[Closed] Greek election - extreme left won

My favourite story is related to state asset sales, finance minister said certain assets had been sold too cheap and that such sales have been halted, they would however be interested in selling loss making assets like the railways where they would be happy to accept €1, haha in their dreams

Why do you think that they should sell off profit making assets, surely they should keep stuff which generates a profit and brings them revenue ? The Greek government needs revenue, does it not ? Can you explain ?

I do share you lack of faith in the ability of privateers to turn loss making railways into a profit making venture though, you only have to look at the UK for example of that. The most obvious example is the state-owned East Coast line which last year paid £225million to Treasury - the privateers gave up trying to run it.

Today the British taxpayer subsidises the privitised railways about 5 times more than when they were nationalised. And many of the "private" companies which now run our railways, and receive British taxpayer subsidy are in fact French, German, and Dutch, state owned companies. Such is the lunacy of British right-wing political thinking.

And one of 'my favourite stories related to state asset sales', since you brought it up, and since you are apparently interested in Argentina, relates to the railways in Argentina. When the right-wing politician Carlos Menem, who was more thatcherite than Thatcher, and whose right-wing economic policies laid the foundation for the catastrophic economic crises in Argentina was President, he decided to privatise pretty much everything, this of course included the railways.

Unsurprisingly the private sector was not prepared to invest in Argentine railways but as a true disciple of Milton Friedman he wasn't prepared to accept the almost socialist solution of government subsidies. All free-marketeers know that the market always knows best so if this was not a viable business venture then it should allowed to go to the wall.

IIRC Milton Friedman argued that had the stagecoaches been nationalised they would still be operating today (at a loss of course) because nationalisation stifles development and progress (he very conveniently ignored the fact that arguably the most advanced railway system in the world, French railways, was nationalised over 70 years ago)

So Carlos Menem's solution was simple......if the private sector couldn't turn Argentina's national railway into a viable business then it had to cease operations - the market knows best. In the 1990s most of the rail system was closed leaving just a few urban commuter lines such as in Buenos Aires.

Today despite once having one of the most extensive railway systems in South America (mostly built by the British I believe) and being the eighth largest country in the world, Argentina has no rail link between its major cities. If you want to travel from Argentina's second largest city, Cordoba, and Buenos Aires, you have to go by road or air. Argentina has to import most of its oil/fuel requirements. It's a free-market paradise.

However the naughty left-wing government now in power in Argentina plans to rebuild a state-owned national railway.

@ernie, interesting comments, on the topic of public ownership of public transport I think you and I are on the same side. I have experienced public and private systems commuting over 30 years, all are better than the UK which has gotten materially worse since I started in the 80's and much more expensive especially once you add in the unregulated stuff like carp parks and on vs off peak ticket pricing. The privitisation of public transport in the UK has not been a success but when looking at the economics you need to include the fact the UK government / taxpayer no longer has a liability to fund all the pensions, this is a huge "hidden" expense in the public sector.

When you are in distress financially whether as an individual, company or country you have to sell assets and usually these are the assets you don't really want to sell. The good assets are worth something, but will of course trade cheap as there is a real risk Greece leaves the euro and they become worth 25-50% overnight. the bad assets like the railway have a massive negative value, ie you have to subsidise them to hand the liability to someone else.

No one can realistically turn the Greek railways round except the government and I doubt they will do so as its too difficult politically. If they are going to rehire 600 cleaners and reestablish some of the highest minimum wages levels in the EU they are not going address the huge structural issues with e railways which go back many many years. Part of me wonders whether it was a joke but I suspect it was another piece of bravado.

Greece has said no more EU money ... but .. they want to issue more Greek government debt the only buyers of which are the Greek banks and the only people lending money to Greek banks are the EU. Smoke and mirrors.

reestablish some of the highest minimum wages levels in the EU

Eh? Minimum wage in Greece is EUR 3.41 per hour. Not princely, I'd say.

DrJ - admittedly I am blindly repeating what I read online, perhaps they where referring to minimum wage levels for certain jobs. I will check.

However the naughty left-wing government now in power in Argentina plans to rebuild a state-owned national railway.

Ah, it's been a while since you've regaled us with tales of the economic and social miracle going on under CFK Ernie... Credit default and double digit inflation, with people keing knocked off for threatening to expose the governments dirty dealings:

http://www.theguardian.com/world/2015/jan/28/alberto-nisman-death-cristina-fernandez-de-kirchner-argentina-intelligence-agency

It's like the old days! Still, at least she's gonna make the trains run on time 😉

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Greek minimum wage (quoted monthly at 680, previously 750 the level they wish to restore it to) is higher than the following

Portugal, Croatia, Turkey, Poland, Hungary, Latvia, Czech Republic, Bulgaria

Greek minimum wage about the same as Spain and really only lower than the richest EU countries.

Well, it's generally lower than the western European countries and higher than the eastern ones. More or less what you'd expect.

Well to me it shows Greek minimum wage is indeed way too high. Why is it 750 in Greece and 525 in Portugal ? At 680 (current) it's poverty yet that's 30% more than in Portugal. (note 750 was the original level, cut to 680 and not they will return it to 750)

Syriza need to come good on their word and break up the cartels, tax avoidance and the black economy.

Oops, what time will the queues begin outside the banks tomorrow?

Very messy.....stay long vol!!!

Why is it 750 in Greece and 525 in Portugal* ?

I have no idea why you think they should be the same

You have to be employed to get minimum wage. Thanks to "austerity" there's a lot less people eligible, and hence not getting a minimum wage, not getting medical care and not getting a roof over their heads. Still, that's all their own fault, so f"ck em, right?

Oops, what time will the queues begin outside the banks tomorrow?

Dunno, but surely Draghi and Merkel are making a better argument for staying out of the EU than Nigel Farage ever did.

The comments section in the FT following the news looks like here on a bad day!

Forget the min wage, the serious stuff is imminent after today.

"BLUFF"

Sadly this is no joke...batten down the hatches.

Anyone know who has the contract for printing Drachma notes?

Sadly this is no joke...

and yet various Euro politicians and bureaucrats don't seem to take it very seriously. They prefer to risk the future of a people as well as their European project just for the sake of pedantry. Sad.

True but every side is living in cloud cuckoo land.

Lazard tried a punt, it's failed, Eurocrats have upped the anti. Banks are screwed, get your money out now.

When you are in distress financially whether as an individual, company or country you have to sell assets and usually these are the assets you don't really want to sell.

So you obviously fully support the re-privatization of the East Coast line despite of the fact that publicly owned DOR (Directly Operated Railways) has handed over £1billion to the Treasury since 2009. Whereas the previous privately owned operator, National Express, only managed to run it at a loss, until they finally gave up altogether.

Where's the logic in that ? Where's the logic of ideological dogma over commonsense ? And you want the Greek government to follow that sort of loopy narrow-minded right-wing thinking ?

.

Why is it 750 in Greece and 525 in Portugal ?

You said, quote : [i]"...some of the highest minimum wages levels in the EU"[/i], your own graph that you posted at the top of the page shows that claim to be false. And why is the minimum wage lower in Portugal than Greece ? Have you considered that the cost of living is lower in Portugal than Greece ?

In fact your graph probably also reasonably reflects the cost of living in the various European countries, eg, Albania probably has the lowest cost of living on the list and Luxemburg the highest. Had that thought really not occurred to you ?

What has probably also not occurred to you is that raising the minimum wage to stimulate a struggling economy makes sound economic sense. Giving a poor man an extra dollar does significantly more to stimulate economic activity than giving an extra dollar to a rich man. The worse sort of consumers are those with hardly any money to spend. In 2013 for the first time in 45 years Greece experienced deflation, this what happens when demand is so low. Don't underestimate the negative effects of deflation.

[url= http://www.telegraph.co.uk/finance/economics/9981843/Greece-enters-deflation-for-first-time-in-45-years.html ]Greece enters deflation for first time in 45 years[/url]

And here Nobel Prize-winning economist Paul Krugman explains how a recent study in the US shows that each dollar spent on food stamps in a depressed economy actually raises growth by about $1.70

[url= http://www.nytimes.com/2013/05/31/opinion/from-the-mouths-of-babes.html?nl=todaysheadlines&emc=edit_th_20130531&_r=2& ]From the Mouths of Babes[/url]

Finally jambalaya, you have repeatedly suggested that Syriza and the Greek people are in denial and yet it is you who appears to be in denial. The first troika brokered austerity package was introduced in Greece in 2010, when that failed another troika brokered austerity package was introduced, when that one failed another one was implemented. Ever since 2010 the answer to the failure of austerity has been to implement more austerity. Greece has now had SEVEN austerity packages, far from having the desired effect the situation is now in fact worse. And yet you want [i]more[/i] austerity.

It's [u]you[/u] who is in denial.

I have no idea why you think they should be the same

@ernie the chart from the EU absolutely confirms my statement, itself taken from the Guradian, that Greece has ludicrously high levels of minimum wage. Greece has mismanaged it's economy so badly they cannot afford measures like increased spending commitments. The spending of the past has caught up with them and they are facing the hardsh lesson about what happens when you over extend yourself financially

The comparison for Greece should be Turkey with regard to appropriate level of minimum wage

Syriza will soon have to face reality that their future lies in internal reforms and tax collection and not asking the tax payers of Europe for gifts.

Austerity around Europe has not failed, it's actually been a success in getting debt levels under control. No one suggested austerity was going to lead to short or medium term improvements in growth. It was about the always painful process of deficit reduction.

and yet various Euro politicians and bureaucrats don't seem to take it very seriously. They prefer to risk the future of a people as well as their European project just for the sake of pedantry. Sad.

Some European countries may be worried about a loss of face with a Greek default and expulsion form the euro but the project will be stronger if they have the courage to follow financial and political reality and kick Greec out.

It's hardly pedantry to decline a €120bn gift to Greece at the European taxpayers expense.

@ernie the chart from the EU absolutely confirms my statement, itself taken from the Guradian, that Greece has ludicrously high levels of minimum wage.

It does no such thing, it places Greece exactly where you would expect to to be relative to other countries. It certainly does not have [i]"some of the highest minimum wages levels in the EU"[/i] as you falsely claimed.

And your claim that the Greek minimum wage is [i]"ludicrously high"[/i] is a betrayal of your political bias rather than a statement of fact.

Greece has mismanaged it's economy so badly ......

And yet throughout this thread you have incessantly attacked Syriza, and the left generally, despite the fact that Syriza have only been in power in Greece for just a few days, while completely ignoring the equally important fact that New Democracy, whose conservative economic policies you obviously share, have been in power in Greece for most of the last ten years.

The spending of the past has caught up with them .....

And yet again you ignore the facts. In this case that Greek government spending as a percentage of GDP was not high in the years leading up to crises, in fact it was lower than France, Italy, and Germany. Yes that's right, Greece spent less of their GDP on government spending than Germany.

It only went up when things went pear-shaped.

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[b] [i]"The spending of the past has caught up with them"[/i][/b] ❓

Greek minimum wage should be lower than Portugal in normal circumstances and substantially lower given the reforms Greece have to make.

Because of dogma.

JY my view is pretty easy to understand if you take the time to think about. Portugal, for example, is an developed economy not subject to endemic corruption, a huge black economy and rampant tax avoidance. Whilst it has had its problems it has managed its affairs far more professionally than Greece. As such it is a more attractive country for investment, an much more robust economy. As such it is a much richer country than Greece. High wages in a poor country make no sense. Greece should be at a similar level to Turkey, ie back to where it was before it joined the EU a time when it basically had to stand on its own two feet and not rely on handouts from the rest of the EU.

Financial reality starting to kick in, no surprises the ECB says it will no longer accept Greek bonds as collateral - they are not of sufficient quality and Syriza's stated policies are in direct breach of the previously agreed commitments. Unless Syriza commits to follow the previously agreed bailout terms and conditions, at least temporarily, they could default as soon as mid/late Feb. Greek government debt now at 20% (note they borrow from the ECB 2%). Some simple maths shows that;

Greek debt to EU 240bn at 2% = 4.8bn pa interest
At current Greek debt levels 4.8bn would support only 24bn and that doesn't factor in the fact that post a euro exit, interest rates would probably be higher and the new currency further devalued. So if 4.8bn is unsustainable now whilst Greece feels half of that amount is, post a Greek exit the Greek economy could only support the equivalent of 12bn in debt.

@ernie, I am attacking Syriza because their policies are financial suicide for Greece. I am attacking the country as a whole for the way it has managed their affairs over many man years.

Syriza needs to pedal back from it's current stance. IMO its going to do exactly that as without the EU support its financial armageddon for the country.

The Greek people have made their bed, and whilst they may not like it, it's time to lie in it.

FFS! How many times? Your lack of compassion for the poor ordinary fold who are pawns in the games of bankers, technocrats and politicians astonishes me. I'm not going to repeat the opposite this time as I think it's obvious to everyone that you're engaged in an exercise blinkered denial of the facts so serious that you could probably get a job as a pundit on Fox News.

So a country with [i]"endemic corruption"[/i] was not only allowed to join and remain in the EU but also to join the Euro, I wonder how its EU partners failed to notice that ? Can you explain ?

And have you any evidence to offer that Portugal [i]"is a much richer country than Greece"[/i] ?

High wages in a poor country make no sense.

I thought we were talking about the [i]minimum wage[/i]

my view is pretty easy to understand if you take the time to think about

Thanks for actually explaining it this time as I understand why you think this though i disagree.This sums it up for me [ and pretty much every debate woth you] and made me lol

I'm not going to repeat the opposite this time as I think it's obvious to everyone that you're engaged in an exercise blinkered denial of the facts so serious that you could probably get a job as a pundit on Fox News.

Why focus on the trees (min wage) instead of the wood?

Overall cost competiveneess is more important than one input. Within the € you have had some countries where unit about costs have converged and others including Greece where they have deteriorated. The impact on Greece has been dramatic as every sector has seen a subsequent deterioration in their levels if competitiveness. This has resulted in a sharp deterioration in the trade balances as result even in sectors such as clothing where Greece used to enjoy trade surpluses.

So you take counties that have relatively high and uncompetitive unit labour costs and lock them into a fixed exchange rate. DOH.....what happens? You have compensatory wage deflation and/or unemployment*. As clear as night follows day. How much pain do people want Greece to take before they address the folly at the heart of this. It's got bugger all to do with party politics, it's transcends that spectrum. It's real stuff......not party political BS.

Dead cat bounce for sure earlier this week. Banks down @25% today. More false markets with politicians speaking before engaging brains.

Sad, sad, sad......

* and lefties who think this is a good idea (or don't understand basics of labour market economics!!!)

Corruption?

How about how many countries satisfied and satisfy the conditions of entry????? Germany (cough).......?

Varoufakis on meeting with Schaeuble - "we didn't even agree to disagree!!!"

What a state of affairs.

Just listened to the press conference. Couple of thoughts.

Debt haircut was not on the agenda, it is "off the table"

Greece was given support at the limit of what was reasonable and possible. it was given support to allow Greece to help itself. Greece must help itself.

Germany recognises the Greek election mandate given to Syriza but Greece should recognise the mandate given to the German government. Any substantial changes to agreements will need national parliamentary approval throughout the EU and chanegs to the EU treaty. that will be a long and slow process.

Schauble said Greece must reform and collect more taxes, especially from the wealthy. Germany recently offered to send 500 tax inspectors to Greece, this was unfortunately declined. German remains willing to help with tax collection.

Voroufakis again said that the largest loan in history in 2009/10 was given to an insolvent country, Greece. "Nothing concrete was agreed or disagreed".

and lefties who think this is a good idea (or don't understand basics of labour market economics!!!

Thanks Alex been a while since you popped in I would ask for a quote but what would be the point in that ? We all know the truth , even you, but dont let that stop you making the slur.

1] Why is it always "righties" vs "lefties"?
2] These debts - are they owned-by/owed-to
a] The already vastly wealthy who tend to hoard it?
b] Poor bastards who will have/be glad to spend it?

Why do they already poor and deprived have to shoulder it? It's fundamentally not right.

Hence my irritation with the "must make profit from 'em" approach.

I don't think public services and such should be run for profit, because the market just cuts corners [very simple example - reluctance to pay living wages] whilst pocketing maximum profit [see Apple's taxes].

Left v right is basically
Collective v individual
Society v market
Personal wealth v fairer society

{ tried to keep them as neutral as I could there ....probably did not manage it]

Many are fine with apple and its tax situation [ probably thinks itss good business and would praise its business model as well* ] whilst many think it stinks and it is indefensible

One of those we all decide what is most important and if you disagree well you disagree.

Its pretty clear some on here care more about the market and profit than the people and some of them even claim its the other side doing it.

* IMHO Its morally indefensible and obscene levels of profit and wealth.

* and lefties who think this is a good idea (or don't understand basics of labour market economics!!!)

Not at all. I'm sure most 'lefties' fully recognise the fact that the lower the wages the higher the profit,
and the more likely an enterprise is of being competitive.

In fact if companies were allowed to use slaves both their profits and competitiveness would be massive.

The argument in favour of low wages is obvious.

Slaves make crap consumers though.

IMHO Its morally indefensible and obscene levels of profit and wealth.

True but it's not even very good capitalism to have one organisation hoarding 100s of billions in their bank account. It's a lazy analogy (not out of place on this thread) but how is what Apple and other busnesses/individuals doing any different to that of a parasite sucking the life out of it's host? 'Free' market my a**e!

{ tried to keep them as neutral as I could there ....probably did not manage it]

Yes, sorry, I didn't mean what do left/right mean - what I'm wondering is why it's always reduced to such simplistic terms.

As a Designer, thinking in novel ways and testing possible ideas is CRITICAL - you'll miss the next advance if all you do is rehash the same concepts....

Which is why the ULEV I'm designing will be ****ing awesome.

Just for avoidance of doubt I am not proposing giving the rich of Greece an extra euro, far from it they should be collecting much more tax from them. Many wealthy Greeks treat tax as a voluntary donation. Germany offered tax advisors, they should accept. As / when Syriza start collecting more taxes they can increase the minimum wage should they chose to do so.

JY it would be a start if the Greek railways could reduce their huge losses somewhat, making a profit is a pipedream which will never be realised, that's why the railways there are unsaleable.

JY my view is pretty easy to understand if you take the time to think about. Portugal, for example, is an developed economy not subject to endemic corruption, a huge black economy and rampant tax avoidance. Whilst it has had its problems it has managed its affairs far more professionally than Greece. As such it is a more attractive country for investment, an much more robust economy. As such it is a much richer country than Greece. High wages in a poor country make no sense. Greece should be at a similar level to Turkey, ie back to where it was before it joined the EU a time when it basically had to stand on its own two feet and not rely on handouts from the rest of the EU.

This.

Schauble said Greece must reform and collect more taxes, especially from the wealthy. Germany recently offered to send 500 tax inspectors to Greece, this was unfortunately declined.

WTF?...Greece needs to show willing to start coming down hard on its own tax avoiders before asking foreign countries for more money....pride doesnt come into it, this is Greece thumbing its nose to Germany.

The most depressing thing about this whole debacle is that the EU/Euro expansion, integration, financial union etc has supposedly been led by intelligent people who seem to be willfully oblivious to the realities and difficulties of joining together economies as opposite as Greece and Germany...accounts get fudged to allow more countries to join, loans get thrown around running into the hundreds of billions and meanwhile the gravy train in Brussels rolls on unaffected.

The political vanity and corruption endemic in the EU as an organisation is on a par with stereotypical Greek corruption but because its done in Brussels by Belgians in suits it goes unchecked....the sooner the whole thing collapses the better.

I could sort of see the point in financial unity between France, Germany and maybe a few other economically similar countries but trying to pull countries like Greece into the deal always smacked of expansion for the sake of it and a willingness to allow countries to join at any cost or level of corruption...

....some of the Mediterranean/southern European countries with similar economies should have pursued economic integration with each other instead of looking up to Germany, France, Holland etc....some of the poorer countries joining knew full well they would have easy access to borrowed money once in 'the fold' so to speak...their politicians who facilitated this need bringing to task over their wreckless borrowing and spending.

I still cant believe that in the rarefied field of top economists, bankers, politicians etc at the European and World level that the old adage of living within your means gets forgotten about so easily...FFS if you havent got it, dont spend it!...i think i was taught this when i was about 6 years old, why is that so hard for Governments to remember?

I was genuinely trying to answer your Q and I think the left and the right fundamentally value different things and they revert to just discussing this point on various issues. We dont get novel solutions as we already know "more market" or a fairer society by regulating the market.
Their is no novel option*.

* technically the novel approach is to blame the EU and immigrants

that's why the railways there are unsaleable.

if you havent got it, dont spend it!...i think i was taught this when i was about 6 years old, why is that so hard for Governments to remember?

You just really lost my interest in your POV.

If you don't understand the importance of credit in modern financial institutions you're not very knowedgable on the subject. "FFS" indeed, we covered this in a term in my university course.

Their is no novel option

I'll solve the world economy with a novel solution right after I solve the transportation crisis with one then, seeing as no-one will see it coming 😉

Thanks JY, I appreciate what you were trying to do - I really value people who actually take the time to answer questions.

FFS if you havent got it, dont spend it!

Are you against mortgages, investments and the entire banking sector?

i'm against the idea of granting mortgages based on the (hoped-for) future income of the applicant.

i don't earn £80k, not even close, but i hope to one day, would you lend me £300k to buy a house? - bearing in mind i currently can't afford to even cover the interest. But i'm dead clever, i'll definitely earn loads sooner or later.

there's leveraging your assets for investment, and there's taking the p154

The Greek people have made their bed, and whilst they may not like it, it's time to lie in it.

So for you it comes down to some (misguided) small-minded view of morality. Who exactly made the bed that is being lain in?

Some European countries may be worried about a loss of face with a Greek default and expulsion form the euro but the project will be stronger if they have the courage to follow financial and political reality and kick Greec out.

It's not a matter of losing face, it's simply proof that the idea of the European club is false - that it is just a club for the powerful, and the smaller faces can be marched on by the ECB or any other non-elected bureaucracy. Seems to me that there are 2 choices - give Greece the space to grow inside the EU, or kick it out, at which point obviously it would default on all its debts, and let hardship provide the perfect soil for fascism to grow.Is that what we need? an impoverished unstable country on the mainland of Europe?

Greece should be at a similar level to Turkey

Yeah - that's sort of the point - the EU helped Greece avoid becoming like Turkey, where the army is the biggest political force and they covertly support ISIS. Still - you'll get your wish if Merkel and co continue to ignore the lessons of history.