Syriza wins Greece election

[Murazor]

Of course it has been successful. Ireland and Portugal, Iceland and Spain as well as Italy are nowhere near a default, which is pretty different from the scenario many on this very board were predicting (that being the exit of at least two of the pigs).

Well, going with the sustained deficit, rapidly rising public debt to GDP ratio, sustained trade deficits, stagnated industrial production and various other indicators that I could present... how is Spain supposed to be safe from default?

Before you go and argue that unemployment figures have started going down. Yep, they have, but not by a lot and mostly because hundreds of thousands of Spaniards have left the country to look for work abroad, resulting in a massive loss of human capital in a national scale (some of the best national capital, at that), and because those who no longer have unemployment benefits of any kind (a very significant fraction of those five plus millions of unemployed) don't even bother reporting in and are thus removed from the official figures.

So while Spain might not be at risk of default right now, current policy seems likely to lead us to experience a Greece style scenario not very far down the line.

And, by the way, Portugal is also in a pretty fucking bad position. External debt stands at 220% plus of GDP, public debt at 110% plus, risible economic growth, high unemployment and what have you. It just happens that Greece has had elections earlier than the others and that is essentially it.

Frankly, Thanas, I am not particularly impressed with your ability to perform economical analysis.

You seem to be offended by the notion that others can point at the fact that EU economic policy (which is largely determined by Germany these days) has been bad for the EU in general and the southern countries in particular (the least negative thing that can be said is that much time and resources have been wasted in "solutions" that haven't really solved anything), and get defensive against this perceived slight.

[Broomstick]

The comparison is valid so as long as we are discussing the way it could be. The US could be a more loose confederacy; the EU could be a superstate. As it stands now, the US is a real nationstate and the EU is not. So who is the idiot here?

The ones who think the EU could be like the US or a superstate or even a nationstate. Those options were all rejected by the European voters.

Voters can change their minds.

I don't know, maybe there's a form of union between the current EU and a true nationstate that is tighter and might be more beneficial to all. The EU is an experiment, after all, just like every other new form of government or alliance. It is a bit arrogant to think you'll get it exactly right from the very first.

I would also hope that if the EU does move to a tighter union they'll be able to avoid the past mistakes of other nations. It's my opinion that European nations giving a bit more of a damn about each other on all levels would be of benefit.

Word is that Greece will attempt to get through the following program:
- freezing the debt
- budget surplus from the current budget to be partially used to pay back debts
- using the difference to stimulate the economy.

This is a surprisingly good plan, let's wait for details.

I sincerely hope it works out to everyone's benefit.

EDIT: I shall also note that nobody here has answered how it could be avoided that other countries like Italy, Spain, Portugal, Ireland and France would demand a reduction in their debt as well if Greece were to be granted one.

Make the requirements for such a debt reduction very, very onerous. Say that there will have to be period of X years to see how things work out for Greece before the question can even be considered for others. Make a condition of the "Greek experiment" that the people responsible for the mess are forever barred from public office or something else of the sort. Be creative.

If it works out really well for Greece, actually consider it for the rest. Yes, I know everyone wants their money back, but honestly, not every loan is going to be a good one. That's part of the idea behind charging interest, to cover the inevitable bad debt that happens. If Germany made a bad bet by loaning Greece money then I'm sorry, Germany is going to have to deal with it, and not by squeezing the Greeks to the point people are living on the streets, starving, and killing themselves.

Since every country in the EU is linked via the euro it really is important for them to support each other's economies, perhaps even to the point of debt forgiveness. Want a strong euro? Then all the economics of the EU need to be strong or else this isn't going to work long term. If the choice is between some loan-givers experiencing pain from bad loans vs. strong economies for all the EU the latter might actually be the best overall for everyone concerned. There is more to economic success than "didn't default on a loan".

[J]

Word is that Greece will attempt to get through the following program:
- freezing the debt
- budget surplus from the current budget to be partially used to pay back debts
- using the difference to stimulate the economy.

This is a surprisingly good plan, let's wait for details. I hope it does not mean "Germany should pay again", which will not really fly.

Open letter from Alexis Tsipras to the Germans
Excerpts:

In 2010, the Greek state ceased to be able to service its debt. Unfortunately, European officials decided to pretend that this problem could be overcome by means of the largest loan in history on condition of fiscal austerity that would, with mathematical precision, shrink the national income from which both new and old loans must be paid. An insolvency problem was thus dealt with as if it were a case of illiquidity.

In other words, Europe adopted the tactics of the least reputable bankers who refuse to acknowledge bad loans, preferring to grant new ones to the insolvent entity so as to pretend that the original loan is performing while extending the bankruptcy into the future. Nothing more than common sense was required to see that the application of the 'extend and pretend' tactic would lead my country to a tragic state. That instead of Greece's stabilization, Europe was creating the circumstances for a self-reinforcing crisis that undermines the foundations of Europe itself.

My party, and I personally, disagreed fiercely with the May 2010 loan agreement not because you, the citizens of Germany, did not give us enough money but because you gave us much, much more than you should have and our government accepted far, far more than it had a right to. Money that would, in any case, neither help the people of Greece (as it was being thrown into the black hole of an unsustainable debt) nor prevent the ballooning of Greek government debt, at great expense to the Greek and German taxpayer.

Germany, and in particular the hard-working German workers, have nothing to fear from a SYRIZA victory. The opposite holds. Our task is not to confront our partners. It is not to secure larger loans or, equivalently, the right to higher deficits. Our target is, rather, the country's stabilization, balanced budgets and, of course, the end of the grand squeeze of the weaker Greek taxpayers in the context of a loan agreement that is simply unenforceable. We are committed to end 'extend and pretend' logic not against German citizens but with a view to the mutual advantages for all Europeans.

Dear readers, I understand that, behind your 'demand' that our government fulfills all of its 'contractual obligations' hides the fear that, if you let us Greeks some breathing space, we shall return to our bad, old ways. I acknowledge this anxiety. However, let me say that it was not SYRIZA that incubated the cleptocracy which today pretends to strive for 'reforms', as long as these 'reforms' do not affect their ill-gotten privileges. We are ready and willing to introduce major reforms for which we are now seeking a mandate to implement from the Greek electorate, naturally in collaboration with our European partners.

Our task is to bring about a European New Deal within which our people can breathe, create and live in dignity.

A great opportunity for Europe is about to be born in Greece on 25th January. An opportunity Europe can ill afford to miss.

So. No more loans. A new start.

EDIT: I shall also note that nobody here has answered how it could be avoided that other countries like Italy, Spain, Portugal, Ireland and France would demand a reduction in their debt as well if Greece were to be granted one.

It can't. It is time to accept that debts which cannot be paid, shall not be paid. That which is mathematically impossible cannot be made possible with fancy language and contracts. 2+2 will not equal 53 regardless of how earnestly you insist it does.

[Vendetta]

I think it's worth noting that Austerity economics comes from basically the same place as libertarian economics. It's an ideological belief not an empirically supported and functional model, and any evidence that it doesn't work and produces the direct opposite of its stated outcome is generally met with the complaint that you just weren't doing it enough.

[Thanas]

I think it's worth noting that Austerity economics comes from basically the same place as libertarian economics. It's an ideological belief not an empirically supported and functional model, and any evidence that it doesn't work and produces the direct opposite of its stated outcome is generally met with the complaint that you just weren't doing it enough.

It works quite well if you got competent people. Otherwise most of northern Europe would not work, when it is the exact opposite.

Voters can change their minds.

The British voters will never vote for a European nationstate within the next twenty years.

I don't know, maybe there's a form of union between the current EU and a true nationstate that is tighter and might be more beneficial to all. The EU is an experiment, after all, just like every other new form of government or alliance. It is a bit arrogant to think you'll get it exactly right from the very first.

I would also hope that if the EU does move to a tighter union they'll be able to avoid the past mistakes of other nations. It's my opinion that European nations giving a bit more of a damn about each other on all levels would be of benefit.

All of that is true, but none of it will happen. Any attempt to form this middle form has already been rejected in Britain before talks even got underway. Instead, we see the opposite - nations like Britain (and to a lesser extent Greece) are trying to limit the EU to a simple economic customs union, with less, not more, power going to Brussels.

If it works out really well for Greece, actually consider it for the rest. Yes, I know everyone wants their money back, but honestly, not every loan is going to be a good one. That's part of the idea behind charging interest, to cover the inevitable bad debt that happens. If Germany made a bad bet by loaning Greece money then I'm sorry, Germany is going to have to deal with it, and not by squeezing the Greeks to the point people are living on the streets, starving, and killing themselves.

Since every country in the EU is linked via the euro it really is important for them to support each other's economies, perhaps even to the point of debt forgiveness. Want a strong euro? Then all the economics of the EU need to be strong or else this isn't going to work long term. If the choice is between some loan-givers experiencing pain from bad loans vs. strong economies for all the EU the latter might actually be the best overall for everyone concerned. There is more to economic success than "didn't default on a loan".

Here is the German worry - Germany cannot handle all that debt and taking on the debt of others would destroy all the process made from 1990-2014, process which a lot of sacrifices were made for. This goes double when some nations have done little to actually reform.

The only way this would work and Germany would even consider paying it is if Germany would get the powers to unilaterally enforce reforms. But that will not happen, so this plan will not happen.

And frankly, considering we get all the shit for even helping to prevent a EU collapse in the first place, we might just as well embrace the villain role. We are going to get shit on either way, so at least let's not burn money on the streets.

Germany, and in particular the hard-working German workers, have nothing to fear from a SYRIZA victory. The opposite holds. Our task is not to confront our partners. It is not to secure larger loans or, equivalently, the right to higher deficits. Our target is, rather, the country's stabilization, balanced budgets and, of course, the end of the grand squeeze of the weaker Greek taxpayers in the context of a loan agreement that is simply unenforceable. We are committed to end 'extend and pretend' logic not against German citizens but with a view to the mutual advantages for all Europeans.

Dear readers, I understand that, behind your 'demand' that our government fulfills all of its 'contractual obligations' hides the fear that, if you let us Greeks some breathing space, we shall return to our bad, old ways. I acknowledge this anxiety. However, let me say that it was not SYRIZA that incubated the cleptocracy which today pretends to strive for 'reforms', as long as these 'reforms' do not affect their ill-gotten privileges. We are ready and willing to introduce major reforms for which we are now seeking a mandate to implement from the Greek electorate, naturally in collaboration with our European partners.

So. No more loans. A new start.

I really hope this bullshit is not what he is trying to push, because nobody is falling for it. This bullshit is nothing but insulting to Germany. Every German knows that in three months Greece is going to have to ask for more money either way. All this does is make him look stupid, dishonest and inept. He should have chosen a better PR management, especially if he slips words like financial waterboarding in there.

And the last paragraph is a joke, considering his first step was to shore up the utterly corrupt greece state power industry, which was one of the main culprits of the crisis in the first place.

EDIT: I shall also note that nobody here has answered how it could be avoided that other countries like Italy, Spain, Portugal, Ireland and France would demand a reduction in their debt as well if Greece were to be granted one.

It can't. It is time to accept that debts which cannot be paid, shall not be paid. That which is mathematically impossible cannot be made possible with fancy language and contracts. 2+2 will not equal 53 regardless of how earnestly you insist it does.

Oh yes, so the solution seems to be "who cares, let the Germans pay for it", as expected. This will not happen.

I shall also note that paying debts over long periods of time is nothing new or bad. We just finished paying off WWI debt. Our current government debt would be paid back somewhere around 2250 at the earliest. If Greece has to pay for hundreds of years then that is no different than any other country.

If Greece wants to default, let them default and suffer the consequences. But all of this "I spent more than I earned for over twenty years, lied to you to get into your economic union, now give me more money while I maybe might possibly change. Btw, I am going to rehire the same people who got us in this mess in the first place and cosy up to Russia" is not fooling me. I can't imagine it fooling Merkel either.

[mr friendly guy]

Silly question, but if the UK only paid off its WWII debt in the mid 2000s, and Germany paid off its WWI debt in 2015, why the hell can Europe (not counting the IMF here) just say, let Greece pay off the debt in like decades.

[Jub]

It sucks that people are going to have to suffer for this, but no sovereign nation should ever expect a bail out. If they do they should be ready to cede at least some of their independence in exchange for it because at that point they clearly aren't fit to run things on their own. In this case I agree that Germany should be well with her rights to say you do this my way or you look elsewhere for help. Especially seeing that Greece lied their asses off to get into the EU at all and had pissed away their own economy long before anybody was asking for austerity measures.

For the rest, did anybody put a gun to Spain's head and force them to ride a massive housing bubble when they should have been able to predict where it would lead? Is anybody stopping Italy from enacting proper economic reform to get their economy back on track?

[Thanas]

Silly question, but if the UK only paid off its WWII debt in the mid 2000s, and Germany paid off its WWI debt in 2015, why the hell can Europe (not counting the IMF here) just say, let Greece pay off the debt in like decades.

We are already doing that. Greece doesn't even have to pay any interest until 2020 and doesn't even have to start paying the first installments until 2035. So due to inflation that already is a money transfer and very generous conditions to boot.

[J]

Silly question, but if the UK only paid off its WWII debt in the mid 2000s, and Germany paid off its WWI debt in 2015, why the hell can Europe (not counting the IMF here) just say, let Greece pay off the debt in like decades.

Except, they didn't. Or rather, some of those debts were forgiven while others were paid off by refinancing those debts with new loans at lower rates.

[Vendetta]

I think it's worth noting that Austerity economics comes from basically the same place as libertarian economics. It's an ideological belief not an empirically supported and functional model, and any evidence that it doesn't work and produces the direct opposite of its stated outcome is generally met with the complaint that you just weren't doing it enough.

It works quite well if you got competent people. Otherwise most of northern Europe would not work, when it is the exact opposite.

Except it actually doesn't.

I mean look at the real vs. projected effects of austerity economics on the Greek economy.

It was predicted (by the ECB and the people who set up the original bailout deal in the European Commission) that there would be a short recession followed by recovery, but cutting internal spending to achieve the imposed 4.5% primary surplus torpedoed the Greek economy into an ongoing depression with internal deflation (which since currency couldn't deflate was achieved by falling wages and employment) generating the situation we are in today where Greece is even less able to deal with its debts (which have balooned as a portion of GDP because GDP itself shrank).

It's not just Greece though, Tory austerity in the UK has perpetuated the economic slump far longer than would have been the case otherwise and has ensured that the British economy recovered far less well than, for instance, the US where economic stimulus was practised from the 2008 crash (indeed recovery is basically only now beginning to happen).

Austerity isn't done by competent people, practising austerity economics in the face of recession where it is inevitably going to worsen the outcome is a direct sign of incompetence in the first place.

[BabelHuber]

Again, I doubt the AfD taking over would be bad for Greece. They would give Greece more control over their currency, which is what they need, but in a gentle enough way that it doesn't suddenly cause massive problems of another kind. Whether they'd be good for the rest of the EU I'm not sure.

The problem for Greece is that it has no industry to speak of. AFAIK they even are a net importer of olive oil.

So if they would leave the Euro, how would they pay for imports? Which importer would accept Drachme for oil or medicine? How would they even pay for mundane stuff like smartphones or clothes?

I think that Greece would basically become a third world country in this case.

[BabelHuber]

Austerity isn't done by competent people, practising austerity economics in the face of recession where it is inevitably going to worsen the outcome is a direct sign of incompetence in the first place.

You do know that Greece went bancrupt in 2010 because it simply wasted the money it received by the European Union from 1981 to 2010, don't you?

So we are talking about a country with an economy which depends on the flow of free money from abroad. A country which has no industry to speak of.

And you want to cure this by spending even more money?

The problem I have with Krugman is that he ignores one major fact: Keynesian programs can only work in a closed economy.

When John Maynard Keynes invented his theory in the 1920ies, unemployed workers were actually starving. Also, international trade was at a low after WW1.

Under such circumstances, his theory can actually work:
- First you employ some of the unemployed (e.g. by building infrastructure)
- Then they start to buy more food again, perhaps they look for an apartment, buy some clothes etc.
- This money-spending then leads to more revenue and hence more employment in other areas

As a consequence, the economy as a whole starts to grow again.

Of course this does not work when the money is used to buy imported goods. Imported goods of course have also an impact on unemployment, but a much smaller one than domestic goods (you still have to transport these products etc., but no factories are founded, no new component suppliers are needed etc.).

A prime example is an economy where you lower the taxes to increase spending, but then most of this money is spend abroad for vacations. This does not help the economy much (except from travel agencies of course, but these won't generate the amount of new jobs needed).

So if you would pour money into the Greece of today, the Greek population would mostly buy foreign products with the money. The effect on the internal economy would be small.

Hence a much more sensible way of getting Greece on track is to create an environment which attracts investors to strengthen their basically non-existing industrial base. But I don't see this happening, a prerequisite would be to reform the Greek bureaucracy, tax collection etc.

[jwl]

Again, I doubt the AfD taking over would be bad for Greece. They would give Greece more control over their currency, which is what they need, but in a gentle enough way that it doesn't suddenly cause massive problems of another kind. Whether they'd be good for the rest of the EU I'm not sure.

The problem for Greece is that it has no industry to speak of. AFAIK they even are a net importer of olive oil.

So if they would leave the Euro, how would they pay for imports? Which importer would accept Drachme for oil or medicine? How would they even pay for mundane stuff like smartphones or clothes?

I think that Greece would basically become a third world country in this case.

Because under the AfD plan they won't be using the drachma, they'll be using the southern euro. And I think the plan is for them to use a mix of currencies for different purposes at the start, before fully moving on to the southern euro. The long term plan I think is to split the euro further, but this would happen gradually in smaller steps to prevent stuff like that happening.

[Broomstick]

Voters can change their minds.

The British voters will never vote for a European nationstate within the next twenty years.

Then tell the British to fuck off. The US did it way back in 1776, after all. You can have an EU without the UK, right?

Also, last I heard the UK still had its own currency and not the euro even if they are part of the EU. This is about countries that are all using the same currency.

I don't know, maybe there's a form of union between the current EU and a true nationstate that is tighter and might be more beneficial to all. The EU is an experiment, after all, just like every other new form of government or alliance. It is a bit arrogant to think you'll get it exactly right from the very first.

I would also hope that if the EU does move to a tighter union they'll be able to avoid the past mistakes of other nations. It's my opinion that European nations giving a bit more of a damn about each other on all levels would be of benefit.

All of that is true, but none of it will happen. Any attempt to form this middle form has already been rejected in Britain before talks even got underway. Instead, we see the opposite - nations like Britain (and to a lesser extent Greece) are trying to limit the EU to a simple economic customs union, with less, not more, power going to Brussels.

If Britain doesn't want to go all in tell them to fuck off. Right now the eurozone is hurting people, not helping. So change it. Either loosen the union or tighten it or whatever is needed to fix the problem, and those who don't want to play can take their marbles and go home.

Here is the German worry - Germany cannot handle all that debt and taking on the debt of others would destroy all the process made from 1990-2014, process which a lot of sacrifices were made for. This goes double when some nations have done little to actually reform.

WHY is Germany throwing good money after bad? I can't wrap my head around that. WHY did you loan money to a bad risk? And having done that, why are you crying because the loan went bad? You took a risk and it turned out badly, that's why it's a risk.

It's like the payday loan companies we have here, that keep loaning more and more money to people circling the drain until there is no way the debt can possibly be repaid, then crying when the debtors declare bankruptcy. Greece IS bankrupt at this point. Accept that any more money given will be a “gift” in that it will never be repaid or stop giving out money!

The only way this would work and Germany would even consider paying it is if Germany would get the powers to unilaterally enforce reforms. But that will not happen, so this plan will not happen.

In other words, Germany annexes Greece. Of course the Greeks won't agree to that.

And frankly, considering we get all the shit for even helping to prevent a EU collapse in the first place, we might just as well embrace the villain role. We are going to get shit on either way, so at least let's not burn money on the streets.

MAYBE the EU should have been allowed to collapse if it was not workable. This looks like it just extended the pain and likely will make an impending collapse worse. Or do you think making the Greeks debt-slaves to Germany is a viable outcome?

Oh, and that whole thing about being the villain either way? Welcome to my world. That's how the US is viewed, after all, so sorry, doesn't get much sympathy from this side of the pond. If you want to play in international politics accept that sometimes it doesn't work at all the way you intend.

I really hope this bullshit is not what he is trying to push, because nobody is falling for it. This bullshit is nothing but insulting to Germany. Every German knows that in three months Greece is going to have to ask for more money either way.

THEN DON'T GIVE THEM ANY MORE MONEY.

Part of the problem here is Greece being loaned more money than they can pay back. Doing that again will only make the problem worse.

And the last paragraph is a joke, considering his first step was to shore up the utterly corrupt greece state power industry, which was one of the main culprits of the crisis in the first place.

So... what are you saying, Greece should let the lights go out?

Oh yes, so the solution seems to be "who cares, let the Germans pay for it", as expected. This will not happen.

Maybe Germany shouldn't have engaged in predatory lending, which is what it looks like from here. Honestly, what was Germany thinking, loaning that much money to countries with sinking economies?

I shall also note that paying debts over long periods of time is nothing new or bad. We just finished paying off WWI debt. Our current government debt would be paid back somewhere around 2250 at the earliest. If Greece has to pay for hundreds of years then that is no different than any other country.

It's not just the time span, it's also the size of the payments. If the result of the loan terms are such that the Greeks are no longer able to shelter, clothe, or feed themselves it doesn't matter how many hundreds of years you allow, you've made it impossible to make a living today. Scold all you want, that's not a situation that will remain stable for long.

Of course I'm biased because I live in an ass-backward country where a creditor is forbidden to take your home, your clothing, and the food in your pantry to repay a debt.

No one put a gun to Germany's head and forced them to loan money to Greece. Germany chose to do that. If you don't like that your government did that then do what you urge the Greeks to do - vote those responsible out of office.

If Greece wants to default, let them default and suffer the consequences.

Maybe that should have been done 5 years ago.

But all of this "I spent more than I earned for over twenty years, lied to you to get into your economic union, now give me more money while I maybe might possibly change. Btw, I am going to rehire the same people who got us in this mess in the first place and cosy up to Russia" is not fooling me. I can't imagine it fooling Merkel either.

So stop enabling them.

And if they leave the EU and cozy up to Russia why would you care? They'd no longer be your problem, right? Let the Russian pour rubles into the hole and let the Greeks live with the consequences.

Germany decided making high risk loans to preserve the EU was more important than letting Greece live with the consequences of its decisions. Turns out that wasn't a great decision, boo-hoo-hoo. Yeah, we get it, you want your money back. Of course you do. So cut 'em loose, what do you care, right? It's not your country, right?

Or, maybe, act like you're in a union and try to do something to actually FIX the problems instead of continuing the same old squeeze until Greece explodes. If the nations of the EU actually want to be in a union for their mutual benefit then fucking act like it. Develop a "Marshall Plan" for Greece that's more than simply writing a check. My nation was still burying its dead when, instead of demanding reparations, we tried to rebuild the economy of a war-torn Europe. We still haven't got all of our loaned money back from that but you know what? We don't fucking care. Well, sure, it was damned nice of the Finns and (eventually) the UK) to pay us back but we didn't put the squeeze on people because we weren't doing it for profit, we were doing it because it was the right thing to do and we knew that a self-supporting, prosperous Europe was vital to world peace. In other words, our own fucking selfish self-interest - stabilizing Europe was good for us. And we aren't even fucking part of Europe.

Does Germany care about money or about prosperity? They aren't quite the same thing. If all you care about it money then cut the Greeks free - they will go into free-fall, become a third world country, and someone else (>sigh<, probably us) will be along to bail them out (if not the US, then yes, the Russians. Maybe China. Who knows?) or find a way to exploit them. Or maybe not, in which case you get to live next door to a fermenting cesspit. Or does Germany care about Europe? In which case stop loaning the Greeks money and try to find another way to get them back on their feet so they CAN pay you back, whether on time or late.

What should you do instead of money? Fuck, I don't know - maybe open some German factories there so you provide JOBS for the unemployed, who will then pay taxes that will then go towards loan payments. Hey, there's an idea - in a country with high unemployment give them jobs instead of a loan.

[BabelHuber]

Because under the AfD plan they won't be using the drachma, they'll be using the southern euro. And I think the plan is for them to use a mix of currencies for different purposes at the start, before fully moving on to the southern euro. The long term plan I think is to split the euro further, but this would happen gradually in smaller steps to prevent stuff like that happening.

You are right here, but then it begs the question how much stronger a "southern Euro" will be.

Before we had the Euro, the European central banks were independent on paper, but they also had to take reality into account. I can remember that back then, when the Bundesbank changed the key interest rate, more often than not the other "independent" European central banks had to follow suit.

So for Mitterand the Euro was seen as a way to limit the influence of the Bundesbank during the German reunification. Helmut Kohl basically gave up the DM to get the reunification back then.

So I have my doubts that a split into a "southern Euro" and a "northern Euro" would be a big benefit for the south. For the north, it surely would result in a more stable currency, albeit at the cost of a higher unemployment rate, at least initially.

[Thanas]

Then tell the British to fuck off. The US did it way back in 1776, after all. You can have an EU without the UK, right?

You are under the mistaken impression that it is easy to get rid of a EU member.

Also, last I heard the UK still had its own currency and not the euro even if they are part of the EU. This is about countries that are all using the same currency.

Yes, because just having a different EU for one and another EU for others is so easy and logical.

If Britain doesn't want to go all in tell them to fuck off. Right now the eurozone is hurting people, not helping. So change it. Either loosen the union or tighten it or whatever is needed to fix the problem, and those who don't want to play can take their marbles and go home.

See above re: unrealistic expressions.

WHY is Germany throwing good money after bad? I can't wrap my head around that. WHY did you loan money to a bad risk? And having done that, why are you crying because the loan went bad? You took a risk and it turned out badly, that's why it's a risk.

Because the alternative was having the Euro collapse with several nations declaring bankruptcy, or have you forgotten what went on two years ago?

MAYBE the EU should have been allowed to collapse if it was not workable. This looks like it just extended the pain and likely will make an impending collapse worse. Or do you think making the Greeks debt-slaves to Germany is a viable outcome?

You're shrieking again over how the EU should be allowed to collapse but then blame the EU for not getting things done. You can't have both ways.

Oh, and that whole thing about being the villain either way? Welcome to my world. That's how the US is viewed, after all, so sorry, doesn't get much sympathy from this side of the pond. If you want to play in international politics accept that sometimes it doesn't work at all the way you intend.

LOL at the false equivalency between the shit the US does and Europe.

THEN DON'T GIVE THEM ANY MORE MONEY.

I hear using caps lock must mean you are a responsible and knowledgeable adult.

And the last paragraph is a joke, considering his first step was to shore up the utterly corrupt greece state power industry, which was one of the main culprits of the crisis in the first place.

So... what are you saying, Greece should let the lights go out?

No, they should go ahead with the plans to de-monopolize it and have competition and stop using it as a retirement package for politicians. You know, what was agreed to in the first place.

Maybe Germany shouldn't have engaged in predatory lending, which is what it looks like from here. Honestly, what was Germany thinking, loaning that much money to countries with sinking economies?

Because the alternative was a Euro collapse, which the US begged us to prevent, btw.

It's not just the time span, it's also the size of the payments. If the result of the loan terms are such that the Greeks are no longer able to shelter, clothe, or feed themselves it doesn't matter

We are far away from that point.

Of course I'm biased because I live in an ass-backward country where a creditor is forbidden to take your home, your clothing, and the food in your pantry to repay a debt.

Your navel-gazing combined with REAL TALK while thinking that there are no similar protections over here in Germany is about as interesting as it is ever going to be.

No one put a gun to Germany's head and forced them to loan money to Greece.

You mean, Obama and Sarkozy did not pressure Merkel to the point of tears? I must be imagining things then.

You really should read this series

To the astonishment of almost everyone in the room, Angela Merkel began to cry.

“Das ist nicht fair.” That is not fair, the German chancellor said angrily, tears welling in her eyes. “Ich bringe mich nicht selbst um.” I am not going to commit suicide.

For those who witnessed the breakdown in a small conference room in the French seaside resort of Cannes, it was shocking enough to watch Europe’s most powerful and emotionally controlled leader brought to tears.

But the scene was even more remarkable, those present said, for the two objects of her ire: the man sitting next to her, French President Nicolas Sarkozy, and the other across the table, US President Barack Obama.

It would be the low point in a brutal, recrimination-filled night, one many participants would recall as the nadir of the three-year eurozone crisis. Mr Sarkozy had hoped his leadership of the Group of 20 summit would cement his standing on the global stage en route to re-election. Instead, everything was falling apart.

Greece was imploding politically; Italy, a country too big to bail out, appeared just days away from being cut off from global financial markets; and Ms Merkel, try as Mr Sarkozy and Mr Obama might, could not be convinced to increase German contributions to the eurozone’s “firewall” – the “big bazooka” or “wall of money” they believed had to grow dramatically to fend off attacks by panicking bond traders.

Instead, a cornered Ms Merkel threw the French and American criticism back in their faces. If Mr Sarkozy or Mr Obama did not like the way her government ran, they had only themselves to blame. After all, it was their allied militaries that had “imposed” the German constitution on a defeated wartime foe six decades earlier.

“It was the point where clearly the eurozone as we know it could have exploded,” said a member of the French delegation at Cannes. “It was the feeling [that with] the contagion, at this point, you were on the brink of explosion.”

[...]
For months the Obama administration had been watching the eurozone crisis with frustration and mounting concern. Tim Geithner, the US Treasury secretary, and his team in Washington had tried to impart lessons learnt during their banking crisis – namely that only a huge wall of public money would calm panicked investors. Despite repeated high-profile European tours by Mr Geithner, and more discreet visits by his deputies, the Americans felt eurozone leaders still fell short.

In some quarters, the White House was suspected of playing politics. “The Americans had only one objective, which is fully understandable,” said one European who dealt directly with Mr Geithner. “The eurozone has to be saved because otherwise we’ll enter into a depression in Europe, and this will impact the economy of the US and my re-election.” US denials were not entirely believed in Europe.

The awkwardness was epitomised by Washington’s relationship with Ms Merkel, who occasionally found US intervention improper and unwelcome. Berlin had pushed for the Washington-based IMF to be part of the crisis response. But on occasions when Mr Obama weighed in, Ms Merkel would tell colleagues that European decisions should be made by Europeans.

Although the two leaders appear similarly cerebral and unemotional, people close to Ms Merkel say their styles are fundamentally different. Mr Obama can be professorial and lecturing, something Ms Merkel finds off-putting. Ms Merkel shuns such academic musings and is more short-term and tactical in her decision-making.
[...]
But Mr Obama opened the session with something different. He had a new plan to increase the size of the eurozone firewall – an idea that put Germany front and centre.
[...]

As soon as Angela Merkel was handed the piece of paper Barack Obama had just passed around the table, her guard went up. “What is this?” the German chancellor asked. “I haven’t seen this before.”

The US president characterised the paper as talking points he and his seven European counterparts in the room could rally around when the Group of 20 summit ended that afternoon in Los Cabos, Mexico.

Most of the items were concise recitations of what had been formally agreed. But the last point was something new, say officials who read the sheet: a full-scale endorsement of a plan that had only been informally shopped around the summit by the man sitting next to Ms Merkel – Mario Monti, the Italian prime minister.

The scheme, which Mr Monti and his closest advisers had been working on for months before the June 2012 summit, called for the European Central Bank to protect eurozone countries when they came under attack from financial markets by automatically buying their bonds.

Only “virtuous” countries that obeyed the EU’s budget rules would be eligible. But the Monti plan would ensure borrowing costs, which for Italy and Spain were again rising to dangerous levels, would be capped.

“We wanted to develop something that would not be dangerous for the control of the money supply in Europe, would not be offensive to German purism, would help concretely moderate the [bond] spreads, but could be earned only as a reward for virtue,” Mr Monti told the Financial Times.

As she read the page, Ms Merkel’s anger rose. “She was absolutely livid,” said another person in the room. Although her objections were procedural, it was clear the Italian and US delegations had conspired to get her to endorse an ECB bond-buying scheme that would have fundamentally changed the way the eurozone fought the crisis.

Washington had been advocating an ECB-backed “firewall” almost since the start of the crisis, arguing that the Federal Reserve had proved indispensable to quelling the US banking panic. Mr Monti was viewed by the White House as its strongest ally, particularly after Nicolas Sarkozy, the French president, lost a re-election bid a month earlier.

Mr Obama pushed Ms Merkel to embrace the understated Italian. In an intimate meeting over a picnic table on the patio of his Aspen Cabin at Camp David only weeks before Los Cabos, Mr Obama told her: “You need to work with him.”

In the face of Ms Merkel’s angry objections in Los Cabos, however, Mr Obama turned to his summit sherpa, White House international economics chief Michael Froman, to ask whether he had failed to share it with other delegations – a gesture many took as a graceful way to end the stand-off. When Mr Froman acknowledged the oversight, the discussion ended.

At the time, the bust-up appeared to be the latest in a series of failed efforts by Mr Obama and EU co-conspirators to push Ms Merkel into backing a larger firewall to shield besieged eurozone countries. The year before, he had teamed up with Mr Sarkozy at the G20 in Cannes; this time it was Mr Monti.

In retrospect, it marked the beginning of the final turning point in the crisis. Three months after the testy exchange, Ms Merkel would give her tacit endorsement to an equally ambitious bond-buying scheme designed by another Italian technocrat, ECB president Mario Draghi. This would end the existential crisis that had faced the euro for more than three years.

Oh, and:
https://euobserver.com/foreign/30054

US President Barack Obama telephoned German Chancellor Angela Merkel over the weekend to persuade her to agree to the €750 billion bailout package for the eurozone.

Mr Obama made two phone calls to German Chancellor Angela Merkel in the last three days and also spoke to French President Nicolas Sarkozy as EU leaders and then their finance ministers were struggling to pin down the deal, White House spokesman Robert Gibbs said Monday.

"The president and his economic team have been following and engaged in this situation for quite some time," he said, noting Mr Obama had spoken about the need for "strong action" to give confidence to the markets. "We are pleased thus far with that result," he added.

According to the New York Times, Mr Obama was on the phone with the German chancellor on Friday "offering urgent advice" and "some not so subtle prodding" that Europe needed an overwhelming rescue package of the sort Washington came up with in 2008.

"He was trying to convey that he knew these were politically difficult steps that the leaders there had to take, that he had gone through them as well. And that, from his experience, trying to get out ahead as much as possible was the right way to go," one senior administration official familiar with the conversation told the US newspaper.

Maybe that should have been done 5 years ago.

No, because then there no longer would have been a EU.

Or, maybe, act like you're in a union and try to do something to actually FIX the problems instead of continuing the same old squeeze until Greece explodes. If the nations of the EU actually want to be in a union for their mutual benefit then fucking act like it. Develop a "Marshall Plan" for Greece that's more than simply writing a check. My nation was still burying its dead when, instead of demanding reparations, we tried to rebuild the economy of a war-torn Europe. We still haven't got all of our loaned money back from that but you know what?

You will though, because Germany pays her debts instead of demanding they be cut. So your shrieking can end right there.

[J]

You will though, because Germany pays her debts instead of demanding they be cut. So your shrieking can end right there.

In what world does THREE debt defaults & restructurings in the 20th century constitute paying her debts?

[Thanas]

You will though, because Germany pays her debts instead of demanding they be cut. So your shrieking can end right there.

In what world does THREE debt defaults & restructurings in the 20th century constitute paying her debts?

She was shrieking about the Marshall Plan, learn to read. Also, it is more than disingenious to compare warfare and reparations to an economic crisis.
And furthermore, the Federal Republic of Germany has never defaulted on her debts.

[J]

Ah yes, the Marshall Plan. Many of those loans became grants following the restructuring of the 1953 London Debt Agreements. Which, by the way tied the interest rates on the remaining loans to a set percentage of German exports, specifically, Germany was NOT allowed to spend more than 5% of its export revenues on debt repayments.

[K. A. Pital]

It's not just the time span, it's also the size of the payments. If the result of the loan terms are such that the Greeks are no longer able to shelter, clothe, or feed themselves it doesn't matter

We are far away from that point.

War is peace and black is white, right?

[K. A. Pital]

Hence a much more sensible way of getting Greece on track is to create an environment which attracts investors to strengthen their basically non-existing industrial base. But I don't see this happening, a prerequisite would be to reform the Greek bureaucracy, tax collection etc.

Idiot, how are their goods going to become competitive if they are not controlling their exchange rates? There's only one other way possible: wage depression. But guess what, foreign goods' prices will not go down, as they are denominated in the Euros and set by companies that make them in other nations. And who got Greece and the rest of the Europeriphery deindustrialized?

The neoliberal charlatans who had been running the show since the 1980s, and especially in the 2000s.

[Jub]

It's not just the time span, it's also the size of the payments. If the result of the loan terms are such that the Greeks are no longer able to shelter, clothe, or feed themselves it doesn't matter

We are far away from that point.

War is peace and black is white, right?

Given how dire the situation is why haven't government officials already slashed their own wages and put the money back into the community? The answer is because those at the top in Greece are still rotten. They're cutting these basic programs while maintaining a military and instituting conscription, DEI still hasn't been cleaned out, and I'd be willing to bet you'd find more juicy pork if you looked into nearly an infrastructure project. Sure, austerity isn't doing a great deal of good, but don't pretend that the Greek people need to be starving when cuts can be properly made elsewhere.

Idiot, how are their goods going to become competitive if they are not controlling their exchange rates? There's only one other way possible: wage depression. But guess what, foreign goods' prices will not go down, as they are denominated in the Euros and set by companies that make them in other nations. And who got Greece and the rest of the Europeriphery deindustrialized?

The neoliberal charlatans who had been running the show since the 1980s, and especially in the 2000s.

So what? All their friends were stupid enough to jump off a bridge and Greece was dumb enough to not only follow them, but to use accounting tricks to lie about having done so. The greeks have nobody but those they voted for and themselves to blame for letting things get this bad. They lied to get into the Eurozone so why should anybody let them off the hook now that they've essentially stolen large sums of money from the EU and Germany especially?

[jwl]

Given how dire the situation is why haven't government officials already slashed their own wages and put the money back into the community? The answer is because those at the top in Greece are still rotten. They're cutting these basic programs while maintaining a military and instituting conscription, DEI still hasn't been cleaned out, and I'd be willing to bet you'd find more juicy pork if you looked into nearly an infrastructure project. Sure, austerity isn't doing a great deal of good, but don't pretend that the Greek people need to be starving when cuts can be properly made elsewhere.

Slashing politicians wages is usually a symbolic or political move that makes little difference to the national finances, unless they are being paid an absurdly high amount of money. If they have a parliament of 300 and paid them a million pounds a year each, that's 300 million pounds a year. Even that shouldn't cause a significant dent in the countries finances.

Still, it might a an idea at the right time. It restores some government trust. But if I were them I'd leave that for when they really look like they need a boosting, and for syriza in particular I don't think they need that currently.

[Jub]

Slashing politicians wages is usually a symbolic or political move that makes little difference to the national finances, unless they are being paid an absurdly high amount of money. If they have a parliament of 300 and paid them a million pounds a year each, that's 300 million pounds a year. Even that shouldn't cause a significant dent in the countries finances.

Still, it might a an idea at the right time. It restores some government trust. But if I were them I'd leave that for when they really look like they need a boosting, and for syriza in particular I don't think they need that currently.

It won't make a dent overall, but lunch programs for the worst hit by the crisis also cost very little and the Greek government has been denying that this is even a problem rather than fixing it. Frankly crying that austerity is causing the Greeks to starve is a cop out, the Greeks have the money to feed their people if they want to do it.

[Crown]

Can I now, officially post this;



Because quite frankly the level of farce, obfuscation and repeatedly debunked myths (if not out right lies) has reached a Basil Fawlty level of farce.

Given how dire the situation is why haven't government officials already slashed their own wages and put the money back into the community? The answer is because those at the top in Greece are still rotten.

Well that was a completely pointless news flash that no one needed, hey do you think maybe the reason we're all talking about this SYRIZA thing is because for the FIRST TIME since post Junta era Greece is being governed by a party that isn't ND or PASOK? And given what I posted on page 3 (Yanis Varoufakis (current Finance Misister), 'We are going to destroy the Greek oligarchy system') you should be dancing on the fucking streets that SYRIZA just got elected.

They're cutting these basic programs while maintaining a military and instituting conscription, DEI still hasn't been cleaned out, and I'd be willing to bet you'd find more juicy pork if you looked into nearly an infrastructure project. Sure, austerity isn't doing a great deal of good, but don't pretend that the Greek people need to be starving when cuts can be properly made elsewhere.

List them and show us the savings, otherwise this is nothing but more bullshit. J did a basic breakdown if what would be required for Greece to pay back the current loans (magic), I still haven't seen anyone contradict her.

The neoliberal charlatans who had been running the show since the 1980s, and especially in the 2000s.

So what? All their friends were stupid enough to jump off a bridge and Greece was dumb enough to not only follow them, but to use accounting tricks to lie about having done so. The greeks have nobody but those they voted for and themselves to blame for letting things get this bad. They lied to get into the Eurozone so why should anybody let them off the hook now that they've essentially stolen large sums of money from the EU and Germany especially?

You do realise that you're making the worst possible argument in the history of arguments? You do realise that the Greece lying to get into the EU meme has been debunked (source)? You do realise that even if you were right that's not an argument to continue a failed policy that has not a snowballs chance in hell of working, right? You do realise that countries defaulting isn't some kind of crime punishable by indentured servitude of their populations, right? You do realise that blaming this on sheeple who took advantage of low interest loans over predatory lenders is like blaming obese kids for eating sweets over their parents for buying them, right?