Alexis Tsipras prepared to step down as parliament set to pass punishing austerity measures

And there you have it. As mentioned in an earlier post, don’t expect him to stay in power for much longer. The Greek ‘no’ vote couldn’t have been a more clear message to leadership, but they still intentionally went the opposite direction. Self-proclaimed Communists Tsipras and Varoufakis are beginning to look more like a hit team whose assignment was do to a quick hit and run.

 

Greek prime minister hinted his position will no longer remain tenable if he did not get the majority backing of his Leftist Syriza party over a bail-out deal

Greek prime minister Alexis Tsipras was ready to stand down from office on Wednesday night, as a Leftist rebellion erupted within his Syriza party over the punishing austerity measures the country needs to stay in the eurozone.

Greece’s lawmakers gathered for a midnight vote on reforms that would raise VAT, cut pensions spending and reform the country’s statistics body. The measures were passed with the support of Greece’s main opposition parties, with 229 voting “yes” and 64 voting “no”. There were six abstentions.

Outside the parliament, troubled flared briefly as groups of anarchists who were part of an anti-austerity protest threw petrol bombs at police, who barricaded the street leading to the entrance to parliament with several riot vans.

Greece debt crisis: PM Alexis Tsipras faces Syriza mutiny after capitulating to demands

As was said just yesterday.

 

Prime Minister Alexis Tsipras returned to face a mutiny within his coalition after he surrendered to European demands for action to qualify for up to 86 billion euros ($127.8 billion) of aid Greece needs to stay in the euro.

With two factions in his government already saying they won’t support the deal, Tsipras met with his closest aides as he tries to stop the revolt from spreading before a vote in parliament on Wednesday. Creditors’ demands include an overhaul of sales tax, a broadening of the tax base and a clampdown on pension costs.

Tsipras will “have to change his administration and clear out hardliners and radicals from his party,” as well as rely on opposition support to pass the necessary measures, said Eurasia Group analysts Mujtaba Rahman and Federico Santi. “But it is a tough call to determine how Tsipras will go about doing this.”

Greece Capitulates: Tsipras Crosses “Red Line”, Will Accept Bailout Extension

We’ve long said that negotiations between Greece and its creditors are more a matter of politics than they are a matter of economics or finance.

From the troika’s perspective, breaking Greece and forcing PM Alexis Tsipras to concede to pension cuts and a VAT hike is paramount, and not necessarily because anyone believes these measures will put the perpetually indebted periphery country on a sustainable fiscal path, but because of the message such concessions would send to Syriza sympathizers in Spain and Portugal. In short, the troika cannot set a precedent of allowing debtor nations to obtain austerity concessions by threatening to expose the euro as dissoluble.

Greece accuses Europe of plotting regime change as creditors draw up ultimatum

The European Commission braces for a “state of emergency” in Greece, fearing social unrest and a break-down of basic supplies

Greek premier Alexis Tsipras has accused Europe’s creditor powers of trying to subvert Greece’s elected government after five years of “pillaging”, warning in solemn terms that his country will defend its sovereign dignity whatever the consequences.

The defiant stand came as the European Commission lashed out at the Greeks and warned that the country would collapse into a “state of emergency” unless there is a deal to avert a financial crash.

Fearful Greek savers pull money from banks and put it in cars

As was reported a month ago HERE.

 

Two weeks after Greece’s leftwing Syriza party won power at the election in January, Panayotis Fotiades pulled his deposits from an Athens bank.

“I felt certain there’d be a confrontation before long with the troika [of bailout monitors],” said the 55-year-old .

Like other owners of small and medium-sized companies in Greece, Mr Fotiades feared a radical government would resort to capital controls if relations with the country’s creditors deteriorated sharply.

Greece Abandons “Red Lines” As Troika Meets In Berlin To Craft “Deal”

We’ve been saying for months that the troika’s ultimate goal in negotiations with Greek PM Alexis Tsipras is to use financial leverage to force Syriza into abandoning its campaign mandate, thus sending a strong message to the EU periphery’s other ascendant socialists that threatening to disprove the idea of ‘euro indissolubility’ is not a viable bargaining strategy when it comes to extracting austerity concessions from creditors.

Over the past several days the political situation has come to a head with Tsipras expressing his extreme displeasure at the troika’s “coordinated leaks” and unwillingness to give even an inch on what the PM calls “absurd” demands.

Eurozone debt crisis: Greece admits it cannot make loan repayments

GREECE raised new fears of eurozone collapse yesterday after saying it could not afford an international loan repayment due next week.

nterior Minister Nikos Voutsis, whose Syriza party was elected earlier this year on a left-wing, anti-austerity ticket,  told Greek TV his country did not have the £1.1 billion expected by the International Monetary Fund on June 5.

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The Greek government is being told by the IMF and EU to make more reforms in exchange for a further £5 billion in bailout cash to stave off bankruptcy.

Russia considers cut-price gas deal with Greece, sparking EU fears that any agreement could undermine its sanctions against Moscow

German officials warn Athens that if they want to continue receiving European aid, their ‘compass must point to Brussels’

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As Greece’s Prime Minister, Alexis Tsipras, left Athens for Moscow today for talks on Wednesday with President Vladimir Putin, Russia’s Kommersant paper quoted an unnamed government source saying that Russia was “ready to consider the issue of a gas price discount for Greece”. There were also reports that Moscow might offer Greece substantial loans in return for unspecified “assets” in the country, which is struggling to meet the EU’s and International Monetary Fund’s conditions for extensions to its current bailout.

Greece draws up drachma plans, prepares to miss IMF payment

‘We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,’ says senior Greek official

Greece is drawing up drastic plans to nationalise the country’s banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands.

Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund next week.

The Fourth Reich Is Here, Says German Newsmagazine

Modern Germany is a new reich, at least in an economic sense, Der Spiegel concluded in the cover article of its March 21 issue.

With a circulation of over 1 million, Der Spiegel is one of Germany’s most popular and well-respected newsmagazines. An English version of the article is available on its website, and is worth reading in full.

“People have even begun talking about the ‘Fourth Reich,’ a reference to the Third Reich of Adolf Hitler,” states the article’s introduction. “That may sound absurd given that today’s Germany is a successful democracy without a trace of national-socialism—and that no one would actually associate Merkel with Nazism. But further reflection on the word ‘reich,’ or empire, may not be entirely out of place. The term refers to a dominion, with a central power exerting control over many different peoples. According to this definition, would it be wrong to speak of a German Reich in the economic realm?”

Greece submits reform proposals to eurozone creditors – with a warning

As the EU, ECB and IMF pore over Athens’s latest attempt to unlock financial aid, minister says country is prepared to go it alone ‘if things do not go well’

Greece submitted a long-awaited list of structural reforms to its creditors on Friday as its leftist-led government warned it would stop meeting debt obligations if negotiations failed and aid was not forthcoming.

Germans in Shock as New Greek Leader Starts With a Bang

While Berlin and Washington swiped Ukraine away from Russia, Russia installed one of their own in Athens.

Matter of fact, the German government was likely not ‘stunned’ by Tsipras’ victory, but more or less is playing politics by downplaying the predicted aftermath. The Merkel leadership isn’t filled with rookie politicians. Germany dropped many hints that the EU could go on without Greece on more than one occasion, which aimed to deaden the anticipated blow that happened in last Sunday’s elections.

It would also be interesting know what “orders from abroad” Tsipras was referring to. That could be this ‘former’ Communist’s subtle hint at orders from Moscow.

 

Berlin:  In his first act as Prime Minister on Monday, Alexis Tsipras visited the war memorial in Kaisariani where 200 Greek resistance fighters were slaughtered by the Nazis in 1944.

The move did not go unnoticed in Berlin. Nor did Tsipras’s decision hours later to receive the Russian ambassador before meeting any other foreign official.

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“No doubt about it, we were surprised by the size of the Syriza victory and the speed with which Tsipras clinched a coalition,” said one senior German official, who requested anonymity because of the sensitivity of the issue.

Greek Election: Syriza Party Leads Exit Polls

The straw that could break the EU’s back. Germany, the powerhouse that runs Europe, is no doubt watching this closely.

Live video feed:

 

Polls have closed in the Greek elections which could see the radical leftist Syriza party take power, that has pledged to ditch painful austerity measures imposed during the economic crisis.

It is leading exit polls ahead of the official election result with between 35.5% and 39.5% of the vote, compared to between 23% and 27% for the New Democracy party, led by incumbent Prime Minister Antonis Samaras.

Early elections in Greece: ‘On Tuesdays the euro, on Fridays the drachma’

Worst possible case scenario is that Greece will exit the Euro, but stay in the EU. Greece still holds too much significance for the German-dominated bloc as it will be a main energy hub along with Cyprus as a means of ending dependence on Russia.

 

 

Less than three weeks from general elections in Greece, Der Spiegel wonders about the intentions of Alexis Tsipras, the leader of the left-wing Syriza party and frontrunner in the campaign to form the next government. The German magazine sees mixed messages that leave observers across Europe “at times anxious and at others baffled” —

World braces as deflation tremors hit Eurozone bond markets

‘The forces of monetary deflation are gathering. Global liquidity is declining and central banks are not doing enough, either in the West or the East to offset the decline,’ warns CrossBorderCapital

Eurozone fears have returned with a vengeance as deepening deflation across Southern Europe and fresh turmoil in Greece set off wild moves on the European bond markets.

Yields on 10-year German Bund plummeted to an all-time low on 0.72pc on flight to safety, touching levels never seen before in any major European country in recorded history. “This is not going to stop until the European Central Bank steps up to the plate. If it does not act in the next few days, this could snowball,” said Andrew Roberts, credit chief at RBS.

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Calls for action came as James Bullard, the once hawkish head of St Louis Federal Reserve, said the Fed may have to back-track on bond tapering in the US, hinting at yet further QE to fight deflationary pressures and shore up defences against a eurozone relapse.