Stocks rallied on Monday amid news that the Greek financial crisis was under control, and a bailout deal had been agreed upon, but that might have been a hasty celebration.
There is late word that the deal is proving to be a tough sell in Greece, as detractors launched a Twitter hashtag campaign declaring the terms so harsh that the plan amounted to a coup against the Greek government.
There are also some in Europe who think the deal is too indulgent of Greece in some of its core concessions about permanent status as a debtor nation, and those who believe Greece should be either immediately booted from the Euro or put on a multi-year glide path to an exit. However, the most fervent criticism runs the other way, leading to a trending hashtag on Twitter called #ThisIsACoup. Many of the comments in this stream essentially accuse Germany of either attempting to subjugate Greece with harsh bailout terms or cooking up a deal so clearly unacceptable that it will force Greece to refuse and exit from the Euro.
The tag was attached to tens of thousands of angry comments denouncing German-inspired proposals for European Union-directed reforms of Greece’s public administration and demands that Athens pass new laws within days to raise taxes and cut back on pensions.
It was given impetus when Paul Krugman, the Nobel laureate economist, praised it on his New York Times blog: “The trending hashtag ThisIsACoup is exactly right,” he wrote. “This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.
“It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.”
Pablo Iglesias, the secretary-general of Spain’s anti-austerity Podemos party, joined in tweeting: “All our support to the Greek people and his government against the mobsters #ThisIsACoup”.
According to the Guardian, one of the proposals most incendiary to Greece is “a suggestion that some €50bn ($56bn) of Greek public assets be placed in an independent trust based in Luxembourg, out of reach of Greek politicians, the proceeds of which from privatizations would go directly to pay debts.”
On the contrary, that sounds like a brilliant idea, something that should be imposed on every spendthrift band of leftists on the planet. If there is one thing they have proven, time and time again, everywhere from Athens to Washington DC, it is that you cannot trust any of their long-term promises about “lockboxes,” or how they will pay off debt with the money from tax increases or other revenue streams.
The weekend began with proposals from the Greek government, which one supposes would make them accomplices to the “coup” that is supposedly going to remove them from power. According to Time’s account of the “grueling” 17-hour meeting in Brussels, Eurozone leaders had some tough counter-proposals, leading to a final deal in which Greece “bowed to nearly all the demands of its creditor nations, especially Germany, and had taken on commitments that would be extremely difficult for the Greek government to fulfill without losing the trust and support of its electorate.”
Time describes a chastened Greek Prime Minister Alexis Tsipras working to “regain the trust of his counterparts from wealthy European nations,” agreeing to “very quickly legislate” some “painful reform measures.” The Financial Times quoted a Eurozone official saying, “They crucified Tsipras in there. Crucified.”
The socialists of the Syriza Party gambled heavily that Europe would pay any price to avoid default and a Greek exit from the Euro. They lost, so instead of shrieking about “coups” and portraying their German creditors as vampires, maybe the Greek people should direct some ire at Tsipras, former Finance Minister Yanis Varoufakis, and the rest of the grifters who convinced them a fresh load of ransom money would be arriving from Europe at any minute.
The last straw for Europe—particularly Germany and Finland—was the Greek “anti-austerity” referendum on July 5th. The spectacle of left-wingers celebrating the referendum as some sort of revolt against tyranny produced many a pursed lip among Greece’s creditors. “I said before the referendum that the situation would be worse after the referendum,” Time quotes European Commission president Jean-Claude Juncker saying. “This has proven to be true.”
That is why Greece wound up with a deal even tougher than the one they voted against. “Indeed, the terms of the bailout that European leaders agreed over the weekend were far harsher than the ones Greek voters had rejected only a week earlier,” Time writes. “To regain the trust of its creditors, Greece will have to scrape together about $50 billion in state assets, which will effectively be used as collateral on the latest package of emergency loans to Greek banks and the Greek government. None of Greece’s previous bailouts have included such draconian terms.”
Yes, and that is why none of them worked, and we ended up here. At this point, half of the world media is reporting rended garments and gnashed teeth over the draconian bailout coup, while the other half carries optimistic declarations that a crisis has been averted. At the time of this writing, it was possible the Greek parliament could still scuttle the deal, which would probably make the financial markets go nuts.