Tsipras, who breathed fire and brimstone in the days leading up to today's Greek default on its IMF loans, swearing that he would never accept the terms being offered by the nation's creditors, saying it would be a humiliation and a blow to Greek pride, sent a letter to the EU on Tuesday night accepting virtually all of the creditor demands and asking for another $32 billion in loans.
The irony is delicious. When Tsipras called for the referendum last weekend, he was urging a Greek "no" vote to show that his government would not back down. Now he is in the position of having to beg for a "yes" vote to keep his job and prevent his nation from slipping into chaos.
For the far-left nutcase, it appears that reality – finally – bites.
Alexis Tsipras — in a late-night letter sent to Greece’s main creditors — made some changes to European Union austerity demands. But he left in place most of the tough measures he had previously dismissed, including cutting pensions, raising taxes and forcing deep reforms to the way the nation’s economy is organized.
The proposal also reiterated a request made Tuesday for a new $32 billion bailout and for more relief for Greece’s crushing debts than E.U. leaders have been prepared to offer.
Hope of a deal sent European stock markets higher.
Yet there was no immediate sign from Greece’s lenders — including economic powerhouse Germany — of a breakthrough a day after the E.U. bailout funds were halted and Greece became the first development country to default on a payment to the International Monetary Fund.
Germany’s Finance Minister Wolfgang Schaeuble said the latest Greek letter “did not provide further clarity” in the impasse and was “no basis” to resume serious negotiations.
But Tsipras — who had refused to consider the tougher spending cuts — framed the offer as an about-face. He said that Greece was willing to accept almost all of the terms of the E.U. demands.
“Our amendments are concrete and they fully respect the robustness and credibility of the design of the overall program,” Tsipras wrote in the letter, which was dated Tuesday and addressed to the heads of the European Union’s executive arm, the European Central Bank, and the International Monetary Fund.
The decision was a major climbdown for Tsipras after having gone to the brink by calling a Sunday referendum that would subject the austerity demands to an up-or-down vote by the Greek people.
Greece’s creditors cut off negotiations after the surprise weekend referendum announcement.
Eurozone finance chiefs were set to discuss Greece’s newest proposals later Wednesday. But many of them said a day earlier that they were disinclined to offer any further assistance to Greece unless Tsipras called off the referendum or advised his citizens to vote “yes” to the demands, rather than “no.”
Why didn't Tsipras make these concessions a week ago when he could have saved his country from the ignominy of default? The Greek prime minister was steeped in delusional thinking, believing he held the upper hand in the negotiations. He thought that the rest of the EU would never allow Greece to default because it would almost certainly kill the euro.
But this strutting, arrogant, ignorant man so offended the rest of the leaders in the EU with his leftist posturing and antics that they allowed Greece to go into default to spite him. Tsipras blindsided the negotiators last weekend by calling for the referendum and then walking out of talks. It was the kind of political theater that the left loves to think makes a difference in the real world. They are paying for their conceits more and more each day.
For the rest of Europe, Greece may be more trouble than it is worth. If European taxpayers are going to have to continue to bail out Greece every couple of years, they will eventually revolt. Perhaps it is best now to sever the lifeline rather than continue to throw good money at the lost cause that is the Greek economy.
“Our amendments are concrete and they fully respect the robustness and credibility of the design of the overall program,” Tsipras wrote in the letter, which was addressed to the heads of the E.U. executive arm, the European Central Bank and the IMF.
Revived hope of a deal sent European stock markets higher after two days of downturns. Wall Street also rose.
Yet the prospect of a breakthrough was almost immediately quashed by Greece’s main creditors, including economic powerhouse Germany, even as Washington continued to press for both sides to reach a compromise.
German Finance Minister Wolfgang Schäuble said the latest Greek letter “did not provide further clarity” in the impasse and was “no basis” for resuming serious negotiations before the referendum. He went on to blast Tsipras’s government for dragging the country deeper into crisis since coming to power in January with a promise to fight further E.U.-imposed financial pressures.
“Greece is in a difficult situation, but purely because of the behavior of the Greek government,” Schäuble said in a speech in the German Parliament’s lower house. “Seeking the blame outside Greece might be helpful in Greece, but it has nothing to do with reality.”
Also in Berlin, German Chancellor Angela Merkel gave no ground. She told German lawmakers that there can be no direct discussions on a new aid program until after the referendum.
“We will wait,” she said, adding that any new bailout would have to be approved by Germany’s Parliament.
French President François Hollande sounded more conciliatory, perhaps to satisfy those in the left wing of his Socialist Party who are sympathetic to Tsipras.
“If we have to wait for a referendum, there is always a risk . . . that we would enter a period of turmoil and enter into the unknown,” he said. “It’s better to be sure than to leap into the void.”
Other European officials, however, signaled that they were in no mood to talk unless Tsipras completely capitulated.
With Europe’s verdict clear, Tsipras appeared on Greek television Wednesday afternoon vowing to stick with plans for the referendum and once again assailing the E.U. demands, which include raising taxes and further trimming pensions.
Greece, he said, will be back at the negotiating table after the referendum, seeking “better terms for the Greek people.”
The fast-moving gambits and declarations across Europe added to the high-stakes atmosphere as Greece tumbled toward the Sunday vote. Tsipras and his allies in the radical leftist Syriza party cast it as a simple up-or-down choice focused on Europe’s bailout proposals. But E.U. leaders have framed it in starker terms: as a judgment on whether Greece wants to remain in the euro currency community or risk being the first country to crash out of it. Polls suggest the vote could go either way.
Meanwhile, Greece’s banking system continued to teeter on the brink of collapse.
The European Central Bank, which controls a vital stream of emergency cash to Greece’s banks, opted Wednesday to keep the banks in limbo — neither slashing support nor increasing it. The decision means the banks’ fate will be determined only after the referendum.
Greece’s banks have been closed to preserve their dwindling cash reserves, and Greeks have been limited to withdrawing 60 euros, or about $67, per day from ATMs. The cash shortage has caused pain and panic as pensioners go without money for their doctors’ bills and citizens try to stock up on basic grocery supplies.
Greek banks are so low on cash that they could run out by Monday, two Greek officials with knowledge of the situation said.
With the country facing such dire prospects, Pope Francis asked Catholics to pray for the Greek people amid their “keenly felt human and social crisis.”
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