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Criticism of the EU's handling of the Greece crisis by IMF officials in a report. The report says the actions taken for debt restructuring in 2012 should have come much earlier to reduce the debt burden and the size of austerity measures in Greece. Similiar criticism has been voiced by president Hollande of France and in editorials by the WSJ. President Samaras of Greece says the sharp cuts in spending reduced potential for growth in the economy.

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This Journal editorial does not shy away from the task of evaluating the Greece bailout in March 2012, for what it really means; its longer term consequences for the EU experiment, the consequences for Greece, and what it does for democracy in Athens. Its clear it points out the last 2 years were spent insulating the rest of the EU from the fallout of the debt crisis in Greece. Even though it would have been better to have acted at the outset two years ago- to let Greece go into a planned default, reduce debt to manageable levels, and to have acted on reforms earlier. This would have setup a better outcome than the one today. It would have meant a bigger haircut for the banks and greater debt reduction which would have hurt European banks. The current outcome is bad for Greece's economy which leaves it with debt at over 120% of GDP in 2020, and no hope to return to growth. And its bad for democracy as the two main political parties in Greece were required to pledge support to the austerity measures against overwhelming public opposition....

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The lack of trust in negotiations on the terms of spending cuts between Greece and EU ministers in February 2011. In difficult exchanges between German finance minister Schauble and Greece's finance minister Venizelos, Schauble criticized the Greek government for not beginning negotiations for reduction in the minimum wage. EU ministers at a meeting with Venizelos on Feb 10, 2012, showed a distrust of Greece's figures on austerity cuts and asked for an additional $428 million in cuts to make up for the refusal of Greece to cut supplemental pensions. In Greece five ministers in the Greek cabinet resigned in protest over the conditions set by the troika of the EC, ECB and the IMF, just as unions launched a 48 hour strike in Athens. Greece is in the fifth year of a recession with unemployment at over 20%, making sharp cuts more painful. A shrinking economy makes achieving budget defict targets even more difficult and worsening the debt situation.

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Kviv winter 2026 with heat infrastructure destroyed by Russian missile attacks.  In the dark days of winter, life in Kviv and Ukraine contrasts with that of life in the other nations of Northern Europe (UK, Nordics) that see a continuation of the war from the comfort of their own homes not having experienced any of the aspects of life in such a war. The US has sought to bring an immediate or early end of the conflict that serve no purpose for Russia or Ukraine or the US. The root cause of the war is enlargement of NATO and it was done under a series of Northern European leaders starting with Solana in Spain, and Robertson from UK under whom much of the enlargement of NATO happened, followed by Nordic heads of NATO. This was a grave mistake and the Bush-Clinton-Bush-Obama administrations in US failed to grasp this mistake. NATO was created under the threat to Eastern Europe and Greece Turkey during the Truman administration from the Soviet Union, after Soviet Union collapsed it served no purpose and another institution was needed built from scratch in which all of Europe could freely participate free of influence of any particular part of Europe, with respect for all parts of Europe. In that situation the Ukraine war would not have happened among people who speak the same language and share the culture. ...

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Iraq is being dragged into Iran War with Iran backed Popular Mobilization Forces as part of the current Iraqi government. Today there are Sectarian divisions Shia and Sunni jostling for influence and power in the state of Iraq, a state created artificially in 1921 by Britain to protect its regional interests. After the Ottoman Empire 1524-1918 was broken up, after the WW1 in 1918, the British in subsequent negotiations got the League of Nations Mandate for Mesopotamia- historically the region between the Tigris and Euphrates rivers. It was made up of three provinces of the Ottoman Empire Basra, Baghdad and Mosul. Basra had a large Shia population, Baghdad and Mosul had a large Sunni population.  To this date no census has taken place except in 1987 and 2024 and never one that shows which portion of the population is Shia or Sunni, so no one really knows. Britain installed Faisal 1 as the King of this artificially created kingdom in 1924. The British operated in this way controlling the Shah of Iran at the time, and the Iraqi king, Egyptian king. Britain and France tried to install a Caliph in Istanbul who would rule Turkey and protect British and French interests but failed because of a Turkish military officer Ataturk who declared a independent Turkish state based in Ankara in the 1920's and defeated British sponsored armies and forces from Greece.   ...

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Germany is turning nationalistic in its approach to the debt crisis in Greece. This comes as Germans consider economic successes as Germany's, and failures in Europe, as the problems not of a united Europe but of these individual countries. The largest circulation German newspaper, Bild, suggested Greece sell the Acropolis to payoff creditors in the bond markets, and putting a estimate of $140 billion for this monument. A senior member of Merkel's party suggesting Greece sell off some of the Aegean islands. And a Bild poll showing a majority of Germans favor expelling Greece from the euro. There is not sufficient acknowledgement by German public opinion of the value to Germany of the export markets in Europe and the part they played in Germany's economic success.

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The artificial nature of the target of debt to GDP of 120% for Greece in 2020. This is the target being followed in negotiations by the troika of the ECB, IMF and the EU. Experts say the sustainable level would be much lower for Greece -this would be much lower because of the aging population in Greece and lower level of workers to support retirees in future years, the inefficient tax collection system and poor prospects for changing it, the degree of control over monetary policy and the rate of change of debt. A recent study by the Bank for International Settlements shows debt sustainability at 85% after studying 18 countries from 1980 to 2010. No precise source has been found for the 120% target. An IMF Report in 2011 said the 120% was the "maximum level considered sustainable." Alan Auerbach at UC Berkeley and Michael Woodford at Columbia University, say the additional factors are relevant to Greece. The many unpredictables over the course of ten years is another serious difficulty.

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Even government ministers line up at ATM's near the parliament building as Greece pulls out of bailout talks with EU finance ministers and calls for a referendum on bailout conditions for July 5, 2015. A decision by Greece on imposing capital controls is expected.

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In an interview with the Wall Street Journal Deutschland, Hans Werner Sinn, head of the Ifo Institute in Germany, says Greece's bondholders are overly exaggerating the effects on the eurozone of an exit by Greece. He sees it in the best interests of Greece to improve its competitiveness and return to growth by going back to the drachma. Just to get to the level of Turkey Greece would need to reduce prices by 31%, which is impossible to do within the eurozone without risking a complete breakdown in civil order. The best way to use the 130 billion euro second bailout package is to use it to recapitalize its banking system, says Sinn. Sinn says Portugal's faces the risk of a debt crisis following the crisis in Greece.

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Dart Management, a vulture fund based in the Cayman Islands, received 90% of the 436 million euros bond payment by Greece on May 15, 2012. Dart is one of the holdout investors who did not participate in the Greek debt restructuring deal. It planned to sue the Greek government. This has implications for the other holdout investors with about 6-7 billion euros of Greek bonds. The reason given by the Greek government was that this caught Greece at a bad time- suing Greece could have tied up European bailout funds that Greece needs to make interest payments on its debt. The timing is bad from another standpoint, as it will further exacerbate voter discontent with the parties associated with the government just before the second Greek elections in June 2012.

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The IMF, ECB, and the EU, are requiring Greece to make cuts to private sector salaries by a reported 25% to bring Greece's wages more in line with a country like Portugal, because of the lower productivity of Greek workers and a way to make Greek goods more competitive. This is one way to accomplish what a devaluation of the drachma would have done when Greece was outside the eurozone. Greece's minimum wage is about $1000 a month- officials from the troika want to see this go down about $750 a month. The difficulty is that consumer prices are higher in Greece, with gasoline at $8 a gallon and other prices higher due to cartels that control the distribution of consumer goods in Greece. Other austerity measures required by the troika as a condition for further aid to Greece are pension cuts and higher taxes on businesses. Labor unions and business leaders pointed out other factors affecting Greece's competitiveness in a letter to prime minister Papademos as they opposed drastic wage cuts- the letter said " competitiveness is affected more by factors like bureaucracy- which is fed by complex regulation, state intervention, the tax system, corruption and antibusiness mentality rather than wage costs."...

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Palaiologos of the Kathimerini newspaper in Athens, Greece, says the early euphoria of support for Tsipras is fading, as the negotiations with the EU require Tsipras to go back on his election pledges and require difficult choices. He points to a poll from the University of Macedonia putting government support of its negotiating strategy in April 2015 at 45.5%, down from 72% in February 2015. He says the Syriza government has conveyed different and contradictory messages, wasting a lot of the goodwill in Europe for Greece's position, and by backtracking on agreements put Greece back into recession. Greece needs to take responsibility for how deep the crisis is compared to a country like Ireland or Portugal, because of dysfunctional public administration and political systems, says Palaiologos. The EU and Greece need to make a fresh start after all the false starts of the early part of 2015.

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John Taylor looks one step ahead of the March 2012 Greece bailout and sets up the most plausible scenario for the future. He says the risks of contagion were always exaggerated from the beginning- a planned default or restructuring of debt such as happened in Argentina in 2001, does not have the contagion risks associated with a chaotic and unplanned default as in Russia in 1998. Predicability in policy makes a huge difference, says Taylor. The European banks which stood to lose from writedowns exaggerated the fears of contagion- a process that always occurs for people who are adversely affected by writedowns- resulting in top officials in the European Union delaying the unavoidable serious restructuring. It was not until Chancellor Merkel handed Charles Dallara, who negotiated for the European banks, a note stating a demand for 50% bondholder writedown, on October 27, 2011, at EU headquarters in Brussels, did any serious writedown of debt begin. Merkel told Dallara: "this is my last offer." The July 2011 summit by contrast had only a 10% bondholder writedown in the agreement, when insolvency not illiquidity was the real issue. Walker Forelle and Meichtry, give a detailed account of what happened in the Wall Street Journal, Dec. 30, 2011. The important thing for Greece, says Taylor, is for what the IMF calls "growth enhancing structural reforms" - greater reliance on private markets, incentives, rule of law. He says this bailout won't work because IMF growth forecasts do not reflect the rapid shrinking of the Greek economy. Antonis Samaras, leader of the major opposition party, is in favor of pro-growth measures and has stated his desire to change the agreement. The 130 billion euro bailout provides 90 billion euros for recapitalizing Greece's banks, and financing the budget. This puts Greece in a situation where the political leaders win voter support by discarding the conditions from the Northern EU nations and come with a plan that is better suited for Greece. The EU in this scenario would cut off further bailout funds to Greece. Taylor sees this as the better outcome for Greece than the current situation, which leaves Greece no hope for growth, and also for the EU by getting out of bailouts that have little prospect of working. It would be difficult but doable for Greece says Taylor, because interest payments would be low and Greek banks would be recapitalized after the current March 2012 bailout. ...

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Christopher Power talks to three former IMF officials. If offered the Greece portfolio at the IMF, Simon Johnson, (a former IMF official) says he would ask for a transfer to Iceland, because Greece is incredibly complex, with the IMF unlikely to impose conditions. Especially with IMF chief Dominique Strauss Kahn's aspirations to become President of France. The ECB controls Greek monetary policy and there is no chance of a devaluation with the Greeks in the euro currency. This leaves Greece locked into an unsustainable currency rate. Kenneth Rogoff and Michael Mussa, both agree that the IMF can help buy time for Greece with bridge loans and laying a framework for confidence. Mussa points to the Greek problem- the credit markets won't buy their bonds forever and at the same time its a nasty business to have a sovereign default in the euro currency area. Mussa sees the situation as much like that of GM. Bush bought time for an orderly transition should GM have to declare bankruptcy, which is what happened under Obama. With the European recovery weak, Portugal and Spain fragile, an orderly arrangement is critical not to upset markets. Its like kicking the can down the street, says Mussa, but that can have some advantages. ...

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With yields on ten year Greek bonds reaching new highs, the Economist says it is time to go to Plan B. The German government wants to see something different from a continuation of the 2010 plan and merely loaning more funds to Greece. One option is for Greece to pledge privatization proceeds as collateral for new loans. Another option is the restructuring of Greece's debt, even though the German government is reluctant to impose losses on holders of Greek bonds. But Trichet and the ECB are opposed to any restructuring. ECB officials fear this could cause a crisis like that caused by the collapse of Lehman Brothers in 2008. And privately ECB officials say they could go so far as to refuse to accept Greek bonds as collateral for ECB loans if a restructuring goes through. The contagion from a Greece default could affect Ireland, Portugal, and impact the European banking system and the ECB's own balance sheet. Yet a sounder plan would be for European governments to come up with the funds to recapitalize hard hit banks, knowing that Greece will never be able to pay back its loans under the current plan. The IMF and the German government should push for an orderly restructuring of Greece's debt as the only workable solution, says the Economist....

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This Economist briefing on Greece before the referendum of July 5, 2015, gives a detailed account of the Greece debt crisis since 2010 leading up to the election of Syriza left party in Jan. 2015 and the referendum.

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The triple C credit ratings of Greek banks, Alpha Bank, National Bank of Greece, Eurobank Ergasias SA, and Piraeus Bank SA, were lowered to selective default by S&P on July 1, 2015. S&P cut Greece's credit ratings to junk, down to triple C minus with a negative outlook, saying Greece is likely to default on its commercial debt within 6 months, unless the situation changes.

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The facts that guide one's understanding of what is happening in Greece relate to the size of the public sector for a small country like Greece, and the failure of people from all classes of society from cab drivers and civil servants to small business and the shipping industry, to pay taxes. These two twin facts and a splurge of spending during and after the 2004 Olympics without proper and correct account keeping, has brought Greece to its present situation. One estimate is that every Greek person would owe 27,000 dollars, that is how much the national debt has swollen to- a massive 300 billion euros debt for a small country. This is 115% of its GDP. And the public sector spending simply went unchecked by different governments trying to win votes. Estimates are that the public sector makes up 40% of Greece's GDP, and government workers are 15% of the active workforce. Not paying taxes has become a societal trait in Greece, as a result the government does not collect an estimated 25 billion euros a year in taxes each year. And this does not include the taxes that would be paid if owners in the Greek shipping industry were to not take advantage of an exemption from paying taxes granted by the government. The result- Greece's socialist government of Prime Minister Papandreou has accepted a $110 billion euro bailout from the European Union and the IMF which comes with cuts in public spending and austerity measures designed to reduce the deficit form 13.6% of GDP to 3% in 3 years. Its important to understand what is happening in Greece, because from Prime Minister Cameron in Britain (with his cuts in government department spending of 25% over 5 years), to Prime Minister Naoto Kan of Japan (with a planned doubling of the sales tax), the mood in Europe and Japan is shifting to austerity measures that would correct excessive government spending. In Greece Papandreou and his ministers are making serious efforts to change a culture of not paying taxes. See the groups and links for Papandreou and Greece....

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The cost of the first bailout for Greece of May 2010 is 53 billion euros for eurozone funds and 20 billion euros for IMF funds, according to the European Commission. The cost of the second bailout for Greece of March 2012 is 142 billion euros for eurozone funds and 12 billion euros for IMF funds. The eurozone took back 11 billion euros following the failure of negotiations.

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Analysts say the odds are now three in four that Greece will exit the euro. The young leader of the Coalition of the Radical Left, which came in second with 16.78% of the vote after New Democracy party's 18.8%, says: "We believe that the path of salvation doesn't pass through the barbarity of austerity measures." A new election is expected as talks to form a new government are expected to fail, with the likelihood that more votes would go to parties other than New Democracy and the Socialist Pasok party, the two parties that have governed Greece. This would mean a smaller vote for the two parties, smaller than the 18.8% New Democracy and 13% Pasok received in this election, relegating them to insignificance in the Greek political landscape. And opening a new chapter for Greece outside the euro.

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As Mr. Mitsotakis of the New Democracy party takes over as prime minister from Mr. Tsipras this report from Greece reflects on what happened under Mr. Tsipras with his call for no in the referendum on the Eurozone economic loan package that set austerity cuts in Greece. Mr Tsipras was unable to reverse the loan agreements set by the eurozone leaders. There is much to reflect on austerity policies also for Germany and northern European countries in the events of the last five years leading to the loss of confidence in major parties in Europe and in eurozone countries. Austerity policies also have undermined public confidence. Yet in the Greek case the lack of transparency bad finances were of another magnitude that called for responsibility to be taken by internal groups within Greece. In the end this proved little except that the eurozone was expanded too hastily for countries such as Greece, hurting the eurozone, the idea of Europe, and Greece.

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A Pew Center poll in Greece shows support for the Euro at 69% in 2013. The situation in Greece has improved in 2013 with the economy expected to decline by 4% in 2013 and return to growth in 2014. The current account deficit at 11% in 2008 is now close to zero. Unemployment is stabilizing and the competitiveness is being restored as labor costs per hour are down 30%, according to Alpha Bank. Ten year government bond yields are now below 8% in 2013, a dramatic improvement.