Blue sunset on Mars - NASA's Curiosity Mars rover recorded this view of the sun setting at the close of the mission's 956th Martian day, or sol (April 15, 2015), from the rover's location in Gale Crater
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Greece has moved closer to default and possible exit from the eurozone after telling the International Monetary Fund it would not be making a debt repayment of €300m (£219m) due on Friday.
A crisis that has been going on for more than five years entered a new phase when Athens surprised the IMF by saying it intended to bundle up four payments in June totalling €1.6bn and make them all at the end of the month.
The move came as the Greek government reacted angrily to what was seen as an ultimatum from its creditors – including the IMF – that demanded further austerity and unpopular reforms to VAT, pensions and wage bargaining as the price for €7.2bn in fresh financial help.
Although Greece’s financial position has become increasingly serious in recent months, Athens had the ability to make the €300m payment and the country’s prime minister, Alexis Tsipras, gave the IMF managing director, Christine Lagarde, an assurance earlier this week it would be made on time.
Asked about the repayment due on Friday, Lagarde told reporters: “The payment had been honoured and will be honoured,. I think his words were, ‘Do not worry,.’ I’m confident that will continue to be the case.”
Instead, the decision to delay payments appears to be a show of defiance by Athens against what it sees as unacceptably harsh terms being demanded by its creditors. This increases the chances of Greece defaulting on its debts, losing the support for its weak financial sector from the European Central Bank, and eventually being forced to leave the single currency.
Fresh from talks in Brussels, Tsipras faced outrage on Thursday from highly sceptical members of his own Syriza party. A five-page ultimatum from creditors, presented by the European commission president, Jean-Claude Juncker, was variously described as shocking, provocative, disgraceful and dishonourable.
“It will never pass,” said Greece’s deputy social security minister, Dimitris Stratoulis. “If they don’t back down, the country won’t be lost … there are alternatives that would cost less than our signing a disgraceful and dishonourable agreement.”
Tsipras had presented the so-called troika of lenders – the EU, the ECB and IMF – with his own 47-page list of proposed reforms, but must now decide to accede to creditors’ demands or take on hardliners in his own party. Actions being asked of Greece include spending cuts and tax increases worth 2% of the country’s GDP in the form of pension and VAT reform – anathema to a party catapulted into office on the promise of terminating austerity.
On Thursday night Tsipras was seen to be leaning on the side of rejection. Officials described him as telling associates: “Such extremist proposals cannot be accepted by the Greek government. Everyone must understand that the Greek people have greatly suffered over the last five years and some have to stop playing games at their expense.” There was also speculation on that he will call a general election over the debt impasse.
News that Greece would not be making its scheduled IMF payment on time came after the close of European markets, but shares fell sharply on Wall Street.
The IMF issued a short statement in which it confirmed Greece’s plan to bundle up its June payments but stressed that the rules that permitted the move were supposed to be for countries facing administrative problems.
“Under an executive board decision adopted in the late 1970s, country members can ask to bundle together multiple principal payments falling due in a calendar month (payments of interest cannot be included in the bundle). The decision was intended to address the administrative difficulty of making multiple payments in a short period,” said IMF spokesman Gerry Rice.
Greece’s finance minister, Yanis Varoufakis, told Sky News: “Objectively speaking, we have until the 30 June because this is when the extension of the agreement with our creditors expires.”
But he conceded that Greece would be unable to continue making repayments at some point.
In Brussels, officials said Athens had 10 days to strike a deal. Technical teams of negotiators from the EC, the ECB and IMF hope to wrap up what is known as a “staff level agreement” by 14 June, four days before the next scheduled session of eurozone finance ministers and 11 says before a Brussels summit of EU leaders on 25 June.
Both Juncker and Jeroen Dijsselbloem, who heads the euro group of eurozone finance ministers, insisted that not enough progress had been made in the talks so far. The European commission chief said he would ask Tsipras back to Brussels for more negotiations in the next few days.
Back in 2013, photos emerged of Merkel when she was a care-free East German — a partial oxymoron — at a nudist retreat. The nudist blogger who discovered the photos said it may or may not have been Merkel strolling on the beach with her friends, wearing nothing but her birthday suit.
Suzanne Moore is an award-winning columnist for the Guardian
The euro ‘family’ has shown it is capable of real cruelty
The seemingly indestructible Angela Merkel can go without sleep, and still manage a half smile and speak about Greece’s wish to remain in “the euro family”. This may sound reasonable and pleasant. All families have their little local difficulties, don’t they? But they work through them. People see reason. When they are forced to.
By infantilising Greece, Germany resembles a child who closes its own eyes and thinks we can not see it. We can. The world is watching what is being done to Greece in the name of euro stability.
It sees a nation stripped of its dignity, its sovereignty, its future.
What kind of family, we might ask, does this to one of its own members? Even Der Spiegel online described the conditions that have been outlined as “a catalogue of cruelties”, but perhaps we should now put it another way, given Jean-Claude Juncker has denied that the Greek people have been humiliated. Juncker instead says that this deal is a typical “European” compromise. Yes, we see.
The machinations of financial institutions (the troika) have been exposed as much as the institutions themselves. Who runs these banks, and for whom? Twitter slogans talk of the three world wars: the first waged with guns, the second with tanks and this third world war waged by banks. Extreme? Well, there clearly is more than one way to take over a country.
The eurozone and Gemany want regime change in Greece, or at least to split Syriza. Alexis Tsipras has fought tooth and nail for something resembling the debt restructuring that even the International Monetary Fund acknowledges is needed. The incompetence of a succession of Greek governments and tax evasion within Greece is not in doubt. But the creditors of the euro family knew this as they upped their loans, and must now delude themselves that everything they have done has been for the best. It hasn’t, and now that same family will go in and asset strip in broad daylight a country that can no longer afford basic medicines. In three days Greece is supposed to push through heaps of legislation on privatisation, tax and pensions so it can be even poorer.
There is to be no debt forgiveness in this family. Tsipras has to sell this to his people so the banks can reopen. His endurance has been remarkable, and more will be needed. The unsustainability of Greek debt, even if the country could achieve growth, remains. The words trust and confidence keep being used but by the wrong people. Trust is gone in this European project. Francois Hollande, ever the pseudo–mediator, may rattle on about the history and culture of Greece. Its value has actually been shown. Its value is purely symbolic. It is worth nothing.
The euro family has been exposed as a loan sharking conglomerate that cares nothing for democracy. This family is abusive. This “bailout”, which will be sold as being a cruel-to-be-kind deal is nothing of the sort. It is simply being cruel to be cruel.
A Roma boy came to the table, selling roses. “Varoufakis!” he said, amazed. “I saw you on the news.” Varoufakis allowed himself to be teased for his habit of carrying a backpack, which, he was told, made him look like a schoolboy. He laughed and paid five euros for a rose, which he gave to Stratou. As the boy left, he shouted “Varoufakis! Varoufakis!” at a vender’s volume, and, a few tables away, the minister’s plainclothes security detail — two chic young men who bore a resemblance to George Michael at the time of “Faith” — turned around.
It was as if Christopher Hitchens had woken up one day as Secretary of State. Varoufakis was no longer writing elegantly prosecutorial blog posts about Christine Lagarde, the managing director of the I.M.F.; he was meeting with Lagarde. Within days of Greece’s election, an academic with Marxist roots, a shaved head, and a strong jaw had become one of the world’s most recognizable politicians. He showed a level of intellectual and rhetorical confidence—or, perhaps, unearned swagger—that lifted Greek hearts and infuriated Northern European politicians. His reluctance to wear a tie seemed to convey the impossibility of containing his manliness.
Harq al’Ada (the breaking of the habit)
I have been listening and reading all sorts of proposals on what Greece needs so that it can recover from its endemic recession. Many politicians and economics scientists, including the notorious Varoufakis, propose this recipe and that playbook that has worked in the past in this country or that region.
Quite frankly everything is going to fail for a single reason: Greece refuses to change the habits that are pushing towards the same fate as Atlantis. The country is rife with cronyism and sub educated supernumerary public sector employees to point out the most glaring problems.
What Greece needs is what the venerated Frank Herbert wrote throughout his work: the “Harq al’Ada”: the breaking of the habit. It is the same meme that Marvin Minsky denotes when he says: “Try to surprise yourself by the way you think today”. The old ways and the stale ancestor worshiping must end.
All that we Greeks knew, all that we know, is useless. We have to adapt or we will be overcome by our very own deficiencies that is the gist of the 20th century and we are already treading water in the 21st. Adapting means changing fundamentally, in habits as well as values and I am calling on all intelligent people to get involved or Atlantis will no longer by an ancient myth.
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