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Greece’s new Radical Left SYRIZA-led government is spinning that while it backed down on campaign pledges it won negotiations with lenders, and some around the world agree.

Greeks Went 0-for-3 vs. The Eurozone, But Maybe Won

The New Yorker – James Surowiecki

At first glance, Tsipras’s positive comments look like spin. Syriza came to power vowing to win a reduction in Greece’s enormous debt burden, to reject the budget commitments that the previous Greek government had made, and to liberate Greece from supervision by the so-called Troika—the European Central Bank, the International Monetary Fund, and the European Commission—that has been vetting all the country’s fiscal decisions in recent years …

Yet the new agreement makes no provision for debt reduction. It says that the extension will take place only within “the framework of the existing arrangement.” And Greece’s plans will still be evaluated by the same three institutions. From that angle, the Greeks went 0 for 3 …

If you look a little harder, though, you can see that Greece won important breathing room. Heading into the negotiations, the country faced budgetary targets for 2015 and 2016 that would have kept the economy stuck in recession—it has shrunk by thirty per cent since 2008—and prevented the government from doing anything about poverty levels that many observers say constitute a humanitarian crisis. The targets are now up for revision in future talks—a significant concession.

Eurozone Recovery Undercuts Greek Leverage

Wall Street Journal – Simon Nixon

After weeks of brinkmanship between Greece and the eurozone, one might think the outlook for Europe was bleak. Since the election of a radical leftist-led government in Athens in January, a breakup of the supposedly irreversible single currency has looked more likely than ever. It took an 11th-hour deal finalized last week to avert imminent Greek bankruptcy—and already this fragile truce is under strain …

Eurozone policy makers claim that they only tolerated a degree of vagueness in a list of Greek reform commitments required as part of that deal to help Athens obscure the scale of its climb-down from its domestic audience. But Athens insists the lack of detail is evidence of “constructive ambiguity” that leaves the exact nature of what it has agreed open to continued negotiation. Thus the uncertainty over Greece’s fate is set to continue …

Yet focusing on Greece only tells part of the story. Equally important to the long-term fate of the currency bloc is growing evidence that the recovery is strengthening, thanks to a weaker currency, which has fallen 19% against the dollar since the start of 2014; a falling oil price, which is likely to add up to 1.5 percentage points to the level of output this year, according to Huw Pill, chief European economist at Goldman Sachs ; and the lower borrowing rates and boost to confidence from the European Central Bank’s new government-bond buying program due to start this week.

Greece Forced Into Purgatory To Save Euro

The Telegraph – Roger Bootle

Whereas the drop in UK GDP, from peak to trough, was about 6pc, in Greece it was more like 25pc. What’s more, that is where GDP stands today. I cannot stress enough how extraordinary a fall of this magnitude is. It is roughly the size of the drop in output in Germany and America in the 1930s. In the postwar world, there is no experience that bears comparison …

The Greek public sector has been appallingly wasteful and making it less so is an important part of boosting Greece’s sustainable growth rate. But the current priority is not that, but boosting Greece’s actual growth rate now – and that is all about demand. There is no such thing as a free spending cut. Even tax evaders and under-employed public servants go shopping …

Why do the IMF and the other lenders persevere with this destructive path? The answer is IMP: “It’s mostly political.” That is to say, it is driven by the overriding will to keep the euro on the road.

The post World Press View: Greece Shows Losing Winning appeared first on The National Herald.

Source: The National Herald
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