[Closed] Why give Greece more cash?

meow. Someone's not getting any grilled haloumi tonight then.

You might also ask the same question of UK consumers - why give us more debt (particularly mortgages) when we're in it up to our necks...

Europe has an ageing population, real economic growth stopped in the late 70s as the post-war baby boom (population growth) and re-growth of the economy after we wrecked it in WW2 came to an end.
Governments have given us debt to replace previously rising incomes to help give the electorate an illusion of rising wealth and rising living standards. We didn't realise this was what they were doing at the time and have swallowed it whole, hence massive amounts of personal and government debt and, as Manic Street Preachers put it in 1991 in 'Natwest, Barclays, Midlands, Lloyds' - 'They're sanitising credit'.

Greece is just the canary in the coalmine IMO - the most vulnerable of the debt-laden countries. Italy, Spain, Portgual, UK not ideally placed right now either.

Scarily, the Chinese seem to have got themselves into a debt-laden speculative mess too... failing to learn the lessons of our mistakes.

Fingers crossed that we'll be able to progress softly into a low-growth world, it's going to take some serious skill on behalf of policy-makers to avoid a repeat (possibly worse) of 2008, which in itself was a sign of the underlying problem, rather than the problem itself...

None of this asks the question of how to finance feeding and housing a fast-rising global population (with expectations of a Western middle-class lifestyle) as well as meeting the costs of climate change...

Without significant meaningful financial reform they should not get any more cash

They have proposed significant reforms, but the troika prefer a political approach - trying to start a bank run, undermining the Syriza govt, using the EC as a propaganda voice etc.

The money isn't going into the Greek economy it goes to the French and German Banks that lent them money in the first place. It's not so much a Greek bailout but another bank bailout.

More money is being lent to the Greeks so they can pay their wages and pensions

It's highly unlikely Greece can repay this money. The EU and IMF want to see Greece make some reforms to labour laws, pensions, tax collection as a condition for lending them more money so that there is some kind of chance Greece reforms. Otherwise the pace at which Greek debt grows will just accelerate.

DrJ Greece has NOT proposed significant reforms, the the contrary they have promised jack sh.t

Interesting viewpoint here:
[url= http://www.davidmcwilliams.ie/2015/06/22/the-eus-disgraceful-treatment-of-greece ]http://www.davidmcwilliams.ie/2015/06/22/the-eus-disgraceful-treatment-of-greece[/url]

DrJ Greece has NOT proposed significant reforms, the the contrary they have promised jack sh.t

Not the case. For example:
http://yanisvaroufakis.eu/2015/06/18/greeces-proposals-to-end-the-crisis-my-intervention-at-todays-eurogroup/

The EU and IMF want to see Greece make some reforms to labour laws, pensions, tax collection as a condition for lending them more money so that there is some kind of chance Greece reforms. Otherwise the pace at which Greek debt grows will just accelerate.

Again, not the case. The EU and IMF don't agree on what should happen - the IMF position is that without debt forgiveness then regardless of what the Greeks do the debt will be unsustainable. The EU position, doubtless politically motivated, is that debt forgiveness is off the table, so the chances of growth are diminished even more.

[i](and assume the gormless Marxist fantasists in Syriza will never embrace real structural reform)[/i]

From that Mark Hulsman article 😯

Mandmade landscapes have encouraged butterfly species to thrive and adapt to a very specific set of environmental conditions that might not otherwise be naturally occurring.
But those environments being not naturally formed must be maintained by man or the habitat is lost and the butterfly colonies would die.

1. Are humans not part of nature?
2. How did the butterflies evolve if they needed traditional farming landscape in order to survive?
3. More holes than a collander.

Greece is going to default at some point. The only issue in question is the timing in relation to any economic recovery in the rest of the EU, and in particular whether Spain and Italy can be prevented from subsequently spinning down the same debt and austerity plughole. I personally think this is a forlorn hope.

It would be in the interests of the Greek people to default to its own timetable, rather than wait for the Germans to pull the plug.

The McWilliams article linked above deserves a wider audience.

Apparently Greece sent the wrong document last night, if true then they are either ****ing stupid beyond belief or too clever for their own good.

Anyone know what the UK and the USA positions is on the whole thing? Both governments have been remarkably quiet apart from general platitudes like wanting to keep Greece in the Euro. I assume that the BofE and Fed are kept in the loop, and possibly that GCHQ and NSA have tapped the whole thing. But are government mandarins more active in being directly involved in negotiations?

Anyone know what the UK and the USA positions is on the whole thing? Both governments have been remarkably quiet apart from general platitudes like wanting to keep Greece in the Euro

We're not on the hook for anything like the Greek debt that Germany and France are. And obviously, though the collapse of the Euro won't be pretty for anyone, we've a lot less to lose than those presently members.

I don't think us, or the Americans, chipping in with any advice would be greatly appreciated. Leave them to sort out their own mess, and hope that when it does go tits up - and lets be honest it will do at some point, whether thats today, in 6 months or 2 years time - that the fall out is to at least a certain degree, contained.

Wishful thinking, I know. But I don't see what anyone outside the Euro could usefully add. Apart from pouring more cash into the bottomless EU money pit. And that ain't going to happen. George Osborne made that perfectly clear 5 years ago

EEK! This would be why Germany and France are a tad worried. Us not so much....

[img] [/img]

1. Are humans not part of nature?
2. How did the butterflies evolve if they needed traditional farming landscape in order to survive?
3. More holes than a collander.

https://books.google.co.uk/books?id=0snnF3vwVO4C&q=232#v=snippet&q=232&f=false

Page 232.
Hole, plugged 😉

As far as I understand it (which isn't a lot):

Lots of companies have money in Greek banks. If the Greeks leave the Euro, these deposits will be converted into Drachma which will then drop like a stone causing a huge sum of other people's money to vanish.

Which is why it'd be bad.

I think it's more that lots of financial institutions have, either directly or indirectly, given Greece A LOT of money with the assumption that it will be paid back with interest. They have in turn packaged up this assumed interest as further debt instruments and sold them on, etc., etc., and so the money trail expands like a Sierpinski fractal until half the world is involved in some way or another.

If Greece leaves the Euro, it will mean none of the original loan money will ever be paid back, which means none of the repackaged debt instruments will be paid either, and a lot of financial institutions will be in a lot of trouble.

But then, I don't understand much of it either. If I did, I'd be making a killing on the international derivatives market. Or something.

anyone who really (and I mean [i]really[/i]) wants to see one way of how a GREXIT might be pulled off, can read Capital Economics' winning paper for the Wolfson Prize in 2012 called "Leaving the Euro: A practical guide"

page 42 for the introduction of a new currency, and summarised:

? Redenominate all contractual nominal values at an official
conversion rate of 1-for-1, including all bank deposits and loans
with Greek resident financial institutions (including the Greek
branches of foreign banks).

? Order printing of new notes and minting of new coins as soon as
exit is announced but accept that there will be a period without new
physical currency.

? Rely on non-cash means of payment for the vast majority of
transactions.

? Allow euros to continue to be used where people so wish, and
permit dual pricing.

? Close the banks and ATMs, and prevent any bank transactions, once
the announcement of euro withdrawal is made.

? Avoid more drastic controls on financial institutions and
transactions. But if news leaks outs early, impose wider capital
controls and move quickly to exit.

? Treat all withdrawals of euros from banks and ATMs after D-Day as
a foreign currency transaction debited from drachma accounts
according to the prevailing exchange rate

@molgrips only a company in need of a lobotamy would have money in a Greek bank. To be honest I am surpirsed deposits have only fallen from €140bn to €100bn since Syriza came to power.

Intereting language this evening, Greeks claiming there will be a deal and German finance minister saying there's nothing new. Meeting once again lasted only an hour. From what I've seen hotel vat wont raise that much and I suspect corporate and personal taxe rises will go largely unpaid. I'd be very surprised if the numbers work or come close to it. Greek pensions are 16% of GDP vs 8.3% for UK. The government needs to address what its paying out.

IMO both the UK and US want to see a solution as 1 that doesnt cost thrm anything other than their shares of the IMF debt and 2 a greek exit and euro area economic slwdown would hurt their economies

German finance minister saying there's nothing new

But that is clearly a lie, since other hawks, such as Dijsselbloem, say the opposite.

Greek pensions are 16% of GDP vs 8.3% for UK

Yes, but the GDP is much less, thanks to the troika's policies. Now pensions are often a family's only income, with many people with no hope of a job taking early retirement which consequently pushes up the costs of pensions.

Page 232.
Hole, plugged

Care to explain as it suggests to me the species were all present prior to agriculture hence your original post being bobbins. Doesnt even attempt to address point 1.

FFS A_A, are the summer term blues getting to you or something?

Where a synthetically created environment encourages a dependant existence, there's a duty on those that create that environment to those dependent upon it on it's withdrawal. The analogy still stands.

How can you have a synthetically created environment? You talk like a first year undergrad and strop like a 3 year old.

One simple fact, they spent the money therefore they are required to repay it. Lets not dress it up.

How can you have a synthetically created environment?

Erm, quite easily, really.

One simple fact, they spent the money therefore they are required to repay it. Lets not dress it up.

Ideally, yes, but the fact on the ground is that this is not possible. The question therefore is, what is the best way to proceed? How can Greece best be returned to economic health, in which it can repay at least some of the debt? Is it by crushing austerity, which has been shown for 5 years to be a failure, or by some more intelligent approach, which is actually based on evidence and not punitive dogma?

Certainly not, tied into a fixed exchange rate, with a requirement to produce a budget surplus and without any fiscal transfers - only a magician could pull that out if the bag and neither Tsipras nor Varoufakis are magicians.

Given that the Troika are full of trained economics, their grasp of basic theory is extraordinarily lacking. There is no way that Greece can deliver what is required. It's BS.

At this point it looks like a game of prisoners dilemma - either party could walk away with everything (leaving the other with nothing) if the one or the other blinks (the question is then who will blink first) or both parties could leave with something - which is perhaps better than nothing. The reality is, neither side can afford to leave with nothing so both must leave with something - except that now Greece has a leader who seems willing to go all in and Merkel looks to be doing the same.

When do you think they will reach Australia if they keep on digging? 😆

How can you have a synthetically created environment?
Erm, quite easily, really.

Care to expand on that or give an example?

Stoner - Member
anyone who really (and I mean really) wants to see one way of how a GREXIT might be pulled off, can read Capital Economics' winning paper for the Wolfson Prize in 2012 called "Leaving the Euro: A practical guide"

and there was me thinking the plan was to change the name of the airport/country and pretend none of it ever happened

When do you think they will reach Australia if they keep on digging?

Care to expand on that or give an example?

take away the goldfish bowl and see how long the goldfish lasts.

Im not sure which is more fatuous: My goldfish example or your determination to spoil for a fight over a whimsical analogy?

Im not sure which is more fatuous: My goldfish example or your determination to spoil for a fight over a whimsical analogy?

Taking away a resource is hardly similar to creating a synthetic environment.

Taking away a resource is hardly similar to creating a synthetic environment.

The synthetic environment was one where the Greek banks could sell bonds to buyers with the expectation that the debts were as good as German bonds (ie low interest rates).

The synthetic environment was one where the Greek banks could sell bonds to buyers with the expectation that the debts were as good as German bonds (ie low interest rates).

that I could go along with

mikewsmith - Member

and there was me thinking the plan was to change the name of the airport/country and pretend none of it ever happened

TBh that's what they'd do if it were a company. Quick, create a "Bad Greece", maybe on one of the Laousses Islets, put all the debt into that one and put all the assets into Greace Holdings, with your wife as director- sorted. But if it's a country, it's totally reasonable to expect unborn children to pick up the tab for their entire lives.

But if it's a country, it's totally reasonable to expect unborn children to pick up the tab for their entire lives.

there was me thinking that was the core policy of the "End Austerity Now" loons.

But, what will have changed by the next dead line? Lets assume that they get the money. Will it be enough to give them a chance to turn this crisis around in the short term and meet the future repayment schedule without further last minute deals?

Greece has had 5 years of bail-outs, all conditional on it making fundamental changes to its economy to bring it into line with the real world. Privatisations, changes to the pensions and benefits system, actually bothering to get people to pay their tax, that type of thing.

Every time it has taken the money, and agreed to these reforms, only to immediately forget about these committments, and carry on exactly as before until it runs out of money again, and goes cap in hand to Brussells.... again.

Will anything be any different this time? What do you think?....

[img] [/img]

Will anything be any different this time? What do you think?....

I know the answer to this one = Nope.

All the proposed 'reforms' are for higher taxes on business and VAT, while making no efforts to tackle the public sector. All the while more money pours out of Greek banks. Nuts.

Im not sure which is more fatuous: My goldfish example or your determination to spoil for a fight over a whimsical analogy?

But if it's a country, it's totally reasonable to expect unborn children to pick up the tab for their entire lives.

What @binners says (nice film analogy), this latest deal is for a 6-7 month extension and during that time we'll have to do this and more all over again. @Pawsy in my view if the deal get done (I expect it to be fudged) in the 6 months the Greeks will be able to deliver very little. If you look at their proposal most of the tax rises are projected to bring an material uptick in income only in 2016. So I agree with your point, this latest can kicking excersize will not change much at all before a longer term deal needs to be negotiated.

Thank God we are not in the euro

[img] ?0623[/img]

What @binners says (nice film analogy)

Not correct jambas - it's exactly the taxpayers that must foot the bill (along with creditors in the case of debt restructuring/default etc). This abdication of responsibility for the required fiscal transfers between nations is what is condemning the € to its ultimate demise. The Germans are as much at fault at the Greeks (and many parties ARE at fault) but you cannot create a monetary union with a fixed exchange rate and not have fiscal transfers between regions or in this case counties ie taxpayers in some regions need to transfer funds to those in weaker regions.

The Germans believe that they can create 3/4 of the required framework and then live with it- largely because it bestows benefits on them eg artificially low exchange rate, artificially cheap acces to credit for consumption in other countries which import their goods and free trade etc. But there is a quid pro quo.

Blaming the Greeks unilaterally is simple economic and political myopia.

Except in the film, Bill Murray uses the opportunity to better himself and make amends

only after the mid film epiphany

THM - Will Hutton came out with an interesting comment - that the only way that the Euro could work as a currency woul be for Germany to leave it, as it is so out of kilter with every other European economy that it can never work with Germany as a member. It is just skewing everything so dramatically for everyone else, who's economies need completely diffferent conditions for growth

jambalaya - Member

It should not be the tax payers and unborn children of Slovakia, Portugal, Ireland etc who should be paying the bill

So what is it about this accident of birth that makes you conclude that unborn greeks should pay the price but unborn kids elsewhere shouldn't? Have they sinned in a past life?

You seem to want to appeal to some sense of justice but it just makes no sense. We have the capacity to inflict this on people who had no part in it, and we probably will, but we can't pretend it's right. Let's at least be honest and say to them "global powers beyond your control have chosen to crush your generation, for something you had nothing to do with. You will pay the price for other people's mistakes, for no good reason at all"

You seem to want to appeal to some sense of justice but it just makes no sense

But it is at least consistent with jamba's world view, in which Palestinian children should be fried in white phosphorous because of what someone somewhere else did at another time.