Through all the ups and downs in the EU at the moment, keep in mind the bigger picture: The Euro was designed to fail.
It was known a lot of the countries allowed into the EU didn’t meet the requirements to begin with, but were intentionally let in to fulfill the end goal: Break nations in half and create vassal states in subservience to a resurgent German hegemon through bailouts from it’s Troika proxy that require giving up national sovereignty in exchange.
Having, as we previously explained, been given ‘just enough rope’ by the Germans, we thought it worth looking at just what Greece capitulated on (or perhaps a shorter version – what they did not capitulate on) and how Tsipras and Varoufakis will sell this to their fellow politicians… and most of all people.
What points has Greece capitulated on?
1. Completion of the current review – Greece has basically agreed to conclude the current bailout. Any funding is conditional on such a process:
Only approval of the conclusion of the review of the extended arrangement by the institutions in turn will allow for any disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits. Both are again subject to approval by the Eurogroup.
This is a clear capitulation for Greek Prime Minister Alexis Tsipras, who said the previous bailout was “dead” and the EU/IMF/ECB Troika is “over”.
2. Remaining bank recapitalisation funds – Greece wanted this money to be held by the Hellenic Financial Stabilisation Fund (HFSF) over the extension period, and possibly be open for use outside the banking sector. However, this has been denied and the bonds will return to the EFSF, although they will remain available for any bank recapitalisation needs.
3. Role of the IMF – The Eurogroup statement says, “We also agreed that the IMF would continue to play its role”. Again, Greece has given in on this point and the Troika continues to exist and be strongly involved in all but name.
4. No unilateral action – According to the statement,
The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.
In light of this, a large number of promises that SYRIZA made in its election campaign will now be hard to fulfill. In the press conference given by Eurogroup Chairman Jeroen Dijsselbloem and EU Economics Commissioner Pierre Moscovici, it was suggested that this pledge also applied to the measures which were announced by Tsipras in his speech to the Greek parliament earlier this week – when he announced plans to roll back some labour market reforms passed by the previous Greek government.
5. Four months rather than six months – Greece requested a six-month extension, but the Eurogroup only agreed to four months. This is a crucial point: it means the extension expires at the end of June. As the graph below shows, Greece faces two crucial bond repayments to the ECB in July and August which total €6.7bn. This is a very tough hard deadline. There is limited time for the longer term negotiations which will take place – provided that a final agreement on the extension is reached. It is very likely we will be back in a similar situation at the end of June.
Full article: How Greece Folded To Germany: The Complete Breakdown (Zero Hedge)