What Tsipras Has In Mind

I wish his name was easier to spell, the one Greek politician, head of Syriza, that few have probably ever heard of may be the most important player right now in all EU politics and the future of the EU.

Sunday night the investing world was stunned when Syriza knocked PASOK out of second place and changed the EU overnight. Everyone expected The New Democracy and PASOK to place first and second giving them the seats they needed to form a government and nominate Samaras the next PM. What I find so interesting in all of this is that the biggest problems facing the EU came from one of the most insignificant countries, the election that changed everything was because a party few people have ever heard of won second place and blocked a Pro-Bailout government, the possibility of Greece actually defaulting may come down to a little over $400 million euros. This is the kind of stuff that fits in the "Truth is stranger than fiction" category.

When I posted last on Greece I said it gets better. Well it looks like new elections in June (which will leave Greece without a government during two of the biggest decision points that need to be made (whether they will or can afford to pay the $400+mm international law bond and the austerity cuts demanded by the Troika) will cement the anti-bailout movement's leadership position. However, between know and then, the 1 tiny and 1 larger issue could both through Greece in to default, taking down numerous creditors/banks across the EU and world. When I said, "This is a Lehman x 1000 moment" I meant it, I just didn't realize it could be even bigger than that.

In any case, it's probably good to get to know where Tsipras is coming from and what his goals are, no where will you find a more brutal assessment than in his letter sent today to the Troika, this is a man who knows he holds all of the cards and he just put the Troika on notice.

(Google Translation-Bold highlights by me)

Letter from the President of the Group SYRIZA MCM , A word Tsipras

the European Commission President Jose Manuel Barroso
the President of the European Council Van Rompuy
the President of the European Parliament Martin Schulz

Notification:

President of European Central Bank Mario Drago
President of the Eurogroup Jean-Claude Juncker

Athens, Thursday 10 May 2012

Dear Mr. President,

I am sending you this letter after receipt of the exploratory mandate from the Greek President to ascertain the possibility of forming a Government enjoying the confidence of Parliament, under our Constitution. This letter builds upon the previous letter I sent on 21 February.

The vote of the Greek people Sunday May 6th nullifies/delegitimizes/makes illegal the political Memorandum of Understanding / Memorandum of Economic and Financial Policy signed by the previous Papademos government and the leaders of two political parties that had guaranteed the parliamentary majority of his government. Both parties recorded a loss of roughly 3.5 million votes, totaling 33.5% share of total votes.

Please note that before this, the MoU / MEFP had already been delegitimized in terms of its potential for economic success. But it's not just that the Memorandum of Understanding / MEFP failed to achieve its own objectives. It has also failed to address the structural imbalances and inequalities of the Greek economy. SYRIZA noted over the years the inherent weaknesses of the economy. All governments who work closely with the European Union ignored our recommendations for specific reforms.

Please also note that because of the policies of the Memorandum of Understanding / MEFP, Greece in 2012 is the only European country to endure its fifth successive year of deep recession during peacetime. Moreover the Bond Exchange Program (PSI) has failed to ensure the long-term viability of Greek debt which continues rising as a share of GDP. Austerity can in no way be the cure to recession. Therefore the immediate, socially just, reversal of the continuous decline of our economy is imperative.

We must urgently ensure economic and social stability in our country. For this purpose, we must take every political initiative to reverse the austerity and recession. Because apart from the lack of democratic legitimacy, continuing a program of internal devaluation is leading economy to catastrophy without creating conditions for recovery. The internal devaluation tends to lead to a humanitarian crisis.

Thus we need to rethink the entire context of the existing strategy, since it not only threatens Greece's social cohesion and stability, but is also a source of instability for the European Union and the EuroZone itself.

The common future of the European peoples is under the threat of such catastrophic choices. It is our deeply held belief that the economic crisis is of a European nature, and thus the solution must be found at the European level.

Sincerely,       

Alexis Tsipras

President K.O SYRIZA

Vice President of the European Left Party