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Wednesday, February 25, 2015

D-Day - Cancelled Or Postponed?

Monday and Tuesday, particularly Tuesday, of this week were extraordinary for me. I had expected Monday to be the day where countless drafts of lists would be leaked to Twitter & Co. and for Tuesday I expected a High Noon type of showdown with the definite result that there wouldn't be a definite result and that further lists and phone conferences would be scheduled for the rest of the week.

For a while it looked to me, judging from tweets, that Tsipras & Co. had outsmarted the Eurogroup. They were going to raise 7,3 BEUR in new taxes from oil smugglers, tax cheats and oligarchs which would allow them to finance all of their campaign promises. I was wondering whether the Eurogroup would have the nerve to say: "First the revenues and then the expenses", and I wasn't so sure.

And then - nothing happened! Monday was a very slow day for Twitter & Co. and Tuesday felt like a bank holiday. The only debate seemed to be about the question whether or not the list had arrived in time. And then, Tuesday evening, word got out that the list had indeed arrived in time, that the phone conference among the Eurogroup had taken place and that they had approved the extension. That was it! No more, no less. Sometime later, the letter of the Greek Finance Minister together with the list was published but it was kind of a non-event - here is the list for anyone who cares, so to speak. No one seemed to care much. Statements by the IMF and the ECB appeared showing between the lines that they really didn't trust the list, but no one seemed to care.

It seemed to me like some Superior Force had called the quarreling children to order and told them: "I've had enough of your fighting! Now stop quarreling and be nice to each other!" And they stopped quarreling and they were nice to each other.

Suddenly, there are totally new perspectives. Tsipras will turn into a Tony Blair. He will slowly discard his radical left and substitute for it with new voters from the center. Like Tony Blair, Tsipras will go for a Third Way! In fact, that truly is the great opportunity which presents itself to Greece now. In fact, it's the opportunity of a lifetime. In fact, there is hope and confidence in the future!

There was one question throughout the last weeks which I have never heard discussed. We have heard from the Eurogroup & Co. that they really 'wanted to keep Greece in the Eurozone' but that they 'might not have a choice but to kick Greece out of the Eurozone'. We have heard noises from the Greek side that they don't wish to get kicked out of the Eurozone. But the one question which I didn't see discussed anywhere is: What would be best for Greece? Staying in the Eurozone or returning to a local currency?

Returning to the Drachma is always discussed in the context of what it would do to Greece's international competitiveness, to its trade and current account balances and to private wealth of Greeks. However, the predominent themes which have come out of Greece in the last couple of months were: 'stop austerity'; 'cease to follow orders', 'regain self-determination'.

A return to the Drachma would give Greeks all the things which seem to matter to them: it would be total financial self-determination; there would be no impediment to fulfilling campaign promises; the humanitarian crisis could be resolved relatively quickly.

In a nutshell: Greece could again print its own currency and become fiscally irresponsible. Prof. Paul Krugman would applaud because he encourages fiscal and monetary irresponsibility. Like Milton Freeman travelled to Chile in the mid-1970s to advise the government on fiscal and monetary responsibility, Krugman could visit Athens to advise Tsipras & Co. on fiscal and monetary irresponsibility.

What about pressure to implement reforms? Well, why implement reforms if Greece has lived happily for ages without reforms? If the external accounts get out of balance, just devalue from time to time and everything is fine again. What about inflation? Ok, we've learned to deal with that!

I was obviously a little satirical above but I truly believe that the question whether the Euro or a local currency is best for Greece should be discussed without prejudices during the next four months. Greeks' passion for the Euro strikes me a little bit like a nun's passion to preserve her virginity for heaven. She can and will be very proud of herself if and when she ever gets to heaven but just think of all the fun she has missed and how many sacrifices she has made in the meantime!

Not to mention the possibility that there might not be a heaven!

Sunday, February 22, 2015

Greece's Current Account: January - December 2014

Below are the figures provided by the Bank of Greece regarding the development of Greece's current account in 2014 relative to the previous year. Also, the last quarter of 2014 is compared to the last quarter of the previous year (in BEUR).


2014 2013
2014 2013
Revenue from abroad

Exports 23,6 22,5
6,1 5,7

Services (e. g. tourism) 31,1 28,0
5,9 5,4

Other income 3,4 3,4
0,8 0,8

Current transfers 6,0 7,7
0,9 1,4

---- ----
---- ----

Total revenue from abroad 64,1 61,6
13,7 13,3

Expenses abroad

Imports 41,6 39,8
10,5 10,0

Services (e. g. tourism) 11,3 11,0
2,9 2,7

Other expense (e. g. interest) 6,3 6,5
1,5 1,3

Current transfers 3,2 3,2
0,9 0,6

---- ----
---- ----

Total expenses abroad 62,4 60,5
15,8 14,6

Current account balance 1,7 1,1
-2,1 -1,3

Trade balance -18,0 -17,3
-4,4 -4,3
Services balance 19,8 17,0
3,0 2,7
Other balance -2,9 -3,1
-0,7 -0,5
Current transfer balance 2,8 4,5
0,0 0,8

---- ----
---- ----
Current account balance 1,7 1,1
-2,1 -1,3

1)  The surplus improved by 600 MEUR to 1,7 BEUR (+52%) which is remarkable. The improvement came as a result of foreign revenues' growing faster (+4,0%) than expenses abroad (+3,1%).
2) Towards the end of the year, the development became negative. The previous year had shown a deficit of 1,3 BEUR in the 4th quarter which deficit increased to 2,1 BEUR in the 4th quarter of 2014.
3) The most critical observation is that imports have started to grow again. It will be recalled that Greece's massive current account improvement since 2010 was almost exclusively due to a cut in imports, caused by the compression of domestic demand (exports increased only very moderately). 2014 was clearly a year where the downward trend in the Greeke economy seemed to have stopped. In fact, several statistics indicated that Greeks were gradually returning to spending money.

Conclusion: as Greeks spend more money, imports go up because the domestic economy cannot provide the products and services which Greek consumers desire in a sufficient amount, or not at all. There is no better argument to support structural reforms than this! The Greek economy will only begin to see the light at the end of the tunnel when increased consumer spending stimulates the domestic economy instead of the economies of other countries.

Saturday, February 21, 2015

Greece versus Eurogroup: "This Thing Ain't Over Till It's Over!"

I used to think that a successful negotiation is one where BOTH sides can walk away declaring themselves as winners and that the worst thing would be for one side to declare the other side as losers. Now it seems that both sides in the recent negotiations opted for the worst thing.

Finance Minister Schäuble made the rather cynical comment in his press conference that 'he was looking forward to seeing how the Greek government would sell the agreement to its supporters' and Finance Minister Varoufakis had the good grace of calling the Eurogroup 'mostly good lawyers trying to fix macro-economic variables they don't understand'.

The key next step is the list of reforms which the Greek government must submit by next Monday and which has to be reviewed by the IMF for approval. Naive people might expect that all discussions of learned people would now focus on the question of what appropriate and effective reforms should be on that list. Meaningful reforms which would also be seen by Greeks as meaningful. Instead, all the learned people seem to discuss only one subject: who was the winner in the negotiations and why?

The Greeks have demonstrated that they first want to win a battle before they focus on solutions. To simply agree on something without a battle does not seem to be the Greek way. The EU (particularly the Germans) has demonstrated that defending the bridge is the most important thing even though it might be a bridge to nowhere.

Let's remember what Yogi Berra said: "This thing ain't over till it's over!"

Thursday, February 19, 2015

Greek Negotiating Strategy a Phenomenal Failure?

Stephan Schulmeister is to Austria what Prof. Paul Krugman is to the rest of the world: the representative on Earth of God John Maynard Keynes. Schulmeister has been an outspoken supporter of SYRIZA, not necessarily for its party program but as the catalyst for a change in Europe's social and economic model of the last decades. When Alexis Tsipras visited Vienna recently, Schulmeister had organzied a demonstration in front of the Austrian Chancellory where they held out in heavy rain!

Schulmeister just gave this very interesting interview to Die Zeit Online (in German). What really caught my attention was the following sentence:

"The Greek negotiating strategy has failed phenomenally, and part of that is psychology. It appears like Mr. Varoufakis has a very strong ego and as an economist he is a newcomer to politics. Intellectuals who move into politics frequently make fatal mistakes because they think they are so smart. Regrettably: The prize for that is often paid by millions of people. That is what the Christian and Social Democratic politicians of Europe must not allow to happen!"

Hear, hear... that's all I can say about this!

Alexis Tsipras: A 'New Greece' Within 6 Months?

A reader referred me to this article ("Not all Greek") by Edward Hadas of Reuters. Here is a key excerpt:

"Europeans talk of structural reforms, but Greece is not merely a malfunctioning welfare state like France and Italy. Its relative poverty stems from a much deeper weakness - a shortage of the habits and practices needed to run sophisticated industrial complexes and complex educational and healthcare systems, or at least to run them well".

I don't remember how often I have voiced my critique that all these seemingly endless discussions/negotiations of Greece's debt are literally a waste of time and effort because they address only the 'derivative' of the problem. The 'underlying' is what Edward Hadas describes in his article: the real economy, the quality of institutions, the know-how in all areas, etc. etc. ONE CANNOT SOLVE THE PROBLEM OF THE 'UNDERLYING' BY ONLY PLAYING AROUND WITH THE 'DERIVATIVE'!!!

How does one change the 'habits and practices' necessary for social and economic development? Some of them can certainly be changed through legislation and executive action. For example, it may well be that SYRIZA scares the tax cheaters and smugglers so much that they will end up paying taxes voluntarily. But there are certain 'habits and practices' which cannot be changed through legislation because they require, among others, a change in value structures.

Greece desperately needs an accelerated transfer of know-how in all areas ranging from technical know-how to general know-how such as good corporate governance. I think the EU Task Force for Greece has been an outstanding platform to accelerate such know-how transfer (I am not sure, though, that it has really been used to its fullest advantage).

The other very important source of accelerated know-how transfer is my pet subject of foreign investments. Some people associate foreign investments with privatizations of state-owned utilities, investments in financial assets like bank or corporate shares, etc. These are certainly foreign investments in terms of bringing money to the economy. Whether they also bring know-how, growth, new employment, etc. to the economy can be quite a different matter. But one thing is for certain: as soon as the Greek economy would experience headwinds, such investors would leave again in a hurry.

But could we imagine that a very serious family-owned company like MIELE decided to concentrate all its production for Greece, South Eastern Europe and the Near/Middle East in Greece? Anyone who is familiar with the MIELE corporate culture knows how much that would mean in terms of know-how transfer. Technical know-how, corporate governance know-how, employee relations know-how, etc. And, of course: it would also bring a lot of money and generate a lot of employment!

Only if and when SYRIZA starts talking about these kinds of things will I begin to believe that they will create a 'new Greece'. Not quite in only 6 months like Alexis Tsipras has announced but probably within a few years and certainly within a generation!

Berlin, Why Do You Have a Problem?

The Greek application letter for renewal of the bail-out program includes the following sentence: "The Greek authorities are now applying for the extension of the Master Financial Assistance Facility Agreement for a period of six months from its termination".

The Master Financial Assistance Facility Agreement (MFAFA) is the umbrella agreement which governs EVERYTHING. For example, the Memorandum of Understanding (MoU) is an integral part of the MFAFA). When the MFAFA is renewed, EVERYTHING is renewed.

It seems to me that all the Eurogroup would have to say is: "We hereby accept your application for a 6-month renewal of the Master Financial Assistance Facility Agreement". Full stop. Whatever else is said in the application letter is for political consumption and/or for future negotiation but it has no legal value.

Now, by implementing new legislation to reverse certain reforms which the MFAFA had called for and which Greece had already implemented, Greece is de facto violating the MFAFA. Strictly speaking, if Greece means what it says (i. e. renewing the MFAFA), it would have to say at the same time that the new legislation would not be implemented. But these are two separate things: one is the renewal of the MFAFA and the other one are the possible violations of the MFAFA.

It will be most interesting to see on what grounds Germany & Co. will reject the application for renewal of the MFAFA.

Wednesday, February 18, 2015

Greece - Germany: A Clash of Cultures?

As I followed the news about the Brussels negotiations (Sorry! They are not 'negotiations'. At this point, we are only talking about 'explorations of common ground', 'discussions' and 'transformations'), some personal memories came to mind.

It was around 2006/07. My job was based in Munich working for an Austrian bank. German-Greek relations seemed to be just perfect. The crisis had not yet hit. I had found a Greek (from Crete) PhD candidate to give me Greek lessons. Eva was her name. One time we got talking about Greece and Germany. Out of the blue, she said something like: "I have come to know several European countries through my studies. There are no two cultures further apart than the Greek and the German culture!" I was perplexed? Why? Her answer was: Because! She explained that these differences would not come to the surface when the sun was shining but as soon as the first clouds would come up, the differences would explode.

Backtrack to the late 1970s. I was working in Munich then, too; that time for an American bank. I was in the socalled Multinational Banking Department responsible, as global relationship manager, for multinationals in Southern Germany. One of my multinational customers was based in Munich and had several large operations in Greece. Some readers might guess correctly as to who that was. As relationship manager, I was responsible for all relationships which my multinational bank had with this multinational customer throughout the world, and in Greece we were their largest foreign bank. So it was only natural that, one day, the Treasurer of the Munich HQ invited me to come along on a 2-day trip to visit their Greek operations which we were financing. It was a great 2 days of good business discussions and even better - and unforgettable - social events in the evenings.

On the flight back to Munich I had an aisle seat. Young and ambitious as I was, I didn't waste any time with drinks but, instead, started hand-writing my reports about the various meetings (PCs did not exist at the time). As I was fully concentrated on my work, I had a strange feeling in my back. I turned around and saw a rather heavy-set Greek sitting on the other side of the aisle. He smiled at me cynically and said: "Are you calculating how much your vacation in Greece cost you?"

I never quite figured out why that little sentence hurt me so much at the time; so much that I can still remember the feeling today. It felt like having been discovered at one of the worst human traits. At the same time, my culture didn't consider conscientious work (even if it had been keeping track of vacation expenses) as a bad human trait. It was the sheer human arrogance of the man; the displayed feeling of superiority in lifestyle, suggesting that only the dumb and simple-minded would do the kind of thing which I was doing. It was a bit like Zorba's making fun of the Englishman for reading so many books. Except, Zorba did it with charme whereas this heavy-set and saturated colossos of a man had no charme at all.

Let's turn to personal life. In a bi-cultural marriage, major differences of opinion (often referred to as 'fights') can erupt over the smallest things. The worst experiences for me were situations where very good intentions on my part (at least good intentions according to my culture) were considered to be mean things on the part of my wife (according to her Greek culture). Obviously, my culture required me to justify the good intentions which I had, only to be rebutted terribly. Thankfully, we have a son who can be very laid-back and rational. He would then say to me: "You are making a mistake! You are trying to respond rationally to a totally emotional reaction". Yes, I agreed, but...

I have now described a few situations of which I was reminded as I followed the Brussels exchanges in the last few days. Both sides make good cases which can be defended on a rational basis. The Greek Finance Minister is obviously a highly intelligent and eloquent person and his European counterparts are not dumb, either. They may both be right but, as one of my bosses once taught me, "The graveyards of the world are full of people who were right!" Even if they reach an agreement before everything explodes, they will not be able to bridge their cultural differences given the damage to each of their cultures which has taken place. In marriage terms, I guess that is referred to as "irreconcilable differences".

The Austrian solution to this kind of a problem would be rather pragmatic. One would get all the players involved together in a beautiful Greek island resort and fill them up with Ouzos until they all agree that they will be best friends forever.

Sunday, February 15, 2015

There Will Be An Agreement on Monday!

FinMin Varoufakis has stated that there will be an agreement on Monday for sure, perhaps only a couple of minutes before the door closes. That is exhilerating news, for sure!

This morning, I read that Varoufakis stated that "what has started is not negotiations but exploration of common ground" and that "the outcome of these explorations will help Monday's discussions". Ok, we now have got explorations and discussions. Unclear is to me when the negotiations will begin.

The most likely outcome for next Monday has been described as a typical Euro fudge formula that the creditors will call 'extension' and the Greek government will call 'transformation'. Ok, after explorations and discussions, we now have got transformations before we get into negotiations. All clear?

If the Greek FinMin commits that there will be an agreement, even at the 11th hour, then he suggests that he has things under his control. He certainly has the Greek side under his control. If it gets to the point of "either/or" and the others make signs that they are about to leave the room, the FinMin can quickly have a change of heart and ask where the dotted line is for him to sign.

Where it becomes a bit more difficult is where the Greek FinM thinks that he also has 'the other side' under his control. That may be the case but it also may not be. What should concern Greece is that, while Germany is playing its cards very close to the chest and not saying much publicly, suddenly other EZ-members are coming on the scene to voice their objections. Even if they agree to something at the 11th hour, will their parliaments at home agree to that as well?

Friday, February 13, 2015

Which Objective Fits The Displayed Strategy?

Like so many others, I have been trying to figure out what objective could be behind Greece's negotiating strategy. Before doing that, the task was to understand that negotiating strategy which ranged from "surprise & confuse" to "putting a gun to one's head and then demanding a ransom for not pulling the trigger", with a lot of shades of grey in between them.

As of now, that is Friday the 13th around 9 pm, I can think of only one objective for which this strategy would work very well: provoke a Grexit in such a way that the responsibility for it clearly falls on the EU and use that climate to negotiate very high alimonies.

I have been most impressed by the peaceful demonstrations in Greece in the last days. Something was set in motion here which is going to be impossible to stop. One has to be overwhelmed when seeing how the Greek people are obviously coming together with an utmost desire not only to regain dignity but, most of all, to regain self-determination. What I am feeling here would suggest that the Greeks would be prepared to assume all possible consequences and do "whatever it takes" to regain self-determination.

There is obviously no 100% self-determination when one shares a common currency with others.

Thursday, February 12, 2015

Eurogroup Meeting - Everything Went According to Plan!

Having spent my career in banking, my career was also one of negotiating. In the early years, my employer made us attend a number of negotiating seminars. Not even once did we deal with Game Theory. My employer was a large Mid-Western American bank and in the American Mid-West people don't have much patience for theories.

My interpretation of yesterday's Eurogroup meeting is as follows: certainly from the Greek side, everything followed a previously agreed-upon plan. That plan was to surprise and confuse people. If the EU Finance Ministers (plus top-level people like Mario Draghi and Christine Lagarde) perhaps expect a serious-looking, respectful Greek in a business suit, then come in your sports outfit. Since they have seen your sports outfit before, carry a scarf because that they haven't seen before. If they assume that, this being your first time in this high-caliber group, you might be a bit nervous or bashful, walk in like you own the place, like your are feeling like a million dollars (or Euros). If Schäuble is your greatest antagonist, walk over to him, pad him on his shoulder and smile like he was your best friend. If nothing else, Schäuble will get an embarrased look on his face.

Then, when the greetings are over and all the others excpect you to start with your PowerPoint presentation summarizing the details of your proposal, you You talk about the big picture of the Eurozone. You lecture about all those things which the others have heard from you ad nauseum before. You throw ideas in the air to demonstrate that Greeks are always about ideas. So, after a few hours, everybody has said to everyone else what he has said on numerous occasions before and it's time to put together a joint statement.

Now you have obviously agreed about the choreography with your boss in Athens before. You would haggle with hands and fists forever and only when the others are about to show you the door, you grudgingly accept the final draft which they are proposing. You create the impression that there has been full agreement and that you have been negotiating in good faith. Everyone is quite pleased with the achievement and some (including Mr. Schäuble) even leave the meeting. And then you think it's about time to pull the punchline.

While the secretaries are busy making the final changes to the joint statement, you demonstratively call your boss to inform him about the results of the meeting. And then you feign shock! What? The boss doesn't agreee with you? With the signs of shock in your face, you come back to the others and inform him that there will not be a deal after all. You show helplessness because you really thought it was an acceptable deal but your boss in Athens overruled you.

Of course, the remaining others are all mad at you but you don't give a damn about that and you let them feel it. However, as soon as you run into the journalists outside the meeting room, you tell them what a wonderful meeting it has been; how happy you are that you could present your and Greece's views; how much you learned and benefited from the others. And, finally: that you really looked forward to next Monday's meeting and that you felt sure that there would be an agreement then.

Outside the building, when no one can hear you any longer, you then call your boss in Athens and tell him: "Everything went according to plan".

Tuesday, February 10, 2015

Greece: Why Russia And Not China?

Gone are the times when the official line was 'there is no Plan B'. Now, the Greek Defense Minister has announced that there is indeed a Plan B, that plan meaning that Greece would turn to Rusia if it failed to conclude a satisfactory deal with the EU.

Off the bat, I have always expressed my view that it would be irresponsible not to have a Plan B (or C or D...), both for Greece as well as for the EU. If such a Plan B entails entering new alliances (while possibly damaging existing alliances), that's fair game, too, as long as one has prudently evalued ahead of such a decision all the possible long-term consequences of it.

But why Russia? Wouldn't China be the obvious candidate?

The statistics which I was once given by the Bank of Greece said that, since the Euro, China has had the largest current account surplus with Greece among all countries. Even a bit larger than that of Germany, the second largest. I don't think China had to reciprocate in any form or fashion, for example by participating in the rescue loans (the way I learned sovereign debt restructurings over 30 years ago is that everyone participates according to his own benefit). And China has been smartly taking advantage of some of Greece's major potential - shipping and logistics. In fact, China appears to be a clear winner of the Greek crisis, if I am not mistaken.

Wouldn't it be smart for Greece to start asking China what they are prepared to offer in exchange for all the benefits they have had from Greece?

Varoufakis: "Greece Must Default Within The Eurozone!"

"To conclude, Europe’s optimal strategy is to let Greece default, to allow the Greek government to find ways to live within its tax take for the next year or so and, at the same time, work out the Overall Solution to the euro crisis that was promised last year and never delivered. A Greek default will provide the clarity and the time-space to do this properly. The other two alternatives (more bailouts or a Greek exit) constitute cruel, unnecessary and unusual punishment. For the whole of Europe".

Details here.

A Harsh Greek Self-Critique

I had come across this article by Spyros Kitsinelis in Protagon (in Greek) through Twitter. The English cover line suggested to me that the article might be of interest to my Greek wife, so I sent it to her iPad. And then I heard an explosion from my wife. The best article she had ever read, she said. Greek expatriates like herself who had worked hard abroad and achieved a lot are ashamed of what their compatriots 'at home' had made out of her beloved country, she cried. How they had turned the most beautiful country in the world into a mess.

I sort of got the gist of the article through my wife's emotional outbreak. I then ran it through GoogleTranslate which gave me a poor translation but confirmed the gist. So I decided to publish it here and see what the reaction of Greek readers will be.

Monday, February 9, 2015

What A Beautiful Inaugural Speech!

The beautiful soundbites of the speech are still ringing in my ears, particularly the following excerpts (which I have taken the liberty to edit a bit): 

“The people said: ‘We will win,’ and we have won, so here we are today to celebrate the start of our victory! This victory belongs to those who suffered and endured under the name of dependence, the exploitation of a ruling class which was unable to vide progress and wasn't even concerned about it. We all know the truth, that the suffering of our people exists and persists because a few privileged people profit from them. But the day has finally come to say enough — enough of economic exploitation, enough of social inequality, enough of political oppression.

Today, we gather here to celebrate our victory and to mark the start of the liberation of the people, who are at last in power and are taking over control of their national destiny. We have received a society torn by social inequality; a society divided into antagonistic classes of the exploited and exploiting. We have inherited a society wracked by unemployment, which throws growing numbers of the citizenry into a situation of forced idleness and poverty. These masses are living witnesses to the inability of previous governments to guarantee everyone the elementary right to work.

The people of this country have risen up against all these forms of existence. Our victory was the result of their conviction that only a genuine 'new' government could stand up to the power of the ruling classes and at the same time mobilize all citizens to build a new republic. This is the great task which history has given us. To carry it out, I call on you today. The only way we who love this country and believe in it can overcome underdevelopment and build a new society is by putting all our shoulders to the wheel.

We are living at a historic time, that of a great transformation of the political institutions, a time in which the parties and movements which represent the most neglected social sectors are assuming power by a majority will. People's power means that we will do away with the pillars on which the minorities have found support — those minorities that always condemned our nation to underdevelopment. We will do away with the monopolies, through which a handful of families control the economy. We will put an end to a fiscal system that serves those who seek lucre, a system which has always borne down hard on the people and touched but lightly on the rich, a system which has concentrated the nation's savings in the hands of the bankers in their greed for amassing greater riches. 

Tell your people that here history will take a new course, that here the people have succeeded in taking the helm of their destiny to embark on a democratic course. This country in the process of renovation, this country in the springtime and an atmosphere of festivity wants, as one of its greatest aspirations, every man in the world to know that we are his brothers”.

I really found it remarkable that a new head of government who had been elected by only 36% of the voters but who had outclassed the conversative party which garnered only 28% of the vote would find such self-assured and motivating soundbites. No wonder that the crowds in Chile's National Stadium went berserk when Salvador Allende gave this inaugural speech on November 5, 1970.

Sunday, February 8, 2015

Greece: "Bridge Agreement" versus "Extension"

This evening, I watched a discussion about Greece on Austrian TV. The focus was on today's speech in parliament by Alexis Tsipras. The participants were not senior level but all possible views were represented. There were two key players: an Austrian economist who, in terms of mindset, could be a twin brother of Yanis Varoufakis and a German MEP who, in terms of mindset, could be a niece of Angela Merkel.

The twin brother carried the evening. He displayed a broken heart when lamenting that the EU, which normally gives a new government a friendly reception, had given the new Greek government an ice cold reception (he had apparently forgotten the reception which the new Austrian government received from the EU back in 1999 when the conservative party made a coalition which a socalled populist-right party which, compared to the Greek ANEL, was actually rather center). The niece interjected that this should not have come as a surprise to anyone after the SYRIZA leaders had offended just about everyone in the EU leadership during the election campaign. The twin brother said that this was a petty way of looking at things and my guess is that many viewers agreed with him.

The major - and very convincing! - argument of the twin brother was that it was only fair of the new government to request a bit more time, a bit of breathing space to prepare, present and negotiate their own plans in detail. "Is that really asking so much when one asks only for another 3 months of time?", the twin brother asked. I would guess that 99%+ of the viewers agreed with him.

Strangely, no participant nor the discussion moderator asked the key question: if all SYRIZA wants and needs is more time, why don't they simply request an extension from February 28 to May 31? The EU has already signalled that they would even agree to a longer extension than that.

Of course, SYRIZA's response would be that by requesting that extension, they would formally acknowledge and perhaps even accept an agreement which they reject outright. Formally, that is a correct argument but is this a time to talk about formalities? Aren't there situations where the end justifies the means? If SYRIZA can negotiate by May 31 all the things they want to have, no one will fault them for having formally and temporarily become party to an agreement which they were then able to negotiate away.

Beware of Misunderstandings About the Primary Balance!

I have received quite a bit of flak from commentators of late. Essentially, some feel that they have unmasked me for being only interested in numbers and not in people and for only caring about creditors' interests and not about a suffering people. I list below the 3 major articles which I have written about Greece's primary balance between 2012-14. Hopefully, they will help my critics to understand what my position is.

23 Dec 2012: Beware of the primary surplus!
30 Jul 2013: Primary surplus - the end of a process or the beginning of a challenge?
6 Apr 2014: Beware of Greeks bearing primary surpluses!

Saturday, February 7, 2015

More Than Only One Game of Chicken!

On more than one occasion in recent years, there was a showdown between Democrats and Republicans over the debt limit of the USA. During one of these showdowns, Charlie Rose had Warren Buffett on his show and asked Buffett to give his opinion about the showdown. True to form, Buffett gave a simply analogy. He said that this was like a Game of Chicken where both sides raced against each other to see who would give in first. And then Buffett said: "Except that one of the two sides has just thrown the steering wheel out the window!"

My assessment of the Greece-EU showdown is that, at least todate, neither of the two sides has yet thrown the steering wheel out the window. I wonder, however, whether the above Game of Chicken is the adequate analogy.

Those who remember the movie "Rebel without a cause" will remember a different kind of a Game of Chicken, namely the one which catapulted James Dean into cult status. In that version of the Game of Chicken, it is not two cars which are racing against each other but, instead, it is two cars which are racing towards a cliff. The opponent is the cliff and not the other party. Winner is the one who jumps out of the car last. James Dean jumped out at the very last moment and could barely hold on to the cliff while his opponent went down the cliff in his car.

The point is: in the James-Dean-version of the Game of Chicken, neither party can influence the outcome by throwing the steering wheel out the window and each party can be reckless without destroying the other party in the process. Whoever is reckless will only destroy himself.

And, most importantly, both parties can be winners if they jump out of their cars at the same time! One could call that a prudent compromise. Perhaps the game theorists on both sides should figure out how they can change the Game of Chicken from Warren Buffett's to James Dean's version.

Bail-Out of Greece or Bail-Out of Banks?

The above question is flooding twitter, blogs and newpapers once again. As valid as the question is, the answer is irrelevant for Greece.

My position on the Greek rescue loans has been clear and consistent from the beginning of this blog. I have called them 'the prodigal sin'. I have described them as follows: "The EU used Greece's balance sheet to bail out its banks and they called that 'help for Greece'". The rescue loans violated one of the most important principles in financial restructurings, namely that 'risk takers must remain risk carriers'. To top it off, I once even called for a Nueremberg Trial of EU elites for having committed this prodigal sin.

Having said that, I need to point out another thing, namely that the rescue loans, however ill designed they were, had no bearing on Greece's financial strength. The rescue loans did not overburden Greece with debt, as some think they did. They did not bury an entire nation under debt which was not even asked for.

Just suppose, for the sake of argument, that Greece's debt was 100 BEUR before the rescue. Those 100 BEUR were owed to a multitude of private foreign creditors. Now the EU made 100 BEUR in rescue loans so that Greece could pay off its private creditors. Fine, but at the end of this exercise, Greece had the same 100 BEUR of debt, only that it was no longer owed to private creditors but to the EU instead. It was only a change of creditors which has no bearing whatsoever on the level of debt of the borrower.

Not the Greek state should call for a Nueremberg Trial of EU elites because of this. Instead, it is the tax payers of the financing countries who ought to do that!

Now, what would have happened if the EU had not committed this prodigal sin? The private creditors would have had to write-down a very substantial portion of their Greek loans. Again, this would have had no bearing whatsoever on the level of Greece's debt. Suppose some major banks would have needed to be bailed out because of this. Again, no bearing whatsoever on the level of Greek debt. The tax payers' money would have been invested in those banks and in exchange for that, the tax payers would have received equity in those banks. For the rescue loans to Greece, the tax payers received nothing.

Finally, assume that some of the banks would have failed. Again, this would have had no bearing on the level of Greece's debt. Instead, it could have been quite dangerous for Greece. The liquidator of a bankrupt bank liquidates its assets at firesale prices. Whoever would have purchased the Greek assets would have put the kind of pressure on Greece as the vulture funds put on Argentina.

To summarize, from 2010-12, rescue loans totalled 247 BEUR, of which 206 BEUR went straight back to creditors via Greece's balance sheet. It was simply a change of creditors, no more. Had these 206 BEUR not rescued banks via Greece's balance sheet, they would have been available for direct bail-out's of banks. Personally, I guess that only part of that would have been necessary to bail-out the banks and the tax payers would have received nice equity in exchange.

The 'true help for Greece' was the 41 BEUR out of the 247 BEUR which stayed in Greece to finance the primary deficit, etc. Greece's austerity was due to the fact that the 'true help for Greece' was only 41 BEUR. It is - correctly! - being argued that the adjustment required of Greece was too much frontloaded. Ok, had the 'true help for Greece' been 82 BEUR instead of only 41 BEUR, the adjustment would have required much less front-loading. But it would also have required someone to lend 82 BEUR instead of only 41 BEUR.

To sum up: the myth is that the rescue loans allegedly overloaded Greece with debt. However, about 83% of the rescue loans were not fresh funds for Greece. They only replaced loans which had already been there. The overloading of Greece with debt was not done by the EU; it was done prior to 2010 by private lenders. The EU rescue loans only refinanced debt which had already been in Greece (and already spent, I might add). Those who blame the front-loading should be aware that this was not due to overloading Greece with debt but, instead, due to not providing Greece with enough debt.

At Y/E 2009, Greece's debt stood at 301 BEUR. At Y/E 2013, it stood at 319 BEUR. How did Greece get from 301 BEUR to 319 BEUR? I don't have the exact details but my estimation would be as follows:

301 BEUR + 41 BEUR (see above) + about 40 BEUR for Greek bank bail-out's - 60 BEUR of PSI = roughly 319 BEUR. Give or take a few billion, but what's a few billion Euro these days, anyway?

Friday, February 6, 2015

What's Another 3 Months of Austerity in the Grand Scheme of Things?

The Greek side seems rather clear: Greece wants another 3 months of time (until May 31) to negotiate a mutually satisfactory deal (they call it 'breathing space'). The EU side says that Greece must comply with the program or else... It should be noted, however, that the EU side has signalled long before the election that a program extension of up to 6 months for the purpose of facilitating responsible negotiations would be favorably considered if Greece makes a request.

So it's all about face, as the Chinese would say. Greece feels it cannot request the extension of a program which they have promised to kill right away and the Finance Minister argues that he cannot request the extension of a program which he has described many times as 'fiscal waterboarding' for Greece.

But what's the big deal about losing face when one is not talking about returning to a much hated program but, instead, only about extending it for another 3 months so that a truly good program for Greece can be negotiated? Isn't the saying that the end justifies the means? Can one not explain to SYRIZA voters that another 3 months of the much hated austerity is a small price to pay for eventually getting an optimal solution for Greece?

Thursday, February 5, 2015

Greece: Will I See The Erred Ways of My Thinking?

"The EU elites did not know that, outside of Western Europe, sovereign debt reschedulings have come a dime a dozen in recent decades" - Willem Buiter back in 2011.

Around the same time, I watched an The Economist interview with William "Bill" Rhodes, the Grand Seigneur of sovereign debt reschedulings. He said (and I quote from memory): "I have told Mr. Papandreou (the then Prime Minister) that any program must be 'his program'. That, if not, he will lose the support of the people. Greece should reschedule debt maturing in the next years with a new bond. At first, the new bond will trade at very low rates but as the markets recognize that Greece is implementing 'its' program, the bonds will rise in value".

At long last, Greece (or rather: SYRIZA as the new Greek government) is coming around to doing, at least verbally, what should have been done by a Greek government from the start: rally the citizens behind a cause; take and "own" the initiative to reform Greece; regularize debt by rescheduling it instead of a haircut; etc. etc.

Admittedly, FM Varoufakis has so far not believed in the theory that the closest distance between two points is a straight line. Instead, he has been doing an incredible amount of slaloms in his first days in office. But what matters is, as Churchill said, that one eventually does the right thing, perhaps after first exhausting all alternatives.

In the book "Why Nations Fail" (Acemoglu/Robinson), the argument was made that a society with a well entrenched and corrupt elite is virtually impossible to reform from within because it would require the elites to self-amputate themselves. The implication was that the change from without would have to be something like a revolution.

Let's just assume for a moment that SYRIZA might indeed mean what they say and that their leadership is really untainted by any of the Greek sins like cronyism and corrupution. If that were the case, SYRIZA would have the unique chance of proving that there can be a Third Way: to reform from within without a revolution. Many if not most of the soft facts suggest that SYRIZA might just be that White Knight who converts Greece into a fair and just society and who goes fearlessly after the parasites. It's too soon to look for hard facts but if supporting hard facts do not show up within a few months, then one could conclude that SYRIZA has missed its chance.

Personally, I now find myself in a very curious situation. I had become quite certain in the last couple of years that SYRIZA would blow it if they came to power; that they would run Greece into the ground. And yet, I now see a lot of soft facts which could suggest that they plan to do a lot of those things which I have recommended in this blog for 4 years.

I once wrote a series of articles under the title "Seeing the erred ways of my thinking". There were 12 such articles in total. Perhaps 13 will turn out to be a lucky number. If SYRIZA can prove with hard facts that they mean what they announced with soft facts, then I will write a 13th article in this series and I will title it: "Seeing the erred ways in my thinking - SYRIZA".

Wednesday, February 4, 2015

On Being Finance Minister of a Bankrupt State

On several occasions I have now read statements by the Greek Finance Minister Yanis Varoufakis that Greece is insolvent. In this interview with Die Zeit, he even declares that he is the Finance Minister of a bankrupt state.

I am no lawyer but it seems to me that when the CFO of a borrower, be that a company or a state, declares himself bankrupt, that could have some very, very serious consequences. Anyone who is extending financing to the borrower could become liable for grossly negligent conduct if he made new loans and/or did not call back existing loans immediately.

I am no lawyer but it seems to me that this is a declaration of default.

Tuesday, February 3, 2015

What Is A Perpetual Bond?

The world of high finance is full of wonderful instruments and structures. To put them to use is called 'financial engineering'. I have always wondered why, so far, non of Greece's debt has been 'financially engineered'. However, progress is under way and now the media have found a new expression of the year: Perpetual Bonds! And what, exactly, are perpetual bonds? I will try to explain in layman's terms.

A Perpetual Bond is also referred to as an Evergreen Bond. To sum it up: those bonds must NEVER be repaid, not in full and not in part, as long as the terms of the bonds are complied with. The most important such term is the payment of interest.

A Perpetual Bond is, in essence, a play on interest payments. Since the principal never gets repaid, there is no need to worry about the repayment of principal. The only worry is to be had about receiving interest payments on time.

Suppose the bond is for 100 units and the interest rate is 5% p.a. That means the borrower has to pay 5 units in interest every year. Suppose the borrower is viewed as troubled and people worry that they might not receive the next interest payment. So they won't pay 100 when they buy the bond but perhaps only 50. If they can buy it for 50 and the next interest payment is made on time (5 units), their return is all of a sudden 10% and no longer just 5%. Nota bene: this process works exactly the same way in reverse!

A Perpetual Bond is a wonderful substitute for a rating agency. When prospects are positive and the next interest payment is very likely, the bonds will rise in value. When prospects go South, the bonds will fall in value. Look at the price development of the bonds and you will know how the market rates the borrower.

FM Varoufakis to EU: "Help Us Reform Our Country!" And the EU's Response Should Be?

Finance Minister Yanis Varoufakis is quoted in the Ekathimerini as follows: "I’ll say, 'Help us to reform our country and give us some fiscal space to do this, otherwise we shall continue to suffocate and become a deformed rather than a reformed Greece'." The proper EU answer to this request should be as follows:

"In October 2011, the EU Task Force for Greece (TFGR) was formed with the mission statement that it is 'a resource at the disposal of the Greek authorities as they seek to build a modern and prosperous Greece: a Greece characterised by economic opportunity and social equity, and served by an efficient administration with a strong public service ethos'".

Put differently, the TFGR is like a platform which organizes the best resources of all EU countries to help Greece in supporting growth, employment and competitiveness, in enabling growth through reform of Greek public administration and in maintaining progress towards fiscal consolidation. Who has the best educational system? Finland? Ok, get them down here ASAP! Who has the best public service? France? Ok, get them down here ASAP! Who has the best social re-destribution system? Austria? Ok, get them down here ASAP!

For over 3 years now, I have been lamenting in this blog that Greece did not really take advantage of the TFGR. Here is one of my major appeals. Perhaps the new Greek government will wise up to the fact that they have a tremendous resource at their disposal. A resource where other developing economies might say "We should be so lucky as to have such a Task Force!"

SYRIZA Will Always Do The Right Thing - After Exhausting All The Alternatives!

Once again, a Churchill quote describes the situation adequately. What Churchill said about Americans can now be said about Greece and its Finance Minister. Finally, they are embarking on a strategy which avoids the haircut issue (which would have brought hardly any cash flow benefit for Greece's budget but caused one-time pain for creditors) and they are moving towards a smart extend-and-pretend strategy (which has far greater benefit for the budget and allows creditors to spread the loss over time).

I have argued ad nauseum in this blog that the most important issue in a sovereign external payments crisis is that the debt gets 'regularized'. Since the debt can't be repaid, anyway, it should be structured on sound footings so that the problem doesn't pop up every few months and all resources can be devoted to other, more important things like getting growth into the economy.

There are really only 2 things to negotiate: (a) the amount of annual debt service (interest) which can be expected to burden the Greek budget and (b) the length of the interest moratorium. Once these 2 points are agreed upon, the matter can be passed on to financial engineers who will translate that into the optimal structure of new bonds. The annual interest burden should be linked to government revenues instead of GDP because, that way, the interest is linked to the revenues out of which interest must be paid. Also, the % of government revenues is optically higher than the % of GDP which would make it easier to sell it to foreign tax payers. Finally, the length of the moratorium is more important than the interest burden because interest doesn't get paid during the moratorium, anyway.

The third post I had made in this blog (June 18, 2011) was a letter which I had written to the then President of the ECB, Jean-Claude Trichet. Here is the key paragraph: 

"If handled well, it wouldn’t even take as long as 3 months to come to something like the following as an agreement: Greece will prepay the entire 410 billion EUR of foreign debt. In the absence of necessary cash, Greece will pay with 20-year bonds for 50% of that foreign debt; 10-year bonds for 30% and 5-year bonds for 20%. During the first 5 years, 2/3 of the interest will be capitalized in order to preserve cash. And needed Fresh Money will be in senior position to the bonds. No “haircut” whatsoever and everything so “unanimous” and so “voluntary” that no smart lawyer can construe an Event of Default".

Those would have been reasonable terms 4 years ago. Today, one has to talk about a maturity extension of 50 years or more (instead of 20 years) and an interest moratorium of 10 years or more (instead of 5 years). More importantly, all the time which has been wasted during the last 4 years with discussions/negotiations about debt could have been used for designing growth measures. And, last but not least, much of the damage to Greece's reputation would have been avoided.

Even Prof. Paul Krugman writes that "SYRIZA is making sense now". What a surprise! Not too long ago he argued that a Greek haircut was unavoidable!

PS: Whether it was smart to accounce the new strategy to third parties in London instead of first discussing it with major creditors is a different matter...

Monday, February 2, 2015

Don Vito Corleone? Or Sonny or Michael?

Prof. Paul Krugman made the following brief comment in this article in his blog: 

"At the moment, Germany is talking as if it intends to follow the MichaelCorleone strategy ("My offer is this... Nothing!"). But do we really think that Syriza will or even can retreat with its tail between its legs immediately after winning a dramatic election victory? Again, wanna bet on it"?

This comes from Godfather II. I have previously suggested to SYRIZA that they should rather look to Godfather I. In an article prior to the June 2012 election, I wrote the following about an interview with Mr. Yiannis Dragasakis, now the Vice Premier of Greece: 


It seems to me that what we have seen in the first week of the new SYRIZA government is quite a few hot-blooded Sonny Corleone's but not one single Godfather. Some think that it is a good strategy to change the tune at least once every day just to confuse the other side and keep it guessing as to what your real motives are. Vito Corleone would have told his followers that they should never let the other side know what they think and talk as little as possible because nothing confuses the other side more than no talk at all. 

And then, of course, never demand anything! Just make them offers which they can't refuse! And after they accept the offer, thank them very nicely! 

Greece: Perhaps a "Fourth Round"?

What we learned in my school days about civil wars was the following: there are bad guys (typically the Communists) and good guys (typically all the others), and - thank God - the good guys always win. Except for Cuba where the Castro's were still in power but they, of course, wouldn't last very much longer (so was the prediction in the mid/late 1960s...).

I have always been fascinated with historical and other writings about the Greek Civil War. The fascination was due to the fact that it really didn't fit the simple model of good guys and bad guys. In fact, my impression was that the ELAS during the Italian invasion and the early German occupation were really the good guys. The true patriots. Those who told the Greek youth that "it is for you that we all embark on this struggle! To put shoes on your feet, food in your children's mouths! We are fighting to change your life, to raise you up from poverty and humiliation, to make you men!"

There was the First Round, the Second Round and after the Third Round the then Communists were routed. But do the wounds of a civil war ever go away? Particularly when they are never treated? As far as I can tell, the Greeks closed the book on their civil war so that it be forgotten. But the wounds, particularly those of the humiliated side, last for a long time, for generations.

When one talks to Southerners in the USA, one often gets the impression that, in their minds, they still haven't capitulated to the Yankees. In Greece, I have never been able to have any meaningful dialogue about the Civil War. The subject was always blocked out of the conversation. I have met a number of people whose mindset was such that I got the clear impression as though they were grand-children or great-grand-children of ELAS fighters but they seemed very secretive about it. As though one would have to fear, even today, to show that one had sympathies for the alleged bad guys.

I recently corresponded about this with a Greek who is a well-known intellectual with a SYRIZA orientation. His response was: "The civil war is in us, deeply embedded in our cultural and spiritual DNA".

Are we perhaps seeing now the Fourth Round, the political and economic alternative to the military version? If the intellectual turf of today's SYRIZA has any relation to the ELAS of the early 1940s, then SYRIZA should learn from the past. The reason why ELAS eventually failed, so I read, was they they could't keep their act together. From what I have read, ELAS could have had Greece in 1944 but they were more focused on their internal divisions.

Allende had wonderful ideas and visions for a better Chile. Over time, he got carried away by his ideas and visions and lost touch with reality (supported in that process by Fidel Castro, just like SYRIZA is now being supported by Podemos). He also lost control over the movement which he had started and he became more and more autocratic. At the end, he even violated the constitution, thereby giving the military an alibi for intervention. But - Allende is still the darling of intellectuals and others throughout the world.

So here is a perspective for Alexis Tsipras. He really can't lose. If he fails, he will go down into history as the Greek who would have changed Europe if only the evil powers of the world had not sabotaged him. And if he succeeds, he deserves a Nobel Prize, anyway.

Greece: Primary Budget Balance for January 2015

One of the key figures which I am waiting for are the January results in the primary budget balance. For the entire year of 2014, the Medium Term Fiscal Strategy MTFS (at least the version which I am looking at) called for a primary state budget surplus of 2,8 BEUR. The actual result was 1,5 BEUR. Here it is important to note that, in November and after 11 months, that balance had been 3,6 BEUR, followed by a primary deficit for December of 2,1 BEUR.

The January results should indicate whether the deficit of December was the beginning of a new (negative) trend of only a one-time aberration. Let's hope it will be a positive number because the budget for entire 2014 is a surplus of 3,6 BEUR, more than twice the actual result of 2014.

If, however, the January results were significantly negative (and below budget), then SYRIZA should change its tune towards Greece's creditors. The new expenses which SYRIZA has implemented will probably start ticking in February. If Greece is heading for deficits in the primary balance, SYRIZA's argument that Greece can survive operationally without further funds from abroad is out the window.

Sunday, February 1, 2015

Tispras & Varoufakis: Good Cop & Bad Cop?

Below is the text of an email which Alexis Tsipras allegedly sent out Friday evening. I don't know who exactly he addressed it to. Allegedly to 'business'. 

"The deliberation with our European partners has just begun. Despite the fact that there are differences in perspective, I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole. No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt. My obligation to respect the clear mandate of the Greek people with respect to ending the policies of austerity and returning to a growth agenda, in no way entails that we will not fulfill our loan obligations to the ECB or the IMF.

On the contrary, it means that we need time to breathe and create our own medium-term recovery program, which amongst other things will incorporate the targets of primary balanced budgets and radical reforms to address the issues of tax evasion, corruption and clientelistic policies. I am  convinced that an agreement on these lines will be acceptable to our partners, because our common interest is the economic stability and recovery for our common home, Europe."

Thursday evening he wouldn't have had to send such an email because the meeting with Martin Schulz, although 'open and constructive', seemed to have left all doors open. At least Schulz said so on German TV that evening. On Friday, a couple of doors were slammed, apparently provoking the above email.

This raises the question of how close the communication between Tsipras and Varoufakis is. It could be that it is not very close and that there is still some confusion as to who the boss is. Or it is so close that the good-cop-bad-cop routine has become second nature to them. Time will tell.

FM Yanis Varoufakis on February 18, 2012

Given developments, it is highly recommendable to re-read this article which the new Finance Minister Yanis Varoufakis published almost 3 years ago!

Greek default does NOT equal Grexit!

12 Billion Euro In New Tax Revenues? Just Like That?

Many people North of the Alps were shocked by the fact that a government South of the Alps kicked off its reign by keeping election promises. The implementation of the accouncement to spend 11 BEUR on all sorts of things which sound wonderful is more or less equivalent to a unilateral cancellation of Troika-Agreements. It has the attributes of a small revolution.

When the Habsburg Emperior Ferdinand I. saw the revolutionaries of 1848 making lots of noises, he asked Count Metternich what was going on down there. Metternich replied that they were making a revolution. To which Ferdinand replied with the following question: "Are they allowed to do that?" They may not have been allowed to do that but that didn't save Ferdinand's job.

One small detail has not been discussed very much about the above extra spending, namely: Greece would not borrow money to finance it. No! Greece would raise new tax revenues from tax cheaters, smugglers and other parasites of Greece. Now if that is not sensational, I don't know what is!

The obvious question is: If that 's really so easy, why wasn't it done before?

In all likelihood, this will not work out as planned because the new expenses will come a lot sooner than the new revenues but still: if SYRIZA manages to collect new tax revenues from tax cheaters, smugglers and other parasites in the near term, then they would receive a lot of international respect.

Perhaps the new government should get a bit away from narcissistic ego displays which alienate a lot of people and focus instead on those things where they could really gather a lot of international respect. I would venture to say: if SYRIZA indeed manages to collect before the end of this year 12 BEUR in new tax revenues from tax cheaters, smugglers and other parasites of Greece, they would certainly have my respect!