From an EU Hero to EU betrayer

Emmanuel Macron won an election 2 years ago with a strong pro-EU platform and has been a vociferous Europhile for the past 2 years. His European vision was immensely laudable and he had the courage to push ahead with it but he faced many hurdles from his closest ally – the Germans.

But since this European election, he has been openly projecting French interest through EU. Rather than having a Commission President from a small country that is absolutely neutral, someone like Margrethe Vestager, he chose Von der Leyen (who importantly happens to be a Francophone) against the wishes of the European Parliament. Her candidacy means its advantage France and Germany.

He has not been good with choosing candidates in the last few months. Besides Von der Leyen, his choice for the leader of the Renew Europe in the European Parliament Nathalie Loiseau ended in a fiasco. His choice for the European Commissioner Sylvia Goulard was rejected by the European Parliament. Despite many excellent candidates for the ECB and IMF, his choices weren’t the best ones.

Besides all these, the worst crime he did was betrayal today. He made the EU, a betrayer.  For a long time Macedonia was waiting to start accession to the EU. It became a candidate country in 2005. It was ready in every sense except that Greece repeatedly voted against opening accession talks because Greece couldn’t accept another country having the name of one of the regions within Greece. In 2018, thanks to Alexis Tsipras, the then Greek PM and Zoran Zaev, the PM of North Macedonia signed the Prespes agreement in changing its name to North Macedonia. Zoran Zaev got ratified in the Parliament despite huge opposition from the opposition parties and few Russia-friendly parties. But the incentive to join the EU was the clincher to get it passed it in the Parliament. The whole Balkan region has huge trust for the EU and one day wants to join the EU. The Balkan people trust the EU more than its own leaders and parliament. In return the EU and its member states often don’t engage enough with the Balkans. Last year once North Macedonia joined NATO, there was a belated promise that the EU would agree to start accession talks the following year June. This year in June, Germany asked for a 4 months delay for technical reasons citing Parliamentary ratification needed time.

Last week when all is set to open the accession talks, the French threw a bomb all of a sudden saying they refuse to agree to start the accession talks. They claimed that the EU has plenty of problems as it is and this is not the time to expand (There’s no mention of what needs to be done to allow expansion). This rejection is despite the green signal given by the European Commission. Their excuse is a lame one and a standard French excuse. The French generally prioritises internal reforms over expansion. Starting the accession talks is not the same as joining the EU. It would take several years to join the EU after starting the accession talks. When the lame-duck Merkel pleaded for at least starting the talks, still the French refused. Despite many leaders warning the consequences, the French were adamant in refusing to agree and so the accession talks were rejected 27 against one. This would constitute to be a historical blunder, a monumental blunder. I don’t know whether the French realises the consequences. This is a massive betrayal. I would say a bigger betrayal than what the US did to the Kurds. And this French betrayal would constitute as a EU betrayal to the Balkans and it would be long lasting. EU loses leverage in Balkans with this rejection. What does this convey to the people of North Macedonia who made all the sacrifices and was looking towards a better future? Why should Serbia and Kosovo listen to the EU anymore? And all this in a region where Russia and China are competing for influence. Forget the Balkans, this betrayal would echo everywhere. Why should anyone listen or trust the EU if they are not going to honour promises in their own backyard?

Move away the Orbans and Kaczynskis, the most dreadful leader of the EU at the moment is Monsieur Macron, who has just made the worst betrayal the EU has ever done, who has just killed a million dreams, who has lost respect from a millions of people. It’s dreary to think this arrogant leader is the most powerful leader in the EU at the moment and what more catastrophes are awaiting. The Russians must be having a hearty laugh!

Disappointed with the top jobs package

So after 5 weeks after the election results, the EU council came out with the names for the top 5 EU jobs package. At least this time, I expected they would chose the candidates as Europeans and not as national leaders with hidden agendas and chose candidates who are best suited for the job profile and not as a compromise candidate. Two of the main reasons for this optimism was among the EU Council, there’s one leader who is a staunch European and very vocal about it – Emmanuel Macron and the second, was the names floating around for each job profile. And yet they didn’t rise to the occasion as Europeans and remained as national leaders with petty hidden agendas and selfish interests. It was the same old compromises and of all the leaders, was disappointed with Macron, the most. Again my expectations let me down.

 According to me, the two best candidates for the European Commission President were Margrethe Vestager and Michel Barnier. Margrethe Vestager, whose virtues are well known, would be the best candidate – who is not a typical politician, a self made leader, who doesn’t bows to any national interest, who is very dynamic and who takes a no nonsense approach and absolutely credible and a leader who can bring the EU institutions closer to the people. Michel Barnier who is the candidate with the best qualifications – long ministerial experience, two terms as a high profile Commissioner and now the Brexit Coordinator where he had kept the whole of the EU unified and has got a spectacular record to show for his candidature. And these two names were floating around as options for the President and Vestager was also a Spitzen candidate.

 Speaking of Spitzenkandidaten, it is still not a perfect system. First of all the leaders contesting the party spitzenkandidaten is not vetted by the member states in the beginning. There’s no European demo to speak of in the European election. The EPP candidate Manfred Weber isn’t known to people outside Germany. People who are voting for EPP parties in other member states vote according to their own party preferences and not because of Weber. It worked in 2014 because there was Jean Claude Juncker who was indeed the best candidate that time across parties and across member states and the EPP and S&D had a broad majority between them but that is not the case this time.

Besides that, Weber is not popular outside EPP circles and outside Bavaria; not even in the rest of Germany. His track record as EPP president is nothing great to talk about. He talks of bringing the European Parliament closer to the people but when it comes to transparency issues, he advocates secret ballot ironically to decide on transparency issues in the EP. He doesn’t have executive experience as well. Weber would probably be one of the worst candidates for the Commission President.

Well as much as Weber and Timmermans options were explored, it’s strange that the Vestager option wasn’t explored to the maximum extent and surprised that the liberal party leaders didn’t push that option.

 The true winners of this European Parliamentary election are the Greens, who have increased their vote share dramatically across Europe. The Liberals can also be said as a winner as they have also performed uniformly well across Europe. The two main losers of this election are the EPP & S&D despite being the two largest parties but having shrunk dramatically. They no longer hold the control of the Parliament between them. They would need the support of both the Liberals and the Greens to have a wide pro-EU majority. In effect, the Parliament President should go to the Greens. It’s a pity that they don’t have any representation in the EU Council to push their names. If the stated ambition is to bring the EU institutions closer to the people, there’s no better party than the Greens to do it. With a Green member as a Parliament President, like Ska Keller, it would be great for European democracy and for bringing the only directly elected chamber much closer to the people. They have better ideas to reach out to the people and are definitely more credible than the other parties in terms of integrity and transparency. Moreover, it’s only the Greens besides the far-right parties who are able to engage with the citizens much more closely.

It’s ridiculous that Tusk asks for Greens cooperation now to get Von der Leyen as the Commission President having ignored them for the past few weeks and not considering them for any posts or in any power sharing agreements.

The European High Representative for Foreign Affairs & Security Policy needs a high profile person and Josep Borrell fits the position perfectly with his wide experience both in Foreign affairs and in European affairs.

To have a geographical balance and a balance in policy positions, the European Council President should come from the Central and Eastern part of the EU and should be a Russophobe. The ideal choice would have been Dalia Grybauskaite. Charles Michel, a not-so-bad candidate again hails from Belgium, which makes it as a general case as the compromise seeking Belgian PMs are the best-suited persons for the European Council President. The position shouldn’t be reduced to brokering solutions. Often the European Council President along with the Commission President represents the EU in summits and in external relations. You need statesmanlike persons with strong reputations. Again the member state leaders don’t want anyone to overpower them. They want meek candidates just to broker deals!

The ECB President should have gone to either Francois Villeroy de Galhau or Benoit Coeure. Both would mean a continuity of the current Draghi policies. The other candidates – from Germany and Finland are hawkish enough to disrupt the current successful course of the monetary policies. Ideally, this position should remain with an economist and not to a politician.

Ideally, Margrethe Vestager should have got the European Commission President, Dalia Grybauskaite of Lithuania, the European Council President, Josep Borrell, the High Representative (who eventually got it), Ska Keller, the European Parliament President and the ECB President to Francois Villeroy de Galhau or Benoit Coeure.

But what Macron did was something else. He wanted to get rid of Weber. Mindful of Germany rejecting a French Commission President instead of a German one, suggested another German candidate for Commission President who is acceptable to him and thought would also be acceptable for everyone and couldn’t be rejected by Germany. By giving the EU HR position to a Spanish, he won the support of the biggest leader from the S&D. By giving another francophone Charles Michel the EU Council leadership, he got the Renew Europe on their side as well. To get the ECB position for the French, he proposed Christine Lagarde over two other better-qualified candidates from his own country. Just to get a French candidate in and to have the rest of the candidates Francophones, he came up with this package, which smacks of petty national politics. Of all the leaders, Macron is the one who talks about rising up to the occasion as Europeans and he ended up as the pettiest minded national politician in the summit.

A not so well admired minister from the most dominant member state to become the Commission president is not the best pick. So Von der Leyen got the candidacy more so because she is a woman, a francophone and a German! How can she be trusted to be impartial; act for the interest of the Union as a whole rather than taking orders from the two biggest member states, when she got the job thanks to the French. She might end up as a very fine Commission President and if this happens, would be very glad for it but nevertheless the way she got this position is deplorable!

I’m back after a hiatus

Due to various other commitments, couldn’t write for the last few years. But now I’m back after a 3 years hiatus. I hope hereafter I’ll be contributing to this blog regularly.

I couldn’t resist writing about my disappointment with the top jobs package that the EU Council came up with.

Thoughts on Brexit

The unexpected vote to leave the EU was a surprise for the British more than anyone else and there was unnecessary panic in the rest of the world, comments ranging from end of the EU to end of theWestern civilisation to end of globalisation and so on. The reality would be nothing but a slight change in the EU functioning and that’s it. But it’s not going to be the same for the Britain. This would be disastrous for a long time and have to pay a huge cost for getting back the so-called ‘sovereignty’ and this is not going to solve the migration problem that the voters were thinking it would solve. The leave voters haven’t realized the consequences of leaving, re-inforced by the fact that the British were Googling what the EU is, well hours after voting to leave it.

Let’s go back a few decades back. There was talk about Brexit during the early 1990s during the Major government, which led to the fall o this government. During Labour’s regime from 1997 to 2010, there was not any talk about Brexit. Tony Blair for all his faults, know how the EU works, knows how to get things done. He was in the forefront of deciding major issues and deciding the Commission President in 1999 and in 2004. He was the main one behind the decision to choose Romano Prodi in 1999 and Jose Manuel Barroso in 2004. He always made sure that Britain remains in the core of the EU and was trying his best to get best deals for the UK and also standing up for the EU within the UK. For all his woes, he showed strong leadership in Britain.

It was only after Tories under David Cameron came to power in 2010, the talk about Brexit arose again. In the last 6 years, he has not only been on the sidelines in the EU Council but also making it as awkward as possible. He will now have a legacy where he has dismantled the United Kingdom. Here is a Prime Minister, who himself doesn’t understands how the EU works and he doesn’t seems to be learning as well as seen in the recent debates. He has been one of the weakest leaders, Britain has seen in the last century. In the last few years, to wean away votes from the UKIP, he started using the same language rather than showing leadership in rebutting their false claims about the EU. Consistently the UKIP, the right-wing media and the Conservative backbenchers were coming out with accusations against the EU most of which are factually incorrect. The Cameron government again instead of showing leadership in rebutting these false claims, was playing the same tune. The main contention of EU migrants abusing the welfare benefits has been found to be wrong in many studies but the Cameron government continued to say the same thing to get a favourable deal from the EU and then continued with the same misinformed argument. So you have one Prime Minister who has been mildly Eurosceptic himself, cribbing about the EU all the time, saying things like the UK is better off without the EU for 6 years and then suddenly after the renegotiation deal in February this year, talks about the virtues of being in the EU. What credibility will he have to lead the debate?

On top of this, his government’s recent budget in March, made big cuts to the welfare to go with the severe austerity measures in the last 6 years which affects the have-nots more, the bulk whom voted for Brexit.

With Cameron not having any credibility, the onus was on the Labour leader Jeremy Corbyn. I was surprised that his campaign was so lackluster. There was not half the passion and conviction that he had when he was campaigning for the Labour leadership last year. He owes a big responsibility for this result. The Labour heartland didn’t deliver the necessary votes for Remain. Often he was not convincing enough despite believing strongly to remain in the EU.

The good thing would be that Scotland would get another chance for self-determination and come back to the EU fold.

For a long time Britain was in the European union but didn’t feel completely part of it, demanding special treatment, constant bickering and simultaneously applying the brakes now and then to further European integration. So this result is in a way good and I personally think this would be a good kick in the ass for the British.

The EU should not panic, over react, over-intrepret the results and go back on integration, unraveling the EU. On the contrary, this is a good opportunity to move ahead with more integration now that the major thorn in the integration process – Britain is no longer there to obstruct. There is a good opportunity to move ahead in several areas like fiscal union, economic and monetary union, financial regulation, security and defence measures – one major area among them could be forming the much-needed EU army with common procurement saving huge money on the member states budget.

With Brexit, many industry headquarters would move away from London to the EU and the countries benefitting from that relocation would be Germany and the Benelux countries. London would remain a global financial centre but its weightage will obviously come down. The UK had earlier got several concessions for its finance sector from the EU directives and now that concessions would be removed which would make a lot more transitions of investment, finance capital, and the bulk of the sector to move to the EU possibly to Frankfurt, which would be the new financial hub. The skilled labour, which used to migrate to the UK would remain within the EU.

It would be ironical that after Brexit, the Brits would realize their folly and see how much being inside the EU was beneficial to them and the rest of the EU would watch that which would make them understand the EU better and make it more popular.

The younger generation in Britain is going to pay for this Brexit caused predominantly by the privileged older generation. This fact would give hope that in the near future there would be another referendum where a reformed, self-realised, understanding Britain would vote to join back the EU. I reckon this would happen within a decade.

Thoughts on the MoU between Greece and the creditors

This MoU is very comprehensive, detailed and impressive. If implemented diligently will be remarkably good for Greece.

The reform measures are broadly divided into four pillars

  1. Restoring fiscal sustainability
  2. Safeguarding financial stability
  3. Growth, Competitiveness and Investment
  4. A modern state and public administration

The overall emphasis should have been more on structural reforms, institutional reforms, investment programs and sustainable debt restructuring than on austerity measures. The outcomes this MoU expects are too ambitious. With the economic situation having deteriorated further, the fiscal targets expected are very ambitious. But I expect a course correction in the short-to-mid term when the austerity measures are relaxed.

Many criticize the deal as an attack on Greece’s sovereignty and as the most intrusive economic supervision program by the EU on a member state. That is an unfair criticism. In the EU and even more so in the Eurozone, each country pools its sovereignty. That is the whole basis behind a shared currency. On the one hand, people criticise that there is a monetary union but it is not backed by a fiscal union and political union. On the other hand, when you try to move towards a political union, people criticise as surrendering more sovereignty. In any case during the last 5 years after the financial crisis far-reaching measures have been adopted where the Eurozone members have given up budgetary oversights to the EU level. In this deal with the Greece, it goes a little further because repeated recommendations have been ignored not least in the decades before but even in the last 5 years. Greece also has a very poor EU transposition rate (where you transpose the EU directives into national law). They lost out on considerable amount of EU structural funds because of their inability to come out with viable projects. These measures to have extra oversight are completely necessary. To transform a country mired in corruption, inefficient bureaucracy, weak institutions, notorious tax collection, close supervision is needed. It has to be clearly understood that the creditor nations are concerned that this should be the last bailout. It has to be made as comprehensive as possible and learn from previous mistakes where repeated promises have been broken. One cannot keep on pouring water into a leaky bucket. You have to seal all the leaks and monitor if there are any further leaks. The return of the troika (EU, ECB and the IMF) or now the Quadriga (ESB joining them) to Athens is not such a bad thing.

There is a difference between Greece and the other Eurozone members that were bailed out. There is considerable institutional weakness in Greece when compared to Portugal, Spain and Ireland and is more comparable to the central and east European (CEE) countries before they joined the EU. There has to be a shake-up of the institutions in Greece. The European Commission has considerable experience in building institutions successfully in the CEE through the enlargement process. The present MoU with the Greece has a strong imprint of the European Commission and the Quadriga is more or less a similar monitoring scheme here.

The democratic deficit that I have with this MoU is that there is very little fiscal space for the Tsipras government to govern. As I mentioned earlier the primary surplus should have been relaxed even further.

This MoU has been successfully agreed despite the initial German reservations regarding the comprehensiveness of the MoU. The German finance minister has given his complete backing for this MoU, which is again a big relief.

Alexis Tsipras is the best leader capable of taking Greece forward. In the last one month with three parliamentary sittings, his government has passed more reforms than any in the past 5 years. He has the political mandate in terms of huge public support behind him, his detachment from the traditional Greek politician-business nexus, his determination to take Greece out of the present crisis and to fight against corruption.

More than 40 Syriza MPs voted against the government or abstained in the last bailout vote prompting many commentators to expect a possible fresh election. There might not be an election at this stage, which would cause a lot more political, social and economic hardship. My expectation is that Tsipras would survive the confidence motion despite the opposition parties New Democracy and PASOK along with many from his own Syriza party not voting for him. A better option would be to ally with the centrist To Potami party to form a stable majority.

The trust between the Tsipras government and the creditors has been restored to a robust level to everyone’s relief thanks to the Greek government passing all the prior actions in the parliament with comfortable majority and the Greek negotiators being very constructive. The MoU would come into force on Thursday with all the parliaments giving the necessary consent before that. Greece is expected to get a total of EUR 86 billion in 3 years besides EUR 50 billion from the privatisation fund (long term) and EUR 35 billion through EU funds over a 7 year period.

Most of the creditor nations especially Germany wants the IMF part of the bailout agreement. But the IMF insists that the debt has to be sustainable before they contribute bailout money although they are part of the creditors at a technical level where they would be monitoring the implementation along with the EU and the ECB. Along with this, the European institutions came out with their own debt sustainability analysis where they conclude that debt is not sustainable as the economic and financial situation in Greece has strongly deteriorated in recent weeks. The necessity and urgency of debt restructuring has been significantly raised by these developments. The creditors would agree to extend the maturities of the loan even longer, reduce the interest rate further and possibly to a moratorium in debt repayment to make the debt more sustainable in the next days. Even if there is a delay, it should definitely happen after the probable first positive review of the implementation in autumn. Then the IMF would come on board completely. After the first review in autumn, if the Tsipras government is very diligent, I even expect the creditors to relax on the fiscal targets and make it more realistic.

The Greek agreement – what happened and is it worth it?

Not just talking about the 17 hours marathon over the July 11-12 weekend, after more than 5 months of negotiations, when an agreement was reached between the creditors and the Tsipras-led Greek Government, it indeed was a big relief. It also made clear to every doubters of the Eurozone that there will definitely be no ‘Grexit’

But looking beyond the relief is the bitter after taste. It was a bad day for the EU and for EU solidarity. Germany, whose post WW II foreign policy was based on projecting its power through Europe and was always at the forefront of European integration and European interest stood first. But in the last decade or so, it slowly started becoming more and more focused towards internally and it started exerting its national interest more often, culminating in a new height that weekend so much that it can now safely be called as a German Europe. Gone are the days when often German leaders are considered as statesmen.

The agreement came at a huge cost for the Tsipras government. The agreement was neither a great one nor a disastrous one like everyone condemns it. In terms of substance, the agreement was not too bad but the way the negotiation was conducted was very bad. The whole negotiations were conducted in a fearful atmosphere with the creditors having a gun over the head of Tsipras’ head.

Let me go through somewhat in detail as what happened after the July 5th referendum and up to that weekend. There was unnecessary panic after the ‘No’ vote. But when the economic situation in Greece is deteriorating day by day, the unnecessary delays from the Greek government in submitting a proposal was strange. Again this made the creditors uneasy and annoyed. The Greeks were given two days deadline and by the 9th had to submit a proposal.

When the Greek government submitted the proposal, everyone from the media to the negotiators to the political commentators were surprised to see the proposal go beyond what was asked of them two weeks earlier in return for debt restructuring. The Greek government proposed to cut government spending to the tune of 13 billion euros against the earlier 8 billion euros. I was not surprised a bit. With the ‘no’ vote, Alexis Tsipras has a broad political mandate behind him. He thought he could extract some concessions but realising the mood has toughened since then, he put debt restructuring as his main take-back. So he proposed an ambitious spending cut plan and yielded to almost all the creditors wish list. I was also very confident about Tsipras’ intentions the moment he replaced his idealist finance minister Yannis Varoufakis with the moderate Euklid Tsakalotos.

The initial response was positive from most of the negotiators and there was a sense of optimism when the European Council President Donald Tusk told that “the realistic proposal from Greece has to be matched by an equally realistic proposal on debt sustainability from the creditors.” But soon that optimism evaporated when the German finance minister Wolfgang Schaeuble felt it was not enough. The prevailing mood in Germany was for a ‘Grexit’. It was expected that the hardline German finance minister would be very hawkish during the negotiations. He is hugely popular domestically for that hawkish stance and well respected for maintaining a rigid fiscal discipline. But what came out of the Euro group meetings were beyond anyone’s imagination. He had prepared a document before the Euro group meeting that talks about a temporary Grexit for 5 years; debt relief (arguing that being inside the EU, a debt relief cannot be provided) and humanitarian aid as a fellow EU member state.

During the Euro group meeting, although the creditors were largely satisfied with the proposal, there was a complete breakdown of trust (of which I’ll go in detail in the next post). Besides Germany, the other countries playing hardball were Finland, the Netherlands, Slovakia and Latvia. I will briefly describe the reasons for which these countries played hardball. A special committee gives Finnish minister’s negotiating mandate and he could only act within that limit. The Finnish government is in coalition with the True Finns who are against another bailout for Greece and for imposing tough austerity measures. So the Finnish minister’s leeway is very restricted. The Dutch Prime Minister won an election campaigning against another bailout for Greece and for being tough in giving money. Slovakia’s previous government lost an election because they agreed to bailout Greece in 2012. Slovakia along with Slovenia and the Baltic countries have a lower per capita than even the present Greece. So for them to pay money to bailout Greece is a sensitive issue in these countries. Moreover, all these countries especially Latvia went through a hard time imposing similar austerity measures and came out successfully. So for them it is difficult to agree for another bailout for Greece. So for all these countries, it is equally or more important to demand a strong program than wanting Greece in the Eurozone. So it was easy for them to fall behind the senior and respected German finance minister.

France and Italy were the biggest supporters for Greece and stood strong against any moves towards ‘Grexit’. All the other member states wanted Greece in the Eurozone but were largely fence sitters. It was France (bureaucrats from the French finance ministry) who helped the Greeks prepare the final draft proposal. When the German finance ministry got to know of this, they were furious. Then the German finance ministry prepared document (for temporary Grexit) came to the picture, which made the French and the Italians furious. So it was clear that this was one summit where the Franco-German motor were operating in opposite direction. For the first time, the French under the Francoise Hollande government stood up to the Germans.

Schaeuble, to come out with such wily ideas and cunning approach were very un-European. To submit an already weakened and submissive Greece to such level is crude. He was risking not only Greece, the Eurozone but the whole European project. Later a Portuguese left leaning newspaper (rightly) called Schaeuble as the greatest threat to Europe. The German Green party MEP Reinhard Buetikofer commented that the “heartless, dictatorial and ugly German has a face, and that is Schaeuble.” So much that the ECB president Mario Draghi during the Euro group meeting warned him of the consequences of his approach for which he reportedly retorted that he was not stupid. But I seriously wonder he is aware of the damage he is doing to the European project. He has created an unwanted wound in Germany’s relationship with France and Italy and in general with a huge cross section of the population all over Europe. When the people are calling for a social Europe, he signals that numbers and data are more important.

He included this document (temporary Grexit) along with the Euro group proposal for the Euro group leaders negotiations. This option was held as a gun on Tsipras head. If Tsipras doesn’t agree with the creditors proposals, there was only this option available. This was a very bad tactic of negotiating from the German side. It amounted to arrogance and vindictiveness. Despite the French and the Italian leadership thrashing this idea, it was floated until the very end of the negotiations. Besides this there was another Schaeuble inspired German proposal to have a privatization trust fund where Greece will park Euros 50 billion worth of assets. The wily part of his idea was that this trust fund will be located in Luxembourg and managed by the Institute of Growth, which is partly owned by the German government where Schaeuble is one of the board members. The idea of a privatization fund sounded logical as repeated Greek governments have failed in their privatization efforts but it was a ludicrous idea that it should be located in Luxembourg and under the control of the Institute of Growth and this was strongly opposed by the Greeks and the French. Finally it was agreed that it will be located in Athens and managed by the Greeks themselves. These two ideas from Schaeuble were very un-European. This Greek government is one which has put aside all its wish list, made a complete U-turn; agreeing to almost all that the creditors wanted; going even further with spending cuts than was earlier proposed; getting a national mandate from the Parliament that he has a working majority to implement the reforms and all this when the countries’ banks are on life support from the ECB and on the verge of running out of money. Making use of this situation, the creditors led by Germany just steamrolled their wish list over the option less Tsipras government. This was like beating a severely injured man. One EU official termed it as ‘mental waterboarding’ of Tsipras and the Greek negotiating team.

The complete Greece bailout agreement can be found here:

The agreement largely was not a bad one. But I would have preferred a much smaller cut in government spending from the agreed 13%; as the VAT rates are increased, the income tax rate for the lower bracket of people should have been reduced. The worst measure is to have quasi-automatic spending cuts. With such a recessionary program, the growth forecast will be reduced and the primary budget surplus targets will be difficult to attain. Besides this all the structural reforms are necessary ones, which has been in table for the last 5 years but with no political will to implement. Debt restructuring which would definitely happen at a later stage should have been discussed and announced along with these measures.

It was a lost opportunity for Angela Merkel to have played a stateswoman like role. She should have led the negotiations in an accommodating yet tough manner where she empathises with her negotiating partner and could have announced an ambitious debt restructuring measures along with these measures but she failed to. The French President Francoise Hollande and the Italian Prime Minister Matteo Renzi had their limits in opposing the German-led group of countries. This summit shows yet again that in the last several years that even when an opportunity arises there is no leader from any member state who rises to the occasion and acts as a European statesman.

Hello world!

I have been a huge admirer of the EU project and have been closely following policies and developments in the EU and in the EU member states for years. Sometimes giving seminars on EU in colleges. But largely not doing anything concrete with this interest/knowledge which made few of my friends to comment that I’m letting go of such a vast resources to utter waste. For a long time have been wanting to write a blog. So here I am starting with the controversial Greek agreement. This blog would be exclusively about the EU and the EU member states. Please feel free to comment and share your thoughts.