Syriza wins Greece election

[Fingolfin_Noldor]

Not in this thread, but it was discussed to death in all previous ones. The big problem there is that for your point to have any meaning, there must be a willingness to actually do reforms in those countries. currently there is NO indication of anything of the kind. Thus zero incentive to play along with them.

Let them demonstrate they are serious about getting their shit together, then there might be some consideration. And before anyone starts accusing me of not giving a shit, Finland is going worryingly far in the same direction because we have a number of structural problems that there has not been any willingness to address. If we get in trouble and don't fix our shit and show no willingness to do so, I don't expect anyone to help us out, so why the fuck should Greece be a special case in this respect?

Greece is such a basket case but it does not have control over the most important lever, which is devaluation of the currency? Which has rendered its country's economy utterly uncompetitive?

[Simon_Jester]

Collective refusal to face structural problems seems to be endemic throughout the developed world. It's like, we've developed all sorts of wonderful technology and tools. And most of the really obvious problems (famine, plagues, illiteracy, reduction of minorities to second-class citizenship, etc.) are solved. What's left are these weird, tangled-up political/economic issues where no one with the power to do anything gains any political incentive to fix them, even in a democracy. Reformers pop up, and they aren't even suppressed- they're just sort of ignored by a broad consensus to engage in policies that will be obviously counterproductive, but not so counterproductive that they cause the system to crash and burn quickly.

The details vary- the problems Japan is failing to face are different than the problems the US is failing to face, which are in turn different than the problems Greece is failing to face. And different nations experience this to different degrees (Germany, so far, seems to me to have been largely untouched by this, for instance... though that may be an illusion born of lack of detail knowledge on my end).

But the pattern seems fairly persistent.

I don't have an answer for this, but I do think it worthwhile to at least start from the premise that nations should cooperate to try and untangle these messes, rather than viewing everything as a zero sum game.

If the EU turns out to be successful in perpetuating the rather good age Europe is enjoying, I think it'll be because they turn out to be better at fixing endemic structural problems than other developed nations like the US...

And the only unique tool they have to do it with, so far as I can tell, is strong international cooperation and solidarity.

On the other hand, if the EU falls apart, it's likely to be because various nations are either overcome by their structural problems, or are forced to break away from the EU system in order to deal with them. Which is the situation Greece may face if the EU doesn't support it.

[Tribble]

But that's not important, and neither is it the point of the graphs I posted.

Then what is your point? Make it, don't bore me.

Rightly or wrongly, Syriza was democratically elected by the people of Greece with a mandate to renegotiate the austerity measures. The EU basically has 3 options:

1. Ignore the election results and try to maintain the status quo.
2. Renegotiate.
3. Kick Greece out of the Eurozone.

Which one do you think is the most likely outcome?

You are attempting to frame the debate in a manner that is quite wrong. The EU doesn't have to do anything. The Greeks will be the ones who will have to initiate that process.

Which they have already done seeing as they just elected a government with a mandate to renegotiate the austerity measures. The EU response to that is the next step of the process, and the response so far seems to be #1: ignore the election results and tell the Greeks that renegotiation is verboten. While that may have worked in the past, something tells me it's not going to work so well this time.

[Thanas]

What pressure do the Greeks have that they can apply on the EU in your opinion?

[jwl]

I have a better idea: let's pull the plug on the fucking EU and watch the corrupt oligarchic suprastate fall into a spiral of depression and suffering. Let's have the USA, Russia, France & Germany and all other major powers who dick around with smaller nations collapse and suffer endlessly.

No, no, no, don't you know anything? Once the EU is dismantled, Nigel Farage and Marine le Pen will lead Europe into embracing right-wing Christian Conservatism, and it'll become the most prosperous region on Earth once again! Some guy in my local pub told me that in-between episodes of foaming at the mouth, so it must be true, right?

More seriously, it looks like the result of this election may be finally causing Cameron to realize that the people aren't quite buying into his pleas of "Oh well, none of this is my fault, it's all on the guys who were in power before me."

Nigel Farage and Marine le pen are in some way opposites of each other: farage wants to destroy the EU because it puts trade barriers up, marine le pen wants to leave the EU because it won't let france put enough trade barriers up. Le pen in that sense isn't really right-wing conservative.

Anyway, on the topic of syriza: apparently they have already started trying to pass anti-austerity bills. So they seem to be ignoring the EU's pleas for austerity before they even start negotiations.

[Tribble]

What pressure do the Greeks have that they can apply on the EU in your opinion?

Apart from the threat of defaulting and leaving the Eurozone?

But that's not the point. Are you suggesting that the EU can simply ignore the results of the election? Do you really believe that the Greek public will just fall in line if all the EU says is "negotiations are verboten, obey us or else"? Do you really think that the Greek public will tolerate being run by Syriza if it becomes another EU mouthpiece?

[The Duchess of Zeon]

Threaten to start printing Euros without authorisation to pay the debt, forcing the rest of the EU to kick them out without agreement and against their will (so that SYRIZA's popularity in Greece is unaffected) or they just pay off their debt with the Euros they printed.

[Thanas]

Threaten to start printing Euros without authorisation to pay the debt, forcing the rest of the EU to kick them out without agreement and against their will (so that SYRIZA's popularity in Greece is unaffected) or they just pay off their debt with the Euros they printed.

They can't print Euros as they get their money from the ECB.

[Crown]

A) You are the fucking asshole who compared the EU to fucking Nazis.
B) Nobody would be fine with Greece being scuttled. I was responding to a hypothetical on what could happen if Greece decides to break treaties and the EU decides to play rough. Do I want it to happen? No.

A) I did nothing of the sort.
B) Thank you for clarifying because I honestly couldn't tell with the tone of your posts in this thread.

No. Those are not the only options. Greek society needs a major reforms that needs to finally touch special interests. If the debt is just written off what incentive is there for further reform?

Careful, you are turning into those old Commies who sit around saying 'if only Communism was implemented right'. The truth is Greece did everything it was asked to do, the problem was it was sold a fantasy to begin with.

Paul Krugman: Syriza should ignore calls to be responsible

The troika was peddling an economic fantasy: Greeks have paid the price

Alexis Tsipras, leader of the left-wing Syriza coalition, has become prime minister of Greece. He is the first European leader elected on an explicit promise to challenge the austerity policies that have prevailed since 2010. And there will be many people warning him to abandon that promise, to behave “responsibly”.

So how has that responsibility thing worked out so far?

To understand the political earthquake in Greece, it helps to look at Greece’s May 2010 “standby arrangement” with the International Monetary Fund, under which the so-called troika – the IMF, the European Central Bank and the European Commission – extended loans to the country in return for a combination of austerity and reform. It’s a remarkable document, in the worst way. The troika, while pretending to be hardheaded and realistic, was peddling an economic fantasy. And the Greek people have been paying the price for those elite delusions.

False assumptions

The economic projections that accompanied the standby arrangement assumed that Greece could impose harsh austerity with little effect on growth and employment. Greece was in recession when the deal was reached, but the projections assumed this downturn would end soon – that there would be only a small contraction in 2011, and that, by 2012, Greece would be recovering. Unemployment, the projections conceded, would rise substantially, from 9.4 per cent in 2009 to almost 15 per cent in 2012, but would then begin coming down fairly quickly.

What actually transpired was an economic and human nightmare. Far from ending in 2011, the Greek recession gathered momentum. Greece didn’t hit the bottom until 2014 and, by that point, it had experienced a full-fledged depression, with overall unemployment rising to 28 per cent and youth unemployment rising to almost 60 per cent. And the recovery now under way is barely visible, offering no prospect of pre-crisis living standards.

What went wrong? I fairly often encounter assertions to the effect that Greece didn’t carry through on its promises, that it failed to deliver promised spending cuts. Nothing could be further from the truth. In reality, Greece imposed savage cuts in public services, wages of government workers and social benefits. Public spending was cut much more than the programme envisaged, and it’s about 20 per cent lower than it was in 2010.

Yet Greek debt troubles are if anything worse than before the programme. One reason is the economic plunge has reduced revenues: the Greek government is collecting a substantially higher share of gross domestic product in taxes, but GDP has fallen so quickly that overall tax take is down. Furthermore, the plunge in GDP has caused a key fiscal indicator, the ratio of debt to GDP, to keep rising even though debt growth has slowed and Greece received some modest debt relief in 2012.

Why were the original projections so wildly over-optimistic? As I said, because supposedly hardheaded officials were in reality engaged in fantasy economics. Both the European Commission and the European Central Bank decided to believe in the confidence fairy – that is, to claim that the direct job-destroying effects of spending cuts would be more than made up for by a surge in private-sector optimism. The IMF was more cautious, but it underestimated the damage of austerity.

And here’s the thing: if the troika had been truly realistic, it would have acknowledged it was demanding the impossible. Two years after the programme began, the IMF looked for historical examples where Greek-type programmes, attempts to pay down debt through austerity without major debt relief or inflation, had been successful. It didn’t find any.

Unable to lecture

So now that Tsipras has won, European officials would be well advised to skip the lectures calling on him to act responsibly and to go along with their programme. The fact is they have no credibility; the programme they imposed on Greece never made sense. It had no chance of working.

If anything, the problem with Syriza’s plans may be that they’re not radical enough. But it’s not clear what more any Greek government can do unless it’s prepared to abandon the euro, and the Greek public isn’t ready for that.

Still, in calling for a major change, Tsipras is being far more realistic than officials who want the beatings to continue until morale improves. The rest of Europe should give him a chance to end his country’s nightmare. – (New York Times)

But if you are genuine in that you want Greece to undertake major reforms, then rejoice! They've elected the correct people to do so;

Yanis Varoufakis (current Finance Misister), 'We are going to destroy the Greek oligarchy system'

Oh right, because you just happened to make a nazi reference in response to a German posting.

I made a WW2 reference. I can understand how it was offensive, but in my defence not even a week ago I spoke about how the 'Good Italian' meme was used to completely absolve the Italian Army of its barbarity during the Greek occupation and how it was all blamed on 'ze Germans' for political convenience. I assumed that since the two posts were so close together I wasn't making a Nazi specific reference.

What pressure do the Greeks have that they can apply on the EU in your opinion?

What pressure did the West Germans have in 1953?

[AMX]

Threaten to start printing Euros without authorisation to pay the debt, forcing the rest of the EU to kick them out without agreement and against their will (so that SYRIZA's popularity in Greece is unaffected) or they just pay off their debt with the Euros they printed.

They can't print Euros as they get their money from the ECB.

The Bank of Greece is one of the printers - it would certainly be possible for the Greek government to make them print more Euro notes than the ECB approves.
Whether they can print enough to make a dent in their debt, let alone threaten the stability of the Euro more than kicking them out would, that's a different question...

[Thanas]

Careful, you are turning into those old Commies who sit around saying 'if only Communism was implemented right'. The truth is Greece did everything it was asked to do, the problem was it was sold a fantasy to begin with.

Really? From what I stand they did precious little and what little they did they did under major bellyaching. The oligarchs are not touched, the inefficient and corrupt bureaucracy has not had a major reform and the tax system was not overhauled. All they did was slash salaries across the board, in short doing a quick fix but shying away from really touching entrenched interests.

But if you are genuine in that you want Greece to undertake major reforms, then rejoice!

I do, see my second post in this thread.

I made a WW2 reference. I can understand how it was offensive, but in my defence not even a week ago I spoke about how the 'Good Italian' meme was used to completely absolve the Italian Army of its barbarity during the Greek occupation and how it was all blamed on 'ze Germans' for political convenience. I assumed that since the two posts were so close together I wasn't making a Nazi specific reference.

Thank you for clarifying because I honestly couldn't tell with the tone of your posts in this thread.

What pressure did the West Germans have in 1953?

How about an occupying army and having every law approved by the allied overlords? Germany was under way more direct pressure and direct influence than Greece ever was, or do you see German tanks rumbling down the Akropolis and German colonels telling the Greek president what laws to enact and what not? The entire German society was reformed according to what the allies deemed just and proper.

[K. A. Pital]

Let them demonstrate they are serious about getting their shit together, then there might be some consideration. And before anyone starts accusing me of not giving a shit, Finland is going worryingly far in the same direction because we have a number of structural problems that there has not been any willingness to address. If we get in trouble and don't fix our shit and show no willingness to do so, I don't expect anyone to help us out, so why the fuck should Greece be a special case in this respect?

How are nations which were deindustrialized by the European Monetary Union are going to 'get their shit together'? How are the industrial exports of the Greeks and Spaniards supposed to be competitive when they have no currency of their own?

Nobody would be fine with Greece being scuttled.

You were perfectly fine when the periphery countries, Greece included, were deindustrialized for decades in the name of the single currency and success of the German industry. You were fine with the way Greece was sold el cheapo to Germans after their sovereign debt crisis. You don't strike me as being very trustworthy on this particular thing.

[Thanas]

You were perfectly fine when the periphery countries, Greece included, were deindustrialized for decades in the name of the single currency and success of the German industry. You were fine with the way Greece was sold el cheapo to Germans after their sovereign debt crisis. You don't strike me as being very trustworthy on this particular thing.

Greece was sold el cheapo to Germans, eh? I wonder how the fuck you can arrive at that conclusion with 80% of the entire Greek debt being financed by the EU, with Greece getting money for 0% interest from Germany etc. Yeah, we could not have found a better use for ~250 bn Euro. I mean, if something that exceeds the entire GDP of the country by well over 150% then I hesitate to ask what you consider to be a heavy price.

If the EU would not care about the Greeks then they would have chucked them out as soon as it became known that they had lied to gain entry. But that didn't happen.

[Crown]

Really? From what I stand they did precious little and what little they did they did under major bellyaching. The oligarchs are not touched,

That was never a condition of the bailouts and why would they be since only 11% of the bailout money went to the Greek state, the rest went to the bankers and oligarchs inside Greece and Germany and France. (source & source)

the inefficient and corrupt bureaucracy has not had a major reform and the tax system was not overhauled.

Both untrue.

All they did was slash salaries across the board, in short doing a quick fix but shying away from really touching entrenched interests.

They gutted spending, to the point where the economy contracted by 25% in four years.

Thank you for clarifying because I honestly couldn't tell with the tone of your posts in this thread.

If anything I'm more pissed off that the Finance Minister of a country who has benefited of debt cancellation twice, twice in the past century responded to a democratic election with 'debt forgiveness is off the table' rather than 'Glückwünsche' then anything else.

What pressure did the West Germans have in 1953?

How about an occupying army and having every law approved by the allied overlords? Germany was under way more direct pressure and direct influence than Greece ever was, or do you see German tanks rumbling down the Akropolis and German colonels telling the Greek president what laws to enact and what not? The entire German society was reformed according to what the allies deemed just and proper.

That doesn't answer my (admittedly very poorly worded question), I'll try again; you ask repeatedly what leverage does Greece have to force/ask for debt forgiveness, I'll ask you what leverage did West Germany have? And I'll cut the back-and-forth short; will your answer be the same; complete and utter submission?

[Thanas]

Well, so much for a good start

"We are going to demand debt reduction, and the money Germany owes us from World War II, including reparations"

[J]

B) Nobody would be fine with Greece being scuttled. I was responding to a hypothetical on what could happen if Greece decides to break treaties and the EU decides to play rough. Do I want it to happen? No.

So you say. Your actions say otherwise. For instance, this.
BBC link
Excerpt:

Germany has warned the new Greek government that it must live up to its commitments to its creditors.
German government spokesman Steffan Seibert said it was important for Greece to "take measures so that the economic recovery continues".
His comments were echoed by the head of the eurozone finance ministers' group.
The far-left Syriza party, which won Sunday's poll, wants to scrap austerity measures demanded

Most rational people can agree that the current debt obligations are impossible to fulfill, and furthermore, austerity isn't working, and cannot work. And yet Greece must live up to its commitments to its creditors and continue upon its failed path. You cannot insist that it does so and at the same time claim that you care for the future of Greece, the two are mutually exclusive.

[Thanas]

That was never a condition of the bailouts and why would they be since only 11% of the bailout money went to the Greek state, the rest went to the bankers and oligarchs inside Greece and Germany and France. (source & source)

It wasn't a condition because one could not force them to do so, but every German finance minister and report about Greece has talked about how the rich got off scot free.

Both untrue.

Please detail the changes made then and their effect.

If anything I'm more pissed off that the Finance Minister of a country who has benefited of debt cancellation twice, twice in the past century responded to a democratic election with 'debt forgiveness is off the table' rather than 'Glückwünsche' then anything else.

People always attempt to frame the debate before it happens. Heck, the new Greek PM did the same when he was campaigning. I mean, I could just as well say that I am pissed off that the PM of a nation which perpetuated fraud to get into the EU and which has received several bailouts has the gall to not stick to agreements. But I don't say that yet because he has not actually presented a list of demands.

That doesn't answer my (admittedly very poorly worded question), I'll try again; you ask repeatedly what leverage does Greece have to force/ask for debt forgiveness, I'll ask you what leverage did West Germany have? And I'll cut the back-and-forth short; will your answer be the same; complete and utter submission?

The German leverage was that they were needed in the war against communism that was starting to take shape. But that was of little help in the day-to-day stuff. I am not sure what you want here. My position is that Germany was utterly dependent on the goodwill of the allies and that they were very lucky that the USA did not follow through with the original plan of starving the Germans to death.

So you say. Your actions say otherwise. For instance, this.

I was unaware that my personal opinions were now public policy and that I have the power of the German finance ministry.

Most rational people can agree that the current debt obligations are impossible to fulfill, and furthermore, austerity isn't working, and cannot work. And yet Greece must live up to its commitments to its creditors and continue upon its failed path. You cannot insist that it does so and at the same time claim that you care for the future of Greece.

I don't see how "you don't have to start paying until 2035 and you get 0% interest on the debt until 2020" is impossible to fulfil, especially if it has been already signalled that pushing the repayment date further back might be possible.

What people are against is Germany and other countries who put their house in order through very painful reforms in the past suddenly are supposed to pay up and the debt then just is forgiven. In essence, this would completely scuttle the EMU as then every southern country would demand the same treatment. And Germany cannot pay for Italy, Greece and Spain at the same time.

[Crown]

Well, so much for a good start

"We are going to demand debt reduction, and the money Germany owes us from World War II, including reparations"

What are you so sensitive about; the he said this during an election campaign where his opposition was profiteering off the Charlie Hebdo shootings to attack Syriza's pro immigration stance?

In the wake of the terrorist attack on the Paris offices of French satirical weekly Charlie Hebdo, which left 12 people dead, Samaras also raised questions about SYRIZA’s immigration policy. “You see what is happening in Europe: Everything is changing dramatically,” he said. “In France, the Socialist [Prime Minister Francois] Hollande has sent the army onto the streets.

“There was a massacre in Paris today and here some people are inviting over illegal immigrants and handing out citizenships.”

Leftist SYRIZA leader Alexis Tsipras sought to reassure skeptics about the repercussions of a likely victory by his party in upcoming snap elections in an article published in Wednesday's edition of Italy’s Corriere della Sera titled “My Greece will not harm Europe.” In the article, Tsipras maintains that SYRIZA is no longer regarded as a risk, as in 2012, but as a challenge that could bring change.

In an interview with Britain’s Channel 4 meanwhile, Tsipras said that a SYRIZA government would seek war reparations from Germany and the return of the Parthenon Marbles along with a writedown of Greece’s debt. “We are going to demand debt reduction, and the money Germany owes us from World War Two, including reparations, but we also want the Marbles, which don’t belong to us but to everybody, and which need to come back to their home,” Tsipras is quoted as saying.

In an interview with the Financial Times meanwhile, prominent SYRIZA MP Giorgos Stathakis said a SYRIZA administration would crack down on Greek oligarchs.

(that is the source of your source FYI)

[Thanas]

What are you so sensitive about; the he said this during an election campaign where his opposition was profiteering off the Charlie Hebdo shootings to attack Syriza's pro immigration stance?

If he only said it to pay lip service, fine. Then why are you so sensitive about German politicians paying lip service to the German electorate by demanding the treaties will be kept?

[Crown]

What are you so sensitive about; the he said this during an election campaign where his opposition was profiteering off the Charlie Hebdo shootings to attack Syriza's pro immigration stance?

If he only said it to pay lip service, fine. Then why are you so sensitive about German politicians paying lip service to the German electorate by demanding the treaties will be kept?

A) Touche
B) Because people are actually suffering because of what one parties active actions are demanding, while the other's rhetoric isn't causing such an affect.

[J]

If he only said it to pay lip service, fine. Then why are you so sensitive about German politicians paying lip service to the German electorate by demanding the treaties will be kept?

From the article which I just posted:
http://www.bbc.com/news/business-30977714
Excerpt:

Syriza leader Alexis Tsipras helped calm investors' nerves when he said in a speech that he wanted negotiation, not confrontation, with international lenders.

"The new Greek government will be ready to co-operate and negotiate for the first time with our peers a just, mutually beneficial and viable solution," Mr Tsipras said following his election win.

That is the official Greek position. I've yet to see any official statements from the EU and other parties which indicate a willingness to negotiate, and in fact much of what I've seen so far mirrors the position taken by the German spokesman. You claim it's lip service, and perhaps it is, but unlike with the Greeks, you can't prove it, and all evidence to date says that it isn't.

[Crown]

As a general note; can I apologise for some of my grammatical crimes against the English language? Sorry to all trying to make sense of what I'm typing at times.

[J]

Most rational people can agree that the current debt obligations are impossible to fulfill, and furthermore, austerity isn't working, and cannot work.

I don't see how "you don't have to start paying until 2035 and you get 0% interest on the debt until 2020" is impossible to fulfil, especially if it has been already signalled that pushing the repayment date further back might be possible.

Have you run the math? There's nearly €250 billion of debt owed to the ECB, IMF, and rest of Europe at an effective blended interest rate of 2.5%. This works out to about 3.3% of Greece's GDP going towards interest payments alone, meaning Greece's budget surplus must be greater than 3.3% of its GDP if it's to pay down its debt.

Russia, Norway, and Finland are the only European or Western countries which have run a budget surplus amounting to 3% of GDP or greater at some point in the past 20 years, and only Norway & Russia have done so on a sustained basis thanks to their oil exports. Germany's never broken 3%, Canada hasn't either, and yet Greece must do so just to make the interest payments, and they must do so on a sustained forward basis. Or somehow double to triple the size of its economy within the due date of those loans.

So let's say we give Greece a 10 year grace period, and by a miracle they start running a surplus after 3 years, for the full 3.3% of GDP. So 7 years at 6 billion Euros a year to pay down their debts, minus a couple billion they added in the turnaround and let's say 40 billion off the 250 at the end of 10 years. And we'll throw in some growth as well so that Greece has a €260 billion GDP (that's a 4.5% annual growth rate by the way) to match it's €210 billion of remaining debt. So now it's 2% of GDP to pay the interest on its loans, which is once again still a number which has never been met by any Western country other than Norway, Russia, and Finland.

It's possible Greece may discover a giant ocean of oil under its land or unlock the secrets of nuclear fusion, but barring a miracle, those debts are impossible to pay off.

[mr friendly guy]

I thought Greece's actual debt has decreased, even as the debt to GDP ratio has increased (because of shrinking economy).

[Guardsman Bass]

They should go for the Grexit, and move as fast as they can to re-introduce the Drachma (or print unauthorized Euros). It'll be absolutely horrible for the first 1-2 years, especially if the Greek government does a piss-poor job in trying to restrain capital flight or use its dwindling supply of Euros/dollars/whatever to buy and distribute food, fuel, and medicine. But after that, Greece will have its own massively devalued currency again, it will have a heavily reduced debt burden, and that means they'll probably start improving fast (like Argentina for a few years after they defaulted and went off the currency peg). The devaluations alone will make Greece extremely attractive for tourism, and any Greek exports will become relatively super-cheap as well.

Hell, they should have done it five years ago, instead of pissing away 5 years in economic depression under austerity - and probably another 5-10 years in economic suckitude until "internal devaluation" gets them growing again.