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jambalaya - Member@Northwind do you see the irony in that statement,
There's no irony- you're just trying to avoid the point. You want to depict the Greeks as people who want to "get something for nothing" and who are "responsible", I'm simply pointing out that many of the people paying the price were neither responsible, nor those who gained. Diversion tactics just suggest you know how weak your argument is.
You can say "that's just the way it is" but you can't pretend it's fair, or reasonable.
@dazh all the euro block members allowed the Greeks to enter, Sarkozy went as far as to admit it had been a mistake. It's very political the way the Greeks position Germany as the bad guy here when their stance in echoed by most (all?) of the other euro block countries. I do remember a number of the Eastern European countries being very critical of Greece at the time of the first bailout arguing they had kept their house in order why should they, as part of the euro, have to subsidise Greece etc who had over borrowed. You could also argue Germany is doing a lot to support Greece, the EU has provided euro 240bn in bailout funding and I suspect the Germans are a very large part of that. Many European banks plus international investors like pension funds provided the debt Greece used to support its economic programme, its the Greeks who are positioning it as Germany vs Greece when in fact its the EU/euro block as a whole.
@DrJ firstly Greece is no where near as impoverished as was Germany after WW1 it remains the beneficiary of approx euro 300bn in loans including 60bn keeping the Greek banks afloat (approx 20bn has been withdrawn from Greek banks in the past couple of months to be sent abroad) and secondly it poses no military threat to anyone. The worst thing the Greeks can do is default on all of their debt and throw all their toys out of the window.
You could also argue Germany is doing a lot to support Greece
Like a loan-shark supports his borrowers by lending them more money to pay off previous debts. At least a loan shark would break the legs of the person who actually borrowed the money, rather than a bunch of people with very little connection to them who had no say in whether the initial loans were taken out.
Jambalaya - r u sure? Default, devalue, big one-off hit. Pretty fast reaction and GDP allowed to recover subsequently. Remember Asia? Tough ST remedies are often the best policy.
Plus give creditors a reminder that they have a responsibility to think about those they lend to. Which major debt crisis has avoided creditors taking the pain? The lesson from J M Keynes....
Slightly tangential as it addresses a related point but see last para on oage 2 here
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firstly Greece is no where near as impoverished as was Germany after WW1 it remains the beneficiary of approx euro 300bn in loans including 60bn keeping the Greek banks afloat (approx 20bn has been withdrawn from Greek banks in the past couple of months to be sent abroad) and secondly it poses no military threat to anyone.
Of course the military threat is of no relevance whatsoever. As for the benefits of the huge loans, the point is that those are not supporting anyone's rent or food bills. Ordinary Greeks are becoming more and more impoverished.
And that's the issue really - "austerity" is not working. Tax receipts are DOWN even though tax rates have increased, because there are just not enough people working to pay the new higher taxes. It's just a matter of pragnatism - if the Germans really want their money back, this isn't the way to get it.
Has Germany paid back (with interest) the loan it forced Greece to give it in the early 40s yet?
It's rhetorical of course, Germany claims it was stolen rather than loaned and so not repayable
DrJ - Greece was never going to be able to "grow" itself out of trouble. Basic debt dynamic calculators showed that. But the can keeps being kicked down the road because the only way out remains off the agenda for the moment - they need to exit the €. Until then, they are buggered and the young, workers will bear the brunt of this folly.
Although bizarrely epicsteve accuses me of, quote : "typical conspiracy theory nutter behaviour" for suggesting such a thing
It's because you're hanging on to what looks a questionable statistic to "prove" your point. Given the stat itself looks dodgy (and isn't supported by other evidence), then it devalues your argument.
I honestly don't care one way or the other, however a stat that shows the Greeks as being way out of line with the rest of the EU looked dodgy to me - and on digging around continues to look dodgy. The other stats I've seen puts Greece roughly in line with other countries (including Germany), which sounds more believable. Those stats (the EU's own) indicate that the Greeks record about the same number of hours worked as the Germans - which might support your argument that they're not lazy (which I've no issue with personally) but doesn't support the point made about them being the hardest working in the EU and working way longer hours than the Germans.
I honestly don't care one way or the other
I think you do
I think you do
Only about the abuse of statistics.
Have a word with the OECD, and perhaps write strongly worded letters to the Washington Post, the BBC, and the other news providers who reported the OECD findings ?
And Ernie, you can write to them to complain about the "far left" comments 😉
Anyway back to Greece, so varoufakis is not messing about - "Europe is willing to negotiate haircuts - anything else is a waste of time."
The opening gambit....
DrJ - Greece was never going to be able to "grow" itself out of trouble
Could well be, but giving them a hand would mean that they could pay back something and get on their feet again without massive social disruption, whereas the IMF recipe has just resulted in loss all around. (Except for the bankers, of course, but that is what we expect.)
But I'm not complaining THM.
[i]"Europe is willing to negotiate haircuts - anything else is a waste of time." [/i]
So the bankers and conservative politicians in Berlin weren't prepared to throw a lifeline to the previous conservative government in Athens and give them some breathing space, but they will to a motley crew of one-time student revolutionaries ? LOL!
True - first fudge would be another restructuring. There also will be an inevitable haircut although perhaps not as extreme as varoufakis'!!
But the two positions are clearly incompatible and the can now too beaten to be kicked too far.
The history of Asia is that the great shock and awe of devaluation etc is ST and manageable. But it remains off agenda here. European politicos prefer subterfuge instead.
Other way round Ernie, he is the new finance minister. He is giving the G position
Anyway, I misread this earlier.
"Far left" is how the FT describes it BTW
The media can use all sorts of labels to describe political organisations, it doesn't make them correct.... No "far left" party would take that stance.
Northwind my argument is more solid than granite on this.
DrJ, the banks and other investors would have forced a Greek default as they had no appetite/ability to fund a bailout
Greece has two fundamental choices, continue to stand by the agreement they signed or go bust (ie default, exit euro, massive devaluation). I've no doubt they'll try and come up with a face saving negotiation such as extending the maturity of the debt a bit whilst claiming a great victory but tax payers in Europe won't pay for a second even more generous bailout.
Let's judge Syriza on how much extra tax they manage to collect given we all know how much is avoided. I'm not holding my breath. In the meantime expect lots of anti-German rhetoric and a reaction there amongst rank and file taxpayers
Let's judge Syriza on how much extra tax they manage to collect given we all know how much is avoided.
The issue in Greece is now what capacity people have to pay the new taxes, not what appetite they have for avoiding it, or how efficient the collectors are.
jambalaya - MemberNorthwind my argument is more solid than granite on this.
Oh well as long as you [i]say[/i] so, while avoiding the counterargument completely, I'm sure you must be right
Its certainly not just Germany thats disgruntled. Going back to Jammy's Eastern Europe point again. Do you seriously think they're going to wear Greece being cut yet more economic slack? If Germany and the more developed, nations with comparatively lavish public services, are fed up with Greece, how do you think the relatively poorer nations with the EU are feeling?
They've watched enviously the public services, generous pensions etc of Greece, while being unable to afford the same themselves, due to sticking the rules of EU membership. They've then been informed that they're being asked to pay for it, as actually Greece couldn't afford these things either.
How would you be feeling about that? Its pretty obvious that theres no way on earth that Greece is in a position to renegotiate anything. Because no-one in the EU is prepared to stump up yet again. So that promise to the electorate can't be delivered on. Never mind whats going to fund these 10,000 new public sector jobs.
So that leaves 2 options. More of the same - which the Greek people look in no mood for - or default, devalue and deal with the aftermath. And them's your choices, I'm afraid
Greece won't leave. The deal will be renegotiated - Greece can't afford to leave & the EU can't afford to let them.
If they do, then what's to stop Portugal, Italy, Spain et al all buggering off??
If they do, then what's to stop Portugal, Italy, Spain et al all buggering off??
The Greek famine and refugee camps should do the trick.*
*Other outcomes are available. None good.
Yes I'm aware he's the new finance minister THM. You've always apparently struggled to understand the point I'm making THM 🙂
They've watched enviously the public services, generous pensions etc of Greece, while being unable to afford the same themselves, due to sticking the rules of EU membership.
The Eastern European nations should feel aggrieved yes, but if we're going to go down the route of punishing the Greek people for the corrupt and criminal actions of their government and the EU politicians who supported their entry, then you could equally say the same about the Eastern Europeans. Buyer beware etc...
Greece has two fundamental choices, continue to stand by the agreement they signed or go bust (ie default, exit euro, massive devaluation).
No they don't. The first is not open to them. They cannot stand by the agreement and the terms that go with. That is the ONLY solid granite bit. The question is what next....
I've no doubt they'll try and come up with a face saving negotiation such as extending the maturity of the debt a bit
Watch both sides try the same trick.
whilst claiming a great victory but tax payers in Europe won't pay for a second even more generous bailout.
Which is what the politicians are scared of, but not as much as the end of their folly.
Ernie, true, but not intentional in this case!!
thm, I very much doubt there'll be any kind of bail out. Again, the question is if Greece get one what's to stop anybody else asking for one?
It'll be a renegotiation & both sides will claim victory.
5 will get you ten, they are already gearing up the drachma printing machines, they daren't admit it or there would be a massive flight of capitol from the country, if in fact there is anyone still there that hasn't already baled.
Perhaps they should re engage Goldman Sachs, they created the mess in the first place at huge profit, make them sort it out.
Northwind, I understand your position/counterargument on this. I simply disagree and in the case of Greece you cannot claim it's just the elite or corrupt government who have benefited as the "love" has been shared throughout the country.
From Germany today reporting in the Telegrapgh
Finance Minister
[i]We have given exceptional help to Greece. I must say emphatically that German taxpayers have handed over a great deal[/i]
Research Institute
[i]Mr Matthes warned that Syriza cannot hope for softer terms from Italy, Spain and France, since the taxpayers of these countries have lent almost as much to Greece per capita as have the Germans. “There is not going to be flexibility in the Eurogroup, nor any coalition of southern states. There is real money at stake,” he said.
Syriza succeeded in selling an illusion that Greece can end the reforms and stop paying the debt, and still stay in the euro. This is impossible. If they do that the European Central Bank cannot accept collateral guaranteed by the Greek government,” he said.
“This will force the Greeks to return to the drachma and that will cause massive disruption. There will a government default, corporate defaults and bank defaults. The financial system will simply break down,[/i]
Syriza succeeded in selling an illusion that Greece can end the reforms and stop paying the debt, and still stay in the euro. This is impossible. If they do that the European Central Bank cannot accept collateral guaranteed by the Greek government,” he said.
My point earlier, which refutes your idea of a choice. It's doesn't exist.
So singapore the latest one to join the currency wars. When we look back at this period, historians and economists will shake their collective heads in disbelief. Extraordinary times
you cannot claim it's just the elite or corrupt government who have benefited as the "love" has been shared throughout the country
We've covered this, but you're still seeking to blame the victims. Yes there were benefits across society, but the whole point is that they had no choice in the matter. You think if the govt had come out and said, 'We can't afford these loans but we're taking them out anyway to fund the shortfall in tax revenues because our biggest industries and most well off in society don't want to pay any tax, and in 10 years time the country will be bankrupt and you're all going to lose your jobs, your pensions, your healthcare and social security', that they would have voted for that?
As THM said (and it's not often we agree), the lender has to take some responsibility and accept that if they make a bad loan to someone who can't repay it, then they shouldn't expect to get all their money back. The main difference in this case is that for some bizarre reason the lenders have been allowed to lend them even more money. It's a poor analogy, but if you or I defaulted on our mortgages, do you think the bank would be saying 'Don't worry, we'll just lend you some more money and it'll all be ok'?
in the case of Greece you cannot claim it's just the elite or corrupt government who have benefited as the "love" has been shared throughout the country.
A lot of the "love" has also gone right back to Germany in the form of shady deals for Siemens and other companies in contracts for items that benefitted nobody. Of course that was always the idea behind the "help".
[url= http://www.wsj.com/articles/SB10001424052748703636404575352991108208712 ]http://www.wsj.com/articles/SB10001424052748703636404575352991108208712[/url]
[url= http://www.wsj.com/articles/SB10001424052748704698004576103481318124252 ]http://www.wsj.com/articles/SB10001424052748704698004576103481318124252[/url]
jambalaya - MemberNorthwind, I understand your position/counterargument on this. I simply disagree and in the case of Greece you cannot claim it's just the elite or corrupt government who have benefited as the "love" has been shared throughout the country.
It's clear you don't understand my point at all. Or rather, I suspect that you do but you prefer to misrepresent it, since it'd be astonishing if you've misunderstood it to this extent.
My point earlier, which refutes your idea of a choice. It's doesn't exist.
Really we are not so far apart which is why I think they should have gone bust in 2009 and exited the euro then. The EU are keen to protect their great project so they bailed out Greece when it should have gone to the wall. Even Syriza know that a default/exit are madness and have said that's not the mandate the people have given them. Remaining in the euro under the reform programme and financial responsibility agreement (not quite as catchy as "austerity") is really their only option, we all know they'll never repay the debt.
@DrJ the amount of money that's gone back into Germany is tiny relative that which has gone into the pockets of the Greeks. Syriza need to show they can collect taxes from Greeks, why should French, Spanish, Italian and German taxpayers pay the taxes the Greeks won't ?
@DrJ the amount of money that's gone back into Germany is tiny relative that which has gone into the pockets of the Greeks.
Well, a billion here, a few billion there - pretty soon you're talking about real money.
Syriza need to show they can collect taxes from Greeks, why should French, Spanish, Italian and German taxpayers pay the taxes the Greeks won't ?
The Greeks mostly don't have anything left to tax, thanks to "austerity".
What they do have, or have had, is a network of corrupt and incompetent decision makers, and I hope that Syriza have the stomach to root them out.
why should French, Spanish, Italian and German taxpayers pay the taxes the Greeks won't ?
God you'll be banging on about Greece maxing out it's 'national credit card' next, and how everyone has a flatscreen telly.
@dazh you describe people who have borrowed too much as victims, there is a reason all our grandparents hated debt, why many religions forbid you to borrow money. Its not a new problem. Financial irresponsibility isn't new.
Greece has indeed maxed out every single credit card and now doesn't want to pay. It is that simple.
@DrJ the Greeks have plenty to tax, let's start with the whole black market economy which is rife from the street seller to the brain surgeon. No doubt at all those untaxed funds are quickly deposited in an offshore bank account
DrJ - MemberWell, a billion here, a few billion there - pretty soon you're talking about real money.
west wing fan?
Greece didn't have an economy before austerity in the first place. It was all propped up by EU development loans, which like with much of Southern Europe, went into either speculative projects or the pockets of political cronies.
The people that did want to get on in Southern Europe immigrated.
The truth is there is a major historic economic divide between Northern and Southern Europe - going back to the collapse of the Spanish empire. The EU tried to change that, but hundreds of years of culture cannot be reversed with the click of the fingers.
@dazh you describe people who have borrowed too much as victims
Will you please stop equating the greek people at large with the corrupt and incompetent politicians, financiers and EU officials who fraudulently allowed the Greek govt to enter the Euro and subsequently take out loans it knew it couldn't repay. The fact that some of this money was spent on social security and filling the black holes from tax avoidance is irrelevant. The Greek people did not take out the loans, they weren't the main benefactors, and they sure as hell shouldn't be the ones paying the bills now.
Greece has indeed maxed out every single credit card and now doesn't want to pay. It is that simple.
It's that simple if you have a naive and simplistic view of the world where you equate national and international finances with that of an individual family.
No doubt at all those untaxed funds are quickly deposited in an offshore bank account
Any proof for that?
Financial irresponsibility isn't new.
I think greeces view, and I have some sympathy with it, is the people who were as stupid as lend them it [ max out every credit card] deserve to take some of th epain as well as the greek people. As NW [ and others] point out some of those paying the piper were not even born when this happened and had nothing to do with it yet they must pay it . Basically everyone must pay but those noble risk takers and players of the free market who lent the money 😕
Free market except when it works against them
IMHO the market also needs to take a bite out of their arse so they will be more prudent next time we cannot just keep letting them be risky safe in the knowledge we [ taxpayers somewhere be it Germany /the EU / Greece] will always pays them