Run, Greeks, run! This travesty of usury and loan-sharking while crushing your ability to ever recover has to end. Or the banks and investment houses, the IMF and other powers that once crushed South and Latin America will certainly go on to crush other European nations, too. Any creditor that squeezes the life out of people, even those who had no power to change the loans or even knew about them, needs to stop the blood-letting before the blood becomes more than a metaphor.
3
The Capitalist West lent billions of Dollars, for Greece to realize its Olympic Games, knowing that it was a risk, as Greece is one of the poorest country in EU.
Now they demand their money back? Seems unrealistic.
If Greece has no more money to pay its obligations, then someone should have transferred it to foreign banks. Money cannot evaporate like smoke.
Billions of Dollars were driven by European and American money-men and invested in their banks.
Now they demand their money back? Seems unrealistic.
If Greece has no more money to pay its obligations, then someone should have transferred it to foreign banks. Money cannot evaporate like smoke.
Billions of Dollars were driven by European and American money-men and invested in their banks.
2
All this stress and pain foisted on ordinary Greeks could have been avoided if the troika of lenders and bureaucrats could just admit: AUSTERITY FAILED.
Why can't they admit that after five years of crushing Greece (and yes Greece DID comply with austerity as evidenced by its surplus and economic nosedive), they have actually sided the debt to skyrocket from 109% of GDP to 180% and the GDP to tank by 26%... Plus unemployment is up to 27% ... The geniuses who took control of Greece ran it to the ground.
So what is a leader expected to do when those same geniuses demand MORE POISON as a *new* remedy for the poison crippling Greece?
If Greece leaves the euro we as Americans should support the move. We left the oppression of England, didn't we? Greece is in many ways fighting another revolution, against very powerful forces, and this little country is doing it alone.
Solidarity with GREECE.
Why can't they admit that after five years of crushing Greece (and yes Greece DID comply with austerity as evidenced by its surplus and economic nosedive), they have actually sided the debt to skyrocket from 109% of GDP to 180% and the GDP to tank by 26%... Plus unemployment is up to 27% ... The geniuses who took control of Greece ran it to the ground.
So what is a leader expected to do when those same geniuses demand MORE POISON as a *new* remedy for the poison crippling Greece?
If Greece leaves the euro we as Americans should support the move. We left the oppression of England, didn't we? Greece is in many ways fighting another revolution, against very powerful forces, and this little country is doing it alone.
Solidarity with GREECE.
5
When I was taking a college course back in the late 80s, the professor asked us to write opinion pieces for publication in "a European newspaper" arguing either for or against the introduction of a common currency before the introduction of a common government. I argued that the expert on monetary, customs, and postal unions was Otto von Bismarck, and that Bismarck would have counselled strongly against the establishment of the Euro. It is not possible to get people to agree on taxation and fiscal policy unless they feel they are part of the whole; and, assuredly, Greeks feel they are Greek, Poles are Poles, Spaniards are Spanish. They are who they always were, and as an afterthought, they are European. The Austro-Hungarian Empire had a common currency, but it never functioned as a democracy; as soon as people were given a choice, they ran away and created linguistic unions.
Greece, the country that gave us the very idea of democracy, is showing us how language and culture trump idealistic notions of a common currency, even when pursued in the noble cause of a European Union.
Greece, the country that gave us the very idea of democracy, is showing us how language and culture trump idealistic notions of a common currency, even when pursued in the noble cause of a European Union.
2
"It would set a precedent that the European currency, and the European Union more broadly, is more fragile than its leaders would like the world to think."
Perhaps if this is the truth the EU's leaders should no longer be allowed to hide it from the world and its other member states. Perhaps a Grexit, while painful in the short term, may prove not only liberating in the longer term, but make it less possible for the huge global corporate wolves hiding behind the EU's voluminous skirts and licking their chops at the march toward TTIP to persuade the British, French, Danish, and Hungarian (for starters) populations that EU membership is the alpha and omega of European evolution.
Hopefully, down the road, a recovering Greece could pave the way for a successful campaign for a NO vote in the British EU referendum ("Should Britain remain a member of the European Union?") - and, thus, a "Brexit", followed by a successful "Frexit" campaign by the FN in France, a "Dexit" led by the Danish People's Party . . . and a new bloc of nations interested in trade but not wholesale surrender of control of their borders, imperious orders on migration and non-European immigration by a faceless bureaucracy in Brussels, and the ability to say NO to TTIP.
Perhaps if this is the truth the EU's leaders should no longer be allowed to hide it from the world and its other member states. Perhaps a Grexit, while painful in the short term, may prove not only liberating in the longer term, but make it less possible for the huge global corporate wolves hiding behind the EU's voluminous skirts and licking their chops at the march toward TTIP to persuade the British, French, Danish, and Hungarian (for starters) populations that EU membership is the alpha and omega of European evolution.
Hopefully, down the road, a recovering Greece could pave the way for a successful campaign for a NO vote in the British EU referendum ("Should Britain remain a member of the European Union?") - and, thus, a "Brexit", followed by a successful "Frexit" campaign by the FN in France, a "Dexit" led by the Danish People's Party . . . and a new bloc of nations interested in trade but not wholesale surrender of control of their borders, imperious orders on migration and non-European immigration by a faceless bureaucracy in Brussels, and the ability to say NO to TTIP.
3
A currency union (like you have in Europe) benefits the most efficient countries to the detriment of the others. At least when they have their own currencies, the less efficient countries can devalue their currency to stay competitive. The currency union is great for Germany which arguably the most efficient producer in the world - but for the others it is a recipe for disaster. I am surprised they were able to hold it together this long. Portugal, Italy, and Spain should be leaving soon also - for their own good.
4
The most disheartening thing about this Greek ttragedy is that the European people, not the bankers and the Big Shots, but the just plain folks there who have to WORK for a living, feel no sympathy for the just plain folks in Greece who also have to work - if they can get work - for a living. They are not responsible for the misery which now befalls them. Their own tax evading Big Shots are. The Greek people themselves understand this, that's why they elected the present "leftist" gov't. If the aforesaid bakers adn Big Shots really wanted to help Greece they'd give that government a chanve to work, to stop corruption and tax evasion, but alll they offer is austerity. Not for the rich, of course, for the poor.
4
The 25% unemployment rate in Greece is 100% the fault of the leftist Greek government. They have created a horrible business climate. It is ludicrous to suggest that the average Greek, who can retire at age 50, must bear no burden for the mess they created and benefited from
1
To all those who are advocating forgiving Greece's past debts and lending them more money, I suggest your whip out your personal checkbooks books and write a check to the Greek government. It is easy to give away someone else's money but let's see if you are willing to give away your own.
The Greeks borrowed the money and they need to learn that you need to pay it back, even if it hurts.
There is this growing trend as seen in many US post-students that feel that debts are not really something one needs to honor. They give themselves excuses about how unfair it is to expect them to sacrifice their personal spending to pay back those big, bad banks.
The Greeks borrowed the money and they need to learn that you need to pay it back, even if it hurts.
There is this growing trend as seen in many US post-students that feel that debts are not really something one needs to honor. They give themselves excuses about how unfair it is to expect them to sacrifice their personal spending to pay back those big, bad banks.
3
I agree with you . As someone who does not expect social security to be around when I retire, I should not have to pay into it. Plus the old have gotten (and keep demanding) more and more out of social security. They have driven it bankrupt. Let the old work longer.
2
Yes, but what about lenders that fail to do due diligence on borrowers and then try to push the losses off on others? That would be anybody who lent the Greek govt money to spend irresponsibly. Like with the mortgage meltdown - those who have nothing to do with the bad decisions (taxpayers, workers, savers) end up paying a large share of the costs of the mistakes of borrowers and lenders.
2
The root problem is that modern democracies refuse to accept the economic consequences of bad decisions, which markets correct through bankruptcies and liquidations. The political process is held hostage to shifting the inevitable losses from the most powerful to the least powerful members of the polity. Do we really think we have progressed beyond political revolutions?
1
If Greece leave the EU, as the author seems to be encouraging it to do, it will be on its way to being a third world country. This will be a great object lesson for the EU and the rest of the world.
3
I really don`t even understand why did the Greeks wait this long to call spade a spade. The concept of Euro was cleverly designed to further prop up German economy. Sooner the rest of southern and some central European members realize it the better for them.
Greeks have made huge contribution in terms of Knowledge and civilization to north and western Europe and to some extent to the rest of world and the bullies ought to be grateful for it
And why do writers keep on rubbing in the label" left wing government " frequently. I do not that being done to the right wing European and other countries that frequently. Cheer up Greeks, keep up the pressure. The silent majority all over the world are with you.
Greeks have made huge contribution in terms of Knowledge and civilization to north and western Europe and to some extent to the rest of world and the bullies ought to be grateful for it
And why do writers keep on rubbing in the label" left wing government " frequently. I do not that being done to the right wing European and other countries that frequently. Cheer up Greeks, keep up the pressure. The silent majority all over the world are with you.
9
The right-wing governments like Germany are paying their bills, aren't in default, and aren't precipitating a global recession with their immaturity and irresponsibility
7
Leaving the euro does not reduce the debt. There is no bankruptcy procedure for countries that could enforce changed terms or reduction of principal....The creditors may not be inclined to volunteer easy terms for Greece after all the insults that have been hurled at them by the greek communist amateurs...
4
Greece's leadership knows that the ghost of Turkey's longstanding, but carefully developed, bid for E.U. membership is shadowing this entire crisis - as is the more distant one of Ukraine - and even that of another former Soviet (that is to say, "Russian") satellite nation. Georgia.
All of the E.U.'s (NATO's) plans for expansion into those countries will be hindered if Greece leaves the Euro, because that setback will set a very bad precedent - and thereby demonstrate that the entire venture of EU (NATO) nations to move eastward is vulnerable in a very basic element of international control that is almost as important as military power in our 21st century world: What was known in early 19h century America as "the Money Power."
All of the E.U.'s (NATO's) plans for expansion into those countries will be hindered if Greece leaves the Euro, because that setback will set a very bad precedent - and thereby demonstrate that the entire venture of EU (NATO) nations to move eastward is vulnerable in a very basic element of international control that is almost as important as military power in our 21st century world: What was known in early 19h century America as "the Money Power."
1
Maybe two value types of Euros should circulate. One color for rich countries, and one for poor. Greece could pay off its debts with the cheaper ones. In effect discounting its debt.
2
I hope the exit the Euro and deal with the aftermath. They can learn a thing or two from Argentina, a success stroy for default is there every was one. Iceland arguably too. Maybe the EU will bite the bullet and impose internally uniform welfare and banking, say modeled after of the Fed with concern about economic growth across the entire Eurozone. I won't hold my breath.
3
This is a ugly divorce where the rich spouse, Germany, is not willing to do anything for the poor spouse, Greece. A true union requires sacrifices by all sides even if only one of the spouses caused the financial crisis. Unless the Germans are willing TO PAY significantly to alleviate the Greek pains (only difficult for the Germans politically), then there is really no reason to continue this arrangement for both sides. How the Greeks are being treated by the Germans strongly suggests that this is no union but no more than a convenient arrangement.
3
The Germans have no duty to work until age 65 so the Greeks can retire at age 50. If the Greeks want the high life, they have a duty to pay for it themselves
6
I've noticed more than one comment praising the austerity of Germany, that is, the enforcing of austerity on others. But many call on the Greeks to give up their month long vacations, and other benefits that in fact Germans enjoy and enjoy more of. Yet the demon Ising of the workers goes on. Who, Larry, created this economic disaster, out of 2008-2009? Did the working man, did the poor? No, Larry, It was the banks and their your responsibility that has sunk many countries that do not have diverse economies to aid recovery....such as the Germans and Americans. But sorry Larry I don't buy that the working people are to blame.
3
I apologize for the typos even so I think people can muddle through it... If only to remember who caused the problems in the first place and who it is that ought to be paying.
1
Greece will never be able to repay loans without significant suffering of the populace. So mark the loans as lost and move on. Grant additional funds to support a new Greek currency for one year to prevent social unrest and let the Greeks figure out thei own future.
2
The article makes the excellent point that it is useless and unhelpful to point the finger of blame anywhere or everywhere. It is what it is and what's done is done. While we all hope for a compromise which keeps Greece in the Euro zone and doesn't impose new austerity or lessens it the Greek people and their leaders will get to decide the direction Greece will take. I'm sure everyone expects the ECB, IMF and Euro-zone leaders to be as forthcoming as possible. Having said that: Que sera,sera.
1
Is the Greek crisis the failure of a "federal system"? Well, if Europe was a true federal system, which in the long term is desireable, many things would be ensured that simply don't happen in Greece. Tax laws would be enforced, from bars to cabs to house owners. Big (shipping) companies would not be officially exempted from taxing. University teachers would have to show up to their scheduled lectures. Health treatment would not depend on tipping the nurses. And. And. And.
The Greek are, as any visitor will notice, one of the most likeable, hospitable and intellectual people in the world. But as a society they have until today refused to build a modern, working state.
So European leaders are presently not being fair? Among them the leaders of Ireland, Portugal, the Baltics and others who have gone through hardship in order to get their public finances straight? Go, read the facts.
The Greek are, as any visitor will notice, one of the most likeable, hospitable and intellectual people in the world. But as a society they have until today refused to build a modern, working state.
So European leaders are presently not being fair? Among them the leaders of Ireland, Portugal, the Baltics and others who have gone through hardship in order to get their public finances straight? Go, read the facts.
7
A rapidly growing number of Euroskeptics across the political spectrum here in France (most of them left & center, not favorable toward Le Pen) are actually applauding Greece's courage in leaving the Euro, and hoping France will do the same someday, unless the EU changes radically. We (for I find myself leaning more and more that way) feel that the EU is becoming a monstrosity, an anti-democratic tool of the 1%. We'd be happy to go back to something like the old Common Market, instead of Big Brother in Brussels. The advent of the euro has brought inflation, all kinds of interference in my life, and nothing of value that I can discern, nor to the lives of anyone I know. On a poetic, symbolic level, I'd be happy to see the return of Le Petit Prince and Debussy portraits on our paper mondy, instead of a soulless, ugly currency that looks like Monopoly money --- which it is, in a way, being a currency that answers to the demands of giant corporate monopolies.
3
that explains why France has been bleeding Germany dry through EU transfers. The Germans need to say enough is enough. You want to retire at age 60, you pay for it.
1
The Greek debt crisis is extraordinarily complex, but ultimately boils down to accept or reject the EU offer. Giving the people of Greece the opportunity to make the ultimate decision is a great idea…certainly better than allowing one or two people decide such a monumental issue. Congratulations to the Greek government for giving democracy a chance to work – whether the people make a good choice or a poor choice, at least it will be their choice.
4
And what is the real purpose of very early retirement ages? To clear the way for younger people to have jobs. Those retired people are living longer and longer, but if they work as long as they are physically able to, then there are fewer and fewer job openings.
There's a point where human society becomes unsustainable. Everything is connected. We had stories last week about the depletion of major world aquifers. There is a limit to how many people the earth can sustainably support. But we need a constant flood of young people to support the costs of aging populations that don't die off as they used to.
Thriving economies need customers, but all those customers are competing for the basics of life.
But meanwhile--I think we can hardly criticize Greece. The people we elected brought us a war that opened the gates of hell on the whole world. The EU is fighting amongst its member countries on how to absorb the refugees we created. We don't even accept as refugees the Iraqis and Afghans who helped us!
The debt we owe the world for what we have done to it is far greater than the monetary debt Greece owes the EU banks. We're never going to pay up. Why should they?
There's a point where human society becomes unsustainable. Everything is connected. We had stories last week about the depletion of major world aquifers. There is a limit to how many people the earth can sustainably support. But we need a constant flood of young people to support the costs of aging populations that don't die off as they used to.
Thriving economies need customers, but all those customers are competing for the basics of life.
But meanwhile--I think we can hardly criticize Greece. The people we elected brought us a war that opened the gates of hell on the whole world. The EU is fighting amongst its member countries on how to absorb the refugees we created. We don't even accept as refugees the Iraqis and Afghans who helped us!
The debt we owe the world for what we have done to it is far greater than the monetary debt Greece owes the EU banks. We're never going to pay up. Why should they?
4
This is what happens when "Mr Bean" becomes the Greek prime minister. It is also time for Greece to start taking out the many years of tax evasion money to use in the coming days of emergency.
3
As a German I'd like to drop some notes why *I* think Germany acts like it does. Please note that I'm studying Computer Science and are by no means a psychologist. I'm also mildly leaning to the left, so my view might be biased.
Anyways:
In Germany when you can't pay your debts it takes you between 6 and 10 years to get fully cleared of that debt if you can't pay. When it was suggested to lower that time to about 12 months (like in France) this caused huge discussions as many people here still think that people should be punished for not being able to pay their debts.
The other point is that Germany has always been a state with a high level of social security. You're not going to die if you're suffering from a disease, because you WILL get treatment.
In the last few years, however, it has been debated if that's still going to work and social security has been lowered (if you want to google: Hartz IV reforms). Basically you now have to actively seek and accept any job and they can lower or completely cancel your benefits if you don't follow a strict ruleset.
Most Germans do believe that it was needed (to be fair, even though I'm leaning towards the left I do agree with that) but at the same time they feel like "We had to lower our standards, why not others?"
So many see Greece as creditors with higher social security.
I do not want to start a discussion if that is true or not. I just want to state why *I* think that people in Germany are acting like they do.
Anyways:
In Germany when you can't pay your debts it takes you between 6 and 10 years to get fully cleared of that debt if you can't pay. When it was suggested to lower that time to about 12 months (like in France) this caused huge discussions as many people here still think that people should be punished for not being able to pay their debts.
The other point is that Germany has always been a state with a high level of social security. You're not going to die if you're suffering from a disease, because you WILL get treatment.
In the last few years, however, it has been debated if that's still going to work and social security has been lowered (if you want to google: Hartz IV reforms). Basically you now have to actively seek and accept any job and they can lower or completely cancel your benefits if you don't follow a strict ruleset.
Most Germans do believe that it was needed (to be fair, even though I'm leaning towards the left I do agree with that) but at the same time they feel like "We had to lower our standards, why not others?"
So many see Greece as creditors with higher social security.
I do not want to start a discussion if that is true or not. I just want to state why *I* think that people in Germany are acting like they do.
5
Thank you. Very helpful input.
4
Very well said...and, very true. I am of German ancestry in the US. The Germans have always had a very strong work ethic and have little patience for those who don't want to work, BUT want all the benefits that work provides. The major problem is that the German and Greek lifestyles are so very different...in every way. I really think that Greece should be forced to default...for THEIR own goods. Greece will use austerity to get back on its feet, BUT it will be coming from themselves and not forced on them by outsiders. They should never have been let into the EU
8
A major factor is that the Greek government did not collect reasonable taxes so no revenue. Spending cuts are important but a government must have revenue. We are seeing this in the USA as more and more avoid taxes and the revenue falls. Our infrastructure is failing, education is failing, our poverty rates increasing, and more and more revenue being hid overseas. This could be our "Greek moment".
6
The Greeks have more than paid for their sins with five years of brutal austerity. The EU clearly offered them a bailout in order to bail out German banks and the ever-slimy Goldman Sachs—with the proviso that Greece needs to pay these parasites in full apportioning no responsibility to the banks for their willing part in the fiasco.
The Greeks have suffered from the EU's demonstrably false ideology that austerity can move a depressed economy to prosperity. In effect, the EU's blinkered economics and smug morality has shot Greece in the foot. Now the EU's fiscal stupidity will shot Europe in the foot, bringing the foundations of the into very real question and possibly moving Greece closer to becoming a satellite of Russia.
Europe's foolish policies in punishing Germany after WW I and it's outcome in contrast to the success of the Marshall Plan reminds anyone with the slightest grasp of history that the EU's politicians and dogmatic economists can see where this policy will lead—to tears and chaos.
Too late to sell your stocks. You'll have to hold on for the a long white knuckle ride. Yes, the EU is shooting us in the foot too.
The Greeks have suffered from the EU's demonstrably false ideology that austerity can move a depressed economy to prosperity. In effect, the EU's blinkered economics and smug morality has shot Greece in the foot. Now the EU's fiscal stupidity will shot Europe in the foot, bringing the foundations of the into very real question and possibly moving Greece closer to becoming a satellite of Russia.
Europe's foolish policies in punishing Germany after WW I and it's outcome in contrast to the success of the Marshall Plan reminds anyone with the slightest grasp of history that the EU's politicians and dogmatic economists can see where this policy will lead—to tears and chaos.
Too late to sell your stocks. You'll have to hold on for the a long white knuckle ride. Yes, the EU is shooting us in the foot too.
9
Except reality tells us that austerity was working until the radical left-wing Syriza Party took over. Austerity worked in Ireland, England, and everywhere else it has been tried. If Big Government spending was the answer, the Greeks would have a booming economy and Europe would be begging them for money, yet the exact opposite is true. To think this crisis can be resolved by not cutting outrageous and unsustainable Greek spending is pure delusional fantasy
1
Keynesian economics worked for the US form many years. Iceland's bankruptcy worked far better than the failed austerity imposed on Greece. Keynesian economics has kept the US economy since WW II, including the 2008 great recession, our monetary technocrats knew it would have been a tragedy if they imposed austerity, put people out of work, out of their houses, drive banks out of business, force businesses into bankruptcy.
Even republicans in the Bush administration abandoned posturing and got with the Keynesian program. Indeed, they started the policies that saved us. We cut interest rates to essentially zero, flooded the economy with cheap money to keep our citizens afloat. And the world took dollars all through the crisis—because they believed in our economy. And they were right.
Does anybody but fanatics believe we would have been better off with austerity?
Even republicans in the Bush administration abandoned posturing and got with the Keynesian program. Indeed, they started the policies that saved us. We cut interest rates to essentially zero, flooded the economy with cheap money to keep our citizens afloat. And the world took dollars all through the crisis—because they believed in our economy. And they were right.
Does anybody but fanatics believe we would have been better off with austerity?
3
Keynesian economics has been a total disaster. The US has pumped trillions of our children's money into the economy to produce the slowest, poorest excuse for a "recovery" ever. Only a fanatical leftist-wedded to a failed ideology- would even try to deny the proven fact that austerity worked in Ireland and England. Austerity was working in Greece too, until Syriza took over. These are demonstrable, proven facts
3
The real danger for greece is to see another right-wing coupe by the Military due to developing chaos. The Regime of the "Obristen" - Colonels - happened just 35 years ago.
2
Maybe that is what is needed. PASOC, NEW Democracy and now this new group of moneys have done nothing but lead the nation down the road to disaster. A very sad commentary on the "success" of democracy. Maybe a Pinochet could fix things!
Currency Union without political union is not workable. But Europeans (other than the bien pensant types that inhibit the NY Times editorial pages) do not want political union.
I am not a European, so I have no vote, though I lived there for 4 1/2 years. As a friend, let me suggest you get the EU back to its roots as a free trading zone. Leave the rest for much later
I am not a European, so I have no vote, though I lived there for 4 1/2 years. As a friend, let me suggest you get the EU back to its roots as a free trading zone. Leave the rest for much later
The author of this article, Neil Irwin, engages in a common argument among liberal-minded economists; that it doesn't matter how Greece got here, let's not now punish them with austerity. But isn't that like trying to help anyone with a major problem that they don't have to worry about that major problem? The addict doesn't have to worry about the addiction, the bankrupt person or business doesn't have to worry about paying the money back, or the person with an injured back doesn't have to worry about rehabilitating the affected body parts? During good times, all countries spend, especially socialist regimes like Greece. So, when the inevitable financial doo-doo hits the fan, just when is it time to enact austerity? During the good times again, if they every happen? Get real.
1
Any funds "loaned" to the Greeks is just throwing good money after bad.
It's unfair to expect the rest of the EU to permanently support their deadbeat relations.
It's unfair to expect the rest of the EU to permanently support their deadbeat relations.
4
Island have thes best idea come out of the EU sack all the bankers and control their own finances. But you have to work and Greece just won't.
2
For an informed running commentary on this issue (as opposed to most of these comments as well as the article itself) check out Paul Krugman's NYT blog. He has long pointed out the limitations of the EURO in just this type of crisis, the fact that Greece was in debt, but not THAT much debt to make a recovery impossible, and the insanity of continuing to apply austerity.
2
Austerity was working until the Syriza Party took over in January. Austerity has never failed anywhere it has been tried. If government spending was the answer, Greece would have a booming economy and the rest of Europe would be begging the Greeks for money. But the exact opposite is true.
2
Krugman is WAY off when it comes to Greece. Greece already tried Krugman's philosophy of spending their way out of debt...Greece NEVER had a truly functioning economy, so giving it more money is useless
2
Larry,
austerity has been the case in Greece for the previous 7 years. 25% unemployment and a drop of GDP of roughly the same amount has been the result. It is hard to label this, as you do, a "success". Remember austerity was the case in the US after 1929 for almost a decade with the same result.
austerity has been the case in Greece for the previous 7 years. 25% unemployment and a drop of GDP of roughly the same amount has been the result. It is hard to label this, as you do, a "success". Remember austerity was the case in the US after 1929 for almost a decade with the same result.
The Greek crisis showed all the weak points of Germany-EU-BCE-IMF in dealing a debt through sadistic harsh measures, which have nothing to do with the debt itself but were addressed to an Unconditional Rendition of Greece, independently from its status and from the socioeconomic consequences that those measures would have caused on the already starving Greece.
Germany is apart because the malicious Merkel-Schäuble role play, the good and the bad, but both with a single Nationalistic target to satisfy the German hunger of Nationalism always alive.
The re-born Troika always showed much arrogance imposing their supposed financial expertise, from Mr Schäuble to Mr Dijsselbloem to Ms Lagarde, from the double faced Mr Juncker to the ambitious Ms Merkel, often ridiculing the “inexperienced Mr Tsipras and Mr Varoufakis”.
Now the Greek people is called to a Referendum to say YES to the Troika's harsh measures in change of money, or say NO to them and so choosing the Freedom and at the same time a period of further sacrifices in its name.
To my opinion, Greeks would better vote NO: only FREEDOM can make Greece surge.
Europe is another question, the re-born Troika and its harsh and arrogant representatives mentioned before will never recognize with humility they failed overdoing things too much.
They pulled down the EU house of cards and they killed the United Stated of Europe dream.
The European Union is finished, independently from the Greek Referendum results.
Germany is apart because the malicious Merkel-Schäuble role play, the good and the bad, but both with a single Nationalistic target to satisfy the German hunger of Nationalism always alive.
The re-born Troika always showed much arrogance imposing their supposed financial expertise, from Mr Schäuble to Mr Dijsselbloem to Ms Lagarde, from the double faced Mr Juncker to the ambitious Ms Merkel, often ridiculing the “inexperienced Mr Tsipras and Mr Varoufakis”.
Now the Greek people is called to a Referendum to say YES to the Troika's harsh measures in change of money, or say NO to them and so choosing the Freedom and at the same time a period of further sacrifices in its name.
To my opinion, Greeks would better vote NO: only FREEDOM can make Greece surge.
Europe is another question, the re-born Troika and its harsh and arrogant representatives mentioned before will never recognize with humility they failed overdoing things too much.
They pulled down the EU house of cards and they killed the United Stated of Europe dream.
The European Union is finished, independently from the Greek Referendum results.
2
I'm happy for the Greeks in a way. I have always detested Angela Merkel and her self-righteous "Austerity is GOOD for you!" attitude. This woman is going to go down in history as the woman who sparked the fire that brought down the euro AND the European Union.
Angela Merkel seems to have forgotten the enormous economic debt that was forgiven of Germany after WWII. Without that economic forbearance, there would have been no "German Miracle." The whole thing reminds me of a line that song by Hall and Oats "high and dryyyyy, outta the rain yea. It's so eeeeasey, to hur others when you can't feel pain!"
Angela Merkel seems to have forgotten the enormous economic debt that was forgiven of Germany after WWII. Without that economic forbearance, there would have been no "German Miracle." The whole thing reminds me of a line that song by Hall and Oats "high and dryyyyy, outta the rain yea. It's so eeeeasey, to hur others when you can't feel pain!"
5
Okay, Mr. Braintrust...after the Germans forgive ALL Greece's debt...then what...will that miraculously solve Greece's problems? They will suddenly become a manufacturing hub...will the people start paying their taxes...will everyone in Greece still be able to retire at 52 and get a nice pension for 30-40 years? Let's hear how, once again it is ALL the big, bad Germans fault...they forced that money down the Greeks' throats
3
Portia, you forgot to mention that Greece is the only nation in europe without a land registry and taht it, basically, has no civil servant tests.
Not that "legal" is going to have much to do with this, but Greeks would have a strong case that their Euro assets cannot be converted to the drachma so long as they remain EU citizens. Also no often mentioned is that the punishment to Greece would be incredibly profound if ag and other subsidies were stopped. Additionally if credit card companies were to find themselves in a situation where they were under a ton of pressure not to honor charges against future hotel bookings for vacations which angry Germans (and whoever else) decide they do not want to spend in Greece, well deep, deep pain is straight ahead. It is easy to say that pre-Syriza governments got bad deals; harder to claim they were unpatriotic in accepting them. As for Russia...what do they think they can accomplish in Greece - intimidate Bulgaria or something? They would be idiots to even contemplate dividing their forces with entities in Greece if push ever came to shove with NATO. Get to hammer Russians on Greek territories? Does it conceivably get any better than that if you are in the Turkish Armed Forces?
My goodness, have we not learned there is no "happy outcome" when borrowed money is not repaid?
2
Those who have not been paying their fair share of taxes, etc...will most likely have taken their money elsewhere. Those most hurt will be the individuals living closer to from paycheck to paycheck. The wealthy must be reeled in everywhere in the world. They should have acceptable benefits from their abundance and no more than the influence of any other. Meanwhile, they should pay their fair share towards supporting the country; whatever country that is!
2
the wealthy are not to blame. The fault lies 100% with Big Government and failed left-wing policies. Big Government must be reined in. Out of control government spending must be topped.
Larry,
so poor lending standards on the part of banks did not play a role in the latest crisis? Did not irrational exhuerance play an important role in the high tech bust of 2000-1?
Govt is not the only force that creates bad outcomes, as much as conservatives like to think so.
so poor lending standards on the part of banks did not play a role in the latest crisis? Did not irrational exhuerance play an important role in the high tech bust of 2000-1?
Govt is not the only force that creates bad outcomes, as much as conservatives like to think so.
Reading the ECB/IMF/et al published offer to the Greeks, most of the requirements are doable (some are outright petty, some have wiggle room, some can be gamed; although there is a fixation on agriculture/farmers for some reason). The two biggest sticking points seem to be tax rates on profitable businesses (which can be gamed by using the European standard: add some loopholes); and pensions. Most of the pension requirements appear acceptable with the exception of further cutting existing pensions for retirees-- this latter could perhaps be handled by an age/means graduated tax on pensions vs. a forever haircut.
The Greek counter seems to be a deep dark secret. Perhaps this is just a nein! response for tax/pension changes, with "why don't you all take a huge haircut?" for the outstanding debt.
It seems unreasonable for the Greeks to expect debt holders to take a haircut while expecting those same debt holders to extend more more credit to keep the Greek state floating.
Perhaps the failing Greek government could essentially abdicate and go into ECB/Brussels "receivership"... it would take Brussels 10 years to decide what to do, all the while pumping in money.
The Greek counter seems to be a deep dark secret. Perhaps this is just a nein! response for tax/pension changes, with "why don't you all take a huge haircut?" for the outstanding debt.
It seems unreasonable for the Greeks to expect debt holders to take a haircut while expecting those same debt holders to extend more more credit to keep the Greek state floating.
Perhaps the failing Greek government could essentially abdicate and go into ECB/Brussels "receivership"... it would take Brussels 10 years to decide what to do, all the while pumping in money.
I admit, I haven't followed the Greek crisis very closely not do I completely understand all of its intricacies. However, what I do know is that the Greek people are suffering horribly and that Austerity is only increasing that misery. IMO, letting the Greeks fall away into oblivion is a MAJOR mistake that not only will entail global financial repercussions but strategic and geopolitical repercussions as well. All for the sake of bankers in Germany and Western Europe. The entire Western Alliance cannot afford to give a hostile Russia a foothold in a democratic Europe. Greece is a strategic nation and if it runs into the arms of the Russians it would hand Putin a major victory that could put pressure on Turkey and possibly cause a domino effect across the Balkans. Many of those nations have economies that are much smaller than that Greece and need huge infusions of Western capital in order to rise to European standards. They may look at the Greek Crisis and decide maybe joining the Euro Zone is a Faustian Bargain at best. This in turn could make governments in Eastern Europe reconsider their current course and think: Maybe a deal with the Russians isn't such a bad idea, after all.
Merkel and the Germans need to re-think their current course and policy as it is not only a threat to Greece but to the entire European Union, NATO and possibly the entirety of the Western Alliance.
Merkel and the Germans need to re-think their current course and policy as it is not only a threat to Greece but to the entire European Union, NATO and possibly the entirety of the Western Alliance.
Austerity was working in Greece, as it did in Ireland, Britain, and everywhere else it has been tried, until January when the radical leftist Syriza party seized power. the Greeks have lived the high life on Europe's dime, and now everybody except the Greeks needs to pay????
2
I don't agree with that assertion at all. The Greeks can pay-off their debt over a period of time. Current Austerity measures are creating an untenable situation and a zero-sum game. However, what you fail to realize is the repercussions go beyond a bunch of bankers that were every bit as complicit as the Greeks. Of course, I wouldn't expect that someone that only thinks in terms of dollars and cents would be able to see the forest for the trees.
Insulting people won't help your case. And, I think most people understand this is very complicated and not just affecting Greece. But, the rest of the EU is tired of being asked to carry Greece's water repeatedly, without any concessions from them
1
Marriage is a social construct with a set of privileges and responsibilities defined differently by many cultures and subcultures. Law is also a social construct. It is not surprising that with the demographic transition from a need to preserve human populations to a need to restrict human populations that the social constructs of marriage and law will change profoundly.
This is not about austerity but about the inability and unwillingness of Greece to run a 21st century economy, collect taxes, create a land ownership registry and to honour signed contracts while at the same time using other people's money to have a good life.
Two years ago Cyprus has had the same situation and it bounced back.
Portugal, Spain, Ireland all have ha similar issues and have bounced back.
All inside the EUR zone and none of the caused more than a stir.
Yes, the EUR zone has a few issues to iron out but Greece is none of them as Greece has shown criminal behaviour which has nothing to do with economics.
The real difference is the kind of marketing Greece is doing about it's situation.
And marketing is all that Greece is doing to solve it's problems while other have made their homework and really solved their problems.
Two years ago Cyprus has had the same situation and it bounced back.
Portugal, Spain, Ireland all have ha similar issues and have bounced back.
All inside the EUR zone and none of the caused more than a stir.
Yes, the EUR zone has a few issues to iron out but Greece is none of them as Greece has shown criminal behaviour which has nothing to do with economics.
The real difference is the kind of marketing Greece is doing about it's situation.
And marketing is all that Greece is doing to solve it's problems while other have made their homework and really solved their problems.
8
Why do I have the feeling that this was premeditated by Greece since it joined the Union? Only the blackmailing of Germany to support its welfare state backfired (Sweden and UK were smart enough to figure this out). The entitlements and ridiculous early full retirement and farcical tax system is only part of the problem. The Greek economic environment has been very hostile to business growth (US take a cue here). Pushed towards Russia? Ok bye. Russia will give them the same assistance that they are providing Cuba – zero.
9
Thank you. I have been trying to tell that to my friends to no avail. Maybe that's because I remember when Russia stopped propping up Cuba. Let Russia have Greece...it would be Greek drama at its best and high entertainment for the rest of us
One source of tax income for Greece is to tax earnings for those worklng outside of the country. But for a country without exports, this behavior is totally reckless and the Greek people are really going to suffer. Much better to pay it back [painfully] like Ireland.
3
The idea of a common currency is that less productive states are buoyed by more productive states. Imagine if the U.S. currency depended on the output of New Mexico, Louisiana, Arkansas, West Virginia, and Mississippi. i does not. The rest of the union keeps those economies afloat by redistributing the wealth generated by California and The Northeast. The E.U. needs to suck it up and understand that they are not all equal players in every regard. There are benefits to having underperforming members. They provide a drag on the currency that makes their economy more competitive as a whole.
6
But the difference is that those places are in the same country with a shared history and a shared populous. Greece is not Germany.
1
That's the problem Anthony. The Euro-zone wants to operate like a federation but without the responsibilities that entails. Those responsibilities include economically propping up less prosperous regions. Those regions also function as resources for labor and natural materials as well as tariff free markets for goods produced in the more prosperous areas. Brussels wants it both way. They want to exploit the cheap labor and markets and also have them "pay their own way". It's tyranny.
When the TPP and the TPA and the other mega-corporate deals have done their work on us, we'll hear how we "deserved it" for not having made it stop. As if our protests meant anything, as if the two major political parties haven't sold out. The rich strip the rest of us and blame us for it; but that's what the rich have done throughout history, and why revolutions occur. It's human nature, apparently, that money buys power and uses it foully. The new part is the way in which the victims take the blame for policies they never made, didn't profit by, and couldn't stop if they wanted.
4
When you squeeze to hard there is nothing left to squeeze. The Greeks need to leave the EU.
4
Yup! The Greeks have squeezed the rest of Europe long enough, and Europe is sick and tired of the Greeks' demands that Europe pay for the Greek good life. But the Hounds of Hades will descend on Greece when they leave the EU and try their own currency. the Greeks must learn to pay their bills, shrink government, and live within their means
4
Europe has different countries with different languages, different cultures, and in many cases years of antagonistic behavior toward one another. The idea that the EU would work was a pipe dream by European elites and their bureaucratic cohorts. The idea was pushed by European multi national financial, manufacturing, and service companies as something that would enable them to compete with growing American and Asian competition. When the economy goes bad in America a tiny percentage in the Northeast may grumble about transfer payments to Mississippi but there is no move to throw them out of the union. In Europe the Dutch and the Germans would love to boot Greece to the curb if they could.
1
In prior posts on this subject I repeatedly stated that I didn't think Alex Tsipras or his proto-Marxist political party, Syriza, had it in them to deliver Greece from this crisis; let alone reform Greek social mores or rebuild its failed institutions -- and the proof is in the pudding. Not only did they fail, they made a mockery of trying.
Tsipras reminds me of a miscreant teenage boy who insists on disrupting his high-school math class. You cannot teach him 2+2 = 4 because he insists it's either 3 or 5 because it must be either 3 or 5.
Now that he's destroyed Greece's relationships with its creditors I think he will take it to the last bitter mile and bungle Greece's transition out of the common currency zone. It will leave their sadly misgoverned nation utterly prostrate and destitute. After he defeats himself there were he to resign and flee abroad to live handsomely on a cash hoard stashed elsewhere would it surprise me? Hardly. After all, it is the Greek way -- how Greece ended up in this predicament in the first place. Were this atrocity to transpire a special place in Hell will be ready-&-waiting for him when he finally arrives there.
If I'm right, what's about to happen will create a truly devastating legacy to be cursed by generations of Greeks yet unborn. For us contemporaries who choose to study government and economics it, and he, will become textbook cases of what not to do, how not to do it and, especially, how not to behave in public and private.
Tsipras reminds me of a miscreant teenage boy who insists on disrupting his high-school math class. You cannot teach him 2+2 = 4 because he insists it's either 3 or 5 because it must be either 3 or 5.
Now that he's destroyed Greece's relationships with its creditors I think he will take it to the last bitter mile and bungle Greece's transition out of the common currency zone. It will leave their sadly misgoverned nation utterly prostrate and destitute. After he defeats himself there were he to resign and flee abroad to live handsomely on a cash hoard stashed elsewhere would it surprise me? Hardly. After all, it is the Greek way -- how Greece ended up in this predicament in the first place. Were this atrocity to transpire a special place in Hell will be ready-&-waiting for him when he finally arrives there.
If I'm right, what's about to happen will create a truly devastating legacy to be cursed by generations of Greeks yet unborn. For us contemporaries who choose to study government and economics it, and he, will become textbook cases of what not to do, how not to do it and, especially, how not to behave in public and private.
4
You're 100% right. The legacy of the Greeks and leftists in general will be to blame the banks, the rich, corporations, trade, capitalism, democracy, and any other scapegoat they can conjure. They'll blame everyone but themselves. Greece is bankrupt, and everybody but Greece is responsible. In reality, left-wing policies carry 110% of the blame.
1
Then Greece should have elected the real Marxists, the KKE. They would've had the testicular fortitude to do what was necessary.
Larry, you do realize that New Democracy, a center-right party, was in power for about a decade before Tsipras came to power correct? If the left-right paradigm you espouse is correct the Greeks would be liviing in a paradise now. Obviously a government of the right, in and by itself, is not enough.
1
Euro does not equal EU membership.
Britain has its own currency but is a member of the EU.
So could Greece.
Britain has its own currency but is a member of the EU.
So could Greece.
6
@Woof:
Britain has a productive economy. It overvalues the Pound to defend itself as the Swiss do. It has access to international credit on reasonable terms.
Greece has none of that and soon will have nothing at all. Millions of people will literally have no cash money to spend and Greek banks will be insolvent.
What happens then? I cannot imagine.
I didn't foresee this predicament. In a prior post that actually won a gold shield I surmised that Syriza would carefully plan for a non-Euro future and prepare a measured transition to it. Greece would default, but the landing, although hard, would be measured, followed by a recovery. But Tsipras seems ready to drop the Big One and see what happens; almost like throwing Greece off a tall skyscraper rooftop to see if it bounces.
While stonewalling his Euro-creditors during the last six months did Tsipras even bother to order printing of a new paper currency and the minting of new coinage, simply as a precaution? It appears not. Maybe there's a stockpile of old drachma in some warehouse somewhere gathering dust. One can only hope so.
Unbelievable.
Britain has a productive economy. It overvalues the Pound to defend itself as the Swiss do. It has access to international credit on reasonable terms.
Greece has none of that and soon will have nothing at all. Millions of people will literally have no cash money to spend and Greek banks will be insolvent.
What happens then? I cannot imagine.
I didn't foresee this predicament. In a prior post that actually won a gold shield I surmised that Syriza would carefully plan for a non-Euro future and prepare a measured transition to it. Greece would default, but the landing, although hard, would be measured, followed by a recovery. But Tsipras seems ready to drop the Big One and see what happens; almost like throwing Greece off a tall skyscraper rooftop to see if it bounces.
While stonewalling his Euro-creditors during the last six months did Tsipras even bother to order printing of a new paper currency and the minting of new coinage, simply as a precaution? It appears not. Maybe there's a stockpile of old drachma in some warehouse somewhere gathering dust. One can only hope so.
Unbelievable.
It seems to me that the inability (or even the hesitancy) of the Greek Government to collect taxes is the cause of Greece's budget deficits for decades and I don't see any good reason for the EU to perpetually fund the Greeks' lack of fiscal sensibility.
10
Just print more money like we do over here. Problem solved, right?
2
That would be the problem, Citizen X: they CAN'T because they are bound to the Euro. That's also the same reason comparing the US and Greek economies, as so many doomsayers are wont to do, is comparing apples and oranges.
Greece should never have been in the Euro to begin with.
8
Suppose I go to a banker, asking him for a loan. He agrees with the loan, but on certain conditions, that I don't accept and I tell him: "Sir, if you don't lend me the money, I will go home and organise a referendum, asking my family if they accept your conditions. I will advice them not to do so".
Comic? It is exactly what Mr. Tsipras did.
Comic? It is exactly what Mr. Tsipras did.
6
Smile and say Grexit!
2
Will they even get to hold the referendum? This all may be determined by the end of the week.
1
I am a British citizen, I have lived all over the World as a foreign correspondent and without malice I feel there is absolutely NOTHING that Greece has to offer Europe or the World !
Decades ago masses of Greeks emigrated to many other countries because of the lack of opportunities there.
Socrates and aristotle would be outraged on what Greece has become !
Greece has always been owned and dominated by a small handful of greedy, corrupt rich people who NEVER shared anything with the populace, no wonder it is in such a dire financial mess today !
So what if it leaves the EU, I say good riddance
whose gonna miss it ?
Decades ago masses of Greeks emigrated to many other countries because of the lack of opportunities there.
Socrates and aristotle would be outraged on what Greece has become !
Greece has always been owned and dominated by a small handful of greedy, corrupt rich people who NEVER shared anything with the populace, no wonder it is in such a dire financial mess today !
So what if it leaves the EU, I say good riddance
whose gonna miss it ?
9
Certainly not the Brits - they already have the Elgin Marbles, so what more is there, eh?
It's pretty amazing that Greece, once the most powerful democracy and cultural center of the world has nothing to offer.
I'd be really interested to know as a "foreign correspondent" for who or what?
1
Its obvious from the language Juncker is using that he realizes the EU, the euro, and by direct extension, himself, have a lot more to lose by a greek exit than Greece.
Vote "NO" Greece, and please start the dismantling of the euro.
Vote "NO" Greece, and please start the dismantling of the euro.
1
not only the dismantling of the euro but the eu to boot.
Creating the Euro without closer cooperation on fiscal policy by its members was always a prescription for disaster. Another glossed over difference within the currency pact was the wide disparity among members in productivity. Now 40+ years removed from the demise of the sensible and self-correcting Bretton Woods Agreement, where chronic trade and fiscal deficits meant a currency devaluation, the time to pay the piper is long overdue in Greece aside from political considerations. Relative to other Euro countries, the combination of fiscal profligacy, low productivity, and inefficient markets has created a bankrupt country that needs the equivalent of a receivership to turn things around. A lot of thought should go into this or the Russian Navy and other armed forces will soon be a likely presence threatening the Mediterranean.
1
The EUropean Union is doomed... and Europe itself is on the brink...
With an anachronistic, Socialist economic policy ; with a growing Moslem population that refuses to integrate and wishes to dominate; with a rising Nationalist sentiment... Europe is headed for chaos...
Oddly emough the country that will benefit is Russia... If Europe disintegrates, so will Nato... and the consequences will also be felt in America...
With an anachronistic, Socialist economic policy ; with a growing Moslem population that refuses to integrate and wishes to dominate; with a rising Nationalist sentiment... Europe is headed for chaos...
Oddly emough the country that will benefit is Russia... If Europe disintegrates, so will Nato... and the consequences will also be felt in America...
1
you need to stop listening to FOX. What will happen is that Greece will leave the Euro, Europe will continue on its Merry way (probably a little better off without the uncertainty and future capital infussions greece will require) and NATO will continue. Not the end of the world. A bump yes. Apacolypse, no.
1
' with a growing Moslem population that refuses to integrate and wishes to dominate; with a rising Nationalist sentiment... Europe is headed for chaos.
Europe should do everything possible to prevent more Moslem immigrants and should even try to deport as many of those already there as possible. World War III will be between Islam and the West and the Moslems of Europe will be a fifth column.
Europe should do everything possible to prevent more Moslem immigrants and should even try to deport as many of those already there as possible. World War III will be between Islam and the West and the Moslems of Europe will be a fifth column.
1
"Greeks consider taxes as theft," which, among other things, explains, as WSJ reports, at the end of 2014, Greeks owed their government about €76 billion in unpaid taxes"
Death threats forced me to quit my job, says Greece's top
tax boss who targeted rich and well-connected 'warned his legs would be broken'
View on www.telegraph.co.uk
Why should anyone bail out a country in which its citizens consistently refuse to pay taxes? The rich in Greece get away with not paying taxes, sort of like the rich corporations and individuals in America.
As Leona Hemsley said " Taxes are for the little people".
Are the Greeks a model for the future of the US?
Death threats forced me to quit my job, says Greece's top
tax boss who targeted rich and well-connected 'warned his legs would be broken'
View on www.telegraph.co.uk
Why should anyone bail out a country in which its citizens consistently refuse to pay taxes? The rich in Greece get away with not paying taxes, sort of like the rich corporations and individuals in America.
As Leona Hemsley said " Taxes are for the little people".
Are the Greeks a model for the future of the US?
6
I agree. I too am outraged that 47% of "Americans" pay zero federal income taxes
3
RECIPE FOR NATIONAL BANKRUPTCY:
1. 60% of Greek wage earners refuse to pay income taxes
2. Greek Retirement: Age 50 for women and age 55 for men.
3. Post Retirement: Lifetime Government Pension
Who did the math on this one?
1. 60% of Greek wage earners refuse to pay income taxes
2. Greek Retirement: Age 50 for women and age 55 for men.
3. Post Retirement: Lifetime Government Pension
Who did the math on this one?
10
In the United States, 47% of wage earners pay zero federal income taxes. Leftist policies have destroyed Greece, Argentina, Cuba, Venezuela, the entire Communist bloc, Puerto Rico, Detroit, Chicago, etc. Next up to bat is the United States, if the failed leftist polices aren't changed
6
False. That's 47% of all adults, including retired seniors, the disabled, the very poor and veterans. Look at a tax form sometime. A single wage earner filing a 1040EZ will pay taxes on just over $10,000 in total earnings.
3
We could stand 60% not paying taxes too if we didn't throw our money away on endless wars.
1
When I was in Greece a few years ago, I was shown the graves of the citizens of Kalavrita, where the entire male population was rounded up and murdered by the Nazis. I spoke with Greeks who had no sympathy for paying any German debt until war debts were addressed. The feeling of entitlement stems from that bloody history.
Consequently Greece needs to be able to float its own currency to prevent EU raiders from taking all the money and to protect the money supply. It may be tough for Greece, but Greece is a proud nation who is able to recover. They will have to reject EU imports and start growing their own food again, but they will be better off when they stop accepting EU austerity measures from Brussels.
Consequently Greece needs to be able to float its own currency to prevent EU raiders from taking all the money and to protect the money supply. It may be tough for Greece, but Greece is a proud nation who is able to recover. They will have to reject EU imports and start growing their own food again, but they will be better off when they stop accepting EU austerity measures from Brussels.
2
A re-introduced drachma would be worthless. That would lead to Weimar-style hyperinflation and depression, assuming Tsirpas hasn't created one already. The Greeks will have no economic growth until they learn to live within their means, shrink government, and pay their debts. The Greek people have no one to blame but themselves
3
Grow their food? God forbid, do you realize that this entails work? Planning, sowing, nurturing, watering, harvesting, and then for what, a few lousy Drachmas? No, it's way better to scream "Foul!" it is unfair that Spain, Holland, France, Turkey and Marocco (Both Non-EU!!!) etc. make money with agriculture....while Greece is forced to buy these imported foods.....
Seriously, who has stopped the Greek from furthering their Agriculture beyonf the pre-existing Olive products? Could it be that nobody wants to inquire about unused lands because no viable land registry exists, or ever should be imposed upon them by evil other Europeans?
Seriously, who has stopped the Greek from furthering their Agriculture beyonf the pre-existing Olive products? Could it be that nobody wants to inquire about unused lands because no viable land registry exists, or ever should be imposed upon them by evil other Europeans?
Since the drachme was coupled to the EUR at a way too favorably rate, i.e. without considering "these are Greeks, folks" -- the Greeks have been living beyond their means.
If you borrow, you are in debt, and you are not in control.
The Greeks of course know this -- that's why in the past, they just devalued the drachme and repaid debts with freshly minted currency. And that's why they paid interest rates in excess of 10% when the Northern Europeans were around 6% and that acted as a natural resistance to over leveraging.
Then came the too cheap for their own good EUR money, and this is where we ended up. EUR 350 billion of pretty much worthless debt due by the Greeks.
So that you gonna do? Make them pay it all back of course. That's the only answer for the Northern European tax payers, whose tax proceeds have been squandered. Squeeze that stone dry. And there's plenty to be had.
If you borrow, you are in debt, and you are not in control.
The Greeks of course know this -- that's why in the past, they just devalued the drachme and repaid debts with freshly minted currency. And that's why they paid interest rates in excess of 10% when the Northern Europeans were around 6% and that acted as a natural resistance to over leveraging.
Then came the too cheap for their own good EUR money, and this is where we ended up. EUR 350 billion of pretty much worthless debt due by the Greeks.
So that you gonna do? Make them pay it all back of course. That's the only answer for the Northern European tax payers, whose tax proceeds have been squandered. Squeeze that stone dry. And there's plenty to be had.
4
"So that you gonna do? Make them pay it all back of course. That's the only answer for the Northern European tax payers, whose tax proceeds have been squandered. Squeeze that stone dry. And there's plenty to be had."
or, alternatively, it can be written off. Writing it off seems the acceptance of reality instead of pursuing the fantasy of getting it back. Realistically it is not reasonable to believe that more than a tiny share of that debt will be recovered. Might as well cut your losses and prevent more $ from going down the toilet (which would be required if it were to stay).
or, alternatively, it can be written off. Writing it off seems the acceptance of reality instead of pursuing the fantasy of getting it back. Realistically it is not reasonable to believe that more than a tiny share of that debt will be recovered. Might as well cut your losses and prevent more $ from going down the toilet (which would be required if it were to stay).
Rather than showing us the "pensioners" many of whom took very early retirement, show us how the wealthy are suffering and what Tsipras is doing about them. Tell us also what the Greek Orthodox Church ( by the way is sitting on tons of real estate and money) is doing to alleviate this crisis and then we will feel empathy for Greece.
14
No one forced the Greeks to elect incompetent, irresponsible governments which promised something for nothing. The bills have come due. Greece (and its enablers) can either take the bitter medicine now or take more and more bitter medicine later.
11
Let Greece leave and rebuild its economy. The problem is Goldman Sachs engineered the admittance of Greece into the Euro, by portraying the country to be on the same economic footing as the rest of the Euro Zone nations.
If Greece was to remain in the EU it would be like tethering a donkey to a team of thoroughbreds. Greece would never be able to keep pace with the rest of the EU and the rest of the Euro Zone would have to continually subsidize Greece.
The problem is the people steering the conversation on the EU side are all financial institutions with short term stakes on the line, versus the people of Greece who will have to shoulder the burden the longer burden of being the donkey amongst the race horses.
If Greece was to remain in the EU it would be like tethering a donkey to a team of thoroughbreds. Greece would never be able to keep pace with the rest of the EU and the rest of the Euro Zone would have to continually subsidize Greece.
The problem is the people steering the conversation on the EU side are all financial institutions with short term stakes on the line, versus the people of Greece who will have to shoulder the burden the longer burden of being the donkey amongst the race horses.
14
Not exactly. Spain, Italy and maybe Portugal are donkeys, as well.
This really isn't as complicated as it seems. The North-South European divide still exists. Greece, Italy, Spain and Portugal historically have been the weakest of the European states in economic terms. The Euro, and its exchange rate, damp down exports and make foreign (i.e. non EU) goods less expensive. Therefore, the unemployment rate skyrockets.
In the meantime, Germany and, France to a lesser extent, go merrily along and ignore this ancient fact. The Benelux countries and the rest of Northern Europe are almost in the German strength category.
The real scary part is if Britain votes to exit the EU with what is seen there as too much regulation over which they have not control. An extra expensive layer of government with the European Parliament and typical British independent ways. They, at least, kept the pound and are lucky for it.
In the meantime, Germany and, France to a lesser extent, go merrily along and ignore this ancient fact. The Benelux countries and the rest of Northern Europe are almost in the German strength category.
The real scary part is if Britain votes to exit the EU with what is seen there as too much regulation over which they have not control. An extra expensive layer of government with the European Parliament and typical British independent ways. They, at least, kept the pound and are lucky for it.
5
Few days back we read the comparison of Greek crisis with Argentins. The whole issue is about the Greek's economic culture and intrensic economic strength.
Greek has very few exportable products and it must restrict its import to avoid loan from ECB to buy products from other EU countries.
Austerity will balance the budget but it will not help Greece address her economic problem.
Important thing is to make Greece a competitive economic country first. Only way that will happen, if Greece gets out of Euro and focus on its economic strength.
In future, if Greece can rebuild its economic strength, she can join Euro zone based on real economic data - not based on falsified Goldman Sacks data.
Greek has very few exportable products and it must restrict its import to avoid loan from ECB to buy products from other EU countries.
Austerity will balance the budget but it will not help Greece address her economic problem.
Important thing is to make Greece a competitive economic country first. Only way that will happen, if Greece gets out of Euro and focus on its economic strength.
In future, if Greece can rebuild its economic strength, she can join Euro zone based on real economic data - not based on falsified Goldman Sacks data.
5
and who hired Sachs to falsify the data?
How many know that Greece right now is actually running a budget surplus? Yes. that is true.Previous reforms from austerity have put the government into the black. But it also reduced GDP by 25% & created 50% unemployment for the young & a huge loss of human capital.This proposal was about keeping Greece paying the interest on the debt and not about anything else.
Please read EC proposal. It is focused 100% on austerity & 0 percent on growth & debt deduction to get Greece back on its feet. Now they claim growth plans were on the table but they were not.
To accept the proposal and create further permanent reforms (reforms that are 50% harsher than anything the US has),three things need to happen to give them future hope:
1. Lower the VAT tax from a crazy 23%? Seriously,who came up with that one?The Greeks rely on tourism and 23% would virtually wipe out that industry for them. Turkey by example is 8%.The Greeks know that this would create a further GDP decline totally 50% & would wipe out any chance of recovery.
2. Create a growth plan for the country working with the Greek government (left or right).Currently and inexplicably,none has been provided leading Greeks to believe that this is about keeping a country down versus a EU.
3. Provide debt relief in exchange for these final reforms which would make the Greek government pensions and other policies no different than northern Europe. The EU could do that and not even blink.
Then you have a deal or the Greeks should say no
Please read EC proposal. It is focused 100% on austerity & 0 percent on growth & debt deduction to get Greece back on its feet. Now they claim growth plans were on the table but they were not.
To accept the proposal and create further permanent reforms (reforms that are 50% harsher than anything the US has),three things need to happen to give them future hope:
1. Lower the VAT tax from a crazy 23%? Seriously,who came up with that one?The Greeks rely on tourism and 23% would virtually wipe out that industry for them. Turkey by example is 8%.The Greeks know that this would create a further GDP decline totally 50% & would wipe out any chance of recovery.
2. Create a growth plan for the country working with the Greek government (left or right).Currently and inexplicably,none has been provided leading Greeks to believe that this is about keeping a country down versus a EU.
3. Provide debt relief in exchange for these final reforms which would make the Greek government pensions and other policies no different than northern Europe. The EU could do that and not even blink.
Then you have a deal or the Greeks should say no
13
You're incorrect. At the end of 2014, Greece was running a budget surplus, but since electing the Syriza government, Greece is now running a budget deficit. The country's GDP has also swung from positive to negative. Greece can't vote themselves rich. Ireland is still Greece's best example of how to take economic hardship and restart your economy. It doesn't matter which direction Greece takes, the results will nearly be the same: either reform labor, business regulations and pensions, or the loss of purchasing power parity will do it for the Greek people. I would recommend the later since the Drachma will never be an efficient, strong currency.
Britain and its handmaiden, the US, has always pursued a policy of trying to keep Europe divided especially France and Germany and Russia, and both of these countries will say and do anything they can think of to weaken a United Europe, Neither Britain nor Greece are sincere in pretending they want the EU to succeed as it is undoubtedly doing. Europe also should and will integrate with Russia to our chagrin. Europe is tiring of the US instigating senseless wars for them to fight. The sooner the US and Britain are ejected from the continent the better for all concerned.
6
LOL. Are you serious? "Europe is tired of the US instigating senseless wars for them (Europe) to fight". The last time I checked the two most deadly wars in history were started in Europe by Europeans and the Americans were pulled into the conflicts. I had heard that they do not teach history in schools anymore but I had no idea it was this bad.
2
In 2001 the Greek government, with the assistance of Goldman Sachs, manipulated the economic figures of the nation to get entry into the EU.
The EU leadership (??), the ECB and the IMF were fully aware of the extent of the falsification, but took no action.
It is the primary task of any government to rectify transactions such as Goldman Sachs fabricated and were so handsomely paid for.
By 2010 this became common knowledge, yet again no positive action was taken.
The guilty parties (Goldman Sachs and all the various governments involved) were fully aware of the real situation) and should be held accountable.
Eventually the Greek government should do the utmost to get at least the greater part (if not all) paid to Goldman Sachs refunded.
The EU leadership (??), the ECB and the IMF should give the Greek government more reasonable conditions for the repayment of the debt (they have never indicated they were not going to pay back).
The EU leadership (??) - under the command of Germany - the ECB and the IMFshould be ashamed of their misplaced decisions to bully the Greek people into more hardship with their demands for more austerity, more work and jobless people.
It is obvious changes in the Greek way of running their business are necessary and Mr. Tsripas has shown his willingness to implement whichever action required.
As it is at present the Greek people - who had no part whatsoever in the illegal actions by Goldman Sachs - are suffering too much
The EU leadership (??), the ECB and the IMF were fully aware of the extent of the falsification, but took no action.
It is the primary task of any government to rectify transactions such as Goldman Sachs fabricated and were so handsomely paid for.
By 2010 this became common knowledge, yet again no positive action was taken.
The guilty parties (Goldman Sachs and all the various governments involved) were fully aware of the real situation) and should be held accountable.
Eventually the Greek government should do the utmost to get at least the greater part (if not all) paid to Goldman Sachs refunded.
The EU leadership (??), the ECB and the IMF should give the Greek government more reasonable conditions for the repayment of the debt (they have never indicated they were not going to pay back).
The EU leadership (??) - under the command of Germany - the ECB and the IMFshould be ashamed of their misplaced decisions to bully the Greek people into more hardship with their demands for more austerity, more work and jobless people.
It is obvious changes in the Greek way of running their business are necessary and Mr. Tsripas has shown his willingness to implement whichever action required.
As it is at present the Greek people - who had no part whatsoever in the illegal actions by Goldman Sachs - are suffering too much
15
Goldman Sachs started the US and World's depression and have spent the years since running a public relations media advertising spree. They've paid a few large fines, and the US Regulators have looked the other way. No one has been arrested, indicted, convicted, nor gone to prison for the $12 Trillion US Dollar Bank Robbery. The history is all there. In black and white on the internet for anyone to research. Hundreds of corporate thieves were sent to prison for the earlier Savings and Loan debacle, but nary a hair mussed at Wall Street, Goldman Sachs, JPMorgan, the six consolidated Major Banks, the FED, SEC, DOJ, contributing members of Congress, two Presidents, and
one Vice President with baby sitter duties..
one Vice President with baby sitter duties..
4
You freely admit the greek government was involved in the falsification of data but then you shift all of the blame everywhere but on the greek government itself. Correct me if I'm wrong but shouldn't the greek government be responsible for its own lies?
2
It was the Greek people who got the benefits of retiring at 50 and unsustainable pensions paid for by the German and other European people. The Greek people should pay the price.
3
Get a grip. Greece in the E.U. was a mistake from the start. And yes France, Italy and Spain will have to adjust to the reality of global competition. The E.U. may have been a mistake from the beginning but without it Europe becomes a minor player in world trade.
8
The Domino Effect will be awesome. Look out Wall Street, Hong Kong, Singapore, etc...
2
The lessons of socialism are in plain view and have been for decades. The 20th century is one giant cautionary tale against socialism, and Venezuela is already a 21st century affirmation.
Anyone who does not already see is lying to himself. Because of that lie, politicians are able to promise unicorns and pixie dust and get elected.
Anyone who does not already see is lying to himself. Because of that lie, politicians are able to promise unicorns and pixie dust and get elected.
11
The lessons of socialism are that the world's bankers allow it to work just as long as they are its only beneficiaries.
21
Please read Naomi Klein's Shock Doctrine for a better understanding of these things.
6
That is an excellent way to describe the 20th century: a trash heap of failed socialism
I believe that at this stage the main problem is the isolationist feeling that is being cultivated in the collective greek psyche and creates impediments to economic logic and political stability from running their course, leading thus to a ''rational'' solution. This post attached i believe that encaptures how the greek people feel at this point vis a vis the international community. Hope that the NYT team will allow its viewing. It tries to convery a genuine message as to how people in greece feel right now. cornered. and its not about Right or Left, right or wrong, its about feel lonely and cornered. And thats a bad feeling, be that an individual, a family, or a society. Greece is bleeding and crying for help. Its no longer negotiatings. it does not have the capacity for that. https://www.facebook.com/809017379187244/photos/a.809378972484418.107374...
1
The true story.
Greeks got tired of their Politicians and Goldman Sachs stealing the treasury.
Greeks stopped paying taxes.
Greek tax collectors stopped collection.
Now the Politicians have no way to repay, Banks are moving in for the kill.
Greek Politicians will nationalize properties, and pledge them to get more money that they can steal.
Watch the Domino Effect....
We may end up being The United Goldman Sachs of America.
Greeks got tired of their Politicians and Goldman Sachs stealing the treasury.
Greeks stopped paying taxes.
Greek tax collectors stopped collection.
Now the Politicians have no way to repay, Banks are moving in for the kill.
Greek Politicians will nationalize properties, and pledge them to get more money that they can steal.
Watch the Domino Effect....
We may end up being The United Goldman Sachs of America.
Looks like Greece is headed to doing what should have happened to it several years ago - crash, burn and die. Unfortunately, it will bring down other countries with it, sort of collateral damage. Maybe something good will come out of this - a worldwide revolution by the working people, who will take down the wealthy.
5
The wealthy did not cause this train wreck. Big Government socialism caused this, Big Government must be made to pay
2
Anarchy, something we've all been waiting for... Not !!!
That is why Police are armed to the teeth.
That is why Police are armed to the teeth.
Larry--
Some recent history for you and others who are venting their feelings about Greek Socialism, via Paul Krugman:
"It’s true that Greece (or more precisely the *center-right* government that ruled the nation from 2004-9) voluntarily borrowed vast sums." (emphasis added)
http://www.nytimes.com/2015/01/30/opinion/paul-krugman-europes-greek-tes...
Now, cue the rants about Paul Krugman.
Some recent history for you and others who are venting their feelings about Greek Socialism, via Paul Krugman:
"It’s true that Greece (or more precisely the *center-right* government that ruled the nation from 2004-9) voluntarily borrowed vast sums." (emphasis added)
http://www.nytimes.com/2015/01/30/opinion/paul-krugman-europes-greek-tes...
Now, cue the rants about Paul Krugman.
It is consistent with your policy of evading essential truths for reasons unknown. In your newspaper as in most of the US press, Greece is the number one issue, as it should be. Nevertheless the economic bankruptcy of Puerto Rico is in the opinion of most economists even worse. Your extensive article describes Puerto Rico as a Commonwealth. No such concept is present in the US Constitution. Puerto Rico is an unincorporated territory of the United States. It is a colony unable to protect its economy through any of the means available to Greece. You do not offer the opportunity to comment in that article.
18
My thoughts exactly. The problem in Puerto Rico is huge and is not getting enough coverage in the US press as it could negatively impact the entire US economy.
5
The best way to help Greece is let them clean up their own mess.
18
Like Russia selling Alaska, perhaps the Greeks will sell a piece of their rock.
Don't you need to have a plan for reopening the banks after you call a bank holiday? What Greece needs now is a coherent way to quickly switch to their own currency: hopefully Tsipras was kidding when he indicated that Greece can walk away from the troika's offer and still stay on the euro.
If I were Vanguard, I'd be opening branches in Greece, Spain, Portugal and Italy, keeping savings in US treasuries.
If I were Vanguard, I'd be opening branches in Greece, Spain, Portugal and Italy, keeping savings in US treasuries.
2
Like all leftists, Tsipras has no clue how economies work. he is delusional enough to really believe Europe owes Greece whatever they want, including staying with the Euro.
Why are the people of Greece being punished for the greed and incompetence of the banks that fostered this crisis in the first place? We never hear about 'austerity' programs for the banks - who are the actual bad guys in all this.
13
Chis, Chris. The Greek government did the borrowing and set domestic economic policy. They are do the primary blame. With that said lenders were greedy as in Puerto Rico and should take the fall as well as the Greek voters. We have a bunch of welfare addicts in both places.
7
clarity007 - no greedy lenders to Greece then? Thewy knw the books were cooked before they lent, and did so anyway, in anticipation of a killing. Just like the US mortgage crisis.
6
What 'killing'? The banks have lost billions of dollars on their loans and now EU citizens will likely lose more.
The only people coming out of this unscathed will be the Greek politicians that lit the house on fire and walked away.
The only people coming out of this unscathed will be the Greek politicians that lit the house on fire and walked away.
2
The elephant in the room that the NYT, EU, and most on the left don't want to discuss is this: the farther left you go, the more Greece looks like a model outcome and not an anomaly.
Bad government is not the cause, it's the consequence of cultural liberalisation. Greece is a culture that really believes in liberalism and socialism and so took its promises of social utopia on its face and marched in that direction as fast as it could. Now the entire nation has become a welfare case, and expects the EU, if not the world, to continue to fund their entitlement mentality. .........indefinitely.
The people of Greece say this: "We don't care how you do it, just give us our entitlements; and by the way, ask the other guy to pay for it because I don't want austerity, I want utopia". Once taxing the wealthy to moon still couldn't generate enough money to pay for entitlements, and the people of Greece developed a tax avoidance mentality, Greece decided other EU member countries should pay for it.
Once a cultural is trained for 2 or 3 generations into liberalism, it will accept nothing less than a free lunch and would rather self destruct than change.
Bad government is not the cause, it's the consequence of cultural liberalisation. Greece is a culture that really believes in liberalism and socialism and so took its promises of social utopia on its face and marched in that direction as fast as it could. Now the entire nation has become a welfare case, and expects the EU, if not the world, to continue to fund their entitlement mentality. .........indefinitely.
The people of Greece say this: "We don't care how you do it, just give us our entitlements; and by the way, ask the other guy to pay for it because I don't want austerity, I want utopia". Once taxing the wealthy to moon still couldn't generate enough money to pay for entitlements, and the people of Greece developed a tax avoidance mentality, Greece decided other EU member countries should pay for it.
Once a cultural is trained for 2 or 3 generations into liberalism, it will accept nothing less than a free lunch and would rather self destruct than change.
16
leftist policies are the worst poison a human can consume
1
I can't believe I'm saying this: Junker is lying
1. Only basic food and hotels are 13%...the resat of the VAT is 23%
2. There is no debt relief in the current package..what's the number!
3. There are pension cuts..he says there are not. PS I agree that pension cuts are needed in return for debt relief
1. Only basic food and hotels are 13%...the resat of the VAT is 23%
2. There is no debt relief in the current package..what's the number!
3. There are pension cuts..he says there are not. PS I agree that pension cuts are needed in return for debt relief
2
Despite Greece's magnificent past and, more recently, its gallant anti-Nazi stance in the 20th century, and Winston Churchill's ardent desire for it not to fall into Soviet hands ("You can have anything you want, but not Greece" during post-World War II negotiations), Greece has never been a completely "European" country.
It should never have joined the Euro zone. It had its exports, family structure, various businesses, including agriculture, and tourism, based on a fluctuating drachma. The Greeks did all right.
When Europe began feeding Greece money -- and I saw it spent, on new roads and gas stations, the Acropolis, parks connecting archaeological sites in Athens, the subways, and even the streets, newly paved in some places in marble -- it became difficult to resist entry into the EU. Who wouldn't want all that cash?
Historically hardworking Greeks began retiring at 50 and 55, supported by Europeans who worked until they were 60 and 65.
Now what? When you're living on a pension, not having saved money, and it's cut in half, you're cooked. When you've never paid property taxes, never budgeted for doing so, and now you have to, you're cooked.
Greece's new regime, excited to be in power, is young, irresponsible and callous; its Levantine games will hurt everyday Greeks even more than Draconian austerity has.
And if they sally over to Russia, with all Russia's shenanigans nowadays, then the Greek politicians are even stupider and more venal than I think they are.
It should never have joined the Euro zone. It had its exports, family structure, various businesses, including agriculture, and tourism, based on a fluctuating drachma. The Greeks did all right.
When Europe began feeding Greece money -- and I saw it spent, on new roads and gas stations, the Acropolis, parks connecting archaeological sites in Athens, the subways, and even the streets, newly paved in some places in marble -- it became difficult to resist entry into the EU. Who wouldn't want all that cash?
Historically hardworking Greeks began retiring at 50 and 55, supported by Europeans who worked until they were 60 and 65.
Now what? When you're living on a pension, not having saved money, and it's cut in half, you're cooked. When you've never paid property taxes, never budgeted for doing so, and now you have to, you're cooked.
Greece's new regime, excited to be in power, is young, irresponsible and callous; its Levantine games will hurt everyday Greeks even more than Draconian austerity has.
And if they sally over to Russia, with all Russia's shenanigans nowadays, then the Greek politicians are even stupider and more venal than I think they are.
24
Ok, so the borders are still open right? Did anyone figure out what happens when you have a group of 11M desperate people without enough food, fuel, and medicines all within a day or two drive of the rest of the zone? And all those core countries like Germany complaining about unsecure Greek borders letting in too many illegals from the mideast and Africa? Good luck!
4
Greek peoples know their politicians and banks stole them blind. Why haven't these peoples risen up and done something about that. After WW2 the collaborators had their hair shorn, as minimal punishment, and worse as the maximum. So these are people with guts. They may do something soon.
A new leader could become popular overnight, revolt and form a new government. Better than being the lowest of the low.
A new leader could become popular overnight, revolt and form a new government. Better than being the lowest of the low.
I don't think there is a happy outcome here, Mr. Irwin. You've got one set of failures, the way the Greeks have run their country for decades, nestled inside of another set of failures, the incomplete, and weak centralized economic yoke which is the European Union. Idealists in the EU have wanted to believe for decades that good will and trust were enough for a Three-Musketeers approach to being an uber-nation: one-for-all, and all-for-one.
Unfortunately, without political mechanisms in place to accompany the economic union, the EU has no enforcement mechanisms for bad actors, you know, the ones who want to run a decades-long scam, then expect to be forgiven for doing so. Ones that look an awful like the Greeks, who are notorious for not paying their own government the taxes it is due. This has all gone on for so long now, that it has become more of a farce than a Greek tragedy. That the oldest Western civilizations can act so stupid politically for so long shows a willful ignorance of reality. These people invented government, and now don't know how to do it. What to do?
7
Greece entered the Euro under false pretenses and all of the parties involved knew it and let it happen with a wink and a nod. Now all of the parties involved are going to reap the outcome of their self deceptions.
6
Actually a Greek exit would strengthen the Euro. The endless soap opera is now creating wider instability. The dangers of contagion are minimal as Irwin observes and even the cost of writing off the money that the Eurogroup has put into Greece via the EFSF is not what it appears. Germany's share is about 40 billion but they don't have to write a check tomorrow. The cost of servicing this debt over about 40 years is 11 Euros per German annually.
3
Syriza has led Greece to the edge of a cliff created by the ECB. The Greek economy requires massive restructuring, and so does Greece's heavy debt. It is a bankrupt state that by definition cannot comply with the debt-to-GDP requirements of the Euro Zone.
The Greek people need to loudly state their willingness to restructure and rationalize their economy. It seems unlikely that Syriza possesses the leadership to manage this issue. A vote of no-confidence in Syriza -- following an endorsement of the EU in this week's referendum -- appears to be the sanest course.
The Greek people need to loudly state their willingness to restructure and rationalize their economy. It seems unlikely that Syriza possesses the leadership to manage this issue. A vote of no-confidence in Syriza -- following an endorsement of the EU in this week's referendum -- appears to be the sanest course.
3
yes, officially, the dream was to unite southern and northern europe.
in reality:
greece's agriculture has been destroyed by the EU (ie. rotting oranges in the fields, dutch milk and cheese on the shelves)
industry, which was always underdeveloped but met the needs of its people, has also been gutted. european companies came in and bought greek ones only to shut them down. today, almost nothing is made in greece anymore...
much money was disbursed to greece over the years - but huge amounts were spent on german weapons systems, tanks and submarines, as well as french missiles and jets...why does a little country need such a swollen military budget for defense when it is part of the union?
things will be difficult - but walking away from the diktats of the northern countries and bankers is the first step towards the future of rebuilding greece.
going into further debt and living with more austerity is not an option!
in reality:
greece's agriculture has been destroyed by the EU (ie. rotting oranges in the fields, dutch milk and cheese on the shelves)
industry, which was always underdeveloped but met the needs of its people, has also been gutted. european companies came in and bought greek ones only to shut them down. today, almost nothing is made in greece anymore...
much money was disbursed to greece over the years - but huge amounts were spent on german weapons systems, tanks and submarines, as well as french missiles and jets...why does a little country need such a swollen military budget for defense when it is part of the union?
things will be difficult - but walking away from the diktats of the northern countries and bankers is the first step towards the future of rebuilding greece.
going into further debt and living with more austerity is not an option!
18
That's the point of a single market, we sell to each other. Plenty of greek cheese in dutch supermarkets.
Somehow I don't think agriculture is at the root of this problem....
Somehow I don't think agriculture is at the root of this problem....
3
Rotting oranges? And imported Spanish oranges, "pushed" upon the poor Greeks! Why let their own oranges rot? To much trouble picking them up? Seems like there is an direct connection to burning the euro bill, Ahh somebody will print another one, why should I care? I was happy with my underdeveloped industry, if you're an F student, no need to inspire higher! I agree with the wassted money on the military, this Greece does not need at all, only to show "pride" against Turkey, the fellow Nato partner!
Neither the Greeks..who are among the world's leaders when it comes to cheating on taxes...nor the European Central Bank...which refuses to recognize that economies cannot grow when austerity is imposed...holds the moral high ground here.
There are two real problems that must be addressed in order to return stability to the Greek financial system and economy. The first is that wealthy Greeks, who have made cheating on taxes into an art form, must begin to pay their fair share of taxes to support the Greek government. The second is that the oligarchs who run the ECB have to recognize that, whether they like it or not, austerity alone will never return a debt-ridden economy to health.
Between the greedy wealthy tax cheating Greeks and the European oligarchs ordinary Greeks are the real victims here. There circumstance is not unlike that of working Americans who were forced to pay for the bailout of the bankers who caused the mini-depression of 2008 and continue to find new ways to manipulate the financial system to enrich themselves at the expense of ordinary Americans.
There are two real problems that must be addressed in order to return stability to the Greek financial system and economy. The first is that wealthy Greeks, who have made cheating on taxes into an art form, must begin to pay their fair share of taxes to support the Greek government. The second is that the oligarchs who run the ECB have to recognize that, whether they like it or not, austerity alone will never return a debt-ridden economy to health.
Between the greedy wealthy tax cheating Greeks and the European oligarchs ordinary Greeks are the real victims here. There circumstance is not unlike that of working Americans who were forced to pay for the bailout of the bankers who caused the mini-depression of 2008 and continue to find new ways to manipulate the financial system to enrich themselves at the expense of ordinary Americans.
55
The Greek economy was booming when austerity measures were in place last year, exactly like the Irish and British economies boomed during times of austerity. Austerity has never failed to boost an economy, and government spending has never succeeded to grow an economy. If government spending was the answer, the austere Europeans would be begging the big-spending Greeks for money, yet the exact opposite is true. Reality is the exact opposite of what leftists predict,yet they cling to their failed disastrous leftist policies.
2
Austerity does not create growth in an economy.
In fact:
GDP=ConsumerSpending+GovernmentSpending+Investment+(Exports-Imports)
Poor people can't participate in the economy enough to grow it by themselves.
Austerity shifts punishment and blame. It speeds the descent.
There surely is not much "trickle down" when there is no effective demand from the working class.
In fact:
GDP=ConsumerSpending+GovernmentSpending+Investment+(Exports-Imports)
Poor people can't participate in the economy enough to grow it by themselves.
Austerity shifts punishment and blame. It speeds the descent.
There surely is not much "trickle down" when there is no effective demand from the working class.
2
Except during the Roosevelt years, yeah?
2
The Greeks lived in a fairy tale world for far too long. Instead of collecting taxes, many paid none at all. Instead of building an economy, a disproportionate number were employed by the government. Their pension system had to be the envy of Western Civilization. Wouldn't it be wonderful to retire young with a healthy pension? The chickens have come home to roost!
18
I've heard that the rich did not pay anywhere near their share of taxes. The rich being private sector people who had the power to keep the tax man at pay and influence politicians into maintaining that stays quo.
4
Tremendous damage has been done to us all by the fraudulent "austerity" doctrine, which turns out merely to have been part of a massive, propaganda-driven project to shatter the progressive legislation of the last hundred years and redistribute wealth upward to the one percent of the one percent.
It's particularly vile that the world's journalists have participated so eagerly in villainizing the social welfare programs that have, over the last century plus, elevated hundreds of millions of human souls out of wretchedness and squalor. I don't remember a time in my life when the mainstream press hasn't reportedly breathlessly and obediently on the "crisis" in Social Security, the looming "crisis" in Medicare, the awful onerous cost of food stamps, the tax burden imposed by paying for civil society, the need for the poor to give up just a little more so that the rich can continue to--what was that? make jobs? oh yes, all those jobs....
In fact the super-rich are quite willing for most of us to be thrust back into tremendous and endless squalor so long as they themselves can continue to lead immensely pleasant lives, toying with algorithms and moving money and commodities about the globe like colored blips in a computer game.
Now, the very rich, like the jealous, petty, profligate and self-indulgent gods of Olympus they so resemble, find themselves locked in a bitter quarrel with the Greeks. I do wish that just this once, the gods would find themselves on the losing end.
It's particularly vile that the world's journalists have participated so eagerly in villainizing the social welfare programs that have, over the last century plus, elevated hundreds of millions of human souls out of wretchedness and squalor. I don't remember a time in my life when the mainstream press hasn't reportedly breathlessly and obediently on the "crisis" in Social Security, the looming "crisis" in Medicare, the awful onerous cost of food stamps, the tax burden imposed by paying for civil society, the need for the poor to give up just a little more so that the rich can continue to--what was that? make jobs? oh yes, all those jobs....
In fact the super-rich are quite willing for most of us to be thrust back into tremendous and endless squalor so long as they themselves can continue to lead immensely pleasant lives, toying with algorithms and moving money and commodities about the globe like colored blips in a computer game.
Now, the very rich, like the jealous, petty, profligate and self-indulgent gods of Olympus they so resemble, find themselves locked in a bitter quarrel with the Greeks. I do wish that just this once, the gods would find themselves on the losing end.
27
Oh lets hate the guy that has some money. This is caused by politicians spreading money around to buy votes. It is about a nation living high on the hog with other peoples money. Now the bill comes due and instead of paying for what you have already bought and used you expect someone to else to pay for it yet again.
4
Michael, I want to speak to you respectfully, so all I'm going to say is that you've misunderstood me (and the situation) completely if you actually believe this is about hating "the guy that has some money."
Read up on the boom and bust cycles of the 19th century and the cyclical recessions and depressions of the 20th if you want to understand the dangerous and potentially lethal instabilities that prompted politicians (among others) to create a social safety net in the first place.
Back when we still imposed a relatively high tax on wealth, by the way, "the guy that has some money" did terribly well for himself nevertheless. No billionaires starved or wasted away back when they still had to pay taxes like regular citizens.
It was just that the ordinary taxpayer did so much better back then than now, and it's the ordinary, hard-working, productive human being who concerns me--the decent, everyday citizen being squeezed to death so that unimaginably wealthy people can have even more.
Read up on the boom and bust cycles of the 19th century and the cyclical recessions and depressions of the 20th if you want to understand the dangerous and potentially lethal instabilities that prompted politicians (among others) to create a social safety net in the first place.
Back when we still imposed a relatively high tax on wealth, by the way, "the guy that has some money" did terribly well for himself nevertheless. No billionaires starved or wasted away back when they still had to pay taxes like regular citizens.
It was just that the ordinary taxpayer did so much better back then than now, and it's the ordinary, hard-working, productive human being who concerns me--the decent, everyday citizen being squeezed to death so that unimaginably wealthy people can have even more.
2
The failure here is that the Greek's have been and want to continue re-distributing other peoples money and the non-Greeks have said no more. Now the Greeks are free to print massive amounts of Drachmas and distribute them as they wish which of course will cause horrendous inflation, more printing and eventual disaster. Take an economics course at your local community college before engaging further.
1
The ignorance and self-righteousness of Americans on this issue would be shocking, if one also didn't remember that the US has the lowest literacy rate in the developed world. I guess it's easy to judge the economic situation of a country that over half Americans couldn't find on a map when you can barely read past the fourth grade.
I lived in Greece for many years, and while the country has always functioned as a bit of a rogue nation, blithely disregarding the fact that German and American banks like Goldman Sachs are deeply responsible for what has happened to Greece is disingenuous. To think that the Greeks can continue to accept money under the stipulation that none of the money goes towards rebuilding Greek society and only goes towards paying off rich and corrupt banks that got Greece into this is complete madness and totally unsustainable.
As someone who lived throughout the Mediterranean for much of the 80s and 90s, I can say that I have always thought the EU to be a horrible idea - great for bankers and tourists - awful for everyone else. This has certainly proven true.
Finally, I think it more than a little ironic that everyone wants Greece to pay off its debts, but when the US banks failed in 2008 (Goldman Sachs included), no one was called to task and those criminals were bailed out with our public funds. As for Germany, it wouldn't even be a country if we hadn't given them massive debt forgiveness after WWII. And they killed 6 million people.
I lived in Greece for many years, and while the country has always functioned as a bit of a rogue nation, blithely disregarding the fact that German and American banks like Goldman Sachs are deeply responsible for what has happened to Greece is disingenuous. To think that the Greeks can continue to accept money under the stipulation that none of the money goes towards rebuilding Greek society and only goes towards paying off rich and corrupt banks that got Greece into this is complete madness and totally unsustainable.
As someone who lived throughout the Mediterranean for much of the 80s and 90s, I can say that I have always thought the EU to be a horrible idea - great for bankers and tourists - awful for everyone else. This has certainly proven true.
Finally, I think it more than a little ironic that everyone wants Greece to pay off its debts, but when the US banks failed in 2008 (Goldman Sachs included), no one was called to task and those criminals were bailed out with our public funds. As for Germany, it wouldn't even be a country if we hadn't given them massive debt forgiveness after WWII. And they killed 6 million people.
35
It doesn't do to forget that one of the earliest and most enthusiastic proponents of a European Union model was Sir Oswald Moseley, founder of the British Union of Fascists, who advocated fiercely for a European "state" in which a European government would manage defense and coordinate the economy. Just a footnote: but it ought to be said.
7
I am sure by withdrawing from the EU and worshipping at the alter of Putin or China, the Greek government will have a wonderful future. Once in the arms of Mother Russia, they can then claim and invade all of Europe because it was once part of the Greek Empire. We dumb Americans can then sit back and watch Duck Dynasty episodes!
Those banks paid back all that money with interest. Blaming this on the banks is disingenuous. Do you consider the Greek leaders to be poor innocent naif being led astray by those evil banks. That money was used and abused by all segments of Greek society.
1
Not only has austerity in a depressed economy "caused pain" to the citizens of Greece, it's also made it impossible to have any economic growth, thus compounding the problem to begin with.
It's abundantly clear to anyone not in complete denial that the idea of "expansionary contraction" is complete fantasy, and if anyone weren't convinced, what happened in Greece should be all the evidence they need to come around.
The banks and government agencies were saying to Greece that the condition for continuing in the Euro was accepting terms that will depress the Greek economy even further, making it even harder to come up with the billions needed for payments next time. It was sheer lunacy.
It's abundantly clear to anyone not in complete denial that the idea of "expansionary contraction" is complete fantasy, and if anyone weren't convinced, what happened in Greece should be all the evidence they need to come around.
The banks and government agencies were saying to Greece that the condition for continuing in the Euro was accepting terms that will depress the Greek economy even further, making it even harder to come up with the billions needed for payments next time. It was sheer lunacy.
9
Europeans are blessed with early retirement, big pensions, guaranteed years long severance, generous welfare, housing, education, childcare, health care eldercare and dozens of more free, free. It's heaven before you get to heaven - who worries or why do so, someone else will pay the bills. Go ask someone from Ireland, Spain or Portugal what pain is to scratch back from debt to make it in the EU zone. What about those EU citizens? Sorry Greece, unless the evil Germans pay up their WW2 reparations to Greece, the Greeks will reap what they sowed.
5
Goldman Sachs actively worked to conceal the magnitude of Greece's debt, cooking their books, to get them into the Euro. They deceived regulators and investors. Why isn't Goldman at least partially responsible for this crisis? Why can't Goldman contribute some of their billions to rectify damage they have caused? Why should elderly Greek pensioners dig through trash cans for food while the bankers at Goldman live like kings? This is simply outrageous.
32
When do the Greeks become responsible for their own actions?
1
This is what happens when you elect a communist party.
2
Enough about Greece. Since there's no comment option on the Puerto Rico (PR) debt debacle article, how about a Prexit?
Perhaps there are enough economic similarities between the respective relationships of Greece to the Eurozone and Puerto Rico to the rest of the US to make the various same arguments on Greece about what to do about the tiny Caribbean island "nation".
Perhaps there are enough economic similarities between the respective relationships of Greece to the Eurozone and Puerto Rico to the rest of the US to make the various same arguments on Greece about what to do about the tiny Caribbean island "nation".
6
Hello from Greece (yes I am here).
Things are bad and they are about to get worst. The money in the banks are enough for a few days. After that God knows. Everything is fluid. It is not certain if the referendum will take place or if the Government will collapse. As a Chinese proverb says "May you live in interesting times" these are definitely very "interesting" times.
Things are bad and they are about to get worst. The money in the banks are enough for a few days. After that God knows. Everything is fluid. It is not certain if the referendum will take place or if the Government will collapse. As a Chinese proverb says "May you live in interesting times" these are definitely very "interesting" times.
5
Is Greece the thin end of the wedge?
Will Spain, Italy, and Portugal be next?
Will Spain, Italy, and Portugal be next?
2
greece should dump the euro and go back to basics.
5
The photo of the man burning money is an apt metaphor for how and why Greece got into this mess.
9
I find it tragic the northern European central bankers and others will irresponsibly "roll the dice" with the economies of the EU and possibly the world at stake literally forcing a nation sized Lehman Brothers default. The austerity plan imposed on Greece didn't work. The country is in a deflationary cycle with over 25% unemployment. Raising taxes and cutting pensions will further undermine what little macroeconomic "heartbeat" and consumer demand the Greek economy has left.
Further, their is no political will left to support any elected Greek government which agrees to any further austerity. Whatever the norther european troika may think about the current Greek governmernt, it is infinitely better than the Greek government which will come next if it defaults and exits the EU.
This will mean Spain, Portugal and Ireland will also need to be taken off the austerity till death program as well.
The answer is Greece being suppported and encouraged to economically recover. Physcians do not attempt a serious operation until the patient's chances of survival are acceptable. It is ludicrious to expect the Greek economy to stabilize if every quarter the EU central bank and IMF are playing a monetary form of Russian roulette with Greece's economy. Speaking of Russia, is forcing Greece into Mr. Putin's bear hug in the geopolitical long term best interests of the EU?
Puerto Rico declared insolvency with $75 billion in debts so the curtain rises on another "greek" tragedy.
Further, their is no political will left to support any elected Greek government which agrees to any further austerity. Whatever the norther european troika may think about the current Greek governmernt, it is infinitely better than the Greek government which will come next if it defaults and exits the EU.
This will mean Spain, Portugal and Ireland will also need to be taken off the austerity till death program as well.
The answer is Greece being suppported and encouraged to economically recover. Physcians do not attempt a serious operation until the patient's chances of survival are acceptable. It is ludicrious to expect the Greek economy to stabilize if every quarter the EU central bank and IMF are playing a monetary form of Russian roulette with Greece's economy. Speaking of Russia, is forcing Greece into Mr. Putin's bear hug in the geopolitical long term best interests of the EU?
Puerto Rico declared insolvency with $75 billion in debts so the curtain rises on another "greek" tragedy.
8
The Greeks were wrong whenn they thought the EMU would be forced to safe Greece for the sake of eurpean unity.Actually,the case is the opposite.The EU will be stronger after Grexit when each member state understands that there is nobody around to pick up the tap after a party that went on for years.The EU/EMU is about helping each other,not using each other!
3
The Greeks were wrong whenn they thought the EMU would be forced to safe Greece for the sake of eurpean unity. <-- True
Regards,
Karimun
http://karimunwagonr.com
Regards,
Karimun
http://karimunwagonr.com
Let's get something straight: the definition of insanity is an inability to distinguish between fantasy and reality with no awareness of such. Doing the same thing over and over is not insane, because we all have examples in our past where that strategy worked--probably because of other factors we didn't control.
2
It is interesting to see hypocrisy at work! In 2003, France and Germany had both overspent, and their budget deficits had exceeded the 3% of GDP limit to which they were legally bound. In 2011 German debt to GDP ratio was 81.1 %.Also in 2011 the European Commission approved 175bn Euros of aid to just 1 bank in Germany (HRE). To put that in perspective,the Greek gov has a 141.8 bn Euro loan from the European Stability Fund.That's the Greek gov, not one bank!
In short, those who wish to impose austerity on the southern areas of the European Common Market either cannot keep the rules themselves or benefit
substantially from a bias in respect of loan/support facilities.
When Germany and France 'broke the law' in 2003, I don't remember any talk about cutting German worker's pensions, or starving their health system of resources, or punishing their banks/population with harsh measures.
The Euro currency was, and still is,against a fundamental principal of the EU.Moreover, it was not simply a 'currency accommodation', with it came restrictive rules on governments in respect of the way in which a sovereign state may choose to function.
The idea of the EU was to raise the standards of all in Europe.It was not that some elitist nations could enslave other nations by themselves breaking the rules they had pushed to enact.
Good luck Greece. Why don't you set up an account so all of us ordinary folks in Europe can send you a small donation to help your cause?
In short, those who wish to impose austerity on the southern areas of the European Common Market either cannot keep the rules themselves or benefit
substantially from a bias in respect of loan/support facilities.
When Germany and France 'broke the law' in 2003, I don't remember any talk about cutting German worker's pensions, or starving their health system of resources, or punishing their banks/population with harsh measures.
The Euro currency was, and still is,against a fundamental principal of the EU.Moreover, it was not simply a 'currency accommodation', with it came restrictive rules on governments in respect of the way in which a sovereign state may choose to function.
The idea of the EU was to raise the standards of all in Europe.It was not that some elitist nations could enslave other nations by themselves breaking the rules they had pushed to enact.
Good luck Greece. Why don't you set up an account so all of us ordinary folks in Europe can send you a small donation to help your cause?
17
Because that one bank in Germany was deemed far more likely to repay a bailout than the entire nation of Greece. Says more about Greece I think.
as for your idea of setting up an account for the Greek people, I wonder would you trust the Greeks to administer this fund correctly and fairly...
as for your idea of setting up an account for the Greek people, I wonder would you trust the Greeks to administer this fund correctly and fairly...
Really? Well, that one bank was so good at accounting that the German gov managed to find an accounting error of $78 billion (yes, that's billion) at that bank in October 2011.
Yes, I would trust the Greeks as much as I would trust any nationality when it comes to finance.Probably more than I would have trusted Lehman Bros. In any event, it is not the issue, the issue is the ordinary people of Europe signifying their support for the ordinary people of Greece by just sending Euro 10 to such a fund. 20% of the European population doing that could be helpful,huh?
Yes, I would trust the Greeks as much as I would trust any nationality when it comes to finance.Probably more than I would have trusted Lehman Bros. In any event, it is not the issue, the issue is the ordinary people of Europe signifying their support for the ordinary people of Greece by just sending Euro 10 to such a fund. 20% of the European population doing that could be helpful,huh?
1
Just structure some credit default swaps like Goldman-Sachs did. Oh, right, G-S was cooking the books for the Greek government way back when this whole mess began.
9
It's too easy not to mention that austerity and rigour was finally paying off in 2014 by an increase of GDP.
2
The solution for Greece is simple......Pay your bloody bills.
4
I predicted Greece's exit from the euro in an article ("Terra Instabilis") that was published in 2011 and then included in one of McGraw-Hill's textbooks. It may not happen right now, but it is inevitable. The Greek economy and the Greek people are simply not productive enough to stay in the same currency as the Germans and the rest of the northerners. You can postpone the day or reckoning, but eventually economic reality hits everyone in the face.
10
Simply right - Greece has not earned the pensions, the unemployment insurance, the right not to collect taxes, the high level of government employment or the health care that it now wants to consume as a right. "Austerity" in the context of Greece means living on what you earn and make, not on what Germany will lend to you that you never intended to repay. Krugman and Irwin in their rants against austerity as some sort of choice fail to see that Greece is $240 billion in debt because they have consumed as a society $240 billion more than they produced and they took that money from Germany and Finland and the Netherlands and they never will pay it back to the pensioners and investors in those countries. Austerity is the paying back of money you borrowed and the consumption of less now than in the past as you repay what you borrowed. Smart people borrow and invest, countries like Greece borrow to consume and transfer for immediate use and they never, ever want to pay anything back.
7
Is productivity the only issue though? Could't you say the same thing about the most productive and least productive state in the US?
--Ram
--Ram
1
It took the United States from 1776 until 1789 to work out a federal system that worked... kind of... if you want to ignore the Civil War.
Europe is trying to unify, in fact with free travel and commerce as a nation, but only through a common currency that has been in existence since 1999. Except... the United Kingdom, the only counterweight to Germany, joining the EU... but not really since it has steadfastly retained the British Pound.
Think of Greece... as well... a kind of Mexico. Your know, joined at the hip with it's neighbor from the beginning, but... a failed state.
Perhaps the best thing the EU and Britain could do is to peacefully invade the country, take it over, restore sanity, bring it into the modern European state, and hey... while you're at it-- have Germany pay the war antique reparations from their occupation of the country from 1941 through 1945 which they ducked. Greece needs a Marshall plan as well as Germany's reparations.
Hey, and by the way... Mexico needs to be invaded, sanity restored, the government replaced, the drug lords and pistoleros arrested, tried, imprisoned, and a Marshall plan.
Mexico is the United States' Greece.
Europe is trying to unify, in fact with free travel and commerce as a nation, but only through a common currency that has been in existence since 1999. Except... the United Kingdom, the only counterweight to Germany, joining the EU... but not really since it has steadfastly retained the British Pound.
Think of Greece... as well... a kind of Mexico. Your know, joined at the hip with it's neighbor from the beginning, but... a failed state.
Perhaps the best thing the EU and Britain could do is to peacefully invade the country, take it over, restore sanity, bring it into the modern European state, and hey... while you're at it-- have Germany pay the war antique reparations from their occupation of the country from 1941 through 1945 which they ducked. Greece needs a Marshall plan as well as Germany's reparations.
Hey, and by the way... Mexico needs to be invaded, sanity restored, the government replaced, the drug lords and pistoleros arrested, tried, imprisoned, and a Marshall plan.
Mexico is the United States' Greece.
3
The role of Russia in this needs to be looked at more closely. Russia wants - badly - warm water ports. They want access to the Mediterranean and they want to bust up NATO. So here comes Greece, cap in hand, with NATO membership and warm water ports.
The Europeans are only thinking about getting their money back. They should be thinking about Russia extending its sphere of influence. And also about the porous Greek borders, through which migrants and refugees from the Middle East can flow.
The Europeans are only thinking about getting their money back. They should be thinking about Russia extending its sphere of influence. And also about the porous Greek borders, through which migrants and refugees from the Middle East can flow.
5
"European leaders in Brussels and Frankfurt and Berlin may not be fair, or democratic, and there’s a good case that the economic policy they are advancing is not very sound"?
This column is as fun as the boy group in Greece - dreaming of its cool ideological "left"-winged doctrines. Ignoring the rest.
This column is as fun as the boy group in Greece - dreaming of its cool ideological "left"-winged doctrines. Ignoring the rest.
2
People make a lot of money over this volatility. All this will end well. The referendum will support Germany and the IMF.the will get a 400 plus rebound. This roller coaster ride could. Go on for months
2
It is amazing that Germany is calling the shots. This is a country that almost destroyed Europe, just about wiped out the European Jewish population and was the recipient of huge sums from the U.S. (aka Marshall Plan). They as well as European countries devastated by war, 13 billion dollars, which in today's economy would be around 120 Billion USD. We did that, not out of altruism, but a belief that a strong Europe would perhaps stave off the incessant tribal battles that would explode into World Wars decimating Europe and provide the necessary infrastructure the continent needed to begin an economic recovery that would reduce the pain of people. The wisest course is to help rebuild Greece's infrastructure as well as her economy because it will benefit all of Europe, and the EU. Such support would also demonstrate that Europe is indeed united and not run by the few, to benefit the few at the expense of the many. Germany still owes so much to the countries that it devastated-helping Greece and encouraging other countries to do the same will go a long way in demonstrating that Germany finally understands what it means to be a good, trusted and moral neighbor.
17
Greece has fantastic infrastructure thanks to generous EU funding.
And by the way, before you get too smug about the Marshall plan, remember that money was loaned, not grants, which were paid back by Germany with interest. AND, Germany was sending a lot more money the other direction as war reparations.
And by the way, before you get too smug about the Marshall plan, remember that money was loaned, not grants, which were paid back by Germany with interest. AND, Germany was sending a lot more money the other direction as war reparations.
In most instances, whenever Europe has a problem, America is often blamed. Is there anyone believes that America is at fault in this crisis?
not america as country,
it had been american bankers, that helped cooking the books and hiding the unsoundness of the greek economy,
many countries also suffered from the toxic subprimes, sold by the US.
But the biggest impact had the neoliberal narrative - but i am reluctant to blame the US for that, because this wen't so wrong for more reasons, including germany unwittingly fueling the bubble.
Let's put it like this - do you think the US has actual much to say in europe ? If you don't there might be a reason for this.
it had been american bankers, that helped cooking the books and hiding the unsoundness of the greek economy,
many countries also suffered from the toxic subprimes, sold by the US.
But the biggest impact had the neoliberal narrative - but i am reluctant to blame the US for that, because this wen't so wrong for more reasons, including germany unwittingly fueling the bubble.
Let's put it like this - do you think the US has actual much to say in europe ? If you don't there might be a reason for this.
2
This is such a tired silly argument.
Of course the books were cooked. Greece and the EU wanted them cooked. You seriously think that G-S just got this notion on its own to juggle the figures to make it come out the way Greece and the EU wanted it to? The admission of Greece to the EU was a political imperative for the EU, so the economics of it had to be manipulated to make it work. The hope was that in the long run it wouldn't matter. Turns out Greece is generally incompatible with "true" Europe. And the Greece folly is going to be very costly to unwind.
Of course the books were cooked. Greece and the EU wanted them cooked. You seriously think that G-S just got this notion on its own to juggle the figures to make it come out the way Greece and the EU wanted it to? The admission of Greece to the EU was a political imperative for the EU, so the economics of it had to be manipulated to make it work. The hope was that in the long run it wouldn't matter. Turns out Greece is generally incompatible with "true" Europe. And the Greece folly is going to be very costly to unwind.
Greece is corrupt. It doesn't collect taxes and it doesn't balance its books. You invest in something that is badly run, you lose.
You sell at a loss. You move on.
Europe is full of strong countries with balanced economies. They'll get over it.
You sell at a loss. You move on.
Europe is full of strong countries with balanced economies. They'll get over it.
4
I am not thrilled by "An anti-austerity protester burned a euro note at a demonstration in Athens on Sunday." This real and symbolic act just shows how wrong Greeks are about their crisis: They would love to burn their debts and stay with the EURO and all the benefits they have derived from the EURO and the EU. But you can't have your cake and eat it too. You need to do something to reap the benefits. The EU countries can't give any more EUROS to burn. It's as simple as that.
4
An endemically corrupt public sector which cannot collect income taxes is no prescription for repaying debt. The Greeks deserve everything they (don't) get, as do their German bankers.
6
It's amazing how confidently vindictive and judgmental so many comments here are, often seeming the judge the entire Greek people and portraying recent years' events entirely through the one-sided lens of northern European bankers.
Look, it takes two to make a dumb loan, one to make it, and one to take it. Since the financial crisis and related economic disasters (which were caused by a bunch of scamster bankers), Greece has, contrary to many claims here, made enormous, terribly painful compromises. No, it hasn't undertaken many of the structural reforms asked of it, but it has undertaken others, and it has most certainly followed through on the principal EU demand, austerity. It hasn't worked, as credible leftists predicted. Merkel was wrong, the Republicans were wrong, right-winters all over the world were wrong, austerity in recession is a stupid policy, sold because humans are vindictive and arrogant. EU projections for the Greek economy were grossly optimistic. And look, you can't just say "WELL THE GREEKS SHOULD HAVE REFORMED THEIR ECONOMY!" Enacting austerity to the point of creating a primary budget surplus, which involves many reforms and slicing many benefits and programs, was enough for ordinary Greeks to take. Humans are involved here (unless you genuinely belief the undercurrent of racism in these comments and don't see your own humanity in the Greeks) and that perhaps these poor people have suffered enough.
I hope a devalued drachma happens and helps.
Look, it takes two to make a dumb loan, one to make it, and one to take it. Since the financial crisis and related economic disasters (which were caused by a bunch of scamster bankers), Greece has, contrary to many claims here, made enormous, terribly painful compromises. No, it hasn't undertaken many of the structural reforms asked of it, but it has undertaken others, and it has most certainly followed through on the principal EU demand, austerity. It hasn't worked, as credible leftists predicted. Merkel was wrong, the Republicans were wrong, right-winters all over the world were wrong, austerity in recession is a stupid policy, sold because humans are vindictive and arrogant. EU projections for the Greek economy were grossly optimistic. And look, you can't just say "WELL THE GREEKS SHOULD HAVE REFORMED THEIR ECONOMY!" Enacting austerity to the point of creating a primary budget surplus, which involves many reforms and slicing many benefits and programs, was enough for ordinary Greeks to take. Humans are involved here (unless you genuinely belief the undercurrent of racism in these comments and don't see your own humanity in the Greeks) and that perhaps these poor people have suffered enough.
I hope a devalued drachma happens and helps.
18
Germany is again making a mistake. In attempting to avoid the financial mistakes of the 20s which helped bring about the crash of 1929 she is making the opposite mistake which could bring about the collapse of the Euro and everything Germany hoped from the European union.
5
I think you described the happy - or at least the happiest possible - outcome for Greece: leave the Euro, endure short term chaos and then slowly recover with a devalued currency and, quite possibly Russian aid. It would probably be the best outcome for the EU as well.
5
Sounds like the predatory lenders should take a hit. Why did they lend such a small nation with such a small GDP the money.
15
The Greek government, as well as its people need to fess up and admit that they have been living lavishly, yet not very productive outside cooking oil and tourism. Their tax structure is in shambles, as the wealthy avoids paying like the plague. Yet, the very little work and much relaxation working class has not realized that they are one if the least productive in Europe. Let's not get started on the pensions paid to those who produced little throughout their working lives, yet demand a comfortable pension at a too early age. The aforementioned is the elephant in the room.
1
The people who are having their pensions reduced may have been among the hardest working people in Europe. At the end of the Second World War the Greek economy was in ruin. During the 1950's to 1990s their economy grew and became vibrant. They are still the largest ship building nation in the world. The pensioners have a right to be angry. Those who came after them failed to continue the economic growth.
4
Agree with you about everything, except the Greek shipbuilding industry was offshored to Asia. Most ship building now takes place in Asia. This is part of the problem.
Let's defer the Greek debt for 10 years. Let's demand sacrifices, but let's also make sure those sacrifices are pumped back 100% into the Greek economy, e.g., by building new infrastructure. This could allow Greece to get back on its feet without taking on new debt.
2
How quickly the Germans forget the Martial Plan, of which they received about 11% of the US dollars, and didn't complete repayment until 1971,
For those that forget, the Martial Plan was not just about loaning someone money, but included removing trade barriers, modernizing industry, adoption of modern business practices, etc.
The current German position seems to be about paying their money back but at the cost of austerity, which the Greeks don't accept Wouldn't a more enlightened German position be something along the lines of the Martial Plan?
So, instead of demanding repayment at the cost of austerity, the Germans should offer a New Martial Plan. The Greek voters could then vote this up or down on the 6'th.
For those that forget, the Martial Plan was not just about loaning someone money, but included removing trade barriers, modernizing industry, adoption of modern business practices, etc.
The current German position seems to be about paying their money back but at the cost of austerity, which the Greeks don't accept Wouldn't a more enlightened German position be something along the lines of the Martial Plan?
So, instead of demanding repayment at the cost of austerity, the Germans should offer a New Martial Plan. The Greek voters could then vote this up or down on the 6'th.
9
For those that forget, it was the Marshall Plan.
3
"Martial Plan" ?
If you mean the Marshall-Plan https://en.wikipedia.org/wiki/Marshall_Plan
here are some quotes in context:
"The Marshall Plan aid was mostly used for the purchase of goods from the United States."
"in which the United States gave $13 billion (approximately $120 billion in current dollar value) in economic support" (for whole europe)
Germany received $1.5 billion over 4 year, which would be alike 14 billion in todays value - for purchasing american goods. Of which they paid half of it back.
Now compare this to just the actual tranche of $8.2 Billion for a much smaller country, which is not devastated by war.
If you mean the Marshall-Plan https://en.wikipedia.org/wiki/Marshall_Plan
here are some quotes in context:
"The Marshall Plan aid was mostly used for the purchase of goods from the United States."
"in which the United States gave $13 billion (approximately $120 billion in current dollar value) in economic support" (for whole europe)
Germany received $1.5 billion over 4 year, which would be alike 14 billion in todays value - for purchasing american goods. Of which they paid half of it back.
Now compare this to just the actual tranche of $8.2 Billion for a much smaller country, which is not devastated by war.
1
I think this mess shows the limits of the "European way" toward the construction of a united confederacy.
As far as I know, plenty of U.S. Federal money goes from the more developed states in the U.S. to the ones that are less developed. Nobody really complains... someone has to live even in those states.
What is lacking is a type of "EU Federal Government" with the budget to actually compensate the regional imbalances, and more integration on many levels so that the various Europeans stop thinking "I am an XXX and then, maybe, an European".
For example, the cyclic internal movements of people in the U.S. (to wherever is the "cool" area that decade) are a part of making the country more unite ... but the thought of Greeks migrating en masse to Germany (and other Nordic countries) was enough to prompt some nasty tweaking in the application of of the Schengen rules.
If things go south, it is possible that in the long term the whole E.U. project unravel. Time has passed, and people who remembers why the road to integration was taken (...Dresden, or Coventry reduced to ashes... ) are growing scarce.
In the actual situation, Germany drives the plot, and gets huge dividends.
However, we should remember what DeGaulle answered, when asked
- "How do you impede Germany to control the whole of Europe, again?"
"Mais, pour la guerre" ("Through war, of course").
- I hate the idea of being going to live very interesting times.
As far as I know, plenty of U.S. Federal money goes from the more developed states in the U.S. to the ones that are less developed. Nobody really complains... someone has to live even in those states.
What is lacking is a type of "EU Federal Government" with the budget to actually compensate the regional imbalances, and more integration on many levels so that the various Europeans stop thinking "I am an XXX and then, maybe, an European".
For example, the cyclic internal movements of people in the U.S. (to wherever is the "cool" area that decade) are a part of making the country more unite ... but the thought of Greeks migrating en masse to Germany (and other Nordic countries) was enough to prompt some nasty tweaking in the application of of the Schengen rules.
If things go south, it is possible that in the long term the whole E.U. project unravel. Time has passed, and people who remembers why the road to integration was taken (...Dresden, or Coventry reduced to ashes... ) are growing scarce.
In the actual situation, Germany drives the plot, and gets huge dividends.
However, we should remember what DeGaulle answered, when asked
- "How do you impede Germany to control the whole of Europe, again?"
"Mais, pour la guerre" ("Through war, of course").
- I hate the idea of being going to live very interesting times.
2
One result of today's cut and paste journalism is the endless perpetuating of unreflected and unverified statements. The EU requirement does not call for a 'painfull austrity' instead it requests (for the extension of the loans) significant reforms of a corrupt and unjust system. The richest shipowners are exempt from income taxes, independent professionals like doctors, lawyers just don't declare income ... with no consequences, retirement benefits paid to people long dead ... the saga continues. The result for the common person in Greece is the same, regardless with or without the Euro. The reforms come either planned, controlled and backed by the ECB or in form of a social Tsunami with a new greek currency.
It would be interesting to know who provides the 'blueprints' for this cut and paste journalism, 'qui bono'?
It would be interesting to know who provides the 'blueprints' for this cut and paste journalism, 'qui bono'?
8
Wasn't it Greece previous governments' overblown megalomania holding the 2004 Olympics that effectively depleted its finances to zilch? A classic example of how governments are a caste totally detached from its people eating away billions of taxpayers euros to fatten politician's bellies oblivious to what is going to happen next; they had their derrieres shielded from any "irritating inconvenience" such as bringing the country into bankruptcy.
3
It is going to be interesting to see how the US handles the emerging situation in Puerto Rico versus the way the EU handles the situation with Greece.
8
What continues to be ignored in this crisis is who initially created the unsustainable dynamics, and has reinforced the perception of good and bad players while in reality being the "house" in this casino game: Germany. The primary surplus they insist Greece achieve as well as the money they would have continued to lend would go overwhelmingly to paying the Germans themselves, who lent the Greeks the money despite knowing they could never service the debt without crushing austerity and years if not decades of double-digit unemployment.
The suffering the Greek people have and will continue to endure can justifiably be laid in large measure at the feet of the German bankers and government, who now want to make an example of their "client" for not agreeing to break their own kneecaps as an example to other borrowers (Spain, Italy, etc.).
The suffering the Greek people have and will continue to endure can justifiably be laid in large measure at the feet of the German bankers and government, who now want to make an example of their "client" for not agreeing to break their own kneecaps as an example to other borrowers (Spain, Italy, etc.).
7
I think this report of events brushes over a few pertinent details. It says that "the Germans" are the bad guys - the banks, the government -- it's all one coordinated, unified economic German bad guy. Don't think so, really.
Unpredictable, sloppy, arrogant.
It doesn't matter what the greeks wanted and germany enforces. It's the way how they do it.
Varoufakis, with his lecturing, his "i don't have to come up with a plan", and "give me the money but don't ask what i will do"-attitude have deeply annoyed even those governments, who would have liked to easy austerity.
We have 18 governments again 1.
And i do predict, even if the greeks decide to stay in the euro, no one really want's to deal with them anymore.
It doesn't matter what the greeks wanted and germany enforces. It's the way how they do it.
Varoufakis, with his lecturing, his "i don't have to come up with a plan", and "give me the money but don't ask what i will do"-attitude have deeply annoyed even those governments, who would have liked to easy austerity.
We have 18 governments again 1.
And i do predict, even if the greeks decide to stay in the euro, no one really want's to deal with them anymore.
12
Greece has two problems:
1) Decades of living beyond its means, of importing more than exporting, of spending more than collecting in taxes culminating in a massive debt that by all sensible accounts is unsustainable even as it is today and can never be repaid in full.
2) For similar reasons, Greece has seen ever rising costs and wages that led to an ever shrinking productivity and hence competitiveness, crippling the Greek economy.
The currend Greek government only wants to address the first point and they want to solve the problem by doing a massive haircut and cutting the debt. Europe on the otherhand is mostly interested in the second point. They are arguing (and rightly so), that the first thing that needs to be addressed is Greek competitiveness. Once Greece has done its homework, they offered to talk about looking at a debt-restructure.
So how can Greece solve it's problems? Well the first thing to become a financially viable state is a primary surplus, which Greece achieved thanks to the austerity last year after 4 years of hardship, but which the new government immediately got rid of with its chaotic policies.
The second part is to increase productivity. In the long term, that means better education and training for its people as well as smart investments, in the short term, it means cutting costs and wages either by devaluing internally or by leaving the Euro and devaluing the new currency.
1) Decades of living beyond its means, of importing more than exporting, of spending more than collecting in taxes culminating in a massive debt that by all sensible accounts is unsustainable even as it is today and can never be repaid in full.
2) For similar reasons, Greece has seen ever rising costs and wages that led to an ever shrinking productivity and hence competitiveness, crippling the Greek economy.
The currend Greek government only wants to address the first point and they want to solve the problem by doing a massive haircut and cutting the debt. Europe on the otherhand is mostly interested in the second point. They are arguing (and rightly so), that the first thing that needs to be addressed is Greek competitiveness. Once Greece has done its homework, they offered to talk about looking at a debt-restructure.
So how can Greece solve it's problems? Well the first thing to become a financially viable state is a primary surplus, which Greece achieved thanks to the austerity last year after 4 years of hardship, but which the new government immediately got rid of with its chaotic policies.
The second part is to increase productivity. In the long term, that means better education and training for its people as well as smart investments, in the short term, it means cutting costs and wages either by devaluing internally or by leaving the Euro and devaluing the new currency.
4
As American's watch Greece it turns out that Puerto Rico has exactly the same problem, insurmountable debt and a central government (that'd be the Washington, D.C.) which controls their currency and refuses to flex. No matter the outcome there I'm sure the US won't fall apart, and neither will the EU.
7
Greek Government, very bravely, is doing the right thing. That is asking the Greek people what they want. Do they want an economic policy imposed by the foreign politicians (IMF, ECB, the Commission and the leaders behind them are all politicians) or do they want to set a course decided by their own. By now it is quite obvious that the Troika does not have coherent policy to draw Greece out of this mess. They secured their own banks by transferring the Greek debt on to the public institutions, and now playing a chicken game to make sure that when the eventual breakdown comes it is Greece that is to blame. The bottom line is this: How an economic policy which made 50% of the Greek people miserable and produced no progress can be sustained?
6
Shall they stop ELA? They are now transferring the Greek debt on to the public institutions to Keep the greek Banks running....But now it's ok?
Asking the people? Are you kidding?
The Greek crisis would be easy to fix, if the EU were indeed a true Federal Union, instead of just an economic union consisting of sovereign states. As is, the European Parliament cannot make the decisions for Greece, only its own government can make. And those concern pretty radical structural reforms without which the Greek economy simply cannot function competitively within the overall EU framework.
In the US this is pretty simple: Federal law trumps state law and the states cannot borrow against the Federal Reserve. Otherwise there would be no incentive to be economically prudent and the result would be runaway inflation across the US.
In both cases, Greece wants to have the cake and eat it. Naturally, the other EU countries object. Especially since every other EU country has held up its end of the bargain and made the, often painful, reforms necessary to make the Union work. Greece is behaving like a rebellious child throwing a tantrum. Giving in would only provoke more of the same in the future. Greece has not been willing to get its house in order since they had to admit to cooking their books 6 years ago, why would they suddenly do it now? Unless they are forced to have to do it on their own.
The money that was poured into Greece over the last 15 years is lost anyway. There is no way Greece can pay it back.
In the US this is pretty simple: Federal law trumps state law and the states cannot borrow against the Federal Reserve. Otherwise there would be no incentive to be economically prudent and the result would be runaway inflation across the US.
In both cases, Greece wants to have the cake and eat it. Naturally, the other EU countries object. Especially since every other EU country has held up its end of the bargain and made the, often painful, reforms necessary to make the Union work. Greece is behaving like a rebellious child throwing a tantrum. Giving in would only provoke more of the same in the future. Greece has not been willing to get its house in order since they had to admit to cooking their books 6 years ago, why would they suddenly do it now? Unless they are forced to have to do it on their own.
The money that was poured into Greece over the last 15 years is lost anyway. There is no way Greece can pay it back.
4
I wonder if people like you making comments like these ever think of the actual people involved in this. I have to admit I am one of the LUCKY ones, working 8hours a day/5 days a week and getting a salary of 600euros. This is considered FORTUNATE in Greece. How is someone supposed to live like that? I'm 25 years old and NO this crisis is not my fault. Maybe it's my parents' fault, who knows, maybe it's just the government's fault and that's that. But what about us? The citizens? Do you think about us? Are we supposed to be left to die?How is someone to get by with 600 euros a month, when a decent house(rent) costs around 200-300 euros/month? Am I supposed to live with even less? Why?
1
I agree that the next few days are very important for Greece and for Europe - as I write this note in the early hours of June 29th, Asian financial markets are registering a stampede toward their respective exits.
But we all know that this budding - and probably brief - financial crisis will be an opportunity for the financiers who provoked it to make megabucks off the very panic they helped to bring about These folks - who are the most economically unproductive actors in the entire global capitalist system - make money coming and going - as the billions made by hedge funds and others off the 2008 collapse proved very clearly.
I'm sure that the Greek government is playing a game of what we Americans call "Chicken" with the financial authorities of the Eurozone - and maybe the rest of the world's financial un-elected elites as well.
And I bet Greece will win, one way or another in the next few days - just as many of the super-rich institutions and individuals with their too-heavy hands on the scales of financial fair play will profit - one way or the other.
Europe is too comfortable - even in a deflation - to want to undergo a transformation. My bet is that the E.C.B. will figure out a way to keep Greece in the Euro - even at this late date, and even if that means a "haircut" for Greece's creditors that will turn out to be a real scalping.
But we all know that this budding - and probably brief - financial crisis will be an opportunity for the financiers who provoked it to make megabucks off the very panic they helped to bring about These folks - who are the most economically unproductive actors in the entire global capitalist system - make money coming and going - as the billions made by hedge funds and others off the 2008 collapse proved very clearly.
I'm sure that the Greek government is playing a game of what we Americans call "Chicken" with the financial authorities of the Eurozone - and maybe the rest of the world's financial un-elected elites as well.
And I bet Greece will win, one way or another in the next few days - just as many of the super-rich institutions and individuals with their too-heavy hands on the scales of financial fair play will profit - one way or the other.
Europe is too comfortable - even in a deflation - to want to undergo a transformation. My bet is that the E.C.B. will figure out a way to keep Greece in the Euro - even at this late date, and even if that means a "haircut" for Greece's creditors that will turn out to be a real scalping.
8
Everyone writes and comments about the Greek debt and economy and whether the Greeks will be better off exiting the Eurozone and rebuilding their economy alone. No mention is made by the Eurozone of the current statistics of Greek birth rates.
The current socialist/communist government is lobbying for the Greeks to reject the Eurozone proposals and maintain Greek pride and independence. No mention is made by the socialists of the Greek birth rate.
Anyone can research online and look at charts that show the birth rates for Greece, Spain, Portugal, France and Italy.
The Greeks have had a birth rate for years that will not sustain the Greek nation.
The current birth rates are so low that the Greeks have no chance of paying the social services currently offered to the Greek retirees.
Exiting the Euro may big news now, but over the next 5-10 years, the Greeks will be making news as each year fewer and fewer workers will be available to pay the social service debt the Greeks think is some type of Cosmic right.
Pity the Greeks and Spain and Italy and Japan if they do not begin immediately to change the culture to produce children to carry on the culture of their countries. Currency and repayment of debt will be the least of their worries.
The current socialist/communist government is lobbying for the Greeks to reject the Eurozone proposals and maintain Greek pride and independence. No mention is made by the socialists of the Greek birth rate.
Anyone can research online and look at charts that show the birth rates for Greece, Spain, Portugal, France and Italy.
The Greeks have had a birth rate for years that will not sustain the Greek nation.
The current birth rates are so low that the Greeks have no chance of paying the social services currently offered to the Greek retirees.
Exiting the Euro may big news now, but over the next 5-10 years, the Greeks will be making news as each year fewer and fewer workers will be available to pay the social service debt the Greeks think is some type of Cosmic right.
Pity the Greeks and Spain and Italy and Japan if they do not begin immediately to change the culture to produce children to carry on the culture of their countries. Currency and repayment of debt will be the least of their worries.
7
Right. Birth rates in the southern countries are approaching
again the even lower levels at which they started
the past decades. Meantime
the birth rate significantly in Greece, Spain and Italy
increased - with a certain delay to the
Economic boom before and after the euro introduction.
again the even lower levels at which they started
the past decades. Meantime
the birth rate significantly in Greece, Spain and Italy
increased - with a certain delay to the
Economic boom before and after the euro introduction.
This will be true for the entire planet sooner rather than later. We are rapidly heading toward 9 billion people, which is absolutely unsustainable for Earth. And there is no way whatsoever to escape from this planet. So we better get used to figuring out how to solve THAT problem. Clearly, peaceful, though painful, population reduction is preferable to doing the same by war on a scale this planet has never seen.
Again I find in this column the myth of a Greek economy rebound in the "medium" term if they go back to drachmas. Would the writer care to give us some hard facts on his belief? Greece does not have any natural resources or have little economic infrastructure (unlike Argentina or Spain, respectively) which would allow a rebond if external conditions change. Truthfully, the only product we get here from Greece is olive oil, feta cheese, and little else. I wonder what would they sell us more if they got back to drachmas. Would again the economist from Columbia care to answer that???
5
I think he means a cheaper currency would help spark tourism in higher numbers. That is after all a huge contributor to the Greek economy.
And a cheaper currency could also kickstart an industrial economy in which it can export cheaper goods abroad. But you're right in saying that there really isn't any real industry in the country right now. It needs to be developed.
And a cheaper currency could also kickstart an industrial economy in which it can export cheaper goods abroad. But you're right in saying that there really isn't any real industry in the country right now. It needs to be developed.
Umm, I think you forgot tourism, a major contributor to the economy. Tourism is very sensitive to currency devaluations.
I will try to answer you, with good will my friend. I have travelled many places in the globe and I can assure you that greek products (fruits, vegetables, honey, oil, etc.) are among the best I have tried! So, Greece could enhance its exports (and a devalued currency would help) which are now over constrained by the EU so that Germany, Netherlands and other countries can export theirs which, by the way, are of much lower quality.
Are you aware of the fact that EU payed subsidies to the greek farmers in order to throw into garbage their crops (and people did so, with tears in their eyes)? Who wouldn't expect that such actions (alongside with Greece being the third bigger customer (!!) in military equipment) would lead greek economy to catastrophe?
But let me go on answering your question. Greece depends a lot on tourism which would also be aided by a devalued currency. Greece is also the leading power worldwide in shipping capacity! It is true that there is no heavy industry in the country, but this situation could turn out to be a good chance, to create one.
And after all it's NOT EVERYTHING IN LIFE ABOUT MONEY! There are much greater values in life which have been traded for money and this has to stop.
Personally, as a greek individual, I can tell you that I don't know what will happen "tomorrow", but I can tell you what I want today. I want Greece outside of Eurozone. A unified Europe is a very nice concept, but this ugly, undemocratic, and driven money construct is not
Are you aware of the fact that EU payed subsidies to the greek farmers in order to throw into garbage their crops (and people did so, with tears in their eyes)? Who wouldn't expect that such actions (alongside with Greece being the third bigger customer (!!) in military equipment) would lead greek economy to catastrophe?
But let me go on answering your question. Greece depends a lot on tourism which would also be aided by a devalued currency. Greece is also the leading power worldwide in shipping capacity! It is true that there is no heavy industry in the country, but this situation could turn out to be a good chance, to create one.
And after all it's NOT EVERYTHING IN LIFE ABOUT MONEY! There are much greater values in life which have been traded for money and this has to stop.
Personally, as a greek individual, I can tell you that I don't know what will happen "tomorrow", but I can tell you what I want today. I want Greece outside of Eurozone. A unified Europe is a very nice concept, but this ugly, undemocratic, and driven money construct is not
4
As others have commented, you have to bear in mind that the entire rest of the EU is united against Greece. That's the context to bear in mind. This is not about Germany vs Greece. Countries like Slovakia, poorer and smaller than Greece, want their money back,too.
However tempting it is to say this is the end (and I wish it was), I don't think Greece will exit the euro. There will be capital controls until the referendum, in which Greece will say yes to conditions of bailout (60% say yes in opinion polls) At that point the government resigns, new government comes in and signs up to new bailout and more austerity. That's what will happen. Why? Because as game theorists will recognize both sides lose more from any other scenario. Europe loses hundreds of billions in loans and Greece has a cataclysmic return to the drachma. So both sides are better off with a fudge.
However tempting it is to say this is the end (and I wish it was), I don't think Greece will exit the euro. There will be capital controls until the referendum, in which Greece will say yes to conditions of bailout (60% say yes in opinion polls) At that point the government resigns, new government comes in and signs up to new bailout and more austerity. That's what will happen. Why? Because as game theorists will recognize both sides lose more from any other scenario. Europe loses hundreds of billions in loans and Greece has a cataclysmic return to the drachma. So both sides are better off with a fudge.
5
Currency union without fiscal union in a collection of nations with vastly different levels of productivity was bound to fail. Greece may be the first victim but it will not be the last. Spain and Italy may be next.
Blame the French if you must blame somebody. They made currency union a condition for German reunification. This would, thought the French, cement the relationship between France and Germany and make them twin engines of the Eurozone. Top dogs forever.
Well, think again. Now watch the croissant crumble.
Blame the French if you must blame somebody. They made currency union a condition for German reunification. This would, thought the French, cement the relationship between France and Germany and make them twin engines of the Eurozone. Top dogs forever.
Well, think again. Now watch the croissant crumble.
6
The difference between Greece and Germany in per capita GDP, a good stand-in for overall productivity, is less than the difference between Mississipi and Connecticut. The US is also not fully a transfer union - the Federal government is not responsible for guaranteeing State bonds or for State budgets. What makes a union is politics, not economics.
2
" What makes a union is politics, not economics. "
Quite right, Punditji. The tragedy of the EU is that both the economics and the politics have failed.
The Indian Union, which also brings together a congeries of vastly different sub-nations, was glued together by two hundred years of British colonial rule, which created common institutions, a common currency, and, finally, one people, more or less.
Two hundred years of American or Chinese colonial rule might just result in a credible European Union.
Quite right, Punditji. The tragedy of the EU is that both the economics and the politics have failed.
The Indian Union, which also brings together a congeries of vastly different sub-nations, was glued together by two hundred years of British colonial rule, which created common institutions, a common currency, and, finally, one people, more or less.
Two hundred years of American or Chinese colonial rule might just result in a credible European Union.
Greece would get very little from a currency devlauation, because it exports very little and is not in a position to increase its exports very much - there is only so much Feta and olives the world wants. Tourism was already doing well. Meanwhile, Greece cannot feed itself, and all that imported food - and oil - will have to be paid for in hard currency the Greeks won't have, and that no one will lend them. If you thought IMFausterity was bad, this will be worse. Even if the absence of any debt payments allow the government to hike salaries and pension 50%, 100% inflation due to devaluation will be catastrophic. Democracy will not survive. The Greeks had better vote yes.
6
'Ever Stronger Union' does not work with the diversity of European lifestyles and economies. Fifteen years of 'lessons learned' surely points to adjustments that would not attempt to turn Greeks into Germans, or produce the unending conflicts on migration, business regulations and financial support. Time to shift out of Charlemagne-Bonaparte mode, and settle for 'Pretty Good Union'.
No one set out to turn Greeks into Germans. One can be proudly Greek or proudly German and repay loans that they have been given. The concept of making loans and repaying with interest is older than democracy itself and not dependent on particular culture.
2
Greece is a plum that's about to fall to the ground. If Russia picks it up... we're in for a very bumpy ride.
3
Greece is more a poison apple than a plum.
3
How many know that Greece right now is actually running a budget surplus? Yes. that is true.Previous reforms from austerity have put the government into the black. But it also reduced GDP by 25% and created 50% unemployment for the young & a huge loss of human capital.The proposal was about keeping Greece paying the interest on the debt and not about anything else.
Please read the EC proposal. It is focused 100% on austerity & 0 percent on growth to get Greece back on its feet. Now they claim growth plans were on the table but they were not.
To accept the proposal and create further permanent reforms (reforms that are 50% harsher than anything the US has), three things need to happen to give the Greeks future hope:
1. Lower the VAT tax from a crazy 23%? Seriously, who came up with that one? The Greeks rely on tourism and 23% would virtually wipe out that industry for them. Turkey by example is 8%. The Greeks kn ow tha this would create a further GDP decline totally 50% and would wipe out any chance of recovery.
2. Create a growth plan for the country working with the Greek government (left or right). Currently and inexplicably,none has been provided leading Greeks to believe that this is about keeping a country down versus a EU.
3. Provide debt relief in exchange for these final reforms which would make the Greek government pensions and other policies no different than northern Europe. The EU could do that and not even blink.
Then you have a deal or the Greeks should say no
Please read the EC proposal. It is focused 100% on austerity & 0 percent on growth to get Greece back on its feet. Now they claim growth plans were on the table but they were not.
To accept the proposal and create further permanent reforms (reforms that are 50% harsher than anything the US has), three things need to happen to give the Greeks future hope:
1. Lower the VAT tax from a crazy 23%? Seriously, who came up with that one? The Greeks rely on tourism and 23% would virtually wipe out that industry for them. Turkey by example is 8%. The Greeks kn ow tha this would create a further GDP decline totally 50% and would wipe out any chance of recovery.
2. Create a growth plan for the country working with the Greek government (left or right). Currently and inexplicably,none has been provided leading Greeks to believe that this is about keeping a country down versus a EU.
3. Provide debt relief in exchange for these final reforms which would make the Greek government pensions and other policies no different than northern Europe. The EU could do that and not even blink.
Then you have a deal or the Greeks should say no
10
Greece is not running a surplus. It was briefly running a "primary" surplus, *before* interest payments, but even that is a function of the government not paying its suppliers.
3
What really matters is their structural, or full employment deficit/surplus. That i, what is the deficit/surplus abstracting from the business cycle. Greece now has a large structural surplus. Further austerity makes absolutely no sense.
1
Spain runs 23% VAT..
The citizens of Greece are faced with an easy choice which entails a short-term problem - making the transition to a new currency. However, that is a small price to pay to obtain a future which offers the possibility of economic growth which will provide employment opportunities, and rising levels of personal wealth.
On the other hand, the IMF and the EU have a Euro 250+ Billion problem and the ECB has a Euro 89 billion problem. This is true no matter how the referendum on July 5th turns out. This money is gone - it will not be repaid now or during the life time of those who benefitted from the borrowing.
To add insult to injury - what is going to happen in the EU when the remaining member states see that a member state can throw-off its austerity strait-jacket and by the devaluation of its new currency find its way back to economic growth and improving economic opportunities for its citizens.
The old adage is certainly true - when someone owes a bank 10 thousand Euros that someone has a problem, but when someone owes lenders 350+ billion Euros, it is the lender that has the problem.
On the other hand, the IMF and the EU have a Euro 250+ Billion problem and the ECB has a Euro 89 billion problem. This is true no matter how the referendum on July 5th turns out. This money is gone - it will not be repaid now or during the life time of those who benefitted from the borrowing.
To add insult to injury - what is going to happen in the EU when the remaining member states see that a member state can throw-off its austerity strait-jacket and by the devaluation of its new currency find its way back to economic growth and improving economic opportunities for its citizens.
The old adage is certainly true - when someone owes a bank 10 thousand Euros that someone has a problem, but when someone owes lenders 350+ billion Euros, it is the lender that has the problem.
5
Why should Greek citizens pay for oligarchs past who didn't contribute their share paying for social obligations and then left the country with all their wealth stowed elsewhere? The Greek government (and Interpol) really should go after those scoundrels and thieves.
5
Because that didnt happen
I don't understand why/how Eurozone laws allowed decision-makers to accumulate toxic amounts of debt without the public/markets being aware. Had all of this occurred in the public eye, then the public not just in Greece but in Europe as well, would have reacted to do something about it (ie. put a stop to it). The markets would have reacted by downgrading the creditworthiness of both the lenders and the borrowers alike. But no market can work - nor can any accountability mechanism work - if the deeds are kept concealed. As long as concealment is allowed, then anyone can do something to an irresponsible extent, to create a crisis down the road. Some are complaining about Greek pensions, tax evasion - in which case, how come EU and other markets didn't react to those things before? The real issue is the borrowing transactions that were carried to toxic levels without being transparently known to the public/markets. Even if all of you worked hard and paid your taxes, I alone could sink all of you if I was given a legal loophole to allow me to secretly borrow in an unlimited way. The framers of the Eurozone certainly look like fools to me.
3
The reason why Greece was allowed to accumulate toxic amounts of debt is because in 2002, Goldman Sachs sold them on a scheme that would allow them to borrow, without it showing up on the books. According to Der Speigel:
"...Bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.
This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer."
http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman...
German banks were also lending Greece vast amounts of money it had to know it couldn't pay back. Much like the lenders in the US who convinced buyers that they could afford a house, that they knew they would probably end up defaulting on.
"...Bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.
This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer."
http://www.spiegel.de/international/europe/greek-debt-crisis-how-goldman...
German banks were also lending Greece vast amounts of money it had to know it couldn't pay back. Much like the lenders in the US who convinced buyers that they could afford a house, that they knew they would probably end up defaulting on.
5
The birth of the Euro opened a speculative playing field for large investors, states, national banks, and private banks, with all players making bets they could not cover, and then the crash of 2008 hit, and the players who could not -- literally overnight -- secure their assets and institutions, became the targets of a massive global squeeze.
Entire national banking systems became poor beggars overnight, and others became angry sharks wanting their money and wanting it now.
This is what happens when we let the wealth of nations become a Monte Carlo for sharpies and frauds, and governments that sadly have no idea what they are playing around with -- the ability of millions to live a reasonably stable life.
During times of war the people suffer from the wantonness of armies. During times of peace, it seems to me we are increasingly suffering from the wantonness of our financial gamesters.
Entire national banking systems became poor beggars overnight, and others became angry sharks wanting their money and wanting it now.
This is what happens when we let the wealth of nations become a Monte Carlo for sharpies and frauds, and governments that sadly have no idea what they are playing around with -- the ability of millions to live a reasonably stable life.
During times of war the people suffer from the wantonness of armies. During times of peace, it seems to me we are increasingly suffering from the wantonness of our financial gamesters.
7
The euro was rushed into before some governments had the opportunity to restructure their economies. Also, to get Germany to go along, concessions were made to it that effectively gamed the financial system in favor of Germany. Now we have the first player (Greece) who has, effectively, lost all his playing pieces. Is it any surprise that such a player would say, "It was never fair, not from the beginning. I quit and I'm going to go play my own game with new pieces and make my own rules."
If Greece leaves, there will be some pain, but nowhere near the pain that will occur if Greece recovers and does well. Portugal, Spain and Italy will be under great pressure from their citizens to do the same.
Alternatively, Bonn and Paris could decide the only better solution is to integrate Greece even further, to internationalize Greece's debt and move Europe to even further interdependency and unification.
If Greece leaves, there will be some pain, but nowhere near the pain that will occur if Greece recovers and does well. Portugal, Spain and Italy will be under great pressure from their citizens to do the same.
Alternatively, Bonn and Paris could decide the only better solution is to integrate Greece even further, to internationalize Greece's debt and move Europe to even further interdependency and unification.
3
I think you mean Berlin and Paris. Bonn hasn't been the capital of Germany since 1990.
"It would set a precedent that the European currency, and the European Union more broadly, is more fragile than its leaders would like the world to think."
This is a careful construction to say nothing. Credibility or integrity? Credibility is more important.
By the way, anything to say on Puerto Rico? Because Puerto Rico not paying its debts would set a precedent that the American union is more fragile than its leaders would like the world to think. (See, it works both ways.)
This is a careful construction to say nothing. Credibility or integrity? Credibility is more important.
By the way, anything to say on Puerto Rico? Because Puerto Rico not paying its debts would set a precedent that the American union is more fragile than its leaders would like the world to think. (See, it works both ways.)
3
The Next Few Days Have the Potential to Transform Greece and Europe.
But at least with respect to Europe, no such transformation will happen.
Greece is irrelevant. It may be the world's expert in tragedy and deception (remember he Trojan Horse), but it is the 2% appendix of the economic block that is Europe.
Enough to be an irritant, but once surgically removed, a rarely reflected on former annoyance.
Let them go. It gives them the chance to find a way of their own, and to pay their own way, not dependent on others' welfare payments thinly disguised as "loans".
But at least with respect to Europe, no such transformation will happen.
Greece is irrelevant. It may be the world's expert in tragedy and deception (remember he Trojan Horse), but it is the 2% appendix of the economic block that is Europe.
Enough to be an irritant, but once surgically removed, a rarely reflected on former annoyance.
Let them go. It gives them the chance to find a way of their own, and to pay their own way, not dependent on others' welfare payments thinly disguised as "loans".
7
Open a history book or two will ya? Greece is just an experiment and many other countries will follow. Italy, Portugal and Spain are next. The Euro is a joke of a currency with no equality. The "union" is only political for specific reasons. The basic salary across Europe is not equal. If you want to unite nation ( a resiculous concept that destroys identity) have at least a basic salary that is uniformed. The basic salary in NJ to PA to NY to CA is pretty much the same. Do you know that the new deal does not allow the greek government to tax the wealthiest people but want to got the pensions of the elderly from 500 euro to 400? Kill tourism by raising taxes etc. It's a big fat club, and you ain't in it.
12
The real blame here should be on the overpriced euro that for several years drove tourists away -- not just from Greece but from Italy, Spain and Portugal as well. France was hit hard, too, but its larger, wealthier. and more diversified economy allowed it to weather the crisis somewhat better.
The euro has now sunk to more reasonable levels, but the damage was done and will take years to undo. That task is not helped by the continued control of "Austerians." as Paul Krugman has described them, over the key levers of power in Europe.
Former IMF Managing Director Dominique Strauss-Kahn admitted over the weekend that the IMF and other institutions had failed to provide sufficient relief and economic stimulus to Greece. He advocates a moratorium on payment of Greece's debt for a sufficient time to allow it to return to economic health.
The euro has now sunk to more reasonable levels, but the damage was done and will take years to undo. That task is not helped by the continued control of "Austerians." as Paul Krugman has described them, over the key levers of power in Europe.
Former IMF Managing Director Dominique Strauss-Kahn admitted over the weekend that the IMF and other institutions had failed to provide sufficient relief and economic stimulus to Greece. He advocates a moratorium on payment of Greece's debt for a sufficient time to allow it to return to economic health.
11
I never understood how you could have a common currency without a common set of financial policies. I just figured I wasn't smart enough to see how it would work. There was to be "harmonization" as time went by. I always thought that corrupt politicians would simply use the strong currency to borrow and spend which is exactly what they did. Lavish pensions, rigid labor markets, high speed rail, all subsidized by cheap borrowing. Eventually, the most egregious example of this, in Greece got exposed and now Greece will pay the price. Next year I'll be vacationing in Athens where hotels will be 30 percent cheaper. I bet that once they go back to the Drachma and re-donominate their debt they'll be fine. Those that lent them money will eat a 40 percent haircut and get on with life.
5
Greece deserves what's happening to it. Socialism there has bred laziness and greed has killed any possibility of a deal to be reached. All those who think Greece's economy will recover are sadly mistaken. When the people are used to not working past 60 and collecting hefty pensions what do you expect? Eventually you will run out of other peoples' money...
5
Corruptive governments in Gr were there long before Syriza came to power. Your blaming of Socialism is an easy invective and actually quite wrong. The present socialist government in GR tries to blackmail the EU into forgiving all gr debts. They inherited the massive debts and fight tooth and nail to reverse this indebtedness. Except they have not agreed to any significant reforms which Gr needs independent from the blame for the existing debts. And they have not enacted any money saving reforms. But their attempt to force the EU into continual bail outs has backfired. Ultimately the Gr people, the poor will suffer badly from the intransigence of their very ideological and totally unpragmatic leaders.
3
The Greek people don't deserve any of this. 25% unemployment. A negative GDP of 25% and a debt that was initiated by Goldman Sachs, who went to the Greek government in 2002 and said, "Have we got a deal for you!" They convinced them to buy into a scheme that would defer repayment far into the future, so that it wouldn't show up on their books and the ECB wouldn't realize that they were borrowing beyond their capacity to repay the loan.
The real villain (as usual) was non other than a US bank who thought it would be a good idea to offer a credit swap to a country that has "inbred laziness and greed."
The real villain (as usual) was non other than a US bank who thought it would be a good idea to offer a credit swap to a country that has "inbred laziness and greed."
Well I guess the US economic meltdown was also because of "socialism"?
Americans are brain washed, just wait until the next US economic catastrophe, because nothing has changed in our banking system, then talk about the "S" word again. Meanwhile sleep well knowing that you will have no pension, no health care and will work until you drop. Good night
Americans are brain washed, just wait until the next US economic catastrophe, because nothing has changed in our banking system, then talk about the "S" word again. Meanwhile sleep well knowing that you will have no pension, no health care and will work until you drop. Good night
POSSIBLY EXTEND THE DEADLINE
By Tuesday, Greece needs to get a 1.6B euro short-term loan from the Greek diaspora, i.e. Soros & others for 2-3 weeks, get the tranche, pay back the 1.6B & receive the balance. Greece needs "business privacy." Greece should have cash in the bank if they had performed simple investments in previous recent govt admins. Greece needed & still needs to produce excess funds for internal & external high-yield clean investments.
Greece needs to disengage any relationships w/Goldman Sachs. In the news, GS has too many problems in the past 15 yrs w/possibly numerous self-interest reasons for Greece to use the euro.
Currently it looks like Greece has no collateral, wages are low. Tspiras has a few bargaining chips still & needs to craft a long-term plan w/cash flow in mind. Greece needs a debt load Discount & Rebate w/all creditors in exchange for the Greek military to patrol & work together with other EU, NATO & others to address the migrant crisis as well as border security. They need to develop a realistic plan where they do not need to continue to meet w/the troika for any addl measures since it was agreed the austerity had been fulfilled in the last few tranche meetings. Renegotiate a grace period w/0% interest in a New Plan. New banking execs & invstmnt bankers are needed that know how to perform clean banking & will revitalize the country of Greece. The people have suffered enormously though this is a paper construct.
POSSIBLY EXTEND THE DEADLINE
By Tuesday, Greece needs to get a 1.6B euro short-term loan from the Greek diaspora, i.e. Soros & others for 2-3 weeks, get the tranche, pay back the 1.6B & receive the balance. Greece needs "business privacy." Greece should have cash in the bank if they had performed simple investments in previous recent govt admins. Greece needed & still needs to produce excess funds for internal & external high-yield clean investments.
Greece needs to disengage any relationships w/Goldman Sachs. In the news, GS has too many problems in the past 15 yrs w/possibly numerous self-interest reasons for Greece to use the euro.
Currently it looks like Greece has no collateral, wages are low. Tspiras has a few bargaining chips still & needs to craft a long-term plan w/cash flow in mind. Greece needs a debt load Discount & Rebate w/all creditors in exchange for the Greek military to patrol & work together with other EU, NATO & others to address the migrant crisis as well as border security. They need to develop a realistic plan where they do not need to continue to meet w/the troika for any addl measures since it was agreed the austerity had been fulfilled in the last few tranche meetings. Renegotiate a grace period w/0% interest in a New Plan. New banking execs & invstmnt bankers are needed that know how to perform clean banking & will revitalize the country of Greece. The people have suffered enormously though this is a paper construct.
POSSIBLY EXTEND THE DEADLINE
1
The best thing for Greece to do would be to default, leave the EU, and devalue its currency. Because of its failure to achieve financial union, the European Monetary Union has a fatal flaw that will bring down the economies of Spain and Italy as well.
7
The Euro group consists of 18 countries other than Greece and all of them are against giving Greece endless money. This includes countries like Slovakia,Slovenia and other Baltic states with a lower GDP per capita who are now being asked to bail out a much richer country. It's not just Germany who have gotten tired of Syriza's moralizing. Not to say of countries like Ireland and Portugal which successfully implemented austerity measures and are now back in the bond markets. And what's with the endless mention of Germany's past. They have more than made up for it by being a net contributor of funds to the EU which ends up with net recipients like Greece.
9
We are all missing the point. The banks in Greece have been bankrolling the old-guard politicians and Tsipras wants to destroy the banks so he can weaken his competition and the corrupted deep-state of Greece, which the banks facilitate. Simply, Tsipras is smarter than most and more willing to take a risk (for better or worse).
4
If the Greeks end up walking away from the Euro Zone, they will suffer significantly over the next few years. But eventually with their own currency they will recover and their economy will flourish. This would be very bad for the Euro Zone and it could bring about in the long run the end of the monetary union.
When the Greek economy eventually recovers, how many other nations will say, "Why must we be part of the Euro Zone? Greece is doing well on its own. Perhaps we should also leave. "
It seems to me that the Europeans are playing with fire. They may rue the day that they treated the Greeks with such lack of sympathy. It is true that this was caused by irresponsible behavior by former Greek governments. But it is simply unrealistic for Europe to expect that Greece can ever pay back all they owe. The best course is to forgive much of the debt and make sure that something like this never happens again.
When the Greek economy eventually recovers, how many other nations will say, "Why must we be part of the Euro Zone? Greece is doing well on its own. Perhaps we should also leave. "
It seems to me that the Europeans are playing with fire. They may rue the day that they treated the Greeks with such lack of sympathy. It is true that this was caused by irresponsible behavior by former Greek governments. But it is simply unrealistic for Europe to expect that Greece can ever pay back all they owe. The best course is to forgive much of the debt and make sure that something like this never happens again.
22
Why would the economy flourish? It never flourished before the euro, has something fundamentally changed there?
Greece could very well end up in the anti-democracy and anti-liberalism club lead by Russia and Turkey. That would not advance our geostrategic interests. Our banking system and the failed european federalism have put this small country on the verge of economic collapse. It is time we share the burden and let the Greeks breath again. The Germans should show some empathy in their leadership, and stop blaming the Greeks for the failures of European integration (which by the way resulted from an attempt to integrate Germany after WW2). The Greeks made plenty of mistakes, but there is little now they can do to save the day. They produce little, own little, and have thus almost no leverage.
9
Quite right. And the mistakes that Germany made 85 years ago were appalling, yet they were forgiven, help was offered.
The worst thing NATO could do to Russia would be to give it Greece
Greece needs reform. True. However, neither the EU nor the US should walk away. Greece did not have the Marshall Plan and yet they managed to stabilize, It is one of the few stable democracies in the region. A meltdown could result in porous borders with extremist elements seizing access to its waterways. If the EU doesn't act, a Bosnian conflict could erupt at the footsteps of Europe, and Putin should not be allowed a foothold into the country either. As for stereotypic commentaries asserting that Greeks are lazy, the Greeks fought enemies on every border during WWII. They bought time for the allies to land. They sacrificed their lives, helping to ensure that Europe could be free. The survivors are alive today, barely surviving the punishing austerity measures. Easy to say "Let them eat cake" but doing so will come at a heavy price if they are allowed to fail. Syrians and Iraqis are fleeing to the Turkish border. What comes next? The EU and the US would be wise to support nation building in the birthplace of democracy. Global security depends on it.
31
So your response to stereotypes about the Greeks is to offer up even older stereotypes about the Greeks? Not helpful.
Greece will be better off without the euro
5
And, the Eurozone will be better off without Greece.
The EU will be better off without Greece.
Welcome to Post-Historic Europe.
Russia threatens Europe from the east.
Ukraine collapses into anarchy.
ISIS threatens Europe from Libya and from within Europe.
Thousands of immigrants continues to arrive from Libya.
But the only important topic in Europe is how the EU can increase the profits of the banks, whose bad loan practices caused the Great Recession of 2008.
In Post-Historic Europe, because banks are too big to fail, and bankers like Dominique Strauss-Kahn must be paid their bonuses.
But failed countries? Not a problem. In Europe at least, countries are an anachronism from the past.
Russia threatens Europe from the east.
Ukraine collapses into anarchy.
ISIS threatens Europe from Libya and from within Europe.
Thousands of immigrants continues to arrive from Libya.
But the only important topic in Europe is how the EU can increase the profits of the banks, whose bad loan practices caused the Great Recession of 2008.
In Post-Historic Europe, because banks are too big to fail, and bankers like Dominique Strauss-Kahn must be paid their bonuses.
But failed countries? Not a problem. In Europe at least, countries are an anachronism from the past.
18
A minor comment perhaps but worth making: Dominique Strauss-Kahn is not a banker, he is an economist and a Socialist politician who served as Managing Director of the International Monetary Fund from 2007-2011. He also just posted a series of Powerpoint slides in which he suggested that European commissioners were heading in the wrong direction and should make more efforts to help Greece.
9
Mr. Irwin appears to be missing the lesson of the Greek crisis. Austerity was a radically surgery performed on terminally ill patient. The treatment failed, and the patient is in his death throes. However, the failure of the treatment had nothing to do with the treatment itself, but because of the "lifestyle" of the "patient" (to belabor this analogy).
Runaway spending including an insanely generous public pension and entitlements system, widespread tax evasion, and the highest old person/young person in the Europe put Greece in the situation it finds itself. Austerity was a Hail Mary shot that no one really expected to work, but Greece and Europe felt should be tried instead of simply defaulting straight away.
Runaway spending including an insanely generous public pension and entitlements system, widespread tax evasion, and the highest old person/young person in the Europe put Greece in the situation it finds itself. Austerity was a Hail Mary shot that no one really expected to work, but Greece and Europe felt should be tried instead of simply defaulting straight away.
9
Blame whoever you want but this just proves the EU experiment was doomed to failure from the start. No monetary union in history has ever survived for long without political union at some point. It the US acted like Europe, two thirds of the states would've been expelled given they are net beneficiaries of Federal transfer payments from richer states. Yes, I am talking about every state in the south and the midwest. The same bunch of know nothings that insist we need to balance the gov't budget like its a business when they are the ones benefitting the most from the system they complain about.
76
You speak truth to power!
We are all Greeks, now, victimized by reckless, greedy bankers with too much power and their cowardly, corrupted political slaves. Exit the euro, my friends, rather than accept their tyranny. Our thoughts and prayers are with you. We will come and spend our dollars soon.
Podemos, follow their lead, until this financial terrorism ends.
Podemos, follow their lead, until this financial terrorism ends.
29
Your remarks are all misguided. If you got a loan from the bank and spent it all on yourself, and then refused to pay it back as agreed, would you call the banker greedy? or yourself dishonest? I hope the latter. The figures from Greece speak for themselves.
8
The Greek people never benefited from those "loans" ...but the big banks did. Now the people are being blamed, humiliated, called lazy and God knows whatever by self righteous and misinformed finger waggers such as yourself.
If Europe wishes to be a Union, it must centralize fiscal policy, establish firm limits as to deficits and debt on all of its members with a central bank that allows a fair amount of deficit teach of its members in accordance with the stimulus necessary regionally. One nation alone,in this case Germany, cannot use all of its weight to call the shots. And banks which overstep prudent lending limits to any one country should be brought to expect serious losses or even failure as a result.
In this case, a simple but close-to-the-truth explanation would be that the voters on one country, Greece, made imprudent demands upon its government and politicians complied, in order to keep social order and get re-elected. The other side of the equation were the banks and markets that played right into this spending spree, with an equal degree of imprudence. For this bacchanal, the Greek people have suffered and the banks have not. Greek does not need any more lessons, doled out by Germany, for the sake of saving the necks of its banks as well as avoiding an angry German electorate.
If Europe is to be a Union it must work as a union to ease the pain on Greece and to get past this crisis with some suffering to be spread around. Every European government wants to see a strong Europe and that has been the goal of this whole experiment at unification. If the US could have created and spent on the Marshall plan to strengthen, the stronger nations of Europe can now step up to this plate.
In this case, a simple but close-to-the-truth explanation would be that the voters on one country, Greece, made imprudent demands upon its government and politicians complied, in order to keep social order and get re-elected. The other side of the equation were the banks and markets that played right into this spending spree, with an equal degree of imprudence. For this bacchanal, the Greek people have suffered and the banks have not. Greek does not need any more lessons, doled out by Germany, for the sake of saving the necks of its banks as well as avoiding an angry German electorate.
If Europe is to be a Union it must work as a union to ease the pain on Greece and to get past this crisis with some suffering to be spread around. Every European government wants to see a strong Europe and that has been the goal of this whole experiment at unification. If the US could have created and spent on the Marshall plan to strengthen, the stronger nations of Europe can now step up to this plate.
7
NYT readers are apparently are working overtime to propagandize for Brussels and Berlin. Leaving the Euro will benefit Greece in the long run. Greece cannot escape their economic depression with a currency priced at a level to maintain the standard of living of German and Benelux workers. The only way for the Greeks out of this depression is by increasing their competitiveness, which they cannot do as long as they don't have control over the value of the currency used to pay Greek workers and sell Greek goods. Athens must have control over the money supply in Greece in order for the Greek economy to become competitive once again. As far as Putin and Russia's hand in this affair goes I say this: 70 years ago Europe was forced to turn to a Moscow based dictator to free themselves from Berlin's choke hold, and if that's what it will take this time around, then why not consider doing it again?
17
You say that the EU demands put to the Greek government "may not be fair, or democratic" but then give no evidence to support the judgment. Not exactly an example of the scientific rigor that the Times promised when it set up the Upshot. Try reality. Once Upon A time, the Greek government promised wonderful outcomes if Greek voters supported them. No one seemed to notice what happened to Pericles when he first tried it. So predictably, the Greeks voted for more pay, less work and early retirement, with lower taxes and higher spending on public services. Anything less is today called "austerity".
5
From Pericles to 2015 in the span of two sentences. How would you like it if the United States had a 25% unemployment and a GDP reduction of 25% in 5 years, under policies that supposedly were going to "solve the problem"?
They should have let the bankers who made these loans in the first place take a bath. Instead, they were rescued and created pain and misery in Greece
They should have let the bankers who made these loans in the first place take a bath. Instead, they were rescued and created pain and misery in Greece
13
Greece actually presented 'cooked' and falsified books to obtain the loans and Euro entry. They have admitted doing that. They got themselves into the financial problem.
4
Maybe the United States should bail out Greece. At first I know: absurd. BUT: better than Russia or China doing it. We can afford it.
7
It's called geopolitics and it has a value. It is up to the United States to see where their interests lie. Turkey is becoming unstable by the decade. IF Greece were in turmoil that part of the world will become very volatile.
3
It is sure cheaper than trying to do nation building during chaos.
My take-away from the Greek loan crisis is that when government leaders make bad decisions, it is the ordinary people who suffer.
This has happened in the United States too, with the multi-trillion dollar war debts and a series of bad trade treaties (about to be capped by the secret Pacific treaty) -- but most Americans are only slowly waking up to the consequences, which will cause us suffering for decades and decades.
This has happened in the United States too, with the multi-trillion dollar war debts and a series of bad trade treaties (about to be capped by the secret Pacific treaty) -- but most Americans are only slowly waking up to the consequences, which will cause us suffering for decades and decades.
23
With the wars we are currently in, we could have sent every person in America to college for 10 years. A nation of doctorates. Could you imagine how that would have propelled this nation forward. Somehow our leaders think war is a better investment.
I'm still trying to figure out how anyone got money out of ATM's in Greece, when I was there none of the ATM's worked. But I was reminded daily, and rudely, that they had invented democracy. The EU is a ridiculous ideal. It would be like saying Canada, the US, Mexico, and Guatemala should all have the same currency, because we have the same ideals. Ridiculous! Let'd not try to imagine these trade pacts have any benefit, if a country and culture can't control it's currency. I will travel to Guatemala, because it is cheap, I don't expect the same culture as Costa Rica, or the same amenities as St. Bart's. Likewise, as a European, I would travel to Greece, because it's cheap, it's dysfunctional and does not have the same amenities as Switzerland. Better to let different cultures set their own standards and play by their own rules, rather than inflicting them on all the other countries, or having those countries inflict them on them. Stalling does not solve the problem, it prolongs it. Hey Greece, remember Iceland, look to them for a way forward and stop putting off the meeting until next Tuesday. Your economy is a mess and it's your fault. Take it on the chin and move forward, out of the EU. I'll come back, because it'll be cheap, I'll never go again as long as I have to pay for it in Euros.
26
Worse yet it's like saying that Texas, Vermont, California, and Florida should share the same currency just because, well, just because.
Never gonna happen.
Never gonna happen.
2
Apples and oranges my friend, but nice try.
1
I'm reminded of what Chris Hedges wrote about the collapse of Yugoslavia:
"Those who had worked hard all their lives, put their meager savings into banks, and struggled to live on pensions or salaries, lost everything. The unscrupulous, who had massive debts, never had to repay them, lived off the black market or crime, used force to get what they wanted, and became fabulously rich and powerful. The moral universe disintegrated."
It is the ordinary Greek citizens who will suffer most. Not the architects of finance who create bizarre bubbles of debt. The elderly will be the ones left to beg in the streets or starve quietly at home. The young Greeks will continue their exodus and leave to find work in other nations.
It's heartbreaking to think of the human suffering, and how many of the people most likely to suffer won't understand exactly what happened. After all, they got up each day, took care of their families, and went to work in shops and businesses and hotels.
And all the global vultures are waiting: the corrupt Russian oligarchs, the Chinese billionaires, the US 1%'s--they will all be looking for opportunities to loot whatever is left.
It's sad. The Greeks gave us democracy, the Olympics, great writers and thinkers like Hippocrates, Archimedes, Plato, and Aristotle, and much more, but now their nation is at the point of becoming carrion for the globe. I watch with fear--is this one more brick crumbling in the wall of modern civilization?
"Those who had worked hard all their lives, put their meager savings into banks, and struggled to live on pensions or salaries, lost everything. The unscrupulous, who had massive debts, never had to repay them, lived off the black market or crime, used force to get what they wanted, and became fabulously rich and powerful. The moral universe disintegrated."
It is the ordinary Greek citizens who will suffer most. Not the architects of finance who create bizarre bubbles of debt. The elderly will be the ones left to beg in the streets or starve quietly at home. The young Greeks will continue their exodus and leave to find work in other nations.
It's heartbreaking to think of the human suffering, and how many of the people most likely to suffer won't understand exactly what happened. After all, they got up each day, took care of their families, and went to work in shops and businesses and hotels.
And all the global vultures are waiting: the corrupt Russian oligarchs, the Chinese billionaires, the US 1%'s--they will all be looking for opportunities to loot whatever is left.
It's sad. The Greeks gave us democracy, the Olympics, great writers and thinkers like Hippocrates, Archimedes, Plato, and Aristotle, and much more, but now their nation is at the point of becoming carrion for the globe. I watch with fear--is this one more brick crumbling in the wall of modern civilization?
87
I am not sure if the schools assign "David Copperfield" anymore, but Dickens was right: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
9
Great quote but it doesn't apply to government or banks, as the US finance industry knows quite well. The US taxpayers bailed them out when they made risky investments and sold credit default swaps to the Greeks, as a way of hiding their debt.
The question is, should the Greek people shoulder a tremendous burden in order to satisfy the banks or could the banks ease up long enough for the to get their economy back on track so that they can repay the loans? The humane response would be, the latter.
The question is, should the Greek people shoulder a tremendous burden in order to satisfy the banks or could the banks ease up long enough for the to get their economy back on track so that they can repay the loans? The humane response would be, the latter.
16
amydym3's post is the child's version of the financial crisis; the same one the incompetent Greek government is attempting to peddle to its citizens: It's nor our fault.The big bad banks did this, with all their financial hocus pocus.
Nonsense. The greek financial crisis has nothing to do with credit default swaps. It has everything to do with massive corruption, a public employment system that has massive redundancies and allows people to retire while still very young, and a culture of universal disdain for paying taxes.
If Greece were like the US financial system, we could take comfort from the fact that, while bailouts are distasteful and bad policy, at least the the US banks paid their bailout back, with interest. That will never happen with Greece.
Nonsense. The greek financial crisis has nothing to do with credit default swaps. It has everything to do with massive corruption, a public employment system that has massive redundancies and allows people to retire while still very young, and a culture of universal disdain for paying taxes.
If Greece were like the US financial system, we could take comfort from the fact that, while bailouts are distasteful and bad policy, at least the the US banks paid their bailout back, with interest. That will never happen with Greece.
5
Queue up Roy Orbison's 'It's Over'.
1
I think everybody (not only in Europe) is tired of hearing how honorable and proud the Greeks are, and how offended by the lenders (who want their money back...) they are. Isn't repaying your debt part of what constitutes your honor?
13
You are totally amazing. How do you come up with such brilliance?
Unfortunately I have to take exception to the "brilliance" designation in the context of my post. It merely reflects the prevailing sentiment regarding the Greek strategy in the debt negotiations.
4
We, and Europe, especially Greece, our long-time and supportive friend when times demanded that they turn their backs on us, can do little to stem the tide of failure this time. We can only wait and watch for the better times ahead, hopefully. My heart goes out to them, as in any "natural" disaster.
2
I've got a feeling Putin is a player in this meltdown. Tsipras has been to Moscow a few times lately. Just for the scenery? What scenery? Did Putin tell him forget about your big, fat, Greek debt. Ditch Europe and NATO, join up with Russia we'll will give you money--now--in exchange for access to Greek ports and airfields for Russian war ships and Migs. Putin is working 24/7 to pick apart NATO and the Euro zone and Greece is ripe for the picking.
74
I don't think that's actually Putin's plan. He's not that stupid. It would be like adopting a broke, drunken uncle with no job: nice for the Uncle but what do you get out of it? An empty liquor cabinet and more debts?
3
Let the sick Russian economy take on the burden of the dying Greek economy.
Serves them right.
Serves them right.
Cody,
that would require a tremendous amount of finanical support from RUssia. Given its present economic state, Putin is not able to provide this. Hence Greece is not very "ripe for the picking".
that would require a tremendous amount of finanical support from RUssia. Given its present economic state, Putin is not able to provide this. Hence Greece is not very "ripe for the picking".
It appears that Greece, in terms of economic values, or just general values and customs, is not really compatible with other European countries. I.e. Greece is European in terms of land mass only. It also appears that that the sides have been talking past each other, with ECB etc talking in real business terms and Greece talking in political terms (how can they do this to us).
European countries should help Greece have as smooth a withdrawal from the Euro as possible, as well as wealthy diaspora Greeks coming to the aid of their ancestral country. They should decide as a country, by themselves, how their country should run, Greek laws,Greek rules, Greek business and finance. They must stand on their own two feet.
,
European countries should help Greece have as smooth a withdrawal from the Euro as possible, as well as wealthy diaspora Greeks coming to the aid of their ancestral country. They should decide as a country, by themselves, how their country should run, Greek laws,Greek rules, Greek business and finance. They must stand on their own two feet.
,
4
" These next few days are shaping up to become a transformational moment in the 60-year project of building a unified Europe. "
Unified Europe? I just spent four weeks in Spain, North to South, East to West. Spain, much less the EU, exists on a map, as one San Sebastian taxi driver expressed: "...drawn by the bankers of Madrid." Outside of Madrid, I found very little of "I am Spanish."
Does the EU exist, however fragility, only on the maps drawn by the bankers assembled in Brussels?
Unified Europe? I just spent four weeks in Spain, North to South, East to West. Spain, much less the EU, exists on a map, as one San Sebastian taxi driver expressed: "...drawn by the bankers of Madrid." Outside of Madrid, I found very little of "I am Spanish."
Does the EU exist, however fragility, only on the maps drawn by the bankers assembled in Brussels?
2
A debacle on Tuesday, failing a cave by one or the other party, SHOULD mean the political end of Syriza. Nobody likes a loser. But the Greeks have MORE than flirted with Communism before, and Syriza is pretty close: they might weather the catastrophe.
The five people in Greece who have not yet shipped their euros abroad and hidden them will have them taken in return for drastically marked-down new drachmas, destroying their savings, and Greece will simply … start over. Basically as an emerging economy. But one without the means to afford the subsidies that have been so much a part of their lives for the past decades.
The irony, of course, is that impact of the requested reforms would have been lighter than the destruction that will visit them for a generation as a consequence of an exit from the euro and repudiation of their debt. But some prefer to go down swinging … even when they lack arms.
Unlike in the song that M*A*S*H* made famous, suicide AIN’T painless.
The five people in Greece who have not yet shipped their euros abroad and hidden them will have them taken in return for drastically marked-down new drachmas, destroying their savings, and Greece will simply … start over. Basically as an emerging economy. But one without the means to afford the subsidies that have been so much a part of their lives for the past decades.
The irony, of course, is that impact of the requested reforms would have been lighter than the destruction that will visit them for a generation as a consequence of an exit from the euro and repudiation of their debt. But some prefer to go down swinging … even when they lack arms.
Unlike in the song that M*A*S*H* made famous, suicide AIN’T painless.
25
Richard, what destruction? Countries that have defaulted have generally gone on to prosper. And the terms levied on Greece prevent its recovery. So while it would be painful of course the long-term consequence would be better than laboring under the debt, trapped by terms that prevent the economy from growing.
4
Josh:
I never suggested, and I don't believe, that Greece won't recover. But it will take a great deal of time, because they don't have the size of economy to facilitate recovery on their own and they resist fundamental societal changes that would aid such a recovery -- they've cut the proportion of the workforce that works for government, but they started from an immense number, their taxation practices have improved but they're still largely dysfunctional, their job protections still are more intense than those of much of Europe, which are themselves pretty intense. They also suffer from massive bureaucracy that stifles innovation and external investment, and from corruption.
You sound LIKE A REAL ATTRACTIVE GUY, Mr. Fedder.
Argentina defaulted on its debt (2005), and came back roaring, largely because they stimulated their private commercial sector massively by reduced regulation and taxes, as well as by intense investment. But Argentina never labored under all these handicaps that Greece labors under, and they're back in the soup again anyway -- largely for political instability rather than directly from economic failure.
Greece will emerge from the horror, but it will take a generation and be accomplished at immense pain; and they'll NEVER again be able to afford the socialism they built over the past two decades.
I never suggested, and I don't believe, that Greece won't recover. But it will take a great deal of time, because they don't have the size of economy to facilitate recovery on their own and they resist fundamental societal changes that would aid such a recovery -- they've cut the proportion of the workforce that works for government, but they started from an immense number, their taxation practices have improved but they're still largely dysfunctional, their job protections still are more intense than those of much of Europe, which are themselves pretty intense. They also suffer from massive bureaucracy that stifles innovation and external investment, and from corruption.
You sound LIKE A REAL ATTRACTIVE GUY, Mr. Fedder.
Argentina defaulted on its debt (2005), and came back roaring, largely because they stimulated their private commercial sector massively by reduced regulation and taxes, as well as by intense investment. But Argentina never labored under all these handicaps that Greece labors under, and they're back in the soup again anyway -- largely for political instability rather than directly from economic failure.
Greece will emerge from the horror, but it will take a generation and be accomplished at immense pain; and they'll NEVER again be able to afford the socialism they built over the past two decades.
Greece should bite the bullet and go alone. Go back to their own currency and live or die by their own actions. How can a country allow itself to be run by others.
6
Move closer to Russia?! You mean like Cuba did? That worked out well, didn't it.
Greece is a sad case. In 430 BC Pericles made a bad decision in the war with Sparta. He decided to draw back to within the walls of Athens. Greece has never recovered from that bad decision and it has continued to make bad decisions over the past 2400 years. Now it decides to withdraw within its wall once again. Good luck Greece.
Greece is a sad case. In 430 BC Pericles made a bad decision in the war with Sparta. He decided to draw back to within the walls of Athens. Greece has never recovered from that bad decision and it has continued to make bad decisions over the past 2400 years. Now it decides to withdraw within its wall once again. Good luck Greece.
5
Your understanding of Greek history is based on a couple of movies. Invest in a good history book.
6
Hey, in all fairness, Greece did pretty well -- Alexander the Great, and then the Eastern Roman/Byzantine Empire. If anything can be said to have destroyed Greece, I'm guessing it was the years under the Ottomans.
3
It was the years under the European, principally German, banks that have been destroying Greece. Why would you blame the Ottomans for this?
Something I haven't seen mentioned yet, not that I've read everything.
The ECB has assured themselves, through offering a Hobson's choice, that an extremely poverty-stricken country is going to be appended to Europe. As the economic wizards that they are, do they really think that will not be a problem for Europe as a whole?
Something else. Greeks are getting hammered by their own kind, Europeans that is. What's to stop them from looking elsewhere for aid and comfort? China could essentially join Europe with a big bail out of Greece (yes, I know it's a lot of money, but the Chinese have the very long view the EU should have), and maybe Russia, even in dire straits, could move in as a partner. Either country could then have an apartment in the West, and huge Mediterranean presence. Why invade a country when you can buy one for less?
Far-fetched? Think Putin. Think Chinese economic imperialism. And all above board and by the book.
The ECB has assured themselves, through offering a Hobson's choice, that an extremely poverty-stricken country is going to be appended to Europe. As the economic wizards that they are, do they really think that will not be a problem for Europe as a whole?
Something else. Greeks are getting hammered by their own kind, Europeans that is. What's to stop them from looking elsewhere for aid and comfort? China could essentially join Europe with a big bail out of Greece (yes, I know it's a lot of money, but the Chinese have the very long view the EU should have), and maybe Russia, even in dire straits, could move in as a partner. Either country could then have an apartment in the West, and huge Mediterranean presence. Why invade a country when you can buy one for less?
Far-fetched? Think Putin. Think Chinese economic imperialism. And all above board and by the book.
13
If the Chinese can get Greeks to pay their taxes, cut their bloated and politicized bureaucracy, eliminate fat Greek pensions to 50 year-olds, break the stranglehold of the cartels that monopolize virtually every occupation and profession in the country, in short clean the Augean stables, then the Chinese will be doing us all a great favor, and I welcome them.
But the Chinese better develop thick skins because they will make themselves targets of the vitriol of the Greek left and right. Gratitude is not a Greek quality.
But the Chinese better develop thick skins because they will make themselves targets of the vitriol of the Greek left and right. Gratitude is not a Greek quality.
8
In 2002 China overtook the United States to become the world's top handler of containers. Today, Greece handles approximately 20% of the worlds shipping. Looks like the Chinese are lining up for the bargain sale of the century. The EU is so short sighted about options that modern third world countries have beyond the onerous first world banks. Greece will cut a deal with Russia and China, become more capitalist/communist in the Chinese fashion and probably do better than being the red headed step child in the EU.
I disagree with the author, who writes that all the power is in the hands of the ECB and the other two members of the Troika.
If the referendum is held next Sunday and the climate is unchanged, the Greeks will vote overwhelmingly to walk away from the euro. They cannot endure any more austerity, which is all that the Troika will offer. That may well precipitate a much bigger crisis in the euro, beyond what the ECB can manage.
I think the ECB should try very hard to prevent the referendum, by any legitimate means, or else watch a much larger catastrophe occur. We didn't want to bail out Wall Street, either, but that was the better option.
If the referendum is held next Sunday and the climate is unchanged, the Greeks will vote overwhelmingly to walk away from the euro. They cannot endure any more austerity, which is all that the Troika will offer. That may well precipitate a much bigger crisis in the euro, beyond what the ECB can manage.
I think the ECB should try very hard to prevent the referendum, by any legitimate means, or else watch a much larger catastrophe occur. We didn't want to bail out Wall Street, either, but that was the better option.
6
Many of the Greek governing structures have been lacking for a long time. This includes an inept judiciary, corrupt politicians and public servants. These are well known problems. The issue is simple: Who fixes these problems? For me, the answer is simple: GREEKS THEMSELVES should solve their own structural problems, not a bunch of technocrats in Brussels.
It's about basic democratic principles and these are drowned in the noise of economics.
It's about basic democratic principles and these are drowned in the noise of economics.
3
So it turns out that banks are too big to fail but counties are not. Who runs the world is absolutely transparent. Economic capital has power, but the capitals of nations do not unless they act in the service of ensuring the capital of the banks.
15
Let them go. Enough with the farce. The Greeks simply like the idea of retiring before 60 too much to face up to the economic reality that they have a weak economic system that can't support its promises. I won't even mention the fact that they fibbed to gain entry into the EU - an even bigger scandal.
What's extraordinary is how much the world is agonizing over a nation that has less economic impact than Rhode Island.
Let's move on, please.
What's extraordinary is how much the world is agonizing over a nation that has less economic impact than Rhode Island.
Let's move on, please.
16
Do you know WHO was employed by the then corrupt Greek politicians to gain entry into the Euro zone? Hmmm.. could it be Coldman Sacks?
it's been obvious for year that greece could never repay this debt. shame on the lenders for postponing now their debt will be severly compromised and rightfully so. noteworthy for lenders to italy, spain and the u.s. hopefully the principles of capitalism will prevail !
5
toronto:
Who's talking of repaying debt?
This is from the Economist: Greece's public-debt burden is almost 180% of GDP. But thanks to the generous terms of its debt, including long maturities and low interest rates, its servicing costs as a share of GDP are actually lower than in many other countries in the euro zone. Yet while Greece has aggressively cut some components of government spending it has done little to tackle its biggest fiscal mess: an extraordinarily generous pension system. The government owes pensioners and civil servants €2.4 billion in April alone, and the it may be forced to choose whether to shortchange its lenders or the Greek people who put it in power
Who's talking of repaying debt?
This is from the Economist: Greece's public-debt burden is almost 180% of GDP. But thanks to the generous terms of its debt, including long maturities and low interest rates, its servicing costs as a share of GDP are actually lower than in many other countries in the euro zone. Yet while Greece has aggressively cut some components of government spending it has done little to tackle its biggest fiscal mess: an extraordinarily generous pension system. The government owes pensioners and civil servants €2.4 billion in April alone, and the it may be forced to choose whether to shortchange its lenders or the Greek people who put it in power
4
"Ever Closer Union" eh? Good grief - pettyfogging technocrats & teflon politicians now scrabbling to throw someone under the bus (as long as it's not themselves, of course).
What an unseemly mess of Europe's own making. Beijing & Washington must be shaking their heads in disbelief.
What an unseemly mess of Europe's own making. Beijing & Washington must be shaking their heads in disbelief.
28
Elect a bunch of academic far leftists get chaos. This movie has been played over and over again. The only thing missing are the tanks in the square when the right wing military launches a coup.
3
So, what you are suggesting is that a democratically elected Goverment should never stray from the right wing policies that caused all this turmoil and pain, else the tanks will roll in. Shame on you.
12
Tsirpas has blinked; the referendum can be seen as an admission of failure to shrug off the far left of his coalition in the face of European firmness. Whatever the bigger picture of European unity, the Greek story has always been domestic. Tsirpas wants to stay in power but he also needs now to be be flexible regarding his election comittments. Is it possible he would prefer Greeks to vote yes to the reforms? A yes vote would blunt his far left coalition members and hopefully help him stay in power while doing an about-face and agreeing to European terms. A no vote reaffirms the party's election platform and his negotiating position, but what then? European cave-in? That would be doubling your poker bet. No, I think he wants his own referendum voted down. He's passed the buck on resolving this to the Greek people; they now have to own the outcome.
4
Greece needs to leave the EU. They should have never been admitted in the first place. Greece is a third world country. Let them muddle through on their own, without billions of Euros in loans that Greece never intends to repay. They want money without any conditions.
5
This is not about "blinking" or "game over", as Mr. Tsipras was told by his European peers. It's a simple lesson in democracy, yet one that is purposely distorted. Mr. Tsipras was elected to END austerity and renegotiate the terms of the bailout. He is not the one who signed onto these policies that have led Greece to an economic spiral of death and destruction. The *other* Greek politicians who did are the ones that are now urging him to forgo the referendum. They are the one who through incompetence and sheer corruption negotiated a deal that only served the interests of Germany and France.
EU will fail. It is a failed experiment in economic integration and a colossal mistake in true democratic ideals. They can keep their Euro.
EU will fail. It is a failed experiment in economic integration and a colossal mistake in true democratic ideals. They can keep their Euro.
4
Greece could never repay these loans. The real shame is that Germany and France played an awfully fast game on all Europeans, when they transferred all the risk from their banks, who made the loans to begin with, to the EU tax payers.
3
Does this mean Greece will return to the Drachma? I have a few hundred left over from my 1994 trip that I'd be happy to spend there.
27
Like, if Greece "moves closer to Russia," the problem is solved????? As if Russia had tons of cash and financial help to distribute. On the other hand, Putin does bizarre things with money, so who knows?
1
Greece, one of the largest shipping powers in the world moves closer to China which is the largest. Putin will use it to bash the Balkans, but he is not the primary player in this Greek tragedy.
1
Saying that the Euro is flawed as a currency is NOT the same thing as saying that the European Union is flawed. But it should now be clear that the Euro is a flawed currency and is not sustainable. It is time for the entire European Union to admit that they made a big mistake by creating the Euro currency. Everyone should now work together to get Greece onto its own separate currency, just like the UK, Denmark, Sweden and several other members of the EU. Once Greece has its own currency, the foreign exchange markets will reward good behavior and punish bad behavior through the mechanism of exchange rates. The Greek government will then again be free to make its own decisions without consulting with Berlin or Paris; and Greece will then again have both the rights and the responsibilities of economic sovereignty.
18
Two falsehoods that many commenters here have taken as true - while they are not.
First, that Greece's creditors are "greedy hedge funds". Nope - they are all basically out already. The "Greedy" creditors are other Euro governments, the IMF and the ECB.
Second, that somehow, spending more than you can afford, in a system where you cannot devalue your currency, is somehow showing "leadership". The result is default.
All to maintain this fantasy of taxing the few rich more, stepping up giving out freebies to the masses, and promising that somehow it will all work out.
Given that this has failed every time its been tried in the history of mankind, yet the masses still believe the ruse, goes to show how completely uneducated humans really are.
First, that Greece's creditors are "greedy hedge funds". Nope - they are all basically out already. The "Greedy" creditors are other Euro governments, the IMF and the ECB.
Second, that somehow, spending more than you can afford, in a system where you cannot devalue your currency, is somehow showing "leadership". The result is default.
All to maintain this fantasy of taxing the few rich more, stepping up giving out freebies to the masses, and promising that somehow it will all work out.
Given that this has failed every time its been tried in the history of mankind, yet the masses still believe the ruse, goes to show how completely uneducated humans really are.
11
There are still many billions in loans owned by hedge funds. However, this is NOT the point. The point is a simple one: A bunch of banks made bad loans to Greece and these banks (German & French) were rescued by their goverments by transferring these loans to the rest of the EU.
1
There are exactly zero examples of a society benefiting and lasting long term from trickle down policies. Societies benefit most when every person and business share, proportionally, the burden of maintaining said society.
Pull your head out of your butt and read history and economic books that weren't written for the purpose of spreading lies, but were written for the purpose of educating people on actual facts.
Pull your head out of your butt and read history and economic books that weren't written for the purpose of spreading lies, but were written for the purpose of educating people on actual facts.
2
Have the Greeks made the reforms called for under the agreements to loan them money? If not, they have themselves to blame for this crisis. The other countries in the EU seem to have given them second and third chances. They would be foolish to continue loaning money without Greece fulfilling its obligations to make reforms.
Now if the Greeks have fulfilled their obligations to reform and they still have a crisis, they should be given a chance to recover through debt forgiveness and more loans.
As far as Greece leaving the EU, I don't see that as a disaster for either the EU or Greece. I wouldn't worry about Russia. Why would Russia want to finance Greece's economy? I don't see Greece as being a docile satellite nation of Russia. The Greeks seem too willfully independent for that.
Finally, I think the comments about Merkel being a Nazi or Greeks being lazy or big banks being the problem are just ridiculous.
Now if the Greeks have fulfilled their obligations to reform and they still have a crisis, they should be given a chance to recover through debt forgiveness and more loans.
As far as Greece leaving the EU, I don't see that as a disaster for either the EU or Greece. I wouldn't worry about Russia. Why would Russia want to finance Greece's economy? I don't see Greece as being a docile satellite nation of Russia. The Greeks seem too willfully independent for that.
Finally, I think the comments about Merkel being a Nazi or Greeks being lazy or big banks being the problem are just ridiculous.
70
The Russians would LOVE a base in the Aeagean. For the right price, why not? It does not look to me that NATO or the USA is doing much to help Greece right now.
Yes, the Greeks have made the reforms. They are now asking for a little bit of autonomy to pursue what they think will be a better path to growth and getting shot down.
What the Greeks have not succeeded at - disputed following the advice of The EU and IMF on the issue, is stopped the vast tax avoidance. The new left leaning government is particularly devoted to that, but now the EU and IMF say "no don't - collecting the money from the rich will scare nveatment, raise taxes on the poor instead."
What the Greeks have not succeeded at - disputed following the advice of The EU and IMF on the issue, is stopped the vast tax avoidance. The new left leaning government is particularly devoted to that, but now the EU and IMF say "no don't - collecting the money from the rich will scare nveatment, raise taxes on the poor instead."
Angela Merkel is trying her best to help with this situation, and I wish her well. But there is really no dispute among economists (except ones who work for banks) that the crisis was caused by the international financial collapse in 2008, which as everyone knows was fueled by the corrupt practices of bloated banks. The Greeks did not cause this debt crisis any more than they caused global warming.
Jack Illinois hit the nail on the head. The EU was not a bad idea but nobody walked through the what ifs if things got tough. No central control really, no real decision-making or enforcement. Not to mention austerity alone won't solve the problem. The goal should be how to get the failing economy to recover, not destroy it.
11
Greece is doing a superb job destroying its own economy. Spain had a few tough years but they managed. Greece does not want to make any kind of sacrifices, they just want European money. Hope that spigot has been turned off!
The EU exists because millions of people sacrificed their lives during WWII. The Greeks need reform but the issue is much more complex. The West cannot allow Greece to be vulnerable nor its ports seized by other countries. It is one thing for Ireland to rebuild given its northern proximity but allowing Greece to go under will carve a portal for Middle Eastern mayhem to reach Europe. As for Greece's sacrifices, they are well-documented and bloody. It is easy to paint an entire country with stereotypic brushstrokes from the safety of Idaho.
Please. Enough already. I have retirement investments and I keep a close eye on the market gyrations. Far too often I see that this is up or that is down because of something going on in Greece. Really? I know it's all about the EU and the Euro and on and on. But the games have gone on long enough. In the big picture, Greece really doesn't matter so much that it should be causing turmoil in world markets. And the story is getting very old.
Someone or something or somebody needs to take their medicine and go into rehab and leave the rest of us alone.
Someone or something or somebody needs to take their medicine and go into rehab and leave the rest of us alone.
9
Sorry that an entire nation in the verge of economic calamity and almost economic depression is causing havoc with your Fidelity statements.
1
I'm sorry too, Dimitri. How do you suppose this all came about?
Anything to do with spending more than you have to spend? And resulting "economic calamity" because you spend more than you have to spend?
And agreed, my Fidelity statements should not be impacted by this foolishness. Some of us live within our means and should not be harassed by the irresponsible who live for the day.
Anything to do with spending more than you have to spend? And resulting "economic calamity" because you spend more than you have to spend?
And agreed, my Fidelity statements should not be impacted by this foolishness. Some of us live within our means and should not be harassed by the irresponsible who live for the day.
Greece is just a noise. Nobody is really surprised or even even cares (except, possibly, for some hedge fund folks who have placed the wrong bet). The country should have been thrown out of the Eurozone 5 years ago for cooking the books and falsifying the stats.
10
No, Greece is not "just a noise". Greece is 11 million human beings who are enduring the sustained hardships of austerity, high unemployment, massive budget cuts resulting in the reduction of human services and the near severance of that country's lifeline for its poor and disadvantaged.
A solution to the Greek debt crises needs to be found, and an easing of the oppressive, years long economic and financial pain of Greece's citizens needs to be implemented.
"Why" you may ask? Because it is not about the Euros, it is not about the European Union, it is not about whether to some like yourself who do not care "Greece is just a noise". It is about fellow human beings, and it is about doing what is right to ease the suffering and the fears of human beings who did not create the situation for which they are paying this disproportionate price.
A solution to the Greek debt crises needs to be found, and an easing of the oppressive, years long economic and financial pain of Greece's citizens needs to be implemented.
"Why" you may ask? Because it is not about the Euros, it is not about the European Union, it is not about whether to some like yourself who do not care "Greece is just a noise". It is about fellow human beings, and it is about doing what is right to ease the suffering and the fears of human beings who did not create the situation for which they are paying this disproportionate price.
16
Despite "enduring the sustained hardships of austerity, high unemployment, massive budget cuts", an average Greek lives in far better conditions than an average US citizen. All of this courtesy the German taxpayer. Your little diatribe would be more convincing in the context of a sub-Saharan country than Greece. Greece is a noise.
6
Greece got into the EU lying. Then lived off the EU members for a good number of years. It's time this ends. Greece must leave the Euro.
Its France and the French who are, in amounts, the largest "pikers" in Europe. They survive under cover of a strong EURO that in essence is a strong D-Mark. The French want a Greek bail-out because they see themselves in the same trouble.
2
The morality play over 'sunk costs'. When two people fight two people will also lose. If Europe will play every battle as a poker game, with both sides taking no interest or responsibility for anything about the other for decades until the hand is called, what do either side expect but pain. The smugness of the winners and enjoyment of Greece's pain is remarkable.
4
Privatization is a key component of the economic warfare waged under the banner of austerity. It is what ultimately got the IMF kicked out of Latin America and is the handwriting on the wall that should speak clearly to the Greeks that leaving the EU now, while it still owns its beaches and what remains of its national industries, is the only alternative that remains.
Once rich Germans own these, economic sovereignty will never be possible for Greece again. Austerity is the transnational equivalent of a PayDay loan, a straw in the heart of the Greek nation through which its life blood will be sucked by German banks forever.
Once rich Germans own these, economic sovereignty will never be possible for Greece again. Austerity is the transnational equivalent of a PayDay loan, a straw in the heart of the Greek nation through which its life blood will be sucked by German banks forever.
17
Austerity is just another green screen.
The Eurozone was created so that the larger countries/economies would take over the smaller ones. What is happening in Greece now is the perfect illustration of this.
4
There is a local retired American University professor, a very loud and proud Marxist, who became jubilant when the Greeks elected their current government.
He is rooting for the country to leave the EU and create a Marxist revolution that will transform the face of Europe and result in the death of the EU. First Greece, then Portugal, Italy and some other fragile states. This domino effect can work wonders in the collapse of the EU.
The Greeks got themselves into this mess. They refuse to give up all the welfare state benefits that they gave themselves. They refuse to pay taxes and want to retire in their 40s and 50s with the state paying the bill for their laid back life style.
The prudent Prussians to the North who have financed this bacchanalia are about to have a stroke over the whole mess. The idea that they are going to rescue their southern neighbors is wishful dreaming.
And if they should by some bizarre twist do so, what then?
It is a black hole which will be never ending.
The Greeks will not willingly sober up.
And then the Teutonic lenders will have to deal with Portugal, Italy and who knows what other mess.
He is rooting for the country to leave the EU and create a Marxist revolution that will transform the face of Europe and result in the death of the EU. First Greece, then Portugal, Italy and some other fragile states. This domino effect can work wonders in the collapse of the EU.
The Greeks got themselves into this mess. They refuse to give up all the welfare state benefits that they gave themselves. They refuse to pay taxes and want to retire in their 40s and 50s with the state paying the bill for their laid back life style.
The prudent Prussians to the North who have financed this bacchanalia are about to have a stroke over the whole mess. The idea that they are going to rescue their southern neighbors is wishful dreaming.
And if they should by some bizarre twist do so, what then?
It is a black hole which will be never ending.
The Greeks will not willingly sober up.
And then the Teutonic lenders will have to deal with Portugal, Italy and who knows what other mess.
6
Simon: yes the Greeks did get into this mess, thanks largely to irresponsible right-wing governments who looked the other way as wealthy Greeks made an art of tax evasion even as they cooked the books. But they weren't alone. The irresponsioble borrowers had equally irresponsible lenders who knew the books were cooked and, just as in the US housing crisis, saw an opportunity for a killing - if Greece defaulted, they could impose austerity on Greeks and walk away whole. As usual, a wealthy minority make out like bandits while the mass of the population pays. Justice requires that the banks take a bath along with the Greek population.
4
You can thank Goldman Sachs for supplying liquor. It was GS who went to the Greek government and said, "Have I got a deal for you!" We've got this fancy credit default thing, where you borrow lots of money and it won't show up on the books! You can't loose!"
"...in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.
This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.
"...in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.
This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.
3
Apparently, it is easier to attach labels to people (Marxist, socialist, communist) rather than logically argue their points of view.
2
It seems that what everyone is learning is that a financial union isn't workable unless each country is on the same page. My hope is that this does not crash the world economy because I don't know how much more the average person can take.
1
You should also be asking the average person outside the United States. They have taken a lot in the name of failed austerity driven policies.
Are we blaming here austerity or excessive borrowing to support an unsustainable living style?
Why should we be rooting for a settlement that keeps Greece in the Euro? Especially when Greece refuses to liberalize their economy? No. The Eurozone is a fiction of Brussels. Let it fall it apart as Greece, Norway, Italy & Spain all leave and assert their sovereignty again
6
Norway is not in the Eurozone. In fact, it is not even in the EU.
The closest parallel to Greece is probably Iceland (or Cyprus, which is quite a similar case).
At some point, the EU and ECB will have to write off more or even all Greek debt, regardless of currency. Equally, at some point Greece will have to balance its primary budget whether in Euros or Drachmas since it is unlikely to get private financing for years.
Curiously, neither side (EU and Greece) will accept both these points. Only the IMF, whose advice has fallen on deaf ears by each side concerning the part they did not like. has pushed for both parts..
The closest parallel to Greece is probably Iceland (or Cyprus, which is quite a similar case).
At some point, the EU and ECB will have to write off more or even all Greek debt, regardless of currency. Equally, at some point Greece will have to balance its primary budget whether in Euros or Drachmas since it is unlikely to get private financing for years.
Curiously, neither side (EU and Greece) will accept both these points. Only the IMF, whose advice has fallen on deaf ears by each side concerning the part they did not like. has pushed for both parts..
Norway isn't even on the Euro. They still have the Krone for currency.
2
If you substitute "mortgage holders" for "Greeks" and "Banks" for the "Germans, IMF, ECB" you may see a direct parallel to the 2008 happenings in the US
5
As long as the Greek government allowed and still allows a huge shadow economy that does not pay taxes, allows capital to flee the country and expects the more disciplined Eurozone governments to bail them out repeatedly they shouldn't complain when their creditors pull the plug.
43
Peter, You're so right.
1
It's not that they allow it. It's very difficult to get that genie back in the bottle.
The tragedy here is that the Greek people are being held solely accountable for the investment losses of the Greek oligarchs. These people have already taken huge cuts in their earnings and pensions, and seen their economy languish under the thumb of usurious bankers.
Shame on Germany, France, the IMF and the rest who will not allow the Greek people to recover. This is the end of the Euro.
Shame on Germany, France, the IMF and the rest who will not allow the Greek people to recover. This is the end of the Euro.
24
Not shame on Germany, France, the IMF, and others who extended time and again to a Greece that had no intention to change its ways. France or Swiss officials contacted the current Greek government offering help in returning money taken out of Greece without paying taxes, back to Greece. The Greek government never acted on it. Greece just wants free money without cleaning up its act. It got into the EU lying and now it should have the good sense to leave the EU. Everyone will be better off without Greece.
It is high past time for a Greek exit. It's easy to understand why the frugal, balanced budget Germans would be reluctant to bail out their irresponsible neighbor, but in the end, the EU's policy has been extraordinarily myopic and self-defeating.
The EU forced Greece to slash government spending, which in turn drove down demand and slowed the Greek economy, making it ever harder for Greece to repay its debts. It's like the old custom of sending a debtor to debtor's prison, where he can't earn money to repay his creditors.
Perhaps the Euro was a bridge too far, not just because of disparate fiscal and monetary policy within a single currency but because Europe doesn't yet see itself as enough of an entity to bail out a state that gets into trouble.
In any case, it's time for the nightmare to end. Let Greece exit, default, devalue, and start again, so that the Greek people have a chance to restore their prosperity.
The EU forced Greece to slash government spending, which in turn drove down demand and slowed the Greek economy, making it ever harder for Greece to repay its debts. It's like the old custom of sending a debtor to debtor's prison, where he can't earn money to repay his creditors.
Perhaps the Euro was a bridge too far, not just because of disparate fiscal and monetary policy within a single currency but because Europe doesn't yet see itself as enough of an entity to bail out a state that gets into trouble.
In any case, it's time for the nightmare to end. Let Greece exit, default, devalue, and start again, so that the Greek people have a chance to restore their prosperity.
17
You give the Germans way too much credit. Anybody can balance a budget if you don't enough invest in R&D and infrastructure for future growth or are benefitting from an abnormally cheap currency. The last thing the Germans want is to go back to the D-Mark that will kill their exports as much as they like to lecture Draghi at the ECB and everyone else about balance budgets. Try speaking to businesses operating in German and most executives will tell you the infrastructure is starting to fall apart from inadequate investments and the local demographics are terrible. Wait a few years and it'll be obvious to all that the German economy is nothing but a paper tiger.
4
You can say that the EU was a marriage. At the time of the bethrotal all was rosy eyed, love was in the air, nothing could go wrong. But now, as in so many marriages, ugly faces come out when the money goes bad. Is there nothing to be done? No greater and wise leader to rise and show the light? Nope! Sure don't look like there's any heroes in this story. Everyone's pointing fingers and no one is taking blame. A good end does not portend.
23
Argentina did the same thing. Yes, it's taken years to recover but they're doing well.
1
It's a simple question for the referendum - "do your want Greece to remain part of the supra-national EU". If it's YES the current Greek should fall and the Greeks must take their collective medicine - and if it NO the EU should respect the will of the people and throw the bums out (and they can pay their own pensions). Who gets to vote? If it is the whole EU population then the Greeks will be out of the EU for sure.
6
Indeed, there is no happy ending to this tragedy. I agree that this crisis – together with those in Spain, Italy, and Portugal – shows the soft (fragile) underbelly of the European compact, which is based on an extremely wordy constitution that is hardly helpful in circumstances like this.
In a true federal system, the government cannot let a state fail, nor can it stop a specific state’s citizens from withdrawing their money from the banks. Germany and its partners are acting like de-facto feds with a gripe, more eager to teach the Greeks a lesson than to heal an already fragile union. Would Berlin let Bavaria or Saxony fail and fall prey to chaos? So why put the banks' interests ahead of the common good and let Greece collapse? What kind of union is that? Clearly not the type of ‘in sickness and in health.’
European leaders should ask themselves if they can afford let another European nation fail? They have, even in the recent past, when they stood by and let the Balkans go down the toilet while we witnessed yet another genocide take place. It may be a lesson too costly to learn--and unnecessary.
In a true federal system, the government cannot let a state fail, nor can it stop a specific state’s citizens from withdrawing their money from the banks. Germany and its partners are acting like de-facto feds with a gripe, more eager to teach the Greeks a lesson than to heal an already fragile union. Would Berlin let Bavaria or Saxony fail and fall prey to chaos? So why put the banks' interests ahead of the common good and let Greece collapse? What kind of union is that? Clearly not the type of ‘in sickness and in health.’
European leaders should ask themselves if they can afford let another European nation fail? They have, even in the recent past, when they stood by and let the Balkans go down the toilet while we witnessed yet another genocide take place. It may be a lesson too costly to learn--and unnecessary.
101
Spain is coming out of crisis fast.
1
Ernesto states that "In a true federal system, the government cannot let a state fail." Well, the US is apparently not a true federal system because the federal government need not bail out a state that lives beyond its means. The latter is hardly a possibility anyway given that most state constitutions, against all economic logic, require a state's budget to be balanced at all times. In contrast, the Euro member nations pledged contractually to limit their deficits to 3% of GDP. When Greece joined the Euro back in 2002, well before the financial crisis, they were hiding a 15% deficit thanks to the assistance of Goldman Saks. I.e., Greece has never adhered to the pledge it made. And that huge deficit is not a result of the financial crises as many commentators will have one believe, but rather one of the causes. On a last note: did Michigan bail out Detroit? No, and yet Detroit is part of Michigan and the people there even speak the same language. People in glass houses shouldn't throw stones.
continuing your analogy--is it wiser to stay in a marriage founded upon your spouse's dishonesty and refusal to change, or is it wiser to divorce once a pact founded on trust has been breached by deceit?
Every day the Brits should thank the gods that their queen is on their currency — and that they didn't listen to the prophets of doom when the UK refused to join the eurozone.
20
What is the big deal? If this was any other insolvency situation, everyone would've taken a haircut on their debt by now and the borrower restructures to get back on a sustainable footing. Greece is insolvent but the Germans/ECB are in as much denial as the Greeks. Like many commenters have said, this is more about saving the German banks than the Greeks at this point. Lets at least admit the Germans were just as complicit in throwing all that free money at the Greeks to boost their own exports. Greeks are suffering because the Euro is an inflated currency relative to their economic situation. Germany on the other hand has benefitted handsomely for the last 15 years from a Euro that is much cheaper than their economy would have warranted. In this tragedy, the Greeks were crooks but the Germans are being pigs in milking the Euro for their own economic benefits and kicking a dead beat that is already down for the count to perpetuate their own advantage.
16
It is not about saving German banks - in 2010 it was about saving French and Italian banks (German banks never lent that much to Greece but were very exposed to Spain from memory) but now the vast majority of the Greek debt is held by EU governments and institutions.
So it is about the German taxpayer (and Finnish and Slovak and French and Spanish et al) which makes it political poison in those nations.
So it is about the German taxpayer (and Finnish and Slovak and French and Spanish et al) which makes it political poison in those nations.
Greece is the product of unfettered liberalism. Period.
6
Greece is the product of unwisely borrowing far more than it ever can repay. There is nothing unique to liberalism in making that mistake.
2
Look at the GDP growth in the ten years before the financial crisis in 1998:
Greece: +146%
Germany: +70%
Does anyone honestly believe that Greek productivity growth was more than twice as high as the German in that decade?
Krugman and all the the other friends of Greece are complaining that the Eurozone has ruined the Greek economy. But in reality, the Greek GDP was artificially bloated by public spendings that resulted in a 15% deficit for many years.
What happened to the Greek economy since 2010 is nothing more than a correction of the bloating that happened before. Greece had to devaluate in some way - either internally (within the eurozone) or externally (outside of the eurozone). Compare the GDP growth rates between Greece and Germany during the last 15 years, and you will see that they are very similar.
Greece: +146%
Germany: +70%
Does anyone honestly believe that Greek productivity growth was more than twice as high as the German in that decade?
Krugman and all the the other friends of Greece are complaining that the Eurozone has ruined the Greek economy. But in reality, the Greek GDP was artificially bloated by public spendings that resulted in a 15% deficit for many years.
What happened to the Greek economy since 2010 is nothing more than a correction of the bloating that happened before. Greece had to devaluate in some way - either internally (within the eurozone) or externally (outside of the eurozone). Compare the GDP growth rates between Greece and Germany during the last 15 years, and you will see that they are very similar.
11
Fine. Greece can go back to the drachma and Germany can go back to the deutsche mark. Good luck selling BMWs and Mercedes when they become double the price! You should get what you wish for.
8
Were the money for "bloating" came from and who made these unwarranted loans? Germany and French banks! Why just blame and punish Greece and not the greedy lenders. Germany is the major beneficiary of Euro currency which keeps its currency diluted at the expense of countries like Greece, Ireland and other poor EU countries. All the aid Greek received, it went to these banks, it did not help Greece and made the debt worse. Germany is adamant not to share any of the benefits it got from EU currency and that is major hurdle in any solution to the problem.
2
Yes, but who lent the money to Greece that allowed it to live beyond its means for so long and why isn't Germany more willing to help Greece restructure its debts now that it has become painfuly obvious that some portion must be written off?
Here (http://seekingalpha.com/article/3257865-how-greece-could-force-germany-o... is an interesting explanation of why this NYT article is (or might be) simply a superficial recounting of the 'public' positions, while the real power situation strongly favors the Greeks. Why? Because there is nothing (at least according to this seemingly well reasoned article) to prevent the Greek central bank from simply printing Euros. The so called ELB allows this and the Greek central bank has been doing it. But, apparently, there is no power in Europe that can force them to stop. Which means, effectively, that Greece, instead of creating its own currency and devaluing it can devalue the Euro itself and keep doing so until the troika yields.
1
Everyone seriously interested (if you own any US equities, believe me, you are seriously interested) should read the article. Here is a critical excerpt. "....will continue to draw on ELA as long as the ECB allows. When the ECB central administration disallows further ELA, Greece will potentially continue issuing liquidity assistance to its banks without permission. After all, central banks can create money with the stroke of a computer key. The governors of the ECB would have absolutely no recourse if the Bank of Greece were to create some extra liquidity, especially since one of Syriza's first actions after election was to cease cooperating with the Troika's auditors. In the absence of any external oversight and in decidedly desperate times, it should be a shock to no-one if some unsanctioned liquidity assistance quietly takes place - just enough to allow the government to function, just enough to grease a small primary deficit if one arises, just enough to tamp down a bank run, just enough to keep the Greek financial system from imploding, but not so gross an amount as to be immediately obvious to outsiders. The temptation to cheat will be enormous; the likelihood of discovery would be high; but the consequences of discovery are nil. The worst, absolute worst, that other countries could do to Greece would be to expel it from the euro."
Well the ECB has stopped 'allowing' this. We shall soon see how the Greeks respond.
Well the ECB has stopped 'allowing' this. We shall soon see how the Greeks respond.
1
And you believe that other Eurozone countries would just sit back and say 'deary me'?
The EU has long been a running joke among people in some of its more sensible constituent countries. I am from England (live in the USA), and when I discuss the EU with friends and family living in the UK, it is regarded as an enormous fiasco, in large part because of its restrictive policies and nonsensical bureaucracy. The UK had the good sense to retain its own currency and it will be taking a serious look at its future as a member of the the loosely integrated in-fighting fiasco called the EU. The situation in Greece is very different, but the Greeks should get the heck out, take care of their own business and go forth in the world on their own terms and undoubted strengths (tourism... ).
13
Indeed, you have an island view.
On 6/27/15 Yanis Faroufakis issued a statement titled "Intervention" regarding the June Eurogroup meeting. Yanis slides away from discussing anything that Syriza has done during their tenure and blames a lot of outside forces and throws multiple red herrings. Worth reviewing are reforms (need to have a period of tranquility to be able to carry out reforms - no discussion of implemented reforms); falling tax revenues "as a result of the constant threat of Grexit" (no blame for government policies of serial amnesties, non-prosecution of cheaters, basic collection problems and a system that is in chaos); "proposed disbursements' schedule is a minefield of reviews" (can't tolerate oversight)....and what is a major reason for the referendum:
"But even if we managed to pass the institutions' proposal through Parliament, we would be facing a major problem of ownership and implementation."
Syriza can't run on their record because they have not been able to govern. Syriza additionally couldn't fulfill their pie-in-the-sky platform promises to the people of Greece. So, what do you do...have a referendum that places liability on the people if they vote Yes to the memorandum. You propagate outside evil forces; use words like democracy, dignity, humiliation and the threat of higher taxes and hope for a "no" vote. Most likely (either way), Syriza continues to move a Marxist agenda forward. Syriza should be graded on what they have done and the growth they propose (virtually nothing).
"But even if we managed to pass the institutions' proposal through Parliament, we would be facing a major problem of ownership and implementation."
Syriza can't run on their record because they have not been able to govern. Syriza additionally couldn't fulfill their pie-in-the-sky platform promises to the people of Greece. So, what do you do...have a referendum that places liability on the people if they vote Yes to the memorandum. You propagate outside evil forces; use words like democracy, dignity, humiliation and the threat of higher taxes and hope for a "no" vote. Most likely (either way), Syriza continues to move a Marxist agenda forward. Syriza should be graded on what they have done and the growth they propose (virtually nothing).
6
Yes I read all of that...you're a little bias in your own leanings here. Indeed if you had gone to the crux of his intervention memoir. It would have been able to be said that the Eurogroup (I'm referring to it now as I jot this to you), you'd find that he asked to sit in and partake in the final meeting of the day on the 27'th. Yet he was dismissed and not allowed to by the President of the group. He goes on and tells us actually more than this too. I.e what the secretariat told him of rules in this case. There's even a video at the foot of the page and his National Briefing. Yes, you want to get your facts stated correctly...you're very misleading.
1
You are reading this crisis very correctly. Syriza is a mismanaging force. Most unfortunate for the Greek people.
Dear John, in my view, Mike got is much ore on target than you are, Read his contribution again and see its great merits.
Look this country was under the Ottoman empire for so long, and was at such a remove from the seat of that empire's governance, how could it ever feel invested enough in it to pay taxes without complaint? Can't make a modern democracy overnight.
2
Greece became independent from the Ottoman Empire nearly 200 years ago and has defaulted 5 times since then. Can't take forever to introduce responsible government.
The US became independent from the British Empire about 60 years earlier, but there is no special pleading based on that history.
The US became independent from the British Empire about 60 years earlier, but there is no special pleading based on that history.
Let's see. Greece owes 340 billion euros to the troika and another 89 billion euros to the ECB for the overnight funding line which is money gone as well, it's not sitting around liquid is it? Plus whatever other external sovereign debt.
What happened to the story about owing so much to the "bank" that it loses control over the borrower?
On the other side, I don't see how the euro is damaged if the money people in Europe can easily afford the losses and otherwise frozen obligations from Greece. The costs will be distributed to European taxpayers over time.
For its part, Greece needs funding from somewhere that doesn't involve using it only to pay back existing obligations. And is used on productive investments. As an addict to unproductive, non-investment long term deficit spending, the withdrawal symptoms will be brutal.
What happened to the story about owing so much to the "bank" that it loses control over the borrower?
On the other side, I don't see how the euro is damaged if the money people in Europe can easily afford the losses and otherwise frozen obligations from Greece. The costs will be distributed to European taxpayers over time.
For its part, Greece needs funding from somewhere that doesn't involve using it only to pay back existing obligations. And is used on productive investments. As an addict to unproductive, non-investment long term deficit spending, the withdrawal symptoms will be brutal.
4
Uga Muga, your "Let's see" is very insufficient. Germany alone is owed EUR 90 billion. Your math is very wrong and in need of revision.
Pub- there are various totals for total sovereign Greek debt floating around but they're all in the euro 320-350 billion range not counting the ECB emergency funding of 89 billion. The figure you cite for Germany must fall within the first grouping of debt.
Time to stop kicking the can down the road and deal with issues. Greece has been treated with kid gloves for too long. Typical left wing way of dealing with a problem, stick your head in the sand and hope it goes away.
11
JJ, appreciate your summary. It is brief, but in its thrust it is very much on target.
I love the Greek people and I certainly wish the best for them. However, when I was there a few years ago, I was shocked by the amount of tax cheating. If I paid for gas in cash and didn't ask for a receipt, the owner would pocket the gas tax money instead of paying the government. It's been said that if Greece collected all the tax revenue that should be levied, they could go a long way to paying off these loans. So I understand the frustrations of other EU citizens who pay their taxes subsidizing a culture that seems to honor tax evasion.
66
This G, you point out the small tax cheaters. But think of the big ones. It is obscene how the fat cats in Greece get away with cheating. But Greece is humiliated by the rest of Europe, Syriza claims. What a sad farce.
Have you noticed the U.S. corporations that move funds offshore to avoid taxes here? Or the wealthy investor class that moves their money offshore or takes advantage of tax rates that are a fraction of what working people pay? Why is my tax rate so much higher than Mitt Romney's? With a situation like this, who's surprised if a waitress, cab driver or gas station owner in this country pockets $30 and doesn't report it as income? Get back to me when people like Romney don't get tax breaks.
1
The same old story of the grasshopper and the ant, winter has arrived and time's up!
8
When, not if, Greece defaults, I hope those that have lamented the terrible cost of the austerity program that has been imposed on the Greek people will step up and be the first to buy the newly issued Greek debt. Vote with your retirement savings and show your support for Greek Socialism. Put your money where your mouth is and buy Greek debt.
8
It's simple: you borrow money, you need to pay it back w interest. You can't pay back what you borrowed, you go bankrupt. That's how the system works.
The thing here is: these Syriza guys are out to CHANGE THE SYSTEM, or at least try and be heroes. The dream of all the parties from the FAR LEFT is pretty much the same.
What I don't understand is: the dummies in Brussels and the people who voted for them don't know who they are dancing with. And I'm afraid, by the time they realize, it will be too late for everybody.
The thing here is: these Syriza guys are out to CHANGE THE SYSTEM, or at least try and be heroes. The dream of all the parties from the FAR LEFT is pretty much the same.
What I don't understand is: the dummies in Brussels and the people who voted for them don't know who they are dancing with. And I'm afraid, by the time they realize, it will be too late for everybody.
7
Or, like your state, you can just take more from the federal gov't than you send in taxes, all the while, complaining about how evil the federal gov't is.
31
@Huck.
Greece _is_ bankrupt. The corruptocracy in Athens colluded with German finance minsters, Goldman Sachs, and other criminals to borrow vast sums from German banks to buy German goods financed by German banks for export to Greece. When the financial crisis in 2008 ended that merry profit circle, the EU and IMP "loaned" vast additional sums to Greece (with, in fairness, some write downs and interest reductions) to pay off the German banks, which loaded up the Greek government with even more debt.
The Greek economy can't possibly generate enough funds to pay off this burden. In fact, the Greek government is currently running a surplus (except for debt repayment), squeezed out of a Greek economy that has shrunk 25% because of 'austerity'. More 'austerity' means more shrinkage, as long as the Greeks are stuck with using overvalued Euros. The issues of tax collection and pensions, etc., are a sideshow being promoted by politicians: the cuts the "Europeans" are demanding would make a negligible difference in Greece's ability to pay its debt -- bankrupt is bankrupt, already, and the debt is beyond payment. Of course, admitting that would mean the ECB and IMF admitting they made bad loans (to rescue bad German banks), so Greeks must suffer to save the ECB/IMF's face.
Greece _is_ bankrupt. The corruptocracy in Athens colluded with German finance minsters, Goldman Sachs, and other criminals to borrow vast sums from German banks to buy German goods financed by German banks for export to Greece. When the financial crisis in 2008 ended that merry profit circle, the EU and IMP "loaned" vast additional sums to Greece (with, in fairness, some write downs and interest reductions) to pay off the German banks, which loaded up the Greek government with even more debt.
The Greek economy can't possibly generate enough funds to pay off this burden. In fact, the Greek government is currently running a surplus (except for debt repayment), squeezed out of a Greek economy that has shrunk 25% because of 'austerity'. More 'austerity' means more shrinkage, as long as the Greeks are stuck with using overvalued Euros. The issues of tax collection and pensions, etc., are a sideshow being promoted by politicians: the cuts the "Europeans" are demanding would make a negligible difference in Greece's ability to pay its debt -- bankrupt is bankrupt, already, and the debt is beyond payment. Of course, admitting that would mean the ECB and IMF admitting they made bad loans (to rescue bad German banks), so Greeks must suffer to save the ECB/IMF's face.
232
It is not that simple, "Huck". Who paid back the massive debts of AIG and the various firms that were responsible for the mortgage disaster in this country? We did, all of us. Why? First, the administration of G.W. Bush, good Republican, anti-big government people that they were, stepped in with nearly 1 trillion dollars to prevent a complete collapse here, which would have spread around the world and caused a depression far more draconian than that of 1929. When the chips were down, all the endless talk about the evils of big govt. were suddenly pushed aside. Big govt. was the only thing that could save the day.
It used to be said that if you were to borrow a small amount from a bank and were unable to pay it back, YOU were in trouble. If you borrowed a large amount with the same result, THE BANK was in trouble. That old saying reflected a basic reality: someone who takes out a small loan can be tracked down and treated like a criminal. Someone who takes out a large loan usually gets help from the bank, including advisors and consultants, to find a way to make things work out for both parties. Deals are made.
Greece, like a few million mortgage holders in this country, was lured into taking irresponsible loans. Both sides were parties to bad loans. Over confident American banks and investment houses played a role in the Greek tragedy. Mature, reasonable people find a way to move forward so that, over time, everyone benefits.
It used to be said that if you were to borrow a small amount from a bank and were unable to pay it back, YOU were in trouble. If you borrowed a large amount with the same result, THE BANK was in trouble. That old saying reflected a basic reality: someone who takes out a small loan can be tracked down and treated like a criminal. Someone who takes out a large loan usually gets help from the bank, including advisors and consultants, to find a way to make things work out for both parties. Deals are made.
Greece, like a few million mortgage holders in this country, was lured into taking irresponsible loans. Both sides were parties to bad loans. Over confident American banks and investment houses played a role in the Greek tragedy. Mature, reasonable people find a way to move forward so that, over time, everyone benefits.
16
Seems when the going gets tough the leader asks for a referendum. Pass the buck city, in my opinion. Or the Euro in this case. Reminds me of when Obama threatened to attack Syria with his warships after it launched chemical weapons on its own citizens. Beating his chest, he said we would attack and our warships hit the gulf. Then, sensing unrest,he said he would seek Congressional approval. The Commander in Chief buckled under pressure much like Mr. Tsipras.
I am not a wealthy woman, but I learned a hard lesson after the abandonment of my ex-husband which spiraled into the loss of a business, cars, home and furnishings. If I cannot afford it, I don't buy it. And NO JOB is beneath me.
Greece could take a cue from my simple life as it is now. Less is more. Neither a borrower nor a lender be and we do what we have to do to survive.There will always be someone beside me driving a Mercedes, but as I climb the hills on my bicycle to fill the front basket with simple groceries, I smile and realize that I am now debt-free, worry-free and truly free. That's Greek to me.
I am not a wealthy woman, but I learned a hard lesson after the abandonment of my ex-husband which spiraled into the loss of a business, cars, home and furnishings. If I cannot afford it, I don't buy it. And NO JOB is beneath me.
Greece could take a cue from my simple life as it is now. Less is more. Neither a borrower nor a lender be and we do what we have to do to survive.There will always be someone beside me driving a Mercedes, but as I climb the hills on my bicycle to fill the front basket with simple groceries, I smile and realize that I am now debt-free, worry-free and truly free. That's Greek to me.
3
You have got the history of the events surrounding the use of chemical weapons by Assad in Syria all mixed up. Evidence was shown that Assad was using chemical weapons. Obama told Assad to stop using those chemical weapons or he could expect to be attacked, not just his forces but a cruise missile right on his front door. Assad relented, stopped the use of chemical weapons and those chemical weapons were removed and destroyed. You have forgotten all of those events surrounding those chemical weapons.
As far as a vote presented to Congress by Obama, that was for extended military force against Syria. Congress said no.
Get your facts straightened out! It would make for a better argument, for whatever point you're trying to make. Rather than making up a story and then base your points on fake stories!
As far as a vote presented to Congress by Obama, that was for extended military force against Syria. Congress said no.
Get your facts straightened out! It would make for a better argument, for whatever point you're trying to make. Rather than making up a story and then base your points on fake stories!
10
Rubbish. Some chemical weapons were destroyed, many remain and are being used to this day. Get YOUR facts straight. Obama is weak and his red lines are meaningless.
1
Get your facts straight, SIr. The following is a direct quote from a Times article published on Aug 31, 2013: " President Obama abruptly changed course on Saturday and postponed a military strike against the Syrian government in retaliation for a chemical weapons attack so he could seek authorization first from a deeply skeptical Congress."
Either you or the NY Times is incorrect. I'm betting on you.
Either you or the NY Times is incorrect. I'm betting on you.
1
Missing from this account, is the lack of any substantial reform. Corruption, oligopolies, retirement at 52, inefficient state owned enterprises, etc are all still in place. The very conditions that led to this debacle are still in place. The current government is ideologically opposed to liberal market reforms. Greece needs time develope the social capital and institutions necessary for a modern economy. A return to the Drachma and debt relief with generous EU support to facilitate the transition seems the best way forward.
6
Van Schayk, you put together some of the hard truths that few on this side of the Atlantic know about. I am amazed that you haven't received tons of Recommended.
The momentous decision came for Merkel and the ECB, and apparently they failed. An European *Union* demands that poorer areas be supported by the wealthier areas no matter how distasteful --for political reasons. And for economic reasons because the poorer European states, even if not as wealthy, are Germany's best consumers of goods.
If Merkel wants an European *Union* she needs to bite the bullet and wipe about 80% of Greece's debt by accepting that these new amounts of Euros, printed by the ECB, will not be repaid --and let Greece have a chance at recovery. That is how all great countries work. The US coasts subsidized the Midwest, and the industrial areas of China do the same. So does Russia. And India, Mexico, and Brazil, and even in Germany's provinces. It is a dictum that in a real union, the wealthier areas subsidize and spur growth in the underdeveloped areas. It makes sense politically as this creates a more perfect union, and it makes sense economically as a growing satellite economy is the best customer non pareil.
If Merkel wants an European *Union* she needs to bite the bullet and wipe about 80% of Greece's debt by accepting that these new amounts of Euros, printed by the ECB, will not be repaid --and let Greece have a chance at recovery. That is how all great countries work. The US coasts subsidized the Midwest, and the industrial areas of China do the same. So does Russia. And India, Mexico, and Brazil, and even in Germany's provinces. It is a dictum that in a real union, the wealthier areas subsidize and spur growth in the underdeveloped areas. It makes sense politically as this creates a more perfect union, and it makes sense economically as a growing satellite economy is the best customer non pareil.
29
Yoandel, I wish you were an Irish citizen and would have to support Greek high life. You would change your mind.
Yes, and this creates a set of feedbacks where one person's income is another person's spending and a complex economic system is established. This is what makes a sustainable economy and allows the entire system to stay robust even as it goes through its various oscillations. This is what I think people are missing - the big economic picture.
Amazing to read commenters saying all Greek people are lazy and retired early and wanting an easy life.
So little about the troika and crush of austerity that gave no chance of allowing Greece to restructure. An easement plus plan 5 yrs ago that didn't let oligarchs take all the money could have made a difference.
Just like here, a few got filthy rich while the banks got bailed out.
The troika won't relent on keeping their interest paid and don't mind a country's suffering or old people freezing to death in winter.
We need to remember this---it's is Neoliberalism and it's en vogue globally as capital seeks return.
The days of Marshall Plan type help for brother-sister countries is done.
So little about the troika and crush of austerity that gave no chance of allowing Greece to restructure. An easement plus plan 5 yrs ago that didn't let oligarchs take all the money could have made a difference.
Just like here, a few got filthy rich while the banks got bailed out.
The troika won't relent on keeping their interest paid and don't mind a country's suffering or old people freezing to death in winter.
We need to remember this---it's is Neoliberalism and it's en vogue globally as capital seeks return.
The days of Marshall Plan type help for brother-sister countries is done.
9
After I read this in the Times, I hardened against argument like yours. The country is simply not a functioning capitalist society.
http://www.nytimes.com/2012/03/19/world/europe/in-greece-business-rules-...
http://www.nytimes.com/2012/03/19/world/europe/in-greece-business-rules-...
2
I totally agree with you. So many of these comments show a huge level of ignorance about the reality of the situation for the average people and families in Greece. For instance, do these people know that more than 40% of children are living below the poverty line? Can they imagine what this actually means? I am astounded by the the cultural (or racial) prejudice which many of those who comment show about us South Europeans, which is mostly lies and nonsense. Yes, the average people do actually work here and do pay taxes thank you! Incredibly, many people are gloating about the misfortune of the Greeks saying that they are getting what they deserve! Do they realize that people who were in no way responsible for this crisis are literally losing everything? I would love to know how these people would feel if they had family or loved ones living there, would they think that they deserved this fate?
1
The article mentions that should Greece leave the EU it could push Greece closer to a hostile Soviet Union. Whatever the other unfortunate outcomes of this situation may be, I find that one funny.
2
Expect a "yes" vote, rigged or not. The end game will come later when Spain, Italy and Greece all can't pay up, and the credit line runs out. A few years down the road, but coming.
2
They've not only paid up already but are actually growing, albeit slowly.
Without political union, an economic union is eventually destined for failure. The truth is that German manufacturers have loved the Eruo for the last 15 years. If Germany was on the DMark, their manufacturing business would go the way of Detrioit. But Germany has leveraged the poorer economies of Europe to keep its currency lower. Now the chickens are coming home to roost - the cost of euro by subsidizing Greece now exceeds whatever gains they will get in currency.
6
It is striking that in the 3+ years of debt crises in Greece, the government of that nation has been willing to endure harsh austerity, massive budget cuts, extremely high unemployment, all of which have deeply hurt Greece's disadvantaged and middle class citizens, and the small businesses which employ them.
However what the government of Greece has been unwilling to pursue, or even discuss, are the thousands of wealthy, very wealthy and extremely wealthy Greeks who have for many decades practiced tax evasion as vigorously as if it were the national sport.
The evasion of paying taxes by the wealthy in Greece has added greatly to the economic pain and financial burdens of those of lesser means, in Greece. And this American cannot help but notice the striking parallel with my country's wealthy class, and how my country's government has gone out of its way to protect the wealthy class from participating in the rescue of the American economy, and easing the economic and financial pain of those who are disproportionately suffering.
However what the government of Greece has been unwilling to pursue, or even discuss, are the thousands of wealthy, very wealthy and extremely wealthy Greeks who have for many decades practiced tax evasion as vigorously as if it were the national sport.
The evasion of paying taxes by the wealthy in Greece has added greatly to the economic pain and financial burdens of those of lesser means, in Greece. And this American cannot help but notice the striking parallel with my country's wealthy class, and how my country's government has gone out of its way to protect the wealthy class from participating in the rescue of the American economy, and easing the economic and financial pain of those who are disproportionately suffering.
36
Robert, you mention one of the atrocious Greek faults: tax evasion -- the are many others --. It is a GREEK TRAGEDY what has been going on for too long!
What is striking is that after that five years, when an anti-establishment leftist party comes into power and wants to vigorously pursue the uncollected taxes of the rich, the EU and IMF say "oh no, don't do that - raise the most regressive taxes on your poor instead."
And then they say the Greeks are not being real. Sheesh.
And then they say the Greeks are not being real. Sheesh.
The Eurozone is a highly artificial entity brought about by, first De Gaulle, then a host of "Eurocrats" who envisaged building a huge lucrative bureaucracy while working towards a "European" Union. The French have their own exceptions and protections, and the Germans still have guilt from the War.
One hopes that the Greek vote would start the process of bringing down this edifice, whose sole beneficiaries are Brussels and the European bankers.
One hopes that the Greek vote would start the process of bringing down this edifice, whose sole beneficiaries are Brussels and the European bankers.
2
What the article and the Times editorial staff fails to recognize is that this or the previous Greek governments have failed to implement any of the reforms contemplated under the bailout programs. Unlike the Isish government, the Greeks continue to refuse to reform their highly destructive tax system, labor and business regulations, privatize inefficient state owned enterprises, shrink pensions and shrink government. They are hopelessly unproductive and uncompetitive. Why would anyone including European governments want to continue to waste money on them?
9
SellAmerica, your statement is a bright spot in these comments here. Thanks!
1
The pie is growing at a smaller rate - some Quarters even contracting!
If the pie were growing the Euro Zone would have smooth sailing. Now, burdened by social demands - domestic and immigrant - there is no hope for European socialist stability.
Greece is the beginning of the end for a 'democratically' planned economy
If the pie were growing the Euro Zone would have smooth sailing. Now, burdened by social demands - domestic and immigrant - there is no hope for European socialist stability.
Greece is the beginning of the end for a 'democratically' planned economy
“… the daily limit (on bank withdrawals) could end up as low as 50 euros.” -- NY Times today.
50 Euro equals 55.16 US Dollars.
I would like to see somebody try to prevent my wife from removing more than $55.16 dollars a day from our checking account.
50 Euro equals 55.16 US Dollars.
I would like to see somebody try to prevent my wife from removing more than $55.16 dollars a day from our checking account.
3
The story sort of glosses over how public debt got out of hand. For years it should have been obvious to a ten-year-old that the Greek economy was unsustainable. I mean, how can you have people retiring early on generous pensions when, for years, tax avoidance was widespread and the government treated it as no big deal.
Someone or group is responsible and, until they step forward, nothing is going anywhere. I feel sorry for the suffering of he Greek people, but if they were avoiding their taxes and otherwise chiseling the system, they got what they deserved. It all sort of reminds me of the "magical thinking" the GOP program relies on (aka voodoo economics).
Someone or group is responsible and, until they step forward, nothing is going anywhere. I feel sorry for the suffering of he Greek people, but if they were avoiding their taxes and otherwise chiseling the system, they got what they deserved. It all sort of reminds me of the "magical thinking" the GOP program relies on (aka voodoo economics).
9
Even though they couldn't afford it, the Greeks decided to let workers retire on enormous benefits at age 55. And then they expected the rest of Europe to pay those pensions. And their tax system is so ineffective and corrupt that Greeks don't pay a reasonable amount of money to pay for their welfare state. Don't blame the banks and the rest of Europe for what the Greeks chose to do to themselves. Ultimately they have to take responsibility for their own financial mess.
15
The great truth is that for a single currency to succeed over a large region for decades one must balance the overproducing areas with the underproducers, even if the fisical imbalance exists for a long time. It is all well and good to work to make the laggards more effective, but in the end the choice is either have a system that allows the currency to function with that imbalance, or give up on the currency.
We did this is the United States by having a central government that collects a large portion of all taxes collected in the country, from citizens in all States, and distributes them back on a basis that gives the Greece type States a larger portion than they contribute, taking it from the others. In the case of our Deep South States this has gone on for many decades.
We don't lend them money, we give it. Of course, we tie it into ways they can contribute something back, like locating military bases in the South, but the main thing is we give them money we don't formally count as a loan from the others. Regardless of how long one of those States collects more Federal Taxes than they contribute, nor how much that is, it never leads to a currency crisis.
In fact, their citizens fantasize and complain about the extra tax dollars they think they are paying to their more advanced neighbors.
The Germans may think that makes us New Yorkers and Californians suckers, and so do I, but the currency works.
We did this is the United States by having a central government that collects a large portion of all taxes collected in the country, from citizens in all States, and distributes them back on a basis that gives the Greece type States a larger portion than they contribute, taking it from the others. In the case of our Deep South States this has gone on for many decades.
We don't lend them money, we give it. Of course, we tie it into ways they can contribute something back, like locating military bases in the South, but the main thing is we give them money we don't formally count as a loan from the others. Regardless of how long one of those States collects more Federal Taxes than they contribute, nor how much that is, it never leads to a currency crisis.
In fact, their citizens fantasize and complain about the extra tax dollars they think they are paying to their more advanced neighbors.
The Germans may think that makes us New Yorkers and Californians suckers, and so do I, but the currency works.
25
It's ironic, in fact, that Greece's GDP is about the same as Alabama's. Maybe the EU needs to locate several major new naval bases in Greece!
My, my. What do we have here? Clear headed, rational thinking I say. Well said!
'...We don't lend them money, we give it...'
And that has created huge problems, as Southern states keep local taxes low, while freeloading off the Northern states.
And that has created huge problems, as Southern states keep local taxes low, while freeloading off the Northern states.
Paul Krugman argues persuasively that the EU is almost constitutionally unable to deal with recessions, and that the only way for a country like Greece to recover is to go back to its own currency. Once Greece is back on the drachma, the drachma will devalue itself to the point where Greek olive oil, wine and exports are irresistable to the world and imports from other countries will be so expensive that Greeks will buy domestically. It's painful but it is now economies recover.
Greece is going to leave the Euro and Germany is going to let it happen. The question becomes -- what about Spain and Italy? Those economies are still at near depression levels with recovery nowhere in sight after nearly 8 years. It's an incredible tribute to the social stability of Spain that unemployment is still near 25% and there aren't riots in the streets. Americans wouldn't put up with that.
Greece is going to leave the Euro and Germany is going to let it happen. The question becomes -- what about Spain and Italy? Those economies are still at near depression levels with recovery nowhere in sight after nearly 8 years. It's an incredible tribute to the social stability of Spain that unemployment is still near 25% and there aren't riots in the streets. Americans wouldn't put up with that.
6
The Germans need to give the Greeks their money. This was created at a Macro level and the little guy should not be holding the bag.
1
The cradle of democracy, kidnapped by international hedge funds and post-war grain-fed German autocrats, puts a pin in the credit-default swap balloon laughingly called an economic system.
8
Yeah well, forget about Greece, you had better think about the ultimate
mess helicopter Bennie left and the continued dogma of Yellen and now Fischer.
As for Greece, let the hedge fund speculators roast in their own juices
for a change. There is no Uncle Bennie in Greece and his cousin Greenspanopolis.
mess helicopter Bennie left and the continued dogma of Yellen and now Fischer.
As for Greece, let the hedge fund speculators roast in their own juices
for a change. There is no Uncle Bennie in Greece and his cousin Greenspanopolis.
6
I am really tired of this petulant and stupid behavior by Greece. Their prime minister and some of their citizens need to grow up!
6
I am sorry on what you are basing this comment being petulant? He was elected to alleviate the harsh measures imposed by the lenders that made things worst. The lenders want to impose the same medicine on a dead body. Finally he said enough is enough let the citizens decide. We call this the will of the people right or wrong. Remember USA citizens elected G W Bush. Are you going to call those citizens petulant?
To quote Mohammed Ali," you can run but you can't hide"
Time for the Greek people to deal with the consequences of the economic culture they have chosen.
Time for the Greek people to deal with the consequences of the economic culture they have chosen.
7
I think Joe Louis said that first.
1
Actually, that was Joe Louis.
1
It's time for the EU to deal with the consequences of the economic culture they have chosen.
2
Just so we can finish beating this dead horse - does the IMF employ a different set of structural reforms for white countries versus the ones used for decades to force chronic underdevelopment on the rest of the world?
1
just print more money.
2
The Greeks have no power? Let them walk from the EU and the ECB and expose them for who they really are: the Emperor with no clothes. All the riches and no brains. All the money and no sense. Let the Greeks walk and show a path for other EU countries to follow in the Greek's path, or at least emulate them. Let them show Europe and the rest of the world that the oligarch's grip is nothing without acquiescence, without a fear that the money flow will stop. This is all the banksters have going for them, a fear of the unknown. A fear that we must bow deeply to the monied people for our lives and stability, that only with the oligarch's money can the simple people be assured of a nice Sunday walk in the park, and the only price needed to be paid is with our futures and our children's futures.
Huff and puff all you want German banks. When little Greece finally stands up to your bully tactics will you German bankers find out that you are not full of wisdom. You German bankers are full of something else.
Go Greece! Go the way of Iceland! Your choice is fine. You may have to suffer for a little while but at least you will be free of the prison wardens of the ECB. Let the ECB Eat Cake!
Huff and puff all you want German banks. When little Greece finally stands up to your bully tactics will you German bankers find out that you are not full of wisdom. You German bankers are full of something else.
Go Greece! Go the way of Iceland! Your choice is fine. You may have to suffer for a little while but at least you will be free of the prison wardens of the ECB. Let the ECB Eat Cake!
9
If they walk away, no one will loan them money in the future. They will have to live on what they produce. They are currently living above this level, and making up the difference by borrowing.
Iceland had the same problem, but they are more able to adapt to hard work and toughing it out.
Iceland had the same problem, but they are more able to adapt to hard work and toughing it out.
1
No Jonathan, they are not living above their means right now. You're just making that up with no evidence to back you up. Take away the debt burden the Greeks have a budget SURPLUS! The so-called needed loans only go to pay the bankers their loan burdens and not much else. Don't you know this? Seems like NO! Don't worry, the Greeks have many services and assets that folks will want to buy and invest in. And I'm not talking about Big Mouth Putin.
This is exactly the big talk and threats of the bankers and oligarchs: come under our thumb or your world will fall apart. That is junk talk, and the world will see with their very own eyes.
This is exactly the big talk and threats of the bankers and oligarchs: come under our thumb or your world will fall apart. That is junk talk, and the world will see with their very own eyes.
1
@Jack - You might want to take a look at numerous articles written by skilled financial analysts on the Greek economy. Some of the borrowing is used to pay back loans, and some to support their standard of living.
If they were really running a surplus on an operating basis, they wouldn't hesitate to quit, would they? What would be holding them back?
If they were really running a surplus on an operating basis, they wouldn't hesitate to quit, would they? What would be holding them back?
1
It's clear from the failed austerity experiment in Greece that the European Union (E.U.) is misnamed. It is more a hydra-headed economic monster controlled by the European Central Bank, the finance ministers of 19 member countries and the International Monetary Fund with no political center with no unified set of guiding policies. Clearly, the rush to create a trading block with a unified currency, the Euro, left many internal economic policies like taxes and pensions unregulated that now threaten Greece's debt repayment plans. The dire situation now facing the E.U. and Greece illustrates this fundamental weakness of an economic, but not a political, federation. It does not help that Germany, a country with historic deep resentments in Greece stemming from World War II, dominates the E.U. Greece, the ancient home of democracy and a bulwark to the West, deserves better, but the "blame game" underway (and both sides have a lot to blame) now threatens to destabilize the political situation, especially if Greece is forced to exit (the so-called "Grexit") the Euro and then possibly NATO since its hard to imagine Greece wanting to commit to the defense of a Europe that has just cast it aside. Both sides need a cooling off period and even some adult supervision before Europe once again descends into economic and political chaos.
6
A few financial institutions nearly brought the entire world to its knees...
yet they still go unpunished, and unchastened, and even emboldened.
The Greeks listened to a few of them, placed their bets without knowing the house had already rigged the wheel... and lost big. As did millions of other people in dozens of other countries.
Now the Powers That Be have decided... what? To teach the world's people a lesson? That one cannot ever expect fairness, and these companies will now bring an entire country to its knees, and beggar its people?
The Greeks are right to VOTE for their position on this. And it's a wise ruler who will allow his people to stand UP, speak OUT, and REPRESENT as citizens of ancient Athens would have done.
Remember... we don't "need" them; they desperately need us. We buy their things, we pay their fees, we pay their salaries, we buy their penthouses, we pay for their lobster lunches and their private jets. Without us... they have nothing.
Neighbor can always borrow from neighbor; business can always barter with business and customers; we do not need these thugs at the top who insist it's "their way or the highway" - and it's time for a new global paradigm all around: financial, use of resources; healthcare; and a voice in our future. The People of Earth.
Like the Greeks, who will be VOTING, thanks to their leader's faith in democracy.
yet they still go unpunished, and unchastened, and even emboldened.
The Greeks listened to a few of them, placed their bets without knowing the house had already rigged the wheel... and lost big. As did millions of other people in dozens of other countries.
Now the Powers That Be have decided... what? To teach the world's people a lesson? That one cannot ever expect fairness, and these companies will now bring an entire country to its knees, and beggar its people?
The Greeks are right to VOTE for their position on this. And it's a wise ruler who will allow his people to stand UP, speak OUT, and REPRESENT as citizens of ancient Athens would have done.
Remember... we don't "need" them; they desperately need us. We buy their things, we pay their fees, we pay their salaries, we buy their penthouses, we pay for their lobster lunches and their private jets. Without us... they have nothing.
Neighbor can always borrow from neighbor; business can always barter with business and customers; we do not need these thugs at the top who insist it's "their way or the highway" - and it's time for a new global paradigm all around: financial, use of resources; healthcare; and a voice in our future. The People of Earth.
Like the Greeks, who will be VOTING, thanks to their leader's faith in democracy.
29
So you propose to pay cash for everything you buy, not have investments, and keep your money under the mattress?
Well, good luck with that....
Well, good luck with that....
2
The European Union and the Euro in particular suffers from being neither a federal state with a central government nor a trading bloc, but rather a monetary union, without a fiscal and political union. The US tried something similar under the Articles of Confederation and found it to be unworkable, so had to become a true Union under the Constitution, something which took a Civil War to fully realize. Once Greece leaves, Portugal may be next, and then Spain or perhaps Italy.
The only options are: 1. The Euro will fail
2. The Euro will have to become a federal state with taxes paid to and collected by the EU (though national states can levy some taxes as well, as US states do) with a common retirement program, as the US has with Social Security and federal guarantees of private pensions.
In the meantime, it's foolish to pretend Greece can pay these crushing debts. Sovereign defaults are quite common in history (even Germany has defaulted) and no country, as far as I know, has ever fully paid off debts of over 200% of GDP as Greece has now.
The only options are: 1. The Euro will fail
2. The Euro will have to become a federal state with taxes paid to and collected by the EU (though national states can levy some taxes as well, as US states do) with a common retirement program, as the US has with Social Security and federal guarantees of private pensions.
In the meantime, it's foolish to pretend Greece can pay these crushing debts. Sovereign defaults are quite common in history (even Germany has defaulted) and no country, as far as I know, has ever fully paid off debts of over 200% of GDP as Greece has now.
6
I might point out that the only time the US ever paid off its debt, in 1835, that was followed, in 1837, by the start of the longest depression in our history. In fact, ALL 6 times we have even paid the debt DOWN by eliminating deficits for more than 3 years, we have immediately fallen into a depression.
What is most interesting to me about this crisis is the stark differences -- with regard to work, responsibility, efficiency, corruption -- between the Greek people and the German people. The differences can be broadened out to include Northern Europe versus Southern Europe.
Solutions to these long term problems will only be effective and long-lasting when those differences are fully understood.
Solutions to these long term problems will only be effective and long-lasting when those differences are fully understood.
11
Lucian: I'd be careful when throwing around words like "responsibility" and "efficiency."
The Greeks of WWII showed an exceptional responsibility towards their Jewish fellow citizens, resisting to their utmost the efficiency of the German extermination machine.
And corruption, as we know, is everywhere, considering our own bought-and-paid-for government on every level.
I admire much in the culture of Northern Europe. But in a crunch, I'd bet on the South...
The Greeks of WWII showed an exceptional responsibility towards their Jewish fellow citizens, resisting to their utmost the efficiency of the German extermination machine.
And corruption, as we know, is everywhere, considering our own bought-and-paid-for government on every level.
I admire much in the culture of Northern Europe. But in a crunch, I'd bet on the South...
1
I think Lucian was talking about work ethic and fiscal responsibility. And, yes, the Germans and Northern Europeans are much more efficient and responsible than Southern Europe. Hence the economic troubles in Spain, Portugal, Italy and Greece.
Hmmmm... last time a serious study was done by the OECD, of all places, figuring out German's extended vacations, early retirement, and the like, it was found that (the horror for Germany) Greeks work 40% harder than the Germans!!!!
http://www.washingtonpost.com/news/morning-mix/wp/2014/05/16/greeks-work...
http://www.washingtonpost.com/news/morning-mix/wp/2014/05/16/greeks-work...
2
Mr. Irwin writes: "The Greek government apparently agrees that the definition of insanity is doing the same thing over and over again."
The correct conclusion is that giving money to the Greeks over and over again is insanity and Europe finally realized it.
The Greeks have refused to make the basic changes that are necessary to transform themselves into a modern First World country. Tax evasion is the national pastime, their bloated government bureaucracies are sclerotic, etc. etc. The Greek people thought they could merrily roll on, charging the costs of their failed economy to the European Union's credit card without doing anything to fix the rot at the core of their government. And when they were told they could no longer do so, they behaved like spoiled brats, calling the other European countries names, making threats, and refusing to acknowledge any responsibility for the mess they were in.
The European Union will be stronger, not weaker, after Greece leaves. As a country, they are an embarrassment.
The correct conclusion is that giving money to the Greeks over and over again is insanity and Europe finally realized it.
The Greeks have refused to make the basic changes that are necessary to transform themselves into a modern First World country. Tax evasion is the national pastime, their bloated government bureaucracies are sclerotic, etc. etc. The Greek people thought they could merrily roll on, charging the costs of their failed economy to the European Union's credit card without doing anything to fix the rot at the core of their government. And when they were told they could no longer do so, they behaved like spoiled brats, calling the other European countries names, making threats, and refusing to acknowledge any responsibility for the mess they were in.
The European Union will be stronger, not weaker, after Greece leaves. As a country, they are an embarrassment.
39
The Greeks experimented a huge increase in GDP per capita between the years 2000 and 2008 from about 12,000 to 30,000 € that was due to reckless lending by europeans banks but then, after the financial crisis there was a calamitous drop to about 23,000 € in 2014. Notice that this last value is better than 2000, but is still perceived as catastrophic by the people. The IMF and EZ institutions want to continue in that lower and more realistic bases. But the Greeks got addicted to the Euro freeness from previous years and became intractable.
13
Dear Mr. Observer from the North: Your per capita GDP number may be very misleading and inaccurate for the vast majority of Greek whose incomes aren't accurately reflected by the 2014 per capital GDP number. Too many things, such as the distribution of income, declines in population, etc. can distort per capita GDP. Using 2013 OECD data, Greece's median income is just $13,366 in terms of purchasing power parity, which is among the lowest in Europe and is the worse in Western Europe. except for Portugal, which is another basket case. See https://en.wikipedia.org/wiki/Median_household_income. Also, Greece ranks very low in the OECD's Better Life Index in almost every category. See http://www.oecdbetterlifeindex.org/countries/greece/.
So life in Greece and incomes in Greece is awful for the vast majority of Greeks. And your recitation of per capita income is a use of a wrong and misleading stat for the conclusions that you draw.
So life in Greece and incomes in Greece is awful for the vast majority of Greeks. And your recitation of per capita income is a use of a wrong and misleading stat for the conclusions that you draw.
The drachma has been the currency of Greece since 800 BC.
Those who do not read history are bound to repeat its mistakes.
Those who do not read history are bound to repeat its mistakes.
5
"It’s fine to play the blame game over how public debt got out of control in the country, but by the time 2010 came around what was done was done, and the human consequences of austerity have been grave."
But it's not fine to ignore the fact that the Greeks lied their way into the ECM, and then, after getting not one but two bailouts, have done very little to fix their broken practices.
They haven't collected taxes, or slimmed down their bloated bureaucracy, have they?
But it's not fine to ignore the fact that the Greeks lied their way into the ECM, and then, after getting not one but two bailouts, have done very little to fix their broken practices.
They haven't collected taxes, or slimmed down their bloated bureaucracy, have they?
38
There was an article in the NYTs a few years back about one train engineer on a train line with only a few passengers each day who had a salary of $500,000 a year. When the government tried to eliminate the train line, Greek civil servants threatened a strike.
Nothing has changed since then, except these excessive salaries are paid for by borrowing from other countries.
Nothing has changed since then, except these excessive salaries are paid for by borrowing from other countries.
1
To be clear: it is the US that has been forcing Merkel to keep Greece in the Euro and EU for geopolitical reasons in order to prevent more Russian influence in that strategically important part of the world. The Europeans have not the last word in this and Draghi as an ex Goldman is the guy to execute US interests in Europe at ANY cost to the the Europeans themselves.
4
Right, because when europeans get in a bind, it is always somehow the fault of the Americans. Must be great to have a crutch such as this ... only problem, it stops europeans from looking in the mirror and addressing their faults.
I'm not saying at all that Merkel and the Europeans are without fault here, because the austerity politics are clearly of her making while the US was always pushing for more economic stimulus. The European policy was certainly the major cause of the problem, however it's also clear that the US was pushing Europe towards keeping Greece in the EU for geopolitical reasons and whenever things are slipping Obama is on the phone with Merkel, like for instance today and there was never a suggestion from the US side that Greece should leave the Euro, which is certainly a very self-serving point of view and not founded in economic thinking in the first place.
Are you honestly saying with a straight face that the US would ever even suggest that "Greece should leave the euro"? No one in any official position would even whisper that, even if they are thinking it.
If the europeans are the power that they love to make themselves out to be, then what would they care what the U.S. thinks? Instead of whining about the U.S., take action, clean up your own mess! If you are uncomfortable with the U.S. pushing, germans seem to love putin - cast you lot with him.
I see the disease of everything being "Obama's fault" has spread to European conservatives as well.
If the europeans are the power that they love to make themselves out to be, then what would they care what the U.S. thinks? Instead of whining about the U.S., take action, clean up your own mess! If you are uncomfortable with the U.S. pushing, germans seem to love putin - cast you lot with him.
I see the disease of everything being "Obama's fault" has spread to European conservatives as well.
If Greeks reject the Troika's offer (Offer) and there are no further discussion about the Eurozone institutions and/or the IMF providing euros to Greece, I assume that Greece won't start printing its own euros, so it will only get euros that it has something to trade for. Mustn't that mean that Greece will have to adopt new drachmas as its currency?
Or does Greece actually have enough of things of value to trade for euros so that it can, with capital controls, keep the euro as its currency? I don't think so; I don't think that Greece on the euro is sufficiently competitive to be able to trade to get enough euros for the euro to be the medium of exchange and, most importantly, the unit of value for its economy, and not have that economy severely constrained in its financing, output, and money supply.
Or does Greece actually have enough of things of value to trade for euros so that it can, with capital controls, keep the euro as its currency? I don't think so; I don't think that Greece on the euro is sufficiently competitive to be able to trade to get enough euros for the euro to be the medium of exchange and, most importantly, the unit of value for its economy, and not have that economy severely constrained in its financing, output, and money supply.
3
Since fiscal austerity was imposed on Greece, their fiscal budget has gone into surplus but their economy has declined by 25% from 2007 and unemployment remains nearly 26%.
They are living through a Depression as Great as we experienced in the 1920s and 30s.
What does an economic union mean if members don't help other members in times of need?
FDR and Keynes realized that the proper response to an economic depression is fiscal stimulus to offset the drop in demand. This limits economic destruction, loss of human capital and human misery.
After World War I, the victorious Allied forces imposed reparations on Germany that were impossible for the devestated economy to meet during the time scale given.
The economic devastation wrought by such impossible reparations caused much human misery and led directly to the rise of Hitler.
After World War II the Allied forces provided economic assistance to help the Germans and the rest of Europe recover, rather than demands for reparations.
As a result, Germany was able to repay the reparations many decades later from the strength of the economy.
Those who do not learn from their history are doomed to repeat it.
They are living through a Depression as Great as we experienced in the 1920s and 30s.
What does an economic union mean if members don't help other members in times of need?
FDR and Keynes realized that the proper response to an economic depression is fiscal stimulus to offset the drop in demand. This limits economic destruction, loss of human capital and human misery.
After World War I, the victorious Allied forces imposed reparations on Germany that were impossible for the devestated economy to meet during the time scale given.
The economic devastation wrought by such impossible reparations caused much human misery and led directly to the rise of Hitler.
After World War II the Allied forces provided economic assistance to help the Germans and the rest of Europe recover, rather than demands for reparations.
As a result, Germany was able to repay the reparations many decades later from the strength of the economy.
Those who do not learn from their history are doomed to repeat it.
62
This whole mess is analogous to the old joke about dogs. "Why do dogs lick themselves?---because they can."
Why can't Greeks pay taxes, repay debt and make structural changes to ensure their economic survival?---because they can't.
Why can't Greeks pay taxes, repay debt and make structural changes to ensure their economic survival?---because they can't.
4
So, Robert, I guess you haven't been following the events in Greece for the last five years, since you have missed the conservative-inspired austerity imposed by the european banksters? As we can see, this has worked out so well ...
A socialist government, like Greece, will always come to an end when you cannot get 'other people's' money to finance your social spending. Best to let Greece exit the European Union, and do so quickly. It will not lead to the other "pigs' leaving, just shock the hell out of them to get their financial house in order. If it does not, well the Union was not a great idea after all, if the premise was to be able to get access to other countries cash. Here in the US, O'care will provide us with an opportunity to see if 'other people's' money, namely our grandchildren's, will spell similar disaster.
8
The socialist government in Greece has been there for only a few months. The previous mess was created by the favored-by-the-Germans, ECB-loving, oligarchies of Greece. Just sayin' But then again, as Syriza grows unpopular, Golden Dawn is rising --and ultranationalist and far right party proud of its Nazi heritage. I think soon enough Merkel might miss the current Greek prime minister.
A socialist government, like Norway, Germany, Belgium, Denmark, The Netherlands, Sweden, ......will always come to an end when you cannot get 'other people's' money to finance your social spending.
Whereas Kansas is a great success.
Whereas Kansas is a great success.
There is no (can't be) happy ending to this modern Greek tragedy. The outcome is going to be bad for EU whether Greece exits or stays within Eurozone. If exiting is more of an obvious problem, staying in is no panacea either; and in the long run may even be a far worse outcome for EU. So called saving Greece at all costs will unleash the floodgates of 'moral hazard bailout' behavior that may spread even across northern, more affluent countries.
3
Frank, Durham, North Carolina, you must have some Irish in you. 'The Greeks are adversely effected by fiscal evasion'. And that is being kind.
Your last sentence is more to the point.
America don't you bloody well dare send a another ship to defend Greece.
Let Putin have them. Will implode soon enough.
Your last sentence is more to the point.
America don't you bloody well dare send a another ship to defend Greece.
Let Putin have them. Will implode soon enough.
2
I am very fond of the Greek people with relatives there and through many past visits, however their politicians have always been either ineffective, corrupt, or both. I have just read the recently released troika proposal for Greece and there is nothing punitive in it. The requests are all consistent with a modern western democracy prompting any reader to say over and over "you mean they aren't doing that already?". The link follows http://europa.eu/rapid/attachment/IP-15-5270/en/List%20of%20prior%20acti...
17
I can remember when we were told that it was the Greeks who know the secret of the good life, singing, dancing, and sipping ouzo while the rest of us foolishly pursued money and success.
It was always an exaggerated stereotype, and yet it turns out they really weren't working much, and didn't bother paying taxes, and now they're looking to be rescued once again by their less laid back European cousins. My sympathy for their plight is limited.
It was always an exaggerated stereotype, and yet it turns out they really weren't working much, and didn't bother paying taxes, and now they're looking to be rescued once again by their less laid back European cousins. My sympathy for their plight is limited.
68
How in the world do you know that Greek people don't work? Your post is an embarrassment of cliches and stereotypes.
Actually, if you look at the stats, the Greeks work longer hours than the Germans.
1
Not exaggerated, false. Greeks are very hardworking. Check the stats against the rest of Europe. It is true that they are not very law abiding about paying taxes. They are not the only EU country where this is true, but it is a big part of their challenge.
The Greek people worked hard. Their leaders, both elected and economic (rich people, bankers, etc.) made unwise and often corrupt deals with equally unwise and often corrupt politicians and rich people and bankers in other EU countries (especially Germany). When it all blew-up, the EU bailed out the rich people and bankers and politicians at the expense of their taxpayers and - especially - the Greek working classes. Those Greeks have now endured harsher austerity then any major industrial country in memory. The country runs a primary surplus higher than any other EU country (maybe higher than any country.). Their standard of living has plummeted so that they could make good on a swindle they did not commit.
And these are the people you dismiss as lazy cheats? You are aware that contributions to racist stereotypes are not tax deductible, aren't you?
The Greek people worked hard. Their leaders, both elected and economic (rich people, bankers, etc.) made unwise and often corrupt deals with equally unwise and often corrupt politicians and rich people and bankers in other EU countries (especially Germany). When it all blew-up, the EU bailed out the rich people and bankers and politicians at the expense of their taxpayers and - especially - the Greek working classes. Those Greeks have now endured harsher austerity then any major industrial country in memory. The country runs a primary surplus higher than any other EU country (maybe higher than any country.). Their standard of living has plummeted so that they could make good on a swindle they did not commit.
And these are the people you dismiss as lazy cheats? You are aware that contributions to racist stereotypes are not tax deductible, aren't you?
1
A happy way out would be for Greeks to occupy their banks once they are reopened so that their government can repudiate its debt to the titanthropic bankers and get out of the monetary union (Grexit). Also Germany could happily pay the immense debt it owes Greece for its genocidal World War II attack. The Greek Supreme Court this year said Germany owed Greece 278 billion (euros).
Greece today is like Spain in 1936, site of a critical struggle between a population that wants a decent way of life and the elite who want to repair the financial crashes their system produces though more sacrifices by working people.
More about Greece here http://www.thestruggle.org/archive_greece.htm
Greece today is like Spain in 1936, site of a critical struggle between a population that wants a decent way of life and the elite who want to repair the financial crashes their system produces though more sacrifices by working people.
More about Greece here http://www.thestruggle.org/archive_greece.htm
5
What about the billions Greece owes Turkey for its 1920 (failed) invasion?
Dalia Grybauskaitė. the President of Lithuania said this: "The Greek government still wants to party but the bills have to be paid by somebody else" She is the leader of another EU nation, a sister state of Greece. I haven't seen or heard of much partying going on in Greece for many years now. All the money that's gone to that country went directly to banks-- and this is common knowledge. Ordinary people in Greece are suffering through a Great Depression. Doesn't Lithuania have cable Television? The TV reports that pensions have already been drastically cut, taxes raised, and government jobs cut by 30%. People can't buy medicine. I think Lithuania can't accept the new left wing government in Greece because it suffered under communism for so many decades and is now blinded by ideology. It's clear that after the fall of the Berlin Wall and the expansion to 28 nations, the EU stopped working for the benefit of all its subjects. The Greeks will just be the first to go.
5
I bet she will change her tune when putin takes his Ukraine policy and applies it to the Baltics in an attempt to reoccupy them. Then, her country will need help - what will the courageous EU do then? Punt to the U.S. to bail they out as always would be my bet.
There is an irony here in lecturing Greece about its reckless spending when just 8 years ago so many financial institutions needed (and continue to use) huge bailouts to keep afloat because of their gambling on financial instruments that brought the World's economy to its knees.
If only Greece had exercised the same financial prudence demonstrated by the financiers . . . oh never mind.
If only Greece had exercised the same financial prudence demonstrated by the financiers . . . oh never mind.
226
In case you missed it, both banks and Greece were bailed out several years ago.
The banks paid back everything they were loaned and the government made a substantial profit. Greece is refusing to pay back, and now wants more from other countries' taxpayers.
The banks paid back everything they were loaned and the government made a substantial profit. Greece is refusing to pay back, and now wants more from other countries' taxpayers.
3
Pullllleeeeese, how can u criticize the great Bernak?
1
Nations can be held to a higher standard then, say .... Gordon Gekko right?
1
An excellent analysis and summary.
3
If Greeks are sane they will dump the Euro. It is their only hope.
4
If Italy, Spain, Germany, Portugal, etc. were same they would do the same thing. Another economist erotic dream gone bad.
Being a member of the EU is meaningless. Greece can get a better deal from Russia. Who needs the western powers telling them what to do. Greece is better off looking eastward.
4
Been trying to ignore this story because some of the smarter economists have pointed out this is just another Ponzi scheme.
Greece, maybe collect taxes, not the poor souls who have maxed out their credit cards and stolen another to keep eating but those who have ramped their credit to the point it is a house of cards. And cards burn.
France and Germany are not wrong on cutting ties-good luck with Putin.
Greece, maybe collect taxes, not the poor souls who have maxed out their credit cards and stolen another to keep eating but those who have ramped their credit to the point it is a house of cards. And cards burn.
France and Germany are not wrong on cutting ties-good luck with Putin.
8
There are a couple of things that seem to be true. The Greek economy is adversely affected by fiscal evasion, chronic unemployment which requires government actions to give relief to the people and this is done often through early pensions which put a great stress on finances. The unchecked borrowing has contributed to a critical situation that the country cannot solve unless it takes more and more measures that are counter-indicated if the economy is to improve. Cutting expenses, increasing taxes, reducing pensions will improve the balance but it will require further and deeper sacrifices by the common man and cut severely the gross national product. That Greece needs to make absolutely necessary reforms goes without saying. The problem is to what human costs.
4
I'm curious as to why the troika and Greece's international lenders can't come up with a plan to start fresh and write off most or all of Greece's debt in exchange for structural reforms that would bring the country back to growth and remove its structural deficit. At this point Greece has a slight surplus before servicing its debt, but is simply borrowing from one creditor to pay back another. $240 billion is a lot of money, but in the big picture of the eurozone's $12 trillion + economy it is manageable.
This crisis has been hurting the European economy as a whole now for five years, periodically inserting fear of a Lehman-scale collapse; everyone involved needs to ask themselves the price they would pay to end it once and for all.
This crisis has been hurting the European economy as a whole now for five years, periodically inserting fear of a Lehman-scale collapse; everyone involved needs to ask themselves the price they would pay to end it once and for all.
28
Because the germans will have their pound of flesh.
They liked the setup when Greece was flooded with euros and buying german goods, but now that things have turned sour, not so much.
They liked the setup when Greece was flooded with euros and buying german goods, but now that things have turned sour, not so much.
2
In considering the likely effects of (or even feasibility of) exiting the Euro, most commentators seem to ignore that this is a case unlike any in history. Everyone has Euros (stashed in mattresses) and these will continue to be legal tender all over Europe after "the event", so what will shop and business owners do? Clearly they will only accept Euros in payment (why take the new devalued Drachma), so the economy will continue to use the Euro, and will almost entirely become black market. There will be no real devaluation to assist competiveness, and the Government will be unable to collect taxes. The perfect Anarchist state is born!
17
The most remarkable issue here is the cognitive dissonance: Greeks and their creditors do not even appear to speak the same language. Europeans want milestones, guarantees, efficacy and credibility. Once bitten, twice shy.
Greeks are all emotion - lamenting the hardship, pain and bleakness of their predicament but apparently utterly resistant to major structural reorganization. Two make a deal, they must first find a common language.
Greeks are all emotion - lamenting the hardship, pain and bleakness of their predicament but apparently utterly resistant to major structural reorganization. Two make a deal, they must first find a common language.
55
Contributions to stereotypes are not tax deductible.
1
To paraphrase Mark Twain, the rumors of the European Union's demise are exaggerated. Alarmists tend to discount Greece's stature in the EU's overall economy. Fer instance: In 2008 the Geek GDP was 181 billion Euros, while Spain's was 904 billion, Italy's was 1,417 billion, France's was 1,710 billion, and Germany's was 2,247 billion. Greece's economy is thus seen as comprising less than 3% of that of the four largest Eurozone countries, and less than 2% of the Eurozone as a whole. Does anyone honestly think that a catastrophe would result from a Grexit?
One of the great mistakes made in this crisis was letting Greece into the Euro Zone in the first place. It was due to a combination of factors, including the hiring of Goldman Sachs by the existing Greek government to help them cook their books and the irrational desire of other European leaders to expand the Euro Zone, even to the extent of failing to do due diligence in assessing the Greek economy. But unlike the American banksters, the other EU countries will pay for their mistake via the unpaid loans to Greece.
One of the great mistakes made in this crisis was letting Greece into the Euro Zone in the first place. It was due to a combination of factors, including the hiring of Goldman Sachs by the existing Greek government to help them cook their books and the irrational desire of other European leaders to expand the Euro Zone, even to the extent of failing to do due diligence in assessing the Greek economy. But unlike the American banksters, the other EU countries will pay for their mistake via the unpaid loans to Greece.
112
It’s not that anyone feels Greece’s economic contribution is in any way significant. As you alluded to, they are a small nation with an antiquated economy that brings little of value to the European table. The issue five years ago was that their exit could have ignited a similar desire in any number of other Eurozone countries, essentially imploding the union overnight with completely unknown consequences. Since 2010, however, other peripheral economies - notably Ireland and Portugal (both of whom have begun prepaying their bailout loans) have improved significantly while Greece’s situation has only gotten worse. We may be at a seminal moment now where the perception of Greece has changed sufficiently for them to be viewed as an isolated basketcase, one that should never have entered the currency union to begin with, and one whose exit can now be safely contained without causing outright calamity across the eurozone.
1
What "union"? Some EU countries have the common currency, some not. There is no fiscal union, and no political union. It's a virtual union, smoke and mirrors from the start, and now they've been found out.
Funny you mention Spain, Italy ... today, it's Greece, tomorrow, Spain, Portugal, Italy ...
Funny you mention Spain, Italy ... today, it's Greece, tomorrow, Spain, Portugal, Italy ...
Obviously I was referring to the currency union that is the eurozone. Correct in that there is no fiscal union in the same way there exits in the US. Incorrect to state there is no political union - each EU member elects their own MEP’s to the European Parliament.
I did not mention Spain or Italy in my post, only Ireland and Portugal, feel free to re-read it for clarity.
I did not mention Spain or Italy in my post, only Ireland and Portugal, feel free to re-read it for clarity.
1
None of the loan packages made to date were interest-free. The fees and interest is part of the risk and reward in lending. But the lenders are adamant that Greece guarantee and thus socialize their risk, while their rewards are all privatized. Nice work if you can get it.
87
Maybe, now that the game is clear even to the blind, the Kiev government will take a better look at the 'economic help' promises coming from Brussels.
1
What a mess the 3 naked emperors (IMF/EU/ECB) have made of this problem.
They have put the whole EU project a risk for a country of 11 Million people with 1.3% of the EU GDP.
Why:
Because they wanted to protect the wealthy from higher takes and impose a high sales tax (VAT) on the poor.
This was not an economic argument it was battle to impose the same old neo liberal market baloney.
They have put the whole EU project a risk for a country of 11 Million people with 1.3% of the EU GDP.
Why:
Because they wanted to protect the wealthy from higher takes and impose a high sales tax (VAT) on the poor.
This was not an economic argument it was battle to impose the same old neo liberal market baloney.
112
Greece is definitely a disaster. The expectations of the population are way beyond their means. However, remember that it was the financial markets that allowed them to operate with two sets of books. They deserve be highlighted in BOLD PRINT when discussing this entire fiasco.
I truly feel sorry for the average Greek who has been hoodwinked by politicians and financiers.
I truly feel sorry for the average Greek who has been hoodwinked by politicians and financiers.
77
Greece is arguably the most beautiful country in the world and will be fine whoever's picture is on its money. In fact it is much better off sitting out the all-but-inevitable (now that fast-track has passed) TAFTA deal.
1
Where is all this debt money going? Its going into the hands of rich investors. When is the Western world going to punish these crooked creditors, investment banks, and rich Baby Boomers whose inflated retirement portfolios rest on the backs of starving Greek children and the poor? When are we going to punish the investment banks for creating this evil gambling system that has pushed governments all over the world into debt???
175
Where is all this debt money going? It is and has been going to insanely overpaid civil servants and inflated pensions that start at age 53.
Couple that with the fact that Greeks do not believe in paying taxes and continue to believe they can get other countries to loan them money, when they have changed nothing in four years and you have a perfect storm.
Couple that with the fact that Greeks do not believe in paying taxes and continue to believe they can get other countries to loan them money, when they have changed nothing in four years and you have a perfect storm.
4
I fail to see the logic in your accusation that this is somehow a generational issue ... people like you who buy into the mogul-owned media and continue to harp about "baby boomers" fleecing the world need to wake up ... it's the moguls themselves (along with their obscenely wealthy cronies) who are fleecing the world. They just keep pointing fingers elsewhere to keep people fighting amongst themselves instead of holding the real culprit accountable.
1
One world order versus fair market value. Greece ops for the latter and within two years is free of the international banking mobsters. The EU the IMF's brainchild collapses for good.
8
This is a complicated situation and I don't think its fair to reduce the debate to comments like this one: "European leaders in Brussels and Frankfurt and Berlin may not be fair, or democratic"
The democratically elected Greek government accrued those loans but now they say its a breach of their democratic rights to have to pay them back? Of course they have the democratic right to vote to stop paying but then they will have to enter default. They have no "democratic" right to force someone else to give them more money
The democratically elected Greek government accrued those loans but now they say its a breach of their democratic rights to have to pay them back? Of course they have the democratic right to vote to stop paying but then they will have to enter default. They have no "democratic" right to force someone else to give them more money
26
Greece is not refusing to pay the debt back. It has always maintained it will. They are asking for a re-fi that would write down part of it, but have said they would accept simply a reconfiguration of the payment terms.
1
I am not a financial expert but it seems that a compromise would involve forgiving some but not all of the debt and making sure that whatever is lent can go directly to the people who need it, NOT just the banks.
It doesn't make sense that the loans just go towards the debt. The loans should be to get the Greek economy jumpstarted and some of the debts owed should be put on hold until the economy is improved. Otherwise it's a death spiral.
It doesn't make sense that the loans just go towards the debt. The loans should be to get the Greek economy jumpstarted and some of the debts owed should be put on hold until the economy is improved. Otherwise it's a death spiral.
139
That could be the problem -- getting the economy jump-started.
It may be that, like Detroit, Greece has lost much of its ability to fuel the economy. It doesn't have much to export except tourism.
This could be symptomatic of the global restructuring of traditional economies that just can't make it in the new environment.
It may be that, like Detroit, Greece has lost much of its ability to fuel the economy. It doesn't have much to export except tourism.
This could be symptomatic of the global restructuring of traditional economies that just can't make it in the new environment.
I think it is clear that the creditors want to force Greece to privatize their country. Basic utilities would then be bought by the creditors at bargain-basement prices. And Greece would be paying them both exorbitant interest and extortion profits on the necessities of daily life. And Greece would become a colony of Germany. The only way out is to exit the euro and the European Union. And the money involved is a pittance. Banks pay more in fines on a monthly basis. And they see the fines as the cost of doing business. All so sad. A very bad show for the creditors.
135
...and it appears they want to bring down the Greek government that opposes austerity -- a political goal , to punish Greece, and get it under the neo-liberals
10
You are being too reasonable! This is a political problem as much as an economic one. Remember, politicians solve political problems, not real ones.
Exactly. I think this is the goal---the privatisation of Greece's natural resources.
1
it seems the author conveniently omits that Greece has not tackled any major structural reforms in 4 years while it had a chance to reform and make its economy more competitive. A new currency may make exports cheaper but how much more olive oil can Greece export? The economy needs to be restructured from within and entice young workers to return from overseas and foreign investors to invest. Tsirpas was elected to make tough choices yet he feels the need to call a referendum AFTER the deadline passes and urges voters to reject it. Why would the other european countries wait for that to happen?
132
So the disintegration of Greek economy, the skyrocketing unemployment, the collapse of incomes were the result of MINOR structural reforms, right?
9
Depressed wages, impoverishment of the elderly and increased VAT will make young entrepreneurs return to Greece?
Mercantilist economic policies and the purchase by the Eurozone of Deutsche Bank and Société Genérale bad investments in Greece are the cause of this latest crisis, not some imagined south European laziness. If the EU falls apart, will it be the fault of the Greeks?
Mercantilist economic policies and the purchase by the Eurozone of Deutsche Bank and Société Genérale bad investments in Greece are the cause of this latest crisis, not some imagined south European laziness. If the EU falls apart, will it be the fault of the Greeks?
34
This government has been in place for five months not four years.
What exactly did you expect to achieve in five months which 3 bullies dictated how they show generate taxes.
What exactly did you expect to achieve in five months which 3 bullies dictated how they show generate taxes.
10
It is hard to make a rational argument that disciplined and wealthy Germany and poor and corrupt Greece can belong in a successful currency union. A Grexit may be a shock in the short term but in the long term Europe and the world will be stronger for it.
180
Such wisdom from Oregon.
I can't find an economist that can predict next year with even a semblance of accuracy not to mind "the long term".
"disciplined and wealthy Germany" got half its debt written off in 1953. Now Germany refuses to countenance debt write off for Greece.
"disciplined and wealthy Germany" wanted the Euro because the old Deutschmark was getting too strong and made exports uncompetitive.
"disciplined and wealthy Germany" idiot bankers flooded Greece with Euros to buy German goods.
I can't find an economist that can predict next year with even a semblance of accuracy not to mind "the long term".
"disciplined and wealthy Germany" got half its debt written off in 1953. Now Germany refuses to countenance debt write off for Greece.
"disciplined and wealthy Germany" wanted the Euro because the old Deutschmark was getting too strong and made exports uncompetitive.
"disciplined and wealthy Germany" idiot bankers flooded Greece with Euros to buy German goods.
26
I'm not sure whether wealth should be a factor. The EU was created so that every member could strive, eliminating tariffs and making trade easier. The Euro was just the cherry on top. But you are totally right about the "corrupt" part.
The Greek government can't collect property taxes because they don't "know" (or pretend to) who owns what property. Can you dig that? Even in the land of the free every small town knows who owns what!
And their retirement starts as early as 50! All over the world governments have to raise the retirement age due to the baby boomers, but not Greek, oh no! Pathetic!
The Greek government can't collect property taxes because they don't "know" (or pretend to) who owns what property. Can you dig that? Even in the land of the free every small town knows who owns what!
And their retirement starts as early as 50! All over the world governments have to raise the retirement age due to the baby boomers, but not Greek, oh no! Pathetic!
3
There is ample corruption and incompetence in Greece, but Germany is hardly the innocent victim. It determines fiscal policy for the entire EU, rigging it to favor its own export-driven domestic economy. The rest of the EU pays the freight for German "discipline" and wealth. How else do you think Germany can maintain the high wages and social services along with a massive export surplus? How do you think absurdly expensive German goods sell so well abroad while much cheaper foreign goods barely make a dent in Germany? Why do you think Germany has had virtually zero inflation since WWII, despite absorbing its poor Communist half, while Greek inflation has been rampant? It ain't discipline; it's ECB policy, set in accordance to German rules.
2
What a lousy column. Maybe you have not paid attention for the past few years, but others have (especially, for obvious reasons, in Europe). You are missing a big part of the problem here: the Greeks have not implemented most of the structural reforms that they needed to be viable members of the EU. When the new government came to power, they even walked back some of the reforms that were agreed before they got 200 BILLION + relief from creditors (i.e., other European countries). Ultimately, those who want to stay in the Euro need to play by the rules, and Greece has shown, over and over and over again, that they don't want to play by those rules. Take Spain, Portugal, Ireland, Italy, and the Baltic countries in the Euro: they made the reforms that were asked of them.
What's also missing in your column: the recognition that the ENTIRE EU was united against the crazy, stupid, and defenseless requests of the Greeks. (I mean, you have 5 months to negotiate a deal and then the day before the end of the relief program you ask for a referendum?? That's pure madness!)
What's also missing in your column: the recognition that the ENTIRE EU was united against the crazy, stupid, and defenseless requests of the Greeks. (I mean, you have 5 months to negotiate a deal and then the day before the end of the relief program you ask for a referendum?? That's pure madness!)
251
For the last four years, Greece has implemented EVERY reform and "structural adjustment" demanded by the Troika. The problem is that their austerity program simply has not worked, and shows no signs of working in the future. It is entirely reasonable for the Greeks to say enough is enough. In their latest offer-- which has far more madness in it than the referendum call-- the Troika SCRAPPED a Greek proposal to add a 12% tax increase on companies earning more than 500K, and inserted an increase of VAT on basic would items by 10%.
19
Madness was defined as doing the same thing and expecting different results.
Greece has had 5 years of austerity and it hasn't worked.
Why would more austerity work?
Yes they had five months to negotiate a deal with the 3 bullies who wanted to protect the rich and impose more austerity on the poor by implementing a 23% sales tax.
This is about imposing the neo-liberal free market protect the .1% baloney.
Please don't include Ireland in your list of good little Europeans.
We took on the debt of idiot European bankers.
Ireland will repay €8B in interest on a debt that will never be repaid. That's what we spend on education.
Our children have emigrated.
We have a massive bad mortgage problem.
Don't us to beat up the Greeks.
Greece has had 5 years of austerity and it hasn't worked.
Why would more austerity work?
Yes they had five months to negotiate a deal with the 3 bullies who wanted to protect the rich and impose more austerity on the poor by implementing a 23% sales tax.
This is about imposing the neo-liberal free market protect the .1% baloney.
Please don't include Ireland in your list of good little Europeans.
We took on the debt of idiot European bankers.
Ireland will repay €8B in interest on a debt that will never be repaid. That's what we spend on education.
Our children have emigrated.
We have a massive bad mortgage problem.
Don't us to beat up the Greeks.
10
I think the writers for "Up Shot" assume that the readers, interested in economics, have been following the topic all along and so they breeze through the background and zero in on the "Up Shot."
1
For all of the anti-austerity supporters - what is the real plan? Continue lending money ad infinitum - pretending it is a loan that it is known will never be repaid? And who is supposed to continue sending more money and new loans to Greece so they don't undergo austerity? After 2010 the other European nations spent 4 years containing Greece loans to minimize future disruption - the rest of Europe has had 4 years to prepare for an eventual Greek default. What has Greece done for the last 4 years to fix their economy (tax base, competitive environment, other actions to encourage investment and productivity)? Is it any wonder how this may play out?
39
Exactly. Write off the bad debts. That is what they had to do in 1953 to let Germany recover. Trouble is, the rich don't want to take the haircut; they want average Greek citizens to continue starving and dying.
227
Greece lied to get into the EU and continues to allow workers to retire at 53, while doing nothing to collect taxes, which Greeks do not think they should have to pay, as everything is 'free', as long as others are paying the bill.
No sympathy for these freeloaders.
No sympathy for these freeloaders.
63
The problem is that even with total debt write off Greece is not able to survive without new funds (loans). And who is going to lend them? Why is German taxpayer obligated to finance Greek's retairee at 50 while he has to work until 65.
8
By not tackling their tax problems, the Greek government is failing their creditors and their people. Although fixing the tax situation would not solve all the problems, it would be the proper conduit to begin supporting its obligations to its people, and creditors. It would be a reform that others could build properly functioning economic engines around.
23
It would be reasonable to give the new Greek government a chance to fix the problem. Greece has had major problems for decades.
What exactly did you expect to happen in 6 months.
It would appear that the good old US of A is in no position to lecture anyone on implementing a fair tax system.
What exactly did you expect to happen in 6 months.
It would appear that the good old US of A is in no position to lecture anyone on implementing a fair tax system.
3
Yes... it's been decades, it would've been reasonable to use that time to fix the problems. Not doing so makes them creditworthy how?
4
paddy, europeans continually blame the "good old US of A" when they get in a bind ... part of the mentality that continually gets them in a bind.
The problem is that you have a currency union without fiscal union, but more importantly, without political union (at best, you have an political association, a confederation.) No amount of cheap shots at the U.S. will alter this reality.
You should be more aware ... today they come for Greece, tomorrow Spain, Portugal, Ireland ...
The problem is that you have a currency union without fiscal union, but more importantly, without political union (at best, you have an political association, a confederation.) No amount of cheap shots at the U.S. will alter this reality.
You should be more aware ... today they come for Greece, tomorrow Spain, Portugal, Ireland ...
3
Without reform measures, whether exiting EU or not, Greece will not grow again. If anyone looks back to the time before EU was formed, Greece was in a much worse situation than today. It is delusional to think that Greece or Greek politics will change just because it decided to not pay its debt.
51
"before EU was formed, Greece was in a much worse situation than today"?
Sure, Greece didn't have 26% unemployment, nor 25% recession in 4 years, nor 3 million people in/near poverty, nor soup kitchens.
And it didn't have so many Ferraris, so many Swiss accounts, so many off-shore companies.
Those Greeks are really nuts to protest for an imaginary crisis.
After all they live better than the refugees that flood their coasts.
At least for now...
Sure, Greece didn't have 26% unemployment, nor 25% recession in 4 years, nor 3 million people in/near poverty, nor soup kitchens.
And it didn't have so many Ferraris, so many Swiss accounts, so many off-shore companies.
Those Greeks are really nuts to protest for an imaginary crisis.
After all they live better than the refugees that flood their coasts.
At least for now...
26
Of course Greece is in a better situation than that of 1982 - 5 years of irrational austerity were still not enough to wipe out almost 30 years of regular growth. But its probably "troika´s" final objective.
1
Greece has lived off others for a long time. Enough already!
3