Greece may hold referendum on Eurozone membership

[Edi]

I didn't oppose the bailouts initially either, but I do now, for the simple reason of past precedent. As soon as a bailout is announced, the "markets" will clam down for all of two days or a week and then next it's more demands of bailouts and bailout after bailout after bailout and whining about market confidence in Portugal or Spain or Italy or whatever.

Time to put a stop to bailing out fools who act irresponsibly and will not change their behavior one jot as long as they get their tails pulled out of the line of fire without costing them anything. The market is not supposed to guarantee anyone's profits or investments and bailouts are exactly that.

Finland is relatively well off, but we're still taking on too much debt and we need to find a way to reduce it. I'd much rather use our portion of the Greek and whatever other bailouts are being asked for to pay off our own national debt simply because we can't (and shouldn't) sustain the current practices. Our politicians were too cowardly to try to do anything to stem the red ink before, but I think the situation has changed what with the recent shenanigans by Greece and the rest of the southern periphery.

[Siege]

Beg your pardon, I've fuck-all understanding of economics but I don't quite understand why the current EU-saves-Greece-from-bankruptcy-plan on the table is being compared here to the '08 bank bailout when the plan agreed to last week in Brussels by all 17 Eurozone nations explicitly stipulates banks taking a 50 percent loss on the face value of their Greek debt. Can someone explain what one thing has to do with another?

[J]

Beg your pardon, I've fuck-all understanding of economics but I don't quite understand why the current EU-saves-Greece-from-bankruptcy-plan on the table is being compared here to the '08 bank bailout when the plan agreed to last week in Brussels by all 17 Eurozone nations explicitly stipulates banks taking a 50 percent loss on the face value of their Greek debt. Can someone explain what one thing has to do with another?

http://blogs.reuters.com/felix-salmon/2 ... t-edition/

The banks take a writedown now but are recapitalized in the near future with funds from governments & private sector.
They do NOT take a loss, they just want you to think they are.

[K. A. Pital]

Beg your pardon, I've fuck-all understanding of economics but I don't quite understand why the current EU-saves-Greece-from-bankruptcy-plan on the table is being compared here to the '08 bank bailout when the plan agreed to last week in Brussels by all 17 Eurozone nations explicitly stipulates banks taking a 50 percent loss on the face value of their Greek debt. Can someone explain what one thing has to do with another?

http://blogs.reuters.com/felix-salmon/2 ... t-edition/

The banks take a writedown now but are recapitalized in the near future with funds from governments & private sector.
They do NOT take a loss, they just want you to think they are.

Indeed. The recapitalization was a requirement to actually pass the Greek "50% writedown" agreement. It was a subtle way of doing it, but anyone with half a brain would realize that such a massive writedown could cause a lot of them to go belly up, so obviously CAPTAIN GOVERNMENT TO THE RESCUE.

[Siege]

Hokay, that's good to know. Next question from the uninitiated then: what does this "recapitalization" mean? 'Cause there's still a difference between 'hand out free money' like the USA apparently did, and nationalization of money-depleted banks like what happened in the wake of the '08 Fortis debacle, no?

[folti78]

This is just in: Guardian constantly updated article.

The Greek referendum has been called off (at least for now) as the main opposition party sided with the government. They still have a vote of confidence scheduled to tomorrow night.

[Guardsman Bass]

The whole situation is moving really damn fast. I wonder what the public reaction will be.

I can understand why they probably called it off. Both the opposition and important people within Papandreou's government were opposed to it, and threatening to bring it down. On top of that, France and Germany made it not just an issue of rejecting the austerity measures, but of walking away from the Euro Zone.

[Teebs]

The change in rhetoric from the eurozone leadership is very interesting and quite scary for the Greeks. It's suddenly gone from no one is defaulting/leaving the euro etc to Juncker talking about how the EU is ready to deal with departures and Sarkozy/Merkel saying that there is no mechanism for leaving the euro without leaving the EU. Pretty clear signalling of how pissed off they are about the referendum proposal and Greek intransigence.

Hokay, that's good to know. Next question from the uninitiated then: what does this "recapitalization" mean? 'Cause there's still a difference between 'hand out free money' like the USA apparently did, and nationalization of money-depleted banks like what happened in the wake of the '08 Fortis debacle, no?

I was under the impression that recapitalisation generally meant selling shares. Certainly if the money comes from the private sector it's in the form of share purchases, and I think it is from governments too. In which case the banks certainly are taking a loss, or at least in the sense that their shareholders i.e. the people who benefit from bank profits either have to pay up or have their share of the bank significantly diluted.

[The Duchess of Zeon]

I wouldn't be surprised if offering the referendum then scrapping it leads to even larger mass demonstrations in Greece which may bring down the country's government like the Arab spring; it seems the worst possible thing to do publicity-wise, especially in combination with the sacking of the heads of the army , which makes it look like the referendum was just a false flag to cover up the fact they were preparing the army to suppress crowds.

[Kinyo]

BBC is saying that the idea isn't dropped but is ready to be.

Greek PM George Papandreou has said he is ready to drop a proposed referendum on the country's eurozone bailout deal.

He said he had started talks to secure opposition support in parliament which would make the vote unnecessary.

His announcement of a referendum angered European leaders and sent shockwaves through its markets.

Facing calls for his resignation, Mr Papandreou called for unity in ruling party ranks ahead of a confidence vote on Friday. He has a thin majority.

But Finance Minister Evangelos Venizelos, addressing the Socialist Party (Pasok) MPs immediately after the prime minister, said Greece must say it was not holding a referendum.

BBC

[cosmicalstorm]

If I understand this correctly, the best case scenario right now is that Greece would, eight years from now, have a debt of about 120% of the GDP. That kind of debt burden is close to killing Italy right now. And they just sacked a big chunk of the military leadership and replaced them with others (More trustworthy peeps, perhaps?)
Not looking good...

[Rabid]

I seriously hope they aren't going to cancel the referendum just because our national Guignol or Germany's Iron Maiden Lady have expressed their disappointment... Papenderou, don't let them tread on you like an old carpet ! Show some self-respect, man !

Seriously, I heard on the TV some of Sarkozy's talk about Greece at the G20 summit, and by jove's, the urge I had to punch him in the face was more urgent than usual ! The contempt he was showing toward Greece's people, democracy or national sovereignty... simply unbelievable... Honestly, he was speaking about Greece as it was populated by subhumans or something like that...

...

Man, I'm a partisan of a Federal Europe at heart, really ; but when I see what's happening right now, I'm relieved that EU members still have their National Sovereignty.

[/fatigue induced rant]

[Stark]

If only Greece had maintained its sovereignty and not joined the EU at all, everyone would be better off. :v

[K. A. Pital]

Well, well. I guessed the Gods of the Eurozone would put pressure on Greece. I didn't think they'd come that close to overturning the decision to actually, uh... ask the people.

[Rabid]

What's shocking in my eyes is how shameless they are about it. Not even that : they seems to have a hard time understanding why their own people can be shocked by the rhetoric they are using on this issue.

They don't know the can of worm they are opening...

[His Divine Shadow]

I didn't oppose the bailouts initially either, but I do now, for the simple reason of past precedent. As soon as a bailout is announced, the "markets" will clam down for all of two days or a week and then next it's more demands of bailouts and bailout after bailout after bailout and whining about market confidence in Portugal or Spain or Italy or whatever.

Time to put a stop to bailing out fools who act irresponsibly and will not change their behavior one jot as long as they get their tails pulled out of the line of fire without costing them anything. The market is not supposed to guarantee anyone's profits or investments and bailouts are exactly that.

Finland is relatively well off, but we're still taking on too much debt and we need to find a way to reduce it. I'd much rather use our portion of the Greek and whatever other bailouts are being asked for to pay off our own national debt simply because we can't (and shouldn't) sustain the current practices. Our politicians were too cowardly to try to do anything to stem the red ink before, but I think the situation has changed what with the recent shenanigans by Greece and the rest of the southern periphery.

Yeah, fuck these guys running (ruining) this place. They're just gonna get TF more votes.

[Teebs]

In news from the G20 meeting, Berlusconi claims that Italy is in a much better situation than the UK or France and that there is no sense of crisis there...

[Dahak]

And politicians wonder why the people are not pushing them to create the United States of Europistan, when they never, ever tackle the fundamental issue of a subtle lack of democracy and respect for the people in the upper echelons...
If there's ever been a time to ask the real, fundamental questions about society, economy, and politics, it is now. And all we get is more of shady backroom deals.

[Lord Zentei]

I seriously hope they aren't going to cancel the referendum just because our national Guignol or Germany's Iron Maiden Lady have expressed their disappointment... Papenderou, don't let them tread on you like an old carpet ! Show some self-respect, man !

Seriously, I heard on the TV some of Sarkozy's talk about Greece at the G20 summit, and by jove's, the urge I had to punch him in the face was more urgent than usual ! The contempt he was showing toward Greece's people, democracy or national sovereignty... simply unbelievable... Honestly, he was speaking about Greece as it was populated by subhumans or something like that...

You got links to a subtitled video, or better yet, transcripts of that?

[Skgoa]

The change in rhetoric from the eurozone leadership is very interesting and quite scary for the Greeks. It's suddenly gone from no one is defaulting/leaving the euro etc to Juncker talking about how the EU is ready to deal with departures and Sarkozy/Merkel saying that there is no mechanism for leaving the euro without leaving the EU. Pretty clear signalling of how pissed off they are about the referendum proposal and Greek intransigence.

Well, you have to understand their POV: they know they will have to pay the bill, in the end. We aren't bailing out Greece for the sake of the greek, we are bailing Greece out for our own economic benefit. That's also why they have to make it painful for Greece. The economically weaker countries in the EU need to know that it's not a good idea to abuse Germany's and France's deep pockets.
Having said that, the greek POV is very understandable, too. The sudden influx of cheap (in terms of interest rates) money meant a huge step in standards of living, economic investments etc. - I lived there from '99 to '06, it was incredible to watch the transition. Had the financial bubble not burst, it might have never been such a big problem. But it did and now the "average Georgios" is feeling the economic pressure, while the fat cats laugh all the way to the bank. The EU's and IMF's heavy handed approach (unrealistic austerity meassures, moralistic smackdowns in televised speeches) that these people feel is forced on them, makes them rightfully angry.
In the midst of this sits Papandraeou, an asshole of the highest order, having to find a way to both stay in power and keep his fat cat buddies' money safe. He can't continue to make his subjects bend over and ask for more... well, you know where that metaphore was going. He had to make a stand, he had to make a show of "listening to the people". On the other hand, he can't offend Germany and France to much and he can't actually do anything but follow their orders.

But in the end, all of this is of no great consequence in and of itself. Greece just isn't important enough. But what is happening right now, below the surface, is a setting of ways for how future conflicts in the EU will be resolved. It's sad to see that we have become an exclusive club that threatens to cancel membership's at the drop of a hat. But that, too, is just part of a development that was going strong at least as far back as the attempt to force a constitution on he european peoples.

[Rabid]

You got links to a subtitled video, or better yet, transcripts of that?

Sadly not, as it was on TV. But it was at the G20 summit two or three days ago.

My memory is a bit blurred now, on what he said exactly ; but in short it was something to the effect of :
"If Greece does not do as we tell right now, the Greeks are going to get what they deserve."

[Teebs]

UPDATE: Greek PM will be resigning to allow the formation of a coalition government. Apparently plans currently being mooted include a general election in four months time.

CNN Link

Unsurprisingly really. His own party refused to back the referendum in sufficient numbers, the opposition certainly wouldn't have join a coalition with him as PM and the surprise referendum stunt would have killed his credibility and support among Europe's other leaders.

Well, you have to understand their POV: they know they will have to pay the bill, in the end. We aren't bailing out Greece for the sake of the greek, we are bailing Greece out for our own economic benefit. That's also why they have to make it painful for Greece. The economically weaker countries in the EU need to know that it's not a good idea to abuse Germany's and France's deep pockets.

Of course I get it from their point of view. Doesn't change the significance of the change in rhetoric.

[Simon_Jester]

To me, watching things from a great psychological and physical distance...

It's not, when you get down to it, that other European powers are wrong to expect the Greek government and people to make sacrifices in exchange for being bailed out of their debts. That is not especially unreasonable, certainly not as an offer- "we'll solve your problem at our taxpayers' expense, for the general good, but you have to agree to X, Y, and Z."

It's not even that this deal may be bad for the Greek people- from the point of view of Germany or France, it isn't their job to do what's in the best interests of Giorgios Sixpack; it's their job to make sure the French and German economies don't collapse. It doesn't particularly bother me that Country A may make Country B an offer that isn't really a good deal for B, if it's good for A.

It's that there seems to be this expectation that the sacrifice can be negotiated with a corrupt government that did much to create the problem in the first place, without the Greek people getting a veto. A can make B an offer that's bad for B, but B should have a choice in the matter. At the very least, when the Greeks look around and say "our government is saddled with a mountain of bad debt and our leaders are corrupt," they should get a chance to throw the bums out. They shouldn't have to accept those same bums' authority to mortgage the future of Greece as a way of solving the problem bum-style.

It's the practical problem with all forms of technocratic and bureaucratic government: if the system screws up, where's the accountability? And how can there be accountability if there's no chance to replace the people who created the problem in the first place?

[montypython]

To me, watching things from a great psychological and physical distance...

It's not, when you get down to it, that other European powers are wrong to expect the Greek government and people to make sacrifices in exchange for being bailed out of their debts. That is not especially unreasonable, certainly not as an offer- "we'll solve your problem at our taxpayers' expense, for the general good, but you have to agree to X, Y, and Z."

It's not even that this deal may be bad for the Greek people- from the point of view of Germany or France, it isn't their job to do what's in the best interests of Giorgios Sixpack; it's their job to make sure the French and German economies don't collapse. It doesn't particularly bother me that Country A may make Country B an offer that isn't really a good deal for B, if it's good for A.

It's that there seems to be this expectation that the sacrifice can be negotiated with a corrupt government that did much to create the problem in the first place, without the Greek people getting a veto. A can make B an offer that's bad for B, but B should have a choice in the matter. At the very least, when the Greeks look around and say "our government is saddled with a mountain of bad debt and our leaders are corrupt," they should get a chance to throw the bums out. They shouldn't have to accept those same bums' authority to mortgage the future of Greece as a way of solving the problem bum-style.

It's the practical problem with all forms of technocratic and bureaucratic government: if the system screws up, where's the accountability? And how can there be accountability if there's no chance to replace the people who created the problem in the first place?

Even in situations where elections do take place, when the bums get replaced by new people they too get suborned into the existing hierarchy, so simply having voting doesn't really change the underlying issues. If the rot is that far gone revolution rather than reform may be inevitable for real change.

[Simon_Jester]

Maybe so, maybe not- my point is that there is something deeply wrong with foreign governments assuming they have a right to bargain with the corrupt men who caused the problem, and that it is wrong for the people of the country to have a say in whether the bargain gets made, or whether they want different policies and fresh blood in office.