek banks from
buying more Treasury bills.

"We are now aiming at a 'minimum', let's say, agreement in which we
combine some things that we will agree to implement immediately with
the relaxation of the ECB restrictions," Deputy Prime Minister Yannis
Dragasakis told Sto Kokkino radio.

The ECB has kept Greek banks afloat but on a tight leash while talks
with lenders continue. It raised the cap on emergency liquidity
assistance available for Greek banks by 1.4 billion euros to 76.9
billion euros on Wednesday, a banking source told Reuters.

Figures published by the ECB showed that the Greek banks continued to
leak deposits in March, but at a slower pace than in the first two
months. The euro zone official said they were still well capitalised,
but their fate hinged on the continued solvency of the Greek

The discussion with lenders on detailed legislation is meant to
underline the government's serious intent, after the lenders accused
Prime Minister Alexis Tsipras' government of dragging its feet and
failing to produce results.

The euro zone official said it was vital that Greece discuss the legal
texts with its partners before putting them to parliament and not just
present a "take it or leave it" package, immediately leaked to the
media, making negotiation impossible.

The proposals will include tax and public administration reforms, a
tax on television broadcasting rights and on TV advertisements, a
Greek official said. Tourists on popular Greek islands will be
required to use a credit card for transactions of more than 70 euros
in an effort to crack down on tax evasion.

The creditors have demanded that the rate of value added tax applied
on those holiday islands be the same as on the mainland.

It was not immediately clear if the government planned to cede more
ground on such issues in this week's talks.

One official said the government would try to break the deadlock on
the labour market by pushing back its plan to raise the minimum wage,
a move the lenders oppose.

Deputy Labour Minister Dimitris Stratoulis reiterated that Athens
would not agree to demands for further pension cuts.

"Our government is making every possible effort right now to have a
positive deal, which will respect our programme, which will respect
the main principle of our programme since we took power, which is to
put a brake on wage and pension cuts," he told Mega TV.

The draft bill is expected to be discussed at a cabinet meeting in
Athens on Thursday, a finance ministry official said. Once approved,
it would then be debated in parliament.

EU paymaster Germany, which has taken a hard line, said it expected
talks would be speeded up now that Greece had reshuffled its
negotiating team.

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