Europe's Populist Left

[Sheilbh]

Things are looking bad again.

China and Russia are hovering.

One potential bit of wiggle room the Greeks don't mind calling bridging finance a 'technical extension' of the program.

[Monoriu]

Things are looking bad again.

China and Russia are hovering.

One potential bit of wiggle room the Greeks don't mind calling bridging finance a 'technical extension' of the program.

What do you mean by hovering?

[Admiral Yi]

One potential bit of wiggle room the Greeks don't mind calling bridging finance a 'technical extension' of the program.

So your killer line about the troika insisting Greece take more money and Greece refusing is not quite as deadly as previously.

[Sheilbh]

Do they really? How specific are the policies "dictated" by the Troika? Anyway, my issue with the statement is not that they change policy or that they feel an obligation towards the voter and national interest. My issue with the statement is the word "only". A responsible government should try to have a balanced approach, never ignoring certain factions.

They are pretty specific. Here's the Portuguese program, with specific policy objectives from around page 55 on:
http://ec.europa.eu/economy_finance/publications/occasional_paper/2011/pdf/ocp79_en.pdf

And there's the famous Trichet letter to Zapatero, in which a central banker (a central banker!) outlines specific labour market reforms the Spanish government should pass.

I'm not sure what you mean about never ignoring certain factions. I think the problem is that one government does not have a mandate to bind every future government on entire tranches of economic and domestic policy. That's illegitimate and undemocratic.

Greece is hardly the shining beacon that other countries would want to emulate. Why would there be worries that there could be a repeat? The sheer shittiness of Greece's current situation should be motivation enough for all other governments never to go down that road.

Well as I say Podemos are leading the polls in Spain with another new party in fourth place but rising, Sinn Fein are polling as the largest party in Ireland. There's every chance from Italy that Europe will have to deal with a far more Eurosceptic leader than Renzi.

Yes, Greece is in a particularly dreadful position. But I think it'd be naive to expect this sort-of civil revolt of the periphery to stop there and, from a German perspective, giving in to Syriza would encourage everyone else.

Everybody already gets what they want out of the scenario that I outlined. Negotiations won't achieve a better result. The only risk is that the financial markets might overreact to a Greek default, but that as long as they mainly default on debt held by IMF, ECB et al., that shouldn't be a major issue.

I don't think markets would overreact to a default. If Greece stays in the Euro they should be fine if not while the risk of contagion is low now (especially compared with 2012) I don't think it's gone away. There'll be a sort of political contagion of several rather fraught elections coming up and if the Euro is reversible then I'd guess countries are more open to attack and speculation.

Also in the scenario you outlined Eurozone partners and the EFSF don't get any money back. In the one Varoufakis has proposed, they do.

Incidentally and this is unrelated apparently a lot of funds are making big bets against Spain. I'm not sure why but I assume they think there's something unconvincing in the economic figures.

I wish them all the best for that. But that's really something they need to get in order. No one but the Greeks themselves will make them a country of taxpayers and enact policies to redistribute the considerable wealth the Greeks have.

Absolutely. According to the World Bank and Transparency International Greece has a lower level of quality institutions than Bulgaria

[Sheilbh]

So your killer line about the troika insisting Greece take more money and Greece refusing is not quite as deadly as previously.

Not really. The Greeks still don't want to draw any more money from the Troika. But they're willing to describe their bridge money proposals as a 'technical extension' of the program rather than bridge finance to a new position.

[Admiral Yi]

Not really. The Greeks still don't want to draw any more money from the Troika. But they're willing to describe their bridge money proposals as a 'technical extension' of the program rather than bridge finance to a new position.

How would bridge financing not be more money? 

[Monoriu]

Absolutely. According to the World Bank and Transparency International Greece has a lower level of quality institutions than Bulgaria

Maybe Bulgaria has really good institutions 

[Sheilbh]

One other thought Gurria of the OECD seemed to endorse the Greek position (he said it had produced low growth, high unemployment, rising inequality and a loss of trust) when he and his team arrived to help work on the reform proposals. I wonder if he had any interesting advice given that he was the finance minister who restructured Mexico's foreign debt in the late nineties.

[Sheilbh]

Not really. The Greeks still don't want to draw any more money from the Troika. But they're willing to describe their bridge money proposals as a 'technical extension' of the program rather than bridge finance to a new position.

How would bridge financing not be more money? 

They want €1.9 billion of profits the Eurosystem makes of Greek debts and to issue €8 billion of short-term T-bills.

[Admiral Yi]

They want €1.9 billion of profits the Eurosystem makes of Greek debts and to issue €8 billion of short-term T-bills.

How would 8 billion euros of short-term Gree-bills not be new money?

[Sheilbh]

It wouldn't be new money from the EFSF, Eurozone partners or ECB - the Troika.

[Admiral Yi]

I see.  So they're going to launch 8 billion euros in short term paper with the secondary market trading their existing debt at 14%.

[Sheilbh]

Absolutely. According to the World Bank and Transparency International Greece has a lower level of quality institutions than Bulgaria

Maybe Bulgaria has really good institutions 

Weirdly the Greek government and banks apparently have a lot of investments in Bulgaria. The economies are a lot closer than you would've guessed.

[Sheilbh]

Moscovici talking pure sense again 'we're not here to talk technicalities, we're here to talk politics.'

[Tamas]

I see.  So they're going to launch 8 billion euros in short term paper with the secondary market trading their existing debt at 14%.

Brits have a historic soft spot for Greece I guess. Sheilbh is pretty much obligated to take their side.