Time To Go?

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I was encouraged to read this Reuters report in The Times which suggests that if the  Greek Government doesn't get serious over its tax and spending plans, then the rest of Europe will simply turn off the taps.

Ever since the Greek general election, Syriza has repeated the same broken-record theme that the problems of Greece have been caused by everyone else, in fact just about anyone other than the Greeks themselves.

Yet one of the first acts of the new Syriza-led, left-wing Greek Government was to abolish a tax on second homes which by any standard across Europe is an obvious sign of relative wealth and affluence.

So does the problem really lie with the rest of Europe or does it rest with the fact that the Greeks as a nation are none too fond of paying their taxes. 


EU draws up secret plans to kick Greece out of the eurozone


The atmosphere has been further poisoned by talks between Alexis Tsipras and President Putin 


By Alexander Zemlianichenko/Reuters

Eurozone countries are secretly drawing up plans to expel Greece from the European Union’s single currency as they prepare for the country to be declared bankrupt next month.

A memo drawn up by the finance ministry in Finland, which is closely allied to Germany, has revealed preparations for a Greek exit from the euro.

The document warns of “very difficult political decisions” this spring amid predictions that Greece will be bankrupt next month unless the eurozone agrees the next tranche of aid for it within the next three weeks.

Greece has been given until next Friday to come up with a new programme of reforms that must then be agreed by all its eurozone creditors to unlock €7.2 billion (£5.2 billion) of loans needed to pay bills in May and June.

Finland, Germany, Austria, the Netherlands and others are not prepared to release the cash until Greece’s left-wing government actually legislates on key austerity measures it was elected to oppose.

Without urgent legislation in the coming weeks, Finland expects Greece to give “prior notification” that it will not be able to pay back the €763 million that is due to the International Monetary Fund on May 12, putting the Greek government in default.

“By tacit approval of the other eurozone countries a process is started that in effect results in Greece being expelled from the euro,” said the confidential Finnish document, dated March 27 and leaked to the Helsingin Sanomat newspaper.

Finland is convinced that, following reforms over the past three years and measures taken by the European central Bank, the euro can weather the storm of Greece leaving the single currency.

In a sign that time is running out more quickly than expected, Greek bank deposits fell yesterday indicating a capital flight of more than €1 billion in the first week of April. The unexpectedly rapid deterioration led the European Central Bank to almost double emergency bank assistance to Greece.

Greek finances are expected to be stretched to the limit next Tuesday as the government pays public sector payroll and pensions bills.

On April 20, Greece must pay €80 million in interest payments back to the ECB, leaving the government’s coffers empty unless the EU agrees further aid payments.

Trust between the eurozone and Greece reached a new low during talks this week with a demand that legislation on labour market reform, pension cuts and privatisation is passed by the Greek parliament before any aid is released.

“Greece has been asking for urgent support over the next two weeks but there is no willingness until people see concrete progress,” a European official said. “Patience has run out.”

The atmosphere has been further poisoned by cosy talks between Alexis Tsipras, the Greek prime minister, and President Putin of Russia in Moscow yesterday. “Only together with Russia are we able to build a new architecture of security in Europe,” Mr Tsipras said.

EU countries are warily watching the talks. Under a deal being negotiated in Moscow, Russia is offering to give Greece cash based on future profits from shipping Russian gas to Europe through a new pipeline. EU official see it as a sign that Greece is planning to insulate itself economically from the effects of leaving the eurozone.

Speaking to students, Mr Tsipras revealed that he and Mr Putin had found a way to resume Greek agricultural exports, blocked last year under Russia’s ban on western food in retaliation for EU sanctions.

Diplomats fear that the looming bankruptcy is pushing Greece into Russia’s arms. Mr Tsipras, who says that Germany should pay up to €279 billion in war reparations to Greece, is expected to be the only EU leader to attend celebrations in Moscow next month of the 70th anniversary of the Allied victory in the Second World War.

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