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Eurozone officials fall short of Greece deal
Posted By Jerome R. Corsi On 06/22/2015 @ 2:56 pm In Front Page,Money,Politics,World | No Comments
MILAN, ITALY – In what was to be the decisive day for the future of Greece in the European Union, an emergency EuroSummit meeting of Eurozone finance ministers and heads of state in Brussels ended Monday with EU Commission President Jean-Claude Junker acknowledging the discussions will take most likely the rest of the week.
He also said he hopes to end up with a successful conclusion.
“While it is unlikely that the EuroSummit today in Brussels will come to a formal decision on the opportunity to provide further aid to Greece, there is still time this week to find a deal,” German Chancellor Angela Merkel added, in an address to the European press.
“Today it is impossible to give a definitive assessment of the new Greek proposal to satisfy the creditor financial institutions,” Jeroen Dijsselbloem, the president of the lending financial institutions known as the Eurogroup, acknowledged with disappointment. “But we plan to continue discussions to see if Greece has offered a good basis for a final decision.”
Find out what you need to know about the international economy, in “The Return of the Great Depression,” by Vox Day, and also consider the timing of economic crises, as described in “The Mystery of the Shemitah,” which describes the 7-year cycles in the Bible, and notes that money disasters hit both in 2001 and 2008.
Over the weekend, Greek leader Alexis Tsipras offered a new package of measures designed to generate sufficient revenue to make the payments needed to EU creditors in order to avoid default.
Specifically, the Greek plan seeks by the end of 2015 a 1 percent surplus on gross domestic product, GDP, advancing to a target 3.5 percent surplus by 2018, to be achieved by raising taxes 2 percent rather than the 2.5 percent demanded by creditors, while increasing Value Added sales taxes known as VAT, a standard 23 percent, with VAT on basic necessities such as food and medicine pegged at an 11 percent increase.
The provisions would also stop early retirements beginning Jan. 1, 2016, while raising the retirement age gradually to 62 years old as a means of reducing future government pension costs without further penalizing those already receiving government pensions.
“In recent days there has been progress, but I do not know if we will be able to reach a final agreement,” admitted Tsipras at the conclusion of the talks on Monday.
Perhaps the least optimistic at the conclusion of Monday’s EuroSummit talks was German Finance Minister Wolfgang Schaeuble.
“There is nothing new in the proposals we have received from Greece,” Schaeuble said flatly.
“The Greek crisis has arrived at a crossroads,” European Central Bank President Mario Draghi openly admitted. “Either Athens will find an arrangement acceptable to EU creditors, or the financial currents may draw Greece into default and an exit from the EU, with Europe entering uncharted waters where the economic and political conclusions though difficult to predict are certain to be unpleasant for the entire Eurozone.”
WND reported last week on the developments in the fight over the payment Greece owes lenders, estimated at 1.6 billion euros, in just a week.
Emergency meetings last week failed to reach a solution.
The economy there has suffered in recent years because of “austerity” measures intended to try to pay off a massive debt accumulated over years of profligate spending. Greek citizens already have faced higher taxes and lower benefits, but the Eurozone lenders say they need to do more.
But residents are having no part of that discussion, and, in fact, WND had reported there was a lot of fear among the moneyed interests across Europe and around the globe that if Greece defaults, leaves the Eurozone and returns to the drachma, it actually could thrive.
According to a Marketwatch report, the worry is that Greece’s inability to repay its debt would produce skyrocketing interest rates, panic in the banking industry, mistrust in both borrowers and lenders, and, as Marketwatch explained, “rivers flowing upstream.”
There are those who say the United States and others also could end up in that situation. But the analysis by Brett Arends says the real worry is that Greece would abandon the euro and would thrive.
“The fear is that if Greece leaves the euro, the country will return to prosperity – and then other countries might follow suit,” Arends wrote.
He pointed to statistics showing economic growth in several eurozone nations has been stunted during their time in the group.
For example, Greece had real GDP growth, per person per year, of 4 percent before the euro. It’s 2.3 percent with the euro. For Italy, it was 5.2 percent before, 2 percent with. Portugal? Six-point-five percent before, 2.4 percent with. Spain comes in at 5.7 percent before, 2.9 percent with.
The Financial Times also reported that the “defiant youth” of Greece actually might opt for “chaos” rather than more of the same cutbacks and limits that they’ve seen in recent years.
Find out what you need to know about the international economy, in “The Return of the Great Depression,” by Vox Day, and also consider the timing of economic crises, as described in “The Mystery of the Shemitah,” which describes the 7-year cycles in the Bible, and notes that money disasters hit both in 2001 and 2008.
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