Complete Humiliation: Greek Parliament Pressed To"Approve" German "Coup"

Complete Humiliation: Greek Parliament Pressed To"Approve" German "Coup"

Submitted by Tyler Durden on 07/14/2015 10:16 -0400 

Months ago we said the following about the future of Greek politics:

It is becoming increasingly clear that the Syriza show will ultimately have to be canceled in Greece (or at least recast) if the country intends to find a long-term solution that allows for stable relations with European creditors although it may be time for Greeks to ask themselves if binding their fate to Europe is in their best interests given that some EU officials seem to be perfectly fine with inflicting untold economic pain upon everyday Greeks if it means usurping the 'radical leftists.'

At the risk of overstating the case, that assessment has now proven to be almost entirely accurate. 

Greeks did indeed ask themselves if they wished to bind their fate to European "partners" who seem bent on punishing the country for its decision at the ballot box in January and nearly two-thirds of Greeks said the terms of continued EMU membership as presented by creditors were unacceptable. 

Despite that clear mandate, PM Alexis Tsipras declined what some (The Telegraph’s Abrose Evans-Pritchard for one) have suggested was a better option in German FinMin Wolfgang Schaeuble’s 5-year, Brussels managed, “time-out”, in favor of a deal so bad that it might have only been proposed because no one thought he would accept it. 

Now, Tsipras must push that deal through a Greek parliament where Syriza party hardliners - who tabled a proposalto default and exit the euro months ago - are quite simply beside themselves. The likely result: a party reshuffle and a recasting of the Syriza show, exactly as we said. Here’s Bloomberg with more on the political infighting:

Greek Prime Minister Alexis Tsipras faces two days of parliamentary maneuvering in Athens to secure approval for a package of austerity measures that threatens to break his coalition apart.

With all 18 fellow euro-area governments looking on, Tsipras is set to submit a bill to parliament on Tuesday containing sales-tax increases and pension cuts that go against his own Syriza party’s pledges. The legislation, to be voted on Wednesday, is a precondition for creditors to begin talks on a new loan of as much as 86 billion euros ($94 billion).

Dozens of Syriza lawmakers have said they will rebel against the cuts, forcing Tsipras to rely on opposition support to carry the legislation needed to keep Greece in the euro. Panos Kammenos, the defense minister and leader of Tsipras’s Independent Greeks junior coalition partner, said his lawmakers will only back those measures agreed by Greek political leaders and not those imposed by creditors, which he denounced as an attempted "coup d’etat."

"Despite potential defections" among the coalition "we think the deal will be approved with the support of opposition parties," Roubini Global Economics analysts led by Nouriel Roubini said in a note to clients. Yet the legislation means Greece "will have to endure significant austerity measures and other types of reforms, all of which are hard to implement, hard to reinforce and possibly hard for the public to accept."

And more color from FT:

Greek prime minister, on Tuesday will seek to shore up support within his own government after he accepted the most intrusive programme ever mounted by the EU as the price for a new €86bn bailout to keep Greece in the eurozone.

Mr Tsipras looks set to be forced to rely on opposition support to pass a swath of economic reform measures by Wednesday’s EU-imposed deadline or face the country’s bankruptcy, as a growing number of far-left MPs voiced opposition to the deal. The ruling Syriza party’s extremist Left Platform called it a "humiliation of Greece".

The leader of the Independent Greeks, the rightwing coalition partner, also said that his party could not agree to the accord, calling it a "coup by Germany" and its hardline eurozone allies, the Netherlands and Finland.

Marina Chrysoveloni, the Independent Greeks spokeswoman, said on state TV on Tuesday there were “limits” to the party’s support for the government “that are shaped by the mandate of the Greek people, both in January’s elections and in the referendum”.

Greek political leaders said the legislation was not at risk of failing because it had wide support of mainstream opposition lawmakers, who would make up any government defections in the 300-member legislature.

But the insurrection called into question how long Mr Tsipras could survive as prime minister once the legislation was passed. Nikos Filis, Syriza’s parliamentary spokesman, called on any government MPs who did not back the plans to resign.

With 17 government MPs failing to support a far more limited plan offered by Mr Tsipras last week, the prime minister seemed almost certain to lose his parliamentary majority, which currently stands at 12. Some analysts believe that the number of rebels could swell to as many as 30. Already, 15 far-left Syriza MPs who voted for Mr Tsipras’s plan last week have said they would not make similar commitments in the future.

Panagiotis Lafazanis, the Syriza energy minister, on Tuesday branded the agreement "unacceptable". In an emailed statement he said the deal “cancels the popular mandate and the proud ‘NO’ of the Greek people in the referendum”.

As is clear from the above - and from Yanis Varoufakis' "impressionistic" first thoughts on the Greek deal which we posted here earlier - every lawmaker in Athens is now fully aware of the fact that what has happened to Greece is nothing short of a ruthless political coup executed by Germany. The writing has been on the wall for some time and indeed we outlined the entire plan in "Democracy Under Fire: Trokia Looks To Force Greece Political Reshuffle." 

In short, we’ve said for months now that come hell, high water, or "Grimbo," Germany was going to extract its pension cuts and VAT hikes from Tsipras, and not because anyone seriously thinks it will make a difference in terms of putting the country on a 'sustainable' path, but because the EU simply cannot afford for Syriza sympathizers in more economically consequential countries like Spain to get any ideas about rolling back austerity (of 'fauxsterity' as it were) and using EMU membership as a bargaining chip.

And even as the IMF (with Washington's blessing) "suggests" that Germany "mark it zero," it may be too late to preserve democracy in the periphery because as you can see from the following, Schaeuble appears to have gotten his point across:

Greece and Spain are 2 different economies that require different strategies, Nacho Alvarez, Podemos’s economic policy chief, said Tuesday in Madrid. Alvarez says change doesn’t necessarily mean restructuring of public debt.