This feels like the beginning of the end of the EU in its current manifestation.
Lets hope so eh? Before they bankrupt the entire continent.
Sounds like theres some bizarre horse trading going on to form a coalition. A possible pact between people I've heard being referred to as Communists, and some far right parties. The only thing that unites them is their opposition to austerity. I can't see that lasting more than 5 minutes
And a spokesman for Merkel has just reaffirmed that there will be no renegotiation on debt repayments
Its all going well then. The Eurozone marches on on its illustrious path
anagallis_arvensis - Member
Am I right in thinking Greece's problems are down to Germany's gain?
Not exactly. Germany gained from implicit devaluation of DM and open markets. Hence ran currency account surplus. But to offset that, what happens? They have to run a capital account deficit to make BoP balance, hence capital flows out of Germany into the same places. So they get stung if that money is not paid back. Plus they get stung if the economies in the deficit/indebted countries are depresses - as we do.
The krone issue? After the Swiss franc abandoned their peg, the risk is that the Danish Krone may end up in the same situation, leading to the peg being abandoned and the the DK appreciating as the CHF did recently.
Don't forget (1h behind all the fancy worlds, QE is essentially hidden currency wars. But wrap this up in fa new language and you might just get away with it.
Don't forget (2), not paying back what you owe is theft. And the losers, the taxpayer. It's not an innocent story or an issue of stick together comrades.
jambalaya - Member
@DrJ - austerity is working as Greece is starting to be in a position to repay it's debts.
Sorry, jambas, but that's incorrect on both counts.
Talking of extremes, a left party entering a coalition with the far right???? The € always throws up these weird contradictions.
Its like you and Binners played out in the real world 😀
This was drawn for the UK but the same applies to Greece. The debt has caught up with today's population
[img] 
[/img]
The question now ...
Is it time to buy or sell EURO?
😀
austerity is working as Greece is starting to be in a position to repay it's debts
The thousands on the street relying on food banks, and the kids who are fainting in school due to malnutrition will be ever so pleased to hear that the German banks are finally having their bonds repaid. It must be so comforting 🙄
Aside from the headlines about the Euro/Debt/Germany etc, perhaps the most interesting thing happening is the [url= http://www.theguardian.com/world/2015/jan/23/greece-solidarity-movement-cooperatives-syriza ]quiet revolution at a grassroots level[/url]. It'll be interesting to see whether Syriza embraces this further or abandons it now that it has it's hands on power. Hopefully they'll do the former and resist the temptations that previous leftwing governments around the world have fallen for.
Sorry, jambas, but that's incorrect on both counts.
TMH, Economist on the TV last night said Greece was running a budget surplus (ex debt service) of 4% of GDP, so that's progress towards being able to repay no ?
As I recall the only countries that actually met the original Maastricht criteria for Euro membership were Luxembourg and Finland.
DrJ, Germany certainly didn't qualify to join, I remember that well. It would make sense what you say.
The thousands on the street relying on food banks, and the kids who are fainting in school due to malnutrition will be ever so pleased to hear that the German banks are finally having their bonds repaid. It must be so comforting
@dazh that should serve as a painful lesson not to live wildly beyond their means. AFAIK most of the debt is with public sector organisations now so it's German taxpayers who are on the hooks not so much their banks. All those Greek doctors who work as self employed and take 50% of their bill as cash in hand should be the ones feeling guilty about their fellow citizens.
[url= http://www.thedailymash.co.uk/news/international/greeks-vote-to-stop-having-shit-kicked-out-of-them-2015012694755 ]Nicely summed up by the Mash[/url] 😀
TMH, Economist on the TV last night said Greece was running a budget surplus (ex debt service) of 4% of GDP, so that's progress towards being able to repay no ?
It's true that they have run a short term surplus, but not even close to avoid eventual default/restructuring. Unless they do something fancy with perpetuals or the like. The debt dynamics cannot be solved, certainly not without growth. Austerity cannot deliver growth - it's a contractionary policy not an expansionary one. They need to restructure. Creditors will have to take another hit (European taxpayers again nb not the banks anymore and the risk has been taken off their balance sheets, plus ca change).
Greece needs a devaluation, with one off hit to allow it to recover. The lessons from history are perfectly clear. After the euphoria of the past 24 hours have sunk in, the grim reality will have to be faced. I think another trance of funding is due this month, so tough questions will need to be answered before then.
"The thousands on the street relying on food banks, and the kids who are fainting in school due to malnutrition will be ever so pleased to hear that the German banks are finally having their bonds repaid. It must be so comforting"@dazh that should serve as a painful lesson not to live wildly beyond their means.
Do you honestly believe that people now relying on food banks have ever lived "wildly beyond their means"?
@dazh that should serve as a painful lesson not to live wildly beyond their means
Come on now. Do you really actually believe that the people suffering now were the ones who were responsible for and benefited from the previous largesse? IIRC the people responsible for cooking the books when they joined the euro were centre-right conservatives who were in the pockets of the shipping magnates and german banks who stood to make billions from Greece's entry into the Euro. But still, lets carry on with the fiction that it was the ordinary greeks to blame for living a life of state-funded luxury.
Christine Lagarde, the head of the International Monetary Fund, has just said:
[i]“There are internal euro zone rules to be respected,” Lagarde told Le Monde daily. “We cannot make special categories for such or such country.”[/i]
Looks like they're definitely on a collision course then.
Lots of people were responsible - the Greeks, their politicians, the European politicians, the bankers (Greek and foreign). With a heady cocktail of villains like that, it was only ever going to end in tears.
Still impressive that so far, this has been channeled through the ballot box rather than violence and mass unrest.
It might appear as if the creditors have an extra card in this particular case - they can throw Greece out of the Eurozone. Be absolutely clear, that is a threat being made by the creditors. Greece under Syriza has no intention of leaving the Euro, even if they defaulted on all their debt, so they would have to be forced out. I have never seen it set out clearly how the rest of the Eurozone would force Greece to leave without compromising the independence of the ECB, but let’s assume that they have the power to do so. Would the Eurozone ever carry out this threat?Expelling Greece from the Eurozone because they wanted to renegotiate their debts would be an incredibly stupid thing to do. For a start, the creditors would lose everything, because obviously Greece would go for complete default in those circumstances. In addition, individuals and markets would immediately worry that the same fate might befall other periphery countries. (The story that Dani Rodrik tells is all too plausible.) What would be the gain?
[url] http://mainlymacro.blogspot.co.uk/2015/01/let-us-hope-for-syriza-victory.html [/url]
But to balance that out:
If all the economists were laid end to end, they'd never reach a conclusion.[i]George Bernard Shaw[/i]
Still impressive that so far, this has been channeled through the ballot box rather than violence and mass unrest.
Indeed, and the imbeciles of the EU might well reflect that if the Greek path is rejected, then the violence will likely follow, in Greece and elsewhere.
I think it as brilliant result sadly a few years later than would have been really helpful. Greece needs debt relief it's economy is crippled by the debt burden and constant cuts to the economy stuck in a vicious downward economic circle. I hope Germany sees sense at negotiates write downs in exchange for some reforms, I don't think Germany was against debt write down in the London Debt Agreement.
Euro is definitely not the ideal currency for Greece at the moment but many seem to want to stick with it to be part of Europe.
Indeed, and the imbeciles of the EU might well reflect that if the Greek path is rejected, then the violence will likely follow, in Greece and elsewhere.
The EU will come up with numerous can-kicking exercises and empty promises to bide their time. They still think they can get things going with QE - although as in the West, only the top 1% will benefit.
Personally I think taking to the streets is long overdue - the situation can only be resolved with the ballet box and street demonstrations - this feels like the early days of the collapse of the Soviet Union.
The EU will come up with numerous can-kicking exercises and empty promises to bide their time. They still think they can get things going with QE - although as in the West, only the top 1% will benefit.
The EU is part of the West. The 99% in Greece are finding out what lack of growth in a successful economy really means. In fact its the 100% because any wealthy Greek person with an ounce of sense got out a long time ago. People here complaining about static wages in a growing economy need to understand quite how bad the alternative would have been.
What Greece is experiencing today feels like austerity as they have lived on an orgy of debt for so long they've come to believe that was normal.
Do you honestly believe that people now relying on food banks have ever lived "wildly beyond their means"?
@Dr J and @dazh, I was referring to the whole country so in a sense yes absolutely. As I posted in Greece in particular it was the ordinary person who has benefitted hugely from welfare payments made with unsustainably large amounts of borrowed money
This is an old piece from Michael Lewis - 2010 - but it's worth a read. The Greek railway is so expensive and inefficient it would be cheaper (in theory) to just pay for everyone to get a taxi. I don't know how many government workers are now at food banks but they have certainly benefitted
[url= http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010 ]Vanity Fair[/url]
That article is bonkers! 😯
Somehow I think that a party promising 10,000 new public sector jobs probably isn't the answer to the countries problems
It is unfair to keep blaming Greece's problems on the welfare state, tax avoidance was always a bigger problem there, and still the problem which has had the least action taken on.
As I posted in Greece in particular it was the ordinary person who has benefitted hugely from welfare payments made with unsustainably large amounts of borrowed money
So the government buys off the people as a means to enriching their friends in the shipping and banking industries. And you blame the people? Quick question, do you think a Greek public sector worker in 2008 should have voluntarily given up 40% of their salary, paid holidays/sick leave and their pension rights in order to 'save' the Greek economy? Your idea of who should be responsible in these circumstances is completely upside down. The Greek people have had a fraud committed against them by those who were in power at the time on a scale never before seen, and you want to blame the victims!
He is fairly consistent in blaming the victim / getting it wrong
Ask about Israel if you need more examples [ with the added bonus of hypocrisy in action as its wrong when they do it to Israel and right when Israel does it pre-emptively obviously. Its a tortured example of what passes as "thinking" ]
Jambalaya 3 hours ago
So what happens next, a great deal of uncertainty as a new government won't be formed for a few weeks yet
http://www.telegraph.co.uk/news/worldnews/europe/greece/11369232/Greek-election-Syriza-forms-new-government-with-Right-wing-populist-party.html Torygraph 2 hours ago
hope your not taking up fortune telling.
Going into a coalition with a right wing party seems to me to say that the anti austerity policy is paramount for Syriza
It is unfair to keep blaming Greece's problems on the welfare state, tax avoidance was always a bigger problem there, and still the problem which has had the least action taken on.
Surely the problem was the size of the welfare state compared to the tax collected. You can have low taxes*, [b]or[/b] high government spending**, but you have to pick [b]one[/b].
*tax evasion
**borrowing
That government coalition isn't going to make it to the end of the week.
Mind you, it could give the EU its usual answer when it comes to democracy, such as validating treaties. It can carry on sending the electorate away to repeat the exercise until it comes back with the correct result
@gordimor - I appreciate the logic of your post but they've agreed to form a government but that doesn't actually happen till Feb 16. That's what I was referring to in my earlier post. I would agree anti-austerity is their main agenda, they just want the rest of Europe to pay euro 140 billion for the privilege of having Greece remain in the euro.
@MSP, I have made a number of references to the dire state of tax collection. However, even if they collected all of those taxes it would make little difference.
@JY, its about accepting responsibility. Collectively he Greek people are a victim of no one except themselves. As "for getting it wrong" just as I have posted before it's funny how my line of argument seems to follow and generally support what governments and organisations around the world actually do. The various EU bodies have come out saying quite clearly if Greeks want to continue to receive bailout funds they must honour the agreements signed a few years ago which have lead to the budget cuts/austerity. Greece was bailed out last time as there was a concern a default/euro exist would impact other weak eurozone countires (Ireland, Portugal and the biggies of Italy and Spain). If the EU take the view they are now in a better position to weather the fallout from a Greek exit the Greeks will be "told take it or leave it".
Jam if I were you I would google appeal to authority
Amusing, but predictable, that you use a fallacy to defend your view
you never fail to deliver.
Stop bickering you two. Or I'll bang your bloody heads together!
That new Greek coalition is a bit like a coalition involving you pair. I'll give it a week 😀
Somehow I think that a party promising 10,000 new public sector jobs probably isn't the answer to the countries problems
Which tells you something about the electorate.
jambalaya - Member@JY, its about accepting responsibility.
It's about expecting every individual in a country to accept responsibility for something they may have had nothing to do with. Including a bunch that weren't born. I look forward to you accepting responsibility for your neighbour's credit card bill and the gambling debts of the dude that lived in your house before you.
I'll give it a week
Amusing 😆 [ and stops bickering ] but its more like you and THM uniting to hate the Euro zone though it wont last as long as that love in 😛
Collectively he Greek people are a victim of no one except themselves.
I hope you're a troll.
26% Unemployed.
60% Youth unemployment.
Wages down 38%
Pensions down 45%
32% Below the poverty line
33% with no access to healthcare
18% unable to meet their basic food needs
Number of corrupt politicians, bankers and industrialists in prison: 0
Amount of tax paid by shipping, construction and energy industries: 0
Still. They had it coming didn't they! 🙄
I listened to an interview with the Syriza ecconomic representative this morning on R4, essentially the fella likely to take over Greece's finances.
TBH what He was saying made perfect sense and seemed pretty conciliatory with the EU...
Basically the EU negotiated borrowing and repayment schedule for Greece is unsustainable, growing unemployment and homelessness is crippling the country, They don't want out of the EU or the Euro, and they don't want to shirk repaying their debts, but a collapsed Greece with rocketing debts wouldn't exactly be a great advert for European integration, so they want to renegotiate the EU deal and actually try and stimulate their economy...
They Key point he made was that most of the EU loans never actually go into the Greek economy, they are passed straight onto servicing their lenders.
It's not a particularly fantastic deal for anyone involved...
Time will tell, I'm interested to see where Greece goes once it leaves "Austerity" behind and tries to grow it's way out of economic depression.
This is an interesting article
http://www.theguardian.com/society/2013/may/15/recessions-hurt-but-austerity-kills
Given the consequeces of further austerity for its citizens what should a greek government do ? Is "the market" the best arbiter. I don't think so.
I heard that as well and thought the same cookeaa. He didn't exactly sound like an anarchist, or some kind of communist.
What he was saying is that for any of this to be sustainable, in the long term, the one essential ingredient is economic growth. You can't continue repayments with a constantly contracting economy. It just won't work.
Which clearly demonstrates the constraints of modern capitalism, and the dearth of creativity in economic circles. When any deviation from the prevailing neo-liberal orthodoxy, no matter how slight, is immediately decried as heresy, and apocalyptic predictions ensue
Its hardly like its a system thats covered itself in glory over the last ten years. But politicians of all colours are inexplicably still in its thrall. Its tragic really.
The old Greek government were playing fast and loose with borrowed money but the Greek people kept voting them in to do it!....their welfare state was frankly ridiculous, early retirement was the norm, tax evasion was rife...but yeah, the electorate had nothing to do with it! 🙄
Greece will continue to be in this problem (under the EU or otherwise) unless their is a culture change, tax avoidance seems to be a national pastime...culturally that needs to change and that has to come from the people...people need to accept that they will work into their 60s like every other country, again this has to be accepted by the poeple or they will continually shoot themselves in the foot by voting for whatever pie-in-the-sky-party tells them they can have it all and retire early to boot....welfare will have to be less extravagant, again a government can put this in place but it comes to nothing if the electorate wont accept it and just vote the 'nasty party' out each time something is done to try and control debt...
...blaming governments is very easy but us idiots vote them in and then take an 'ostrich with its head in the sand' attitude to politics when the reality of what our economy can deliver is vastly different to our expectations.
One of the things that the chap on R4 said had to change was 'tax immunity' rather than evasion/avoidance.
[url= http://rt.com/news/greece-officials-swiss-accounts-journalist-warrant-407/ ]Tax immunity and evasion[/url]
"The fact is that for the last 30-40 years, the rich in Greece has enjoyed a kind of tax immunity. They’re not really tax evaders, they’re immune from tax because of the cozy relationship that they have with politicians who legislate in a way that makes that tax immunity,”
Money for money, the devil for his own 'It was the poor what done it!'
Amount of tax paid by shipping, construction and energy industries: 0
Did you read that Vanity fair article?
Amount of tax paid by the vast majority; 0
ALL of the doctors in Greece stated income of less than 12,000 euros to avoid tax. Everyone who possibly could was self employed and paid zero tax.
The public sector was hugely bloated; Railway workers earned 65,000 euros.
"Arduous" professions which qualified for early pensions (50 yrs) included hair dressers and radio announcers.
You've got to feel for the average Greek, but the majority are far from blameless.
The Same bloke did address that point deviant, it's new broom time in Greece from the sounds of it, he talked about rooting out corruption at all levels IIRC, and TBH they do need to start actually paying their taxes, same as the Italians, they've made a national sport out of evading them.
Syriza are a pretty "Young" party formed in 2004 (from a Coalition of 13 smaller, broadly aligned, Leftwing parties, yes some are Marxist, etc)...
I think it's an [s]EU[/s] worldwide issue, most countries (UK included) have a bit of a problem with electing anyone under ~48 into senior any political positions, but why? the current lot of 50-60 somethings have not exactly been flawless...
Greece's new President is [i]only[/i] 40 (does that make him the youngest head of state in Europe?).
I think it will be good to see European politics start to include representatives from the generation really affected by their policies over the last 25 years, those who have grown up within the EU, not simply those who've presided over it's creation and assumed they should just carry on governing...
Corruption and lack of innovation both become endemic in organisations where change doesn't take place often enough and those at the top get a bit comfortable with the status quo. Greek politics and public office shows this, and the EU are in danger of sliding the same way, We need younger politicians Europe wide IMO... Discuss
This programme isn't available anymore, it was quite entertaining though. The lady hairdresser retired at 50 on 90% of her pension as that business is classified as dangerous (all those chemicals don't you know), she was bored so went back to work at the same salon cash in hand.
[url= http://www.channel4.com/programmes/go-greek-for-a-week/episode-guide ]Channel 4: Go Greek for a week[/url]
It's about expecting every individual in a country to accept responsibility for something they may have had nothing to do with. Including a bunch that weren't born. I look forward to you accepting responsibility for your neighbour's credit card bill and the gambling debts of the dude that lived in your house before you.
@Northwind, but the fundamental difference is that the national debt is acquired in the name of the nation including the as yet unborn, hence the cartoon I posted earlier.
but the shipping magnates, football club owners etc etc are still immune from tax while the nicely pensioned hairdresser has had all that slashed by order of brussles
@Northwind, but the fundamental difference is that the national debt is acquired in the name of the nation including the as yet unborn
It's not really a difference at all. You can't hold people responsible for something a government does. Next time you meet an old Russian man are you going to complain about Stalin? Of course not.
This is the real difference between right and left...
while the nicely pensioned hairdresser has had all that slashed by order of brussles
Nothing has been slashed though. They are just ensuring people pay their way, and the pansions were wildly out of synch with the reast of europe. Lending a country billions whilst allowing them to continue as before is crazy!
WRT football clubs etc; I'd bet Chelsea etc have tax "specialists" on their case too! It's inexcusable, I agree.