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Wednesday, January 13, 2016

Τσίπρας και η (ΠΦΑ) Κυβέρνησή του ... Πρώτοι Των Πρώτων!

Top 10 Worst Negotiation Tactics of 2015 - PON - Program on Negotiation at Harvard Law School

1. Brinksmanship with benefactors. As he approached European creditors this summer for a new bailout package for Greece, Alexis Tsipras, then the nation’s prime minister, struck a combative tone that did not go over well. Dissatisfied with the deal on the table, Tsipras put it up for a referendum vote in Greece. After Greeks rejected it, the Greek economy tumbled even further, and Tsipras and his team were forced to accept an even worse package from Europe. The lesson? A conciliatory tone will carry you much further than brinksmanship when you’re making bold requests.
Vince Chadwick: POLITICO EU: "The 7 best policy backflips (κωλοτούμπες) of 2015"

1. Tsipras on austerity

January: The Syriza party sweeps to power, with new Prime Minister Alexis Tsipras saying Greeks had “given a clear, strong, indisputable mandate. Greece has turned a page. Greece is leaving behind destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain.”
June: Tsipras calls a referendum on EU creditors’ demands for public spending cuts in exchange for a third bailout program for Greece. He urges people to vote No, saying the required reforms are “an ultimatum towards Greek democracy and the Greek people” and “an ultimatum at odds with the founding principles and values of Europe, the values of our common European construction.”
July 5: More than 60 percent of Greeks vote No, and Tsipras vows to return to the negotiating table with “a mandate for finding a sustainable solution and to take us out of this vicious cycle of austerity.”
July 12: Faced with a plan from German Finance Minister Wolfgang Schäuble for a Grexit from the eurozone, Tsipras bows to creditors’ demands for spending cuts and privatizations during marathon negotiations in Brussels.
“I overestimated the power of righteousness,” Tsipras says. He successfully urges the Greek parliament to approve the reforms, saying, “They won’t benefit the Greek economy, but I’m forced to accept them.”
September: Tsipras wins re-election, telling supporters the result is a message from Greeks to “continue the noble struggle we started seven months ago.”

WOW! που θα έλεγε κι ο Γιάνης
Hm... check this as wall Holger Schmieding : "The 2015 Euro Plus Monitor"
IV. Special Focus:
The Greek Tragedy Since the first Euro Plus Monitor in November 2011,
Greece has featured prominently in the report in three separate ways: 1. According to our analysis, Greece had and still has the worst fundamental problems in the eurozone, usually coming last in the Fundamental Health Indicator. 2. Under the pressure of crisis, Greece also adjusted fast from 2010 onwards. It slashed its fiscal deficit, its export deficit and its labour costs faster than almost any other country in the sample while legislating serious structural reforms. As a result, it usually took the top spot in the Adjustment Progress Indicator. 3. We repeatedly criticised the composition of the Greek adjustment programme. In its design – and even more in its implementation – it focussed too much on suppressing demand through front-loaded fiscal tightening rather than on raising supply through fast labour, product and services markets reforms. In the fiscal sphere, the emphasis was too much on hiking taxes than broadening the tax base. Like other countries with weak administrative capacities, Greece needs simpler rather than higher taxes in order to improve economic efficiency, growth potential and the tax intake. It would have been and still is an ideal candidate for a flat tax on income and sales coupled with an offer to bring undeclared income and assets into the open against a measured penalty. Unfortunately, successive Greek governments and their international creditors found it easier to implement and police tax hikes than structural reforms. The result was an unnecessarily deep adjustment recession. To make matters worse, creditors responded to the fiscal shortfalls caused by the depth of the recession by asking Greece to compress demand even more. As we argued repeatedly in previous editions of this study, beyond taking back a short-term fiscal stimulus such as the Greek pre-election stimulus of 2009, we believe no country should be made to tighten fiscal policy by more than 2% of its GDP in any given year. While Greece went through more pain than was necessary, its adjustment programme did work in the end. Although Greece took the medicine in the wrong dose and not in the optimal sequence, the medicine still did its job. In The 2013 Euro Plus Monitor, we noted that the worst should be over soon for Greece; courtesy of its heroic adjustment efforts, Greece was reaching the turnaround stage. The recovery set in over the course of 2014. In late 2014, Greek corporate confidence had rebounded so fast that it even exceeded that of Spain (see Chart 12 on page 41). In 2015, the Spanish economy is expanding by around 3.2%. Greece could have achieved the same. Unfortunately, the risk of reform reversals, which we had identified as the worst remaining issue in the eurozone in The 2014 Euro Plus Monitor, materialised with a vengeance in Greece. The 2015 Euro Plus Monitor 41 With the rise of political uncertainty in late 2014, capital started to flee the country. With threats to reverse many reforms and a confrontational approach towards the only willing lenders Greece has, the Greek government that came to power in January 2015 confirmed the worst fears. Until the end of the tenure of Yanis Varoufakis as finance minister in mid-2015, capital flight through the banking system as recorded in Greece’s balances in the Target2, the Eurosystem’s inter-bank payment system, reached €66 billion, equivalent to 37% of Greece’s 2014 GDP. No country can withstand such a blow and the sheer fear which the antics of the Greek government had caused in the first seven months of 2015. The Greek economy fell back into recession as a populist coalition in Athens drove Greece’s fiscal outlook and its banks into the ground in 2015. That Greece’s structural primary balance deteriorated by 3.6% of GDP in one year is not the expression of any fiscal stimulus. For a country that had just emerged from one of the worst adjustment recessions on record in Western economies, shattering fragile confidence by a fullblown and futile confrontation with the country’s only willing lenders proved to be a costly disaster. Rarely before has corporate confidence plunged so fast and so badly in any self-inflicted disaster (see chart 12 on page 41). The damage is substantial. Counting only the fiscal costs, we come up with a rough guesstimate for 2015 and 2016: • Lost growth. Instead of expanding by around 3% in 2015 and 2016, the Greek economy will probably contract by 0.5% in 2015 and 1.0% in 2016. For 2016, Greek real GDP will be roughly 7.5% below what it would have been otherwise. • Lost revenues. Lower tax revenues and extra spending will likely lead to a cumulative fiscal shortfall of at least €9 billion for 2015 and 2016 relative to a baseline of unchanged policies and the absence of a political confidence shock. Corporate confidence. Weighted average of confidence in industry, services, retail trade and construction. Sources: European Commission, Berenberg Chart 12.
The Varoufakis Effect
Corporate confidence in Spain and Greece -50 -40 -30 -20 -10 0 10 20 30 2005 2007 2009 2011 2013 2015 Greece Spain ‘Rarely has corporate confidence plunged so badly in any self-inflicted disaster.’ 42 The 2015 Euro Plus Monitor • Weaker banks.
The need to recapitalise the badly weakened banks and the prospect of much lower potential revenues from a future privatisation of banks after the massive dilution of the public sector’s share in the banks probably amounts to a fiscal hit of at least €12 billion and possibly significantly more. 7.5% less of real GDP, a slightly lower GDP deflator in response to renewed recession and an extra fiscal hit of €21 billion add up to a likely rise in the Greek debt-to-GDP ratio by around 28% of Greece’s projected 2016 GDP. Rarely have so few months as Greece’s January to July 2015 policy chaos been so expensive for the public purse while causing so much misery on top of that. Of course, history moves on. After Greece ratified a new agreement with its international lenders in the summer of 2015, corporate confidence recovered somewhat. But shattered trust is difficult to rebuild. Even if a chastened Greek government without Yanis Varoufakis now stays roughly on the course agreed with its lenders, the road ahead will be rocky. Business investment will remain tepid for a while after such a near-death experience. Unfortunately, we cannot rule out a new Greek crisis as, due to the renewed recession, the social situation will take significantly longer before it can improve. The Greek experience should provide a stark warning to other governments thinking of reform reversals. In a still fragile situation, policy mistakes that shatter confidence can be very costly indeed.


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