Syriza wins Greece election

[jwl]

You know, I'm beginning to think the AfD's idea of splitting the euro in two might be worth a try (although a lot of their other ideas aren't). The might be able to resolve stuff like this.

[bobalot]

I don't quite understand the continual circlejerking by Northern Europeans that Greece hasn't "cut spending enough" isn't "collecting taxes".

Greek government spending was cut from €120 bn in 2008 to €90 bn in 2014 (25%).

The problem is this has caused GDP to decrease so rapidly that government revenues also fell (despite increased taxation). Overall, this has resulted in barely any effect on the debt.

This spectacular failure in this EU (lets be real, German) economic policy approach has resulted in:

1) 27% unemployment.
2) Increased rates of suicide
3) Widespread poverty
4) Literal starvation
5) A healthcare system of the brink of collapse and where the least fortunate can no longer access healthcare.

But hey, I'm sure more pompous lectures about obeying Germany's the EU's will do the trick! Those Greeks literally starving in the streets or suffering cancer (they can't afford treatment for) pull themselves up by the bootstraps and pay back those enormous debts! Their lives mean nothing when it comes to keeping the EU together!

[Thanas]

But hey, I'm sure more pompous lectures about obeying Germany's the EU's will do the trick! Those Greeks literally starving in the streets or suffering cancer (they can't afford treatment for) pull themselves up by the bootstraps and pay back those enormous debts! Their lives mean nothing when it comes to keeping the EU together!

You laugh, but it is not like the things going on in France, Italy, Spain, Portugal and Ireland don't have any impact on it. Those nations too faced (and still face) enormous problems. But the fact is that aside from Greece the policy has been a resounding success.

If Greece gets special conditions, how do you justify denying them to the other nations?

[Broomstick]

The other solution is to ditch collective responsibility and actually admit that the Greeks often had no say in what happened. And it is their right to resist when being cornered. As it is the right of every poor and downtrodden being on this Earth.

Yes, let's ditch this whole “collective responsibility” bullshit, which is really another name for prejudice 99% of the time its used and more often than not a smokescreen that lets the real culprits fade into the crowd and escape justice.

Frankly, suggesting Greece should be thrown under the bus is despicable.

Failing to understand the distinction between mentioning a disastrous occurrence and advocating one marks a person as trolling for an argument, not having a discussion.

I'm not some fiscal genius or statistician to give a minute analysis of the situation but it's painfully obvious the “austerity” thing isn't working. Time to try something new, or risk rebellion down the road. When you take away everything from people they tend to get desperate, and people with nothing left to lose can lead to very bad situations.

If the EU is unwilling to do so and persists in its current course, the view expressed by Stas Bush is correct. If a supposed union of nations refuses to help its less fortunate members and arguably contributes to their hardship, that union is exactly what he says they are.

This is an important point, even if some dismiss it.

If something terrible happened to, say, the state of Maryland “throw it under the bus” wouldn't even be an option in the US. There might be a lot of arguing over what, exactly, should be done but there would be no question that the rest of the US should help get Maryland back on its collective feet. That's not the way it is in the EU, where there is far, far more loyalties to the individual states than the union as a whole.

Which is NOT to say I think the EU should be a copy of the US, just that if you're going to engage in a collective economy you have to share the pain as well as the wealth or the whole thing will not work long term.

Of course, the flip side of this is that the US states have far less sovereignty than the EU ones. Change can be imposed from above on US states. As far as I know that can't happen in the EU, and that might be a problem. Long term the EU members might have to surrender some of their current independence to make the system work. I assume that would make quite a few Europeans uncomfortable.

Collective refusal to face structural problems seems to be endemic throughout the developed world.

^ This.

It's a global problem and needs to be fixed although I haven't a clue how it should be done.

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.

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

Having Greece collapse into the chaos of a truly failed state – which will happen if sufficient numbers are rendered homeless and hungry – would be bad for Europe. If the rest of the EU can't see the wrongness of allowing that to happen then your union is very weak.

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.

The west was terrified that if West Germany failed it would become communist. Or that they would return to Nazism.

The EU should be afraid now that if Greece fails it will become chaos and a breeding ground for violent extremists.

Again, there's the problem that the states of the EU have hitched their wagons together, but there's no way to keep a failing wagon from taking the rest with it, no one to say “hey, fix that piece-of-shit, accident-waiting-to-happen-wagon before something horrible happens” and enforce it.

It may be that one reason Germany is doing better these days than some other European nations is because of the Allied occupation's forced reforms – which is NOT to say that occupation was pleasant, didn't have abuses, and gross mistakes weren't made. Wouldn't it be grand if the EU could find a way to reform a member nation without such draconian measures as invasion and/or complete foreign control? Allied control of West Germany in the early post-WWII was hamfisted and accompanied by a lot of anger about what had happened over the proceeding decade, I'd like to think the EU could find a way to help Greece without being that sort of tyrant.

I don't know, maybe we need some international rules on bankrupt nations, how to deal with them without utterly gutting them. Such a solution will, of necessity, mean that those owning the debt of such a nation will have to take a haircut the only question is whether that haircut is merely a trim or as extreme as a buzzcut.

[Broomstick]

But hey, I'm sure more pompous lectures about obeying Germany's the EU's will do the trick! Those Greeks literally starving in the streets or suffering cancer (they can't afford treatment for) pull themselves up by the bootstraps and pay back those enormous debts! Their lives mean nothing when it comes to keeping the EU together!

You laugh, but it is not like the things going on in France, Italy, Spain, Portugal and Ireland don't have any impact on it. Those nations too faced (and still face) enormous problems. But the fact is that aside from Greece the policy has been a resounding success.

If Greece gets special conditions, how do you justify denying them to the other nations?

Say those nations won't get special conditions until their youth unemployment is 60%, their government's tax income is plummeting despite increased taxation, homelessness is up, suicides are up, actual starvation is occurring....

Basically, you don't get that sort of special treatment until you're an equal basket case.

Then the EU should take a hard look at its policies to make sure they aren't unintentionally driving member states to that level of mess. Nobody wants their country to be that fucked up. Nobody should want their neighbor's economy to be that fucked up, either, because it wrecks the whole neighborhood.

[Thanas]

Basically, you don't get that sort of special treatment until you're an equal basket case.

That won't fly, especially because other countries like Ireland and Iceland fulfilled all demands and then some and are now back on their feet, whereas Greece has become a synonym for obstructionism.

Besides, you probably aren't familiar with the EU to see that nations like France - who are not starving - needed a lot of prodding to start reforms at all. If Greece gets special conditions, that would kill all those reforms in other countries. Because after all, if Germany pays, why should they?

France is more important than any other struggling country.

If something terrible happened to, say, the state of Maryland “throw it under the bus” wouldn't even be an option in the US. There might be a lot of arguing over what, exactly, should be done but there would be no question that the rest of the US should help get Maryland back on its collective feet. That's not the way it is in the EU, where there is far, far more loyalties to the individual states than the union as a whole.

The EU is not comparable to the US and any comparison between the two is laughable, unless all votes in the EU count the same, unless there is a federal government and unless all states pay the same taxes.

[Thanas]

Meanwhile, the first act of the new Government was to reemploy the corrupt bureaucracy which created the mess in the first place and give them back their benefits. Great, they learned nothing.

[Thanas]

Ghetto edit: And if you think I am joking about the effect on reforms in other countries, google the situation in Italy, where it is already used as justification to delay further reforms into their own corrupt state.

[J]

That won't fly, especially because other countries like Ireland and Iceland fulfilled all demands and then some and are now back on their feet, whereas Greece has become a synonym for obstructionism.

You realize Iceland defaulted on $85 billion in debts in exchange for a $6.5 billion aid package from the IMF, Nordic countries, and Germany, with a further $4-5 billion or so in various loans which came later. In round numbers, they wrote off 85% of their debt.

So Greece should do the same.

[BabelHuber]

But hey, I'm sure more pompous lectures about obeying Germany's the EU's will do the trick! Those Greeks literally starving in the streets or suffering cancer (they can't afford treatment for) pull themselves up by the bootstraps and pay back those enormous debts! Their lives mean nothing when it comes to keeping the EU together!

I see this from a completely different PoV:

IIRC, from 1981 to 2010 Greece has received some ~100 Billion Euros from the EU in order to make the country competitive.

In 2010, it turned out that this money was simply waisted, Greece was on the brink of bankruptcy.

Violating the 'no bail out clause' from the Masstricht contracts, the EU actually helped the Greece then. But of course in turn it was expected that Greece gets its shit together this time.

And now I have the impression that this simply won't happen. Greece seems to think it can simply live from the taxpayers' money from other EU countries, and it also seems they think that contracts are just sheet of papers you can ignore when you wish.

I do not want the population of Greece to suffer, but I also don't want to pay taxes because Greece thinks it can live from other people's money and ignoring contracts.

As a final note, Merkel has problems with the AfD, a relatively new party which wants to split the Euro into a 'northern Euro' and a 'southern Euro'. Giving further money to Greece means losing voters to the AfD.

And if such parties take over in the Northern European countries, the EU could likely fall apart. This surely is not in the interests of Greece.

[Broomstick]

Basically, you don't get that sort of special treatment until you're an equal basket case.

That won't fly, especially because other countries like Ireland and Iceland fulfilled all demands and then some and are now back on their feet, whereas Greece has become a synonym for obstructionism.

Apparently Greece is unable to fulfill demands, for whatever reason. The EU will have to find another course of action or watch Greece fall apart.

Besides, you probably aren't familiar with the EU to see that nations like France - who are not starving - needed a lot of prodding to start reforms at all. If Greece gets special conditions, that would kill all those reforms in other countries. Because after all, if Germany pays, why should they?

France is more important than any other struggling country.

Forcing reform is a problem. That has been noted already in this thread. So far, the only example of effective forced reform given is post-WWII West Germany... and I think we all agree invasion and tyranny isn't a path anyone wants to pursue at this time.

As I said, I don't know what the answer is, but "more of the same" does not seem to be working very well for you folks.

If something terrible happened to, say, the state of Maryland “throw it under the bus” wouldn't even be an option in the US. There might be a lot of arguing over what, exactly, should be done but there would be no question that the rest of the US should help get Maryland back on its collective feet. That's not the way it is in the EU, where there is far, far more loyalties to the individual states than the union as a whole.

The EU is not comparable to the US and any comparison between the two is laughable, unless all votes in the EU count the same, unless there is a federal government and unless all states pay the same taxes.

Well... maybe all votes SHOULD count the same and Federal government of some sort for the EU would help...? Or maybe not. You're right, the EU is not the US, I believe I mentioned that, too.

As for the individual US states - it's no secret that some get more money from the Federal government than they pay to it in taxes and have for decades. Sure, everyone lives under the same tax rules but some get more back than others. Yes, that does cause some resentment. On the other hand, it keeps things from descending into complete shit in some places. Were you unaware of that?

[Thanas]

As for the individual US states - it's no secret that some get more money from the Federal government than they pay to it in taxes and have for decades. Sure, everyone lives under the same tax rules but some get more back than others. Yes, that does cause some resentment. On the other hand, it keeps things from descending into complete shit in some places. Were you unaware of that?

No, I wasn't, but you got to be a special kind of idiot to think the comparison EU-USA is even remotely apt.

[Guardsman Bass]

You laugh, but it is not like the things going on in France, Italy, Spain, Portugal and Ireland don't have any impact on it. Those nations too faced (and still face) enormous problems. But the fact is that aside from Greece the policy has been a resounding success.

"Resounding success"? The unemployment rate in Italy has been going up (it's at 13.2% now, higher among youth), and both Spain and France's unemployment rates have gone up and stayed high over the past few years. Even Ireland and Portugal are still in the double-digit unemployment range, which they would almost certainly not be if they still had their own currencies and had devalued them (like Iceland, which devalued the Krona and now has 5% unemployment).

There's nothing successful about it. Austerity has been terrible.

[Murazor]

"Resounding success"? The unemployment rate in Italy has been going up (it's at 13.2% now, higher among youth), and both Spain and France's unemployment rates have gone up and stayed high over the past few years. Even Ireland and Portugal are still in the double-digit unemployment range, which they would almost certainly not be if they still had their own currencies and had devalued them (like Iceland, which devalued the Krona and now has 5% unemployment).

There's nothing successful about it. Austerity has been terrible.

24% unemployment, according to the latest data, with over 50% of youth unemployment.

Resounding success, my shiny metal ass.

[J]

There's nothing successful about it. Austerity has been terrible.

24% unemployment, according to the latest data, with over 50% of youth unemployment.
Resounding success, my shiny metal ass.

It was an overwhelming success for German & French banks, the ECB, IMF, and all other major owners of Greek, Portuguese, Spanish, and Italian debts.

[K. A. Pital]

As for the individual US states - it's no secret that some get more money from the Federal government than they pay to it in taxes and have for decades. Sure, everyone lives under the same tax rules but some get more back than others. Yes, that does cause some resentment. On the other hand, it keeps things from descending into complete shit in some places. Were you unaware of that?

No, I wasn't, but you got to be a special kind of idiot to think the comparison EU-USA is even remotely apt.

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?

[UnderAGreySky]

No, I wasn't, but you got to be a special kind of idiot to think the comparison EU-USA is even remotely apt.

Why do you think it's inapt?

The US and the EU are both monetarily united across their member states. They differ in that the former is fiscally united, too. My contention (and that of many others) is that a monetary union without fiscal union is a bad idea, and this is one of the main reasons why the recession in peripheral EU states has been and continues to be a nightmare (and not a "resounding success" as you so blithely claimed).

[K. A. Pital]

Resounding success for the German oligarchs who enjoy a huge windfall due to the downward pressure on the Euro? I can believe in that. Resounding success in the periphery countries?

[Starglider]

Few things make me happier than seeing worthless socialist bureaucrats fired and (preferably) forced into penury; they fully deserve it for all the harm they have inflicted on working citizens, all the bribes they took, all the obstructionism and nepotism and parasitical draining of the economy's life blood over their years of infesting the government. However if you are going to do this without destabilising the country, you must do it in concert with creating private sector job opportunities via investment. Not necessarily job opportunities for the same people; the ex-government parasites may be functionally unemployable, particularly the older ones. But that's ok because Greece has vast swathes of young qualified unemployed people who absolutely are capable of and do deserve a real job. It is only necessary to create at least as many jobs and as much taxable income as that removed by government payroll cuts.

Germany did not do this with Greece. Forced privitisation would have been acceptable even laudable if it was coupled with copious inward investment, but instead German bankers treated Greek assets as something to strip and squeeze for whatever cashflow could be had. One of the reasons that default is so preferable to the current situation is that the uncertainty (currency and of further bank bail-ins) is an investment killer, whereas a year or two after default, grexit and devaluation investment will start to look quite attractive. A thorough round of bankrupcies and recapitalisation (with printed drachmas) will be painful but will leave a functional Greek banking system not at risk of Cyprus-style random confiscation.

[Broomstick]

As for the individual US states - it's no secret that some get more money from the Federal government than they pay to it in taxes and have for decades. Sure, everyone lives under the same tax rules but some get more back than others. Yes, that does cause some resentment. On the other hand, it keeps things from descending into complete shit in some places. Were you unaware of that?

No, I wasn't, but you got to be a special kind of idiot to think the comparison EU-USA is even remotely apt.

My point is that the EU says it has a "union" but doesn't act like it. Either you're a set of independent nations and can act independently or else you are a "union" of some sort where what happens over in country A affects what happens in countries B, C, D, etc.

If you're going to hitch your economic/fiscal wagon to that of another nation then how healthy that nation's economy is WILL affect you. If you try to bleed the other guy dry it's likely to bleed you as well down the line.

If the EU nations that are currently doing well continue to refuse to negotiate a viable repayment scheme for those that are struggling, for whatever reason they are struggling, the drowning people may well pull others under with them. So Ireland was able to repay under the scheme imposed - great for Ireland. Greece apparently can't. Refusing to revisit the problem isn't going to fix it, and it isn't going to result in repayment. That doesn't mean ignore the problem and keep pouring money down the hole, however, if you don't address the real cause of the problem the symptoms (inability to repay) will not go away.

If you find yourself in a union where you can't force the other party to fix their problems you are in serious shit. That's called "dysfunctional". It's why the early US ditched the Articles of Confederation and wrote the current constitution setting up a much tighter union.

No doubt you'll call me an idiot again, but there's a segment in Europe just as convinced of their superiority and exceptionalism as parts of the US are. No, the EU is not the US, that might be part of the problem. You can whine all you want about repayment but you won't get shit if Greece has no money with which to pay because they have no economy.

Either get serious about fixing the real problem(s) or, if you can't, cut them loose. In the long run it will be kinder for both sides. If you want to be in a union then accept that sometimes there are downsides and shared pain to that relationship. You can't skim off the good and refuse the bad and have the union last.

[K. A. Pital]

Germany did not do this with Greece. Forced privitisation would have been acceptable even laudable if it was coupled with copious inward investment, but instead German bankers treated Greek assets as something to strip and squeeze for whatever cashflow could be had.

You are dissappointed they behaved like the typical capitalist vultures they are? Waah, man.

[jwl]

As a final note, Merkel has problems with the AfD, a relatively new party which wants to split the Euro into a 'northern Euro' and a 'southern Euro'. Giving further money to Greece means losing voters to the AfD.

And if such parties take over in the Northern European countries, the EU could likely fall apart. This surely is not in the interests of Greece.

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.

[Thanas]

As for the individual US states - it's no secret that some get more money from the Federal government than they pay to it in taxes and have for decades. Sure, everyone lives under the same tax rules but some get more back than others. Yes, that does cause some resentment. On the other hand, it keeps things from descending into complete shit in some places. Were you unaware of that?

No, I wasn't, but you got to be a special kind of idiot to think the comparison EU-USA is even remotely apt.

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.

You laugh, but it is not like the things going on in France, Italy, Spain, Portugal and Ireland don't have any impact on it. Those nations too faced (and still face) enormous problems. But the fact is that aside from Greece the policy has been a resounding success.

"Resounding success"? The unemployment rate in Italy has been going up (it's at 13.2% now, higher among youth), and both Spain and France's unemployment rates have gone up and stayed high over the past few years. Even Ireland and Portugal are still in the double-digit unemployment range, which they would almost certainly not be if they still had their own currencies and had devalued them (like Iceland, which devalued the Krona and now has 5% unemployment).

There's nothing successful about it. Austerity has been terrible.

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).

[Thanas]

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.


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.

[Guardsman Bass]

Oh, so by "success" you mean "didn't default on their debt". I thought you might mean "success" in the way that most of us would define a successful economic program, namely "how well the country's economy does afterwards".

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.

Good question. Maybe they should see if they can get a reduction in their debt while Greece is at it, or re-assess their commitment to the Euro.