E.R. Campbell said:
Britain's new government outlines EU referendum plan as parliament opens
JILL LAWLESS
LONDON — The Associated Press
Published Wednesday, May. 27 2015
Britain’s first all-Conservative government in two decades unveiled its plans for power Wednesday, including laws to hold a referendum on European Union membership, give Scotland more autonomy and toughen immigration policies.
The list of proposed legislation was read by Queen Elizabeth II at the State Opening of Parliament, an annual blend of politics and pomp replete with gilded throne, diamond-studded crown and officials in antiquated garb.
It follows a May 7 election that unexpectedly gave Prime Minister David Cameron’s centre-right Conservatives a parliamentary majority — and with it the power to implement a political agenda without coalition compromises.
The Queen’s Speech, delivered by the monarch but written by the government, included legislation to cap welfare benefits, freeze some taxes for five years and hold a vote on EU membership by the end of 2017 — all key Conservative election promises.
The queen said the government would adopt a “One Nation approach, helping working people get on.”
The speech promised legislation to cut red tape for small businesses and freeze income and sales tax rates until 2020. There was also a right-to-buy plan to help thousands of tenants become homeowners.
The unemployed face a lower cap on benefits, while the government plans to make it harder for unionized workers to strike.
Cameron’s “One Nation” may well have looser bonds. Scotland is getting more powers to raise and spend taxes, fulfilling a promise made by Cameron before last year’s Scottish independence referendum. Wales will also gain more autonomy, and there was a promise to reduce the say of Scottish lawmakers over policies that affect only England and Wales.
Details of that plan, known as “English votes for English laws,” are likely to prove contentious — one of several pieces of legislation the government may struggle to pass.
Cameron’s majority is small, just 12 seats in the 650-seat House of Commons. An election vow to replace the Human Rights Act — which has a European court as its top arbiter — with a British bill of rights was reduced to a promise of “proposals” rather than legislation. The plan is opposed by some Conservatives as well as opposition parties.
There will also likely be battles in Parliament over promised legislation to crack down on extremism and take a more unwelcoming approach to immigration.
In a ceremony she has enacted 61 previous times in her reign, the 89-year-old queen delivered the speech in the House of Lords — Parliament’s unelected upper house — to a tightly packed audience of lawmakers in ordinary clothes and peers in red robes trimmed with ermine.
Since King Charles I tried to arrest members of the House of Commons in 1642 — and ended up deposed, tried and beheaded — the monarch has been barred from entering the Commons chamber.
The queen arrived from Buckingham Palace to Parliament in the Diamond Jubilee State Coach, pulled by two white horses and escorted by cavalry whose silver helmets gleamed in the spring sunshine.
Inside the Lords, she sat on a gilded throne wearing the Imperial State Crown, encrusted with almost 3,000 diamonds.
The annual pageant draws heavily on the history of the power struggle between the monarchy and Parliament. Lawmakers were summoned from the House of Commons by Black Rod, a security official — but only complied after first slamming the door in his face to symbolize their independence.
In another symbol of the traditional hostility between Commons and crown, a lawmaker was held at Buckingham Palace as a “hostage” during the ceremony to ensure the monarch’s safe return.
Defiant Greece defers payment to IMF as debt deal inches closer
ERIC REGULY
ROME — The Globe and Mail
Last updated Friday, Jun. 05, 2015
Greece ramped up the negotiating drama with its international creditors on Thursday with the surprise announcement that it would delay making a scheduled debt payment this week to the International Monetary Fund.
But leaked documents suggested that the two camps were close to finding common ground in the crucial area that would dictate the country’s budget surpluses.
The documents were widely published as Greek Prime Minister Alexis Tsipras came under enormous pressure from the hard-left arm of his Syriza government to avoid signing a deal that would unleash more harsh austerity on the crumbing Greek economy, which is back in recession after weak growth in 2014.
The party infighting apparently persuaded Mr. Tsipras not to hand over €300-million on Friday to the International Monetary Fund as an act of defiance against the IMF and Greece’s other two creditors, the European Union and the European Central Bank.
The IMF later confirmed that Athens does not intend to default on the loan; instead, it intends to bundle the Friday payment with three other June payments, totalling €1.5-billion, and pay the IMF at the end of the month.
Greece’s decision to push out the Friday payment came only hours after IMF chief Christine Lagarde, who has argued that debt relief should be a component of any new bailout package for Greece, said she was “confident” that Greece would make the Friday payment.
Early on Thursday, after a meeting in Brussels with European Commission president Jean-Claude Juncker, Mr. Tsipras said the two camps were “very close in agreement in the primary surpluses” even if they remained far apart on pension payments and increases to the value added tax (VAT) that is charged on almost all goods and services.
While the pension issue alone could sabotage the negotiations, triggering a default that could push Greece out of the euro zone, there were other indications of progress in the talks that would define new bailout terms for Greece. On Thursday, Jeroen Dijsselbloem, chairman of the euro zone finance ministers’ group, said the talks this week between Greece and its creditors were “successful in narrowing down the remaining issues.”
Greece’s 47-page proposal to its creditors, obtained by the Greek news site Enikos.gr, showed that the government wants to report a primary surplus – the budget surplus after debt payments are stripped out – of only 0.6 per cent this year, 1.5 per cent next year and 2.5 per cent in 2017.
Greek has been lobbying hard for a low primary surplus, which would allow it to devote more funds to social services and less to debt servicing. A high primary surplus would require the government and all its departments to launch another round of spending cuts, potentially triggering more public-sector firings and social unrest.
In a new note published on the Voxeu.org site, economists Elias Papaioannou, Richard Portes and Lucrezia Reichlin said that “the renewed recession, uncertainty and depressed investment climate make it simply unrealistic to target significant surpluses. Further tax increases or expenditure cuts would be self-defeating. They would only intensify the recession.”
The creditors had insisted on far higher primary surpluses, but their latest proposal, which was also leaked on Thursday, shows that they have softened their demands. They now propose a 1 per cent primary surplus this year, 2 per cent next year and 3 per cent in 2017. The gap between the two proposals is narrow, suggesting that the two sides can find common ground.
Mr. Tsipras is to address the Greek Parliament on Friday night. While the content of his speech is not known, he will probably try to convince the fractious lawmakers that it is the Greek government, not its creditors, that has Greece’s best interests at heart.
E.R. Campbell said:
E.R. Campbell said:
Tsipras seeks debt relief as Greeks take offer to Brussels
ATHENS/BRUSSELS | BY RENEE MALTEZOU AND JAN STRUPCZEWSKI
Sat, Jun 13, 2015
Greek Prime Minister Alexis Tsipras said he was willing to accept unpalatable compromises to secure a deal with international creditors, provided he gets debt relief in return, something that Germany refuses to countenance.
With Greece heading towards possible default and bankruptcy, he told his negotiating team before it took a counter-proposal to Brussels that without debt relief he would say "no" to any settlement with the EU and IMF that isolate his country from the rest of Europe.
In little more than a fortnight, Athens must repay 1.6 billion euros to the International Monetary Fund with money it does not have.
Greek ministers arrived in Brussels on Saturday to resume negotiations with international creditors on a cash-for-reforms deal that ended in stalemate on Thursday.
The counter-proposal offering concessions on budget issues is designed to break the deadlock that is threatening Greece's future in the euro zone.
Tsipras, who was elected in January on promises to end austerity, made it clear he was willing to give ground but with strings attached that German Chancellor Angela Merkel is highly unlikely to accept.
"If we have a sustainable solution, regardless of how difficult the compromise is, we will bear the burden because the only criteria are exiting the crisis and the bailouts," a government official quoted Tsipras as telling the ministers on Friday night before they headed to Brussels.
Tsipras used the term "sustainable solution" to refer to a long-standing demand for large parts of Greece's mountainous debts to be written off - something he believes is vital if the Greek economy is to start getting back on its feet after a five-year depression.
Much of that debt is owed to Germany, the biggest contributor to Greece's 240 billion euro bailouts. Any acceptance by Merkel that the money might never be paid back would almost certainly create uproar among the country's politicians and taxpayers.
Tsipras also signaled that without debt relief, he would reject any deal which isolated his country from the rest of Europe, such as the creditors' demands for curbs on the right of Greek workers to bargain collectively on pay - something that union members elsewhere take for granted.
"If Europe desires the split and the continuation of subjugation, we will make the big decision to say 'no' and fight the battle for the dignity of the people and our national sovereignty," he said.
PSYCHOLOGICAL PRESSURE
Government spokesman Gabriel Sakellaridis gave more details on the negotiating stand, such as on the primary surplus, a budget balance that excludes debt repayments, and the creditors' demands for yet more of the austerity that has already radically reduced Greeks' living standards.
"The government seeks a solution which will include a debt relief, low primary surpluses, no wage and pension cuts, an investment package and restarting the economy," he told Agora newspaper.
"Debt relief is not an ideological obsession or a symbolic move, but a necessary condition to relieve people and jumpstart the economy," he added.
On Friday, EU officials said representatives of euro zone member states had formally discussed a series of scenarios, including for the first time one which involved a possible Greek default on the repayment to the International Monetary Fund due by the end of this month.
Athens, which attended a meeting of the official-level Euro Working Group on Thursday, has denied that any such scenario had come up.
Defaulting on a repayment to the IMF, the lender of last resort under the post-World War Two global financial system, would have profound consequences. The European Central Bank would probably have to halt emergency lending that supports Greek banks, which have suffered huge withdrawals by anxious savers.
Athens would then probably have to respond with capital controls, curbing deposit withdrawals and payments abroad in a series of events that would put Greece's future in the euro in grave danger.
But Sakellaridis dismissed such a scenario. "The Greek banking system is steady and solvent, which is being proven every day. Any other theories are just part of the negotiation, a form of (mainly psychological) pressure."
Finance Minister Yanis Varoufakis, a former academic economist, played down any possibility of Greece being forced out of the euro.
"As a former statistician, I will never consent to the notion that there is a zero probability event," he told BBC radio. "It is also possible that a comet will hit planet Earth ... (but) I don’t believe that any sensible European bureaucrat or politician will go down that road.”
Varoufakis, who has been sidelined from the negotiations since falling out with some of his euro zone colleagues, said he believed Merkel would not "even begin to contemplate an exit of Greece from the euro zone".
Asked if the EU and IMF were bluffing, he said: "I hope they are."
(Additional reporting by Costas Pitas in London; Writing by David Stamp; Editing by Alison Williams)
[
Greece: A Ponzi scheme with no end in sight
ERIC REGULY
ST. PETERSBURG — The Globe and Mail
Last updated Saturday, Jun. 20, 2015
Greek Prime Minister Alexis Tsipras rolled into the St. Petersburg International Economic Forum on Friday to make nice with Russian President Vladimir Putin – not that it will make one iota of difference in saving Greece.
Greece is so small that Russia could easily afford to bail it out; one of Mr. Putin’s ministers hinted that Russia was willing to help. Doing so would amount to the cost of a few aircraft carriers or subsidizing a minor land war in Ukraine. But he’s not going to do it.
Mr. Putin has enough geopolitical problems of his own. If he were to bail out Greece, the United States and Europe would assume that Russia’s next move would be to park its navy in Piraeus. Mr. Putin probably also knows that Greece is a terminal case.
More loans won’t fix Greece; the opposite in fact. That’s because the creditors’ treatment of Greece constitutes the greatest Ponzi scheme on the planet (sorry Bernie Madoff). Mr. Tsipras knows that too, which is why Greece is barrelling toward default – he has said as much. The big question is whether some political and financial fudge will allow it to remain in the euro zone and the wider European Union if it does stop paying its debts.
Greece is insolvent, bankrupt, illiquid, economically dead – the sovereign version of Monty Python’s parrot. The creditors – the EU, the European Central Bank and the International Monetary Fund – have the numbskull idea that shovelling more loans into Greece will bring the corpse back to life. The trio of creditors will release €7.2-billion ($10-billion) in loans remaining from the previous bailout if Greece launches another round of austerity, which would include an increase to the value-added tax (VAT), a gutting of the pension plans, and assorted other trims and cuts. In other words, another nasty round of austerity on top of the previous nasty rounds of austerity.
No one feels sorry for Greece. It was largely the author of its own misfortunes, to the point it lied about the true size of its debt, treated tax collection as a part-time hobby and decided that economic diversification meant buying BMWs and stuffing pristine islands with cheap resorts. But anyone with an IQ greater than feta cheese should know by now that austerity is a growth killer, which is why Greece is incapable of emerging from recession. Except for a brief flirtation with growth last year, it has been swirling down the economic toilet since 2009. “VAT going up and pensions going down constitute reductions in the standard of living,” Neil MacKinnon, managing director of VTB Capital, said Friday on the sidelines of the St. Petersburg economic forum. “That will depress the economy even further.”
The creditors want to hand Greece more loans to pay off loans that are coming due this summer (Greece owes the IMF almost €1.6-billion by the end of June). But austerity will ensure that Greece will lack the means to pay off those new loans. That’s the Ponzi scheme – new loans to pay off old loans, to be inevitably followed by new loans to pay off old loans.
Everyone knows that the solution is a debt writeoff, and a big one. But even though the IMF has raised the idea of another debt restructuring – Greece crunched its privately held debt in 2012 – the IMF will not take one itself. It wants the EU to take the “haircut,” as it’s called. But the EU would sooner see Mr. Putin annex another chunk of Ukraine that write off its loans to Greece. A Greek default would cost the taxpayers of Germany and France alone about €60-billion. Try explaining a loss of that size to your voters. Already, half of the voters in Germany would like to turf Greece out of the euro zone, and that’s predefault.
The next few weeks, maybe few days, will make or break both Greece and the euro zone, and things looked dire by the end of the week. On Thursday, a meeting of the euro zone finance ministers, which included Greece’s Yanis Varoufakis, made absolutely no progress. The euro zone summit meeting on Monday is emerging as the true make-or-break session. “The game of chicken needs to end and so does the blame game,” European Council president Donald Tusk said Friday.
Greece has been accused of suicidal tendencies by not giving in to creditors’ demands. But accepting more austerity for more loans is no less suicidal than a default that could send it hurtling out of the euro zone.
How to end the standoff? The EU could commit to some sort of debt writeoff in exchange for diluted austerity and economic reform. Or Greece and the EU could throw in the towel and decide that both sides would be happier and healthier without one another’s company. It could go either way. A Greek default and exit from the euro zone would be nasty and painful, but there are precedents that are somewhat encouraging. Argentina defaulted and ended its currency link with the U.S. dollar in the early part of the last decade and managed to survive, if not quite thrive.
What is certain is that piling more loans onto more loans in exchange for economy-busting austerity is madness. At best, it would buy Greece some time before a long-term solution is found, and the EU is lousy at finding long-term solutions. At worst, it would keep Greece in perpetual recession, guaranteeing a Greek exit in a few years. And who knows what other undead countries – Italy, Spain, Portugal, Cyprus – would go crashing out with it?
Greece is right to resist another hash austerity-for-loans deal. The next few days will be chaos as the IMF demands its money back. Greek banks, kept alive only by fresh doses of liquidity from the ECB, could go bust. Mr. Tsipras could face a confidence vote or election. The creditors could descend into infighting. The markets will wobble, or worse, as the very integrity of the euro zone comes into question.
Throughout all this, Mr. Putin will be watching with amusement, knowing that he alone doesn’t face grave geopolitical problems.
Thucydides said:
