Syriza wins Greece election

[Tribble]

Thanas you seem to be repeatedly ignoring my question, which I have now asked multiple times. You earlier conceded that it is highly likely that should Syriza eventually cave in the Greeks will vote for parties like Golden Dawn next in order to leave. In other words, a Greek exit will happen, the only real question is when. Once again, which do you think is preferable?

I am not ignoring it, I have answered it. I reject your premise that a Grexit is inevitable as Greeks do not believe in it. I believe if the question really is put to them, they will vote in favor of remaining in the EU. But if they vote in favour of an exit, the timetable does not really matter as people have been preparing for that for several years now.

The Greeks also do not believe in following the current austerity measures yet you certainly rejected that premise.

Right now the Greeks want to renegotiate. It's obvious that's not going to happen in any meaningful way. Basically what your saying is that when the negotiations ultimately fail and Greece is basically faced with the choice of leaving the EU or continuing the current austerity measures, Greek voters, despite voting for a party whose entire platform was to renegotiate, will simply shrug their shoulders and obey their masters.

Are you seriously that thick-headed?

[Thanas]

Right now the Greeks want to renegotiate. It's obvious that's not going to happen in any meaningful way. Basically what your saying is that when the negotiations ultimately fail and Greece is basically faced with the choice of leaving the EU or continuing the current austerity measures, Greek voters, despite voting for a party whose entire platform was to renegotiate, will simply shrug their shoulders and obey their masters.

Are you seriously that thick-headed?

No more thick headed than the Greeks themselves, apparently

Furthermore, 74.2% of Greeks answered “yes” or “probably yes” on whether Greece should stay in the Eurozone “at all costs.” This figure has increased significantly compared to the previous survey (May 2013) when it was moving at around 63.5%.

This is the latest poll I can find on the issue.

[K. A. Pital]

Well, in this case good that the government is trying to accomodate all their wishes. But in reality, what will happen is something we simply do not know at this stage. Will something have to be done about the payments? Likely so. What and when? That's the unknown.

[mr friendly guy]

http://www.abc.net.au/news/2015-02-20/g ... on/6155108

Germany rejects Greek proposal for six-month EU loan extension as 'not a substantial solution'
Updated about an hour ago

Germany has rejected a request by Greece to its European partners for a six-month extension to its EU loan program, saying it was "not a substantial proposal for a solution".

"The letter from Athens is not a substantial proposal for a solution," a spokesman for German finance minister Wolfgang Schaeuble said in a short statement.

"In truth it aims at bridge financing, without meeting the requirements of the program.

"The letter does not meet the criteria agreed upon in the Eurogroup on Monday."

Debt-wracked Greece sent a make-or-break request to extend its European loan program that expires at the end of the month, but demanding to end hated austerity measures.

Germany has repeatedly poured cold water on offering Greece more time outside the current arrangement, especially the austerity commitments, arguing that any extension of loans was "inextricably" linked to the reforms earlier agreed by Athens.

Eurozone finance ministers set five conditions at their talks Monday for continuing their financial support to Athens, including a pledge not to reverse previously accepted reforms.

Other conditions include that Athens should not undertake new reforms that would burden Greece's public finances, and a commitment by Athens to reimburse all its creditors.

Eurozone finance ministers to consider request

Eurozone finance ministers will meet on Friday afternoon in Brussels to consider the request, the chairman of their Eurogroup, Jeroen Dijsselbloem, said in a tweet.

That raised hopes of a deal to avert possible bankruptcy and a Greek exit from the 19-nation currency area.

But such hopes soon began to fade when Germany objected the request.

Berlin has led sceptical eurozone governments in demanding that Greece keeps promises made by a previous conservative-led government to implement tough austerity policies and painful economic reforms.

In the letter, Greece pledged to meet its financial obligations to all creditors, recognise the existing EU/IMF program as the legally binding framework and refrain from unilateral action that would undermine the fiscal targets.

Crucially, it accepted that the extension would be monitored by the European Commission, European Central Bank and International Monetary Fund, a back down by Greek prime minister Alexis Tsipras who had vowed to end cooperation with "troika" inspectors accused of inflicting deep economic and social damage on Greece.

However, the document stopped short of accepting that Greece should achieve this year a surplus on the primary budget - which excludes repayments on Greece's huge debts - equal to 3 per cent of the country's annual economic output, as promised under the bailout deal.

Mr Tsipras wants to cut that to 1.5 per cent to allow more state spending to ease the plight of the Greek people, while the document left the issue open by speaking of attaining "appropriate primary budget surpluses".

The six-month interim period would be used to negotiate a long-term deal for recovery and growth incorporating further debt relief measures promised by the Eurogroup in 2012.

Greece confident proposal will be accepted

Greek finance minister Yanis Varoufakis had expressed confidence on Wednesday that the proposal would be accepted.

"The application will be written in such a way so that it will satisfy both the Greek side and the president of the Eurogroup," he said.

Crucial details remain to be clarified on the fiscal targets, labour market reforms, privatisations and other measures due to be implemented under the existing program.

Greek stocks initially rose on Thursday's developments, with the benchmark Athens stock index up 2 per cent but slipped back after the German statement, being up just 0.6 percent on the day.

Banks gained 9 per cent but then shed half the gains.

Greece's finances are in peril. It is burning through its cash reserves and could run out of money by the end of March without fresh funds, a source familiar with the figures said.

Likewise its banks are dependent on the emergency funding controlled by the ECB in order to pay out depositors who have been withdrawing their cash.

[bobalot]

Greece should exit the EU and finally bring about an end to that failed economic experiment.

[Tiriol]

Greece should exit the EU and finally bring about an end to that failed economic experiment.

May I ask, how is it a failed experiment (if you are referring to the EU and not to Greece's membership in the EU)?

[Purple]

Greece should exit the EU and finally bring about an end to that failed economic experiment.

May I ask, how is it a failed experiment (if you are referring to the EU and not to Greece's membership in the EU)?

Because as an organization the EU has proven to favor creditors instead of those being credited and to favor big money as opposed to the welfare of the people living in its member states.

I think we can all agree that a good rule of thumb for when to leave an international organization is when it starts showing favor AGAINST you.

[Tribble]

Right now the Greeks want to renegotiate. It's obvious that's not going to happen in any meaningful way. Basically what your saying is that when the negotiations ultimately fail and Greece is basically faced with the choice of leaving the EU or continuing the current austerity measures, Greek voters, despite voting for a party whose entire platform was to renegotiate, will simply shrug their shoulders and obey their masters.

Are you seriously that thick-headed?

No more thick headed than the Greeks themselves, apparently

Furthermore, 74.2% of Greeks answered “yes” or “probably yes” on whether Greece should stay in the Eurozone “at all costs.” This figure has increased significantly compared to the previous survey (May 2013) when it was moving at around 63.5%.

This is the latest poll I can find on the issue.

Which was taken in December before the election. The election where an openly neo nazi party ended up in 3rd place. I highly doubt that sentiment will hold if and when Syriza caves in.

[Thanas]

Which was taken in December before the election. The election where an openly neo nazi party ended up in 3rd place. I highly doubt that sentiment will hold if and when Syriza caves in.

Feel free to find a newer poll, I was unable to do so. And a 25% swing would be very much unexpected - you don't even get that with state propaganda within one month usually.

Because as an organization the EU has proven to favor creditors instead of those being credited and to favor big money as opposed to the welfare of the people living in its member states.

I don't know, I think the EU in general (which is what you are answering right now) is doing a pretty good job looking out for the welfare of the vast majority of its member states and their citizens. I think it is also doing a pretty good job with regards to free travel, free movement and competition.

I think we can all agree that a good rule of thumb for when to leave an international organization is when it starts showing favor AGAINST you.

That goes for one member state, but remember you were arguing in favor of the whole EU being a failed experiment.

[Purple]

That goes for one member state, but remember you were arguing in favor of the whole EU being a failed experiment.

That was bobalot. My argument is that from a Greek perspective it would certainly appear to be one.
I forgot to make that clear at the beginning.

[Crown]

The Greek bureaucrazy with all its inefficience and Fakelaki-practices would have prevented serious investment for German auto makers anyways, no matter the currency. Further, a big advantage of Poland and the Czech Republic are their work ethics: Their workers are well respected as motivated and efficient. And they don't strike often. If Greece could compete in these areas, we could begin a discussion about the advantages and disadvantages of the Euro for Greece.

But simply claiming that the Euro is at fault for Greek's weakness is retarded. On top of it, Greece wanted to enter the Euro-zone.

One word; Australia.

<snip>

Oh look I can't be arsed with you again, here are the undeniable facts which are provided in nice graphical terms by the good people of The Economist;

Do you think the Euro is good for your country?


Greece's GDP in relation to other financial crashes


Greece vs the Euro Area from crisis to now


Greece's Population


And here's what we also know worked; the New Deal, the Marshall Plan and wholesale forgiveness of German debt post WW2 and whatever debt wasn't forgiven was allowed to be paid back as a percentage of export profits. Anyone who sees the data posted above, and doesn't except reality and refuses to give Greece the same break post WW2 Germany received; really isn't anyone I can be arsed arguing with anymore.

[Crown]

The number comes from a highly respected Thinktank using the official ECB numbers. I'll take their word (and Guardians and Spiegels) over yours and that of the Greeks anyday. You are welcome to look at the ECB numbers and then prove how they are wrong. Either the two sides uses vastly different methodology, the Greeks are lying or there is a massive shadowy conspiracy afoot to crush Greece. The last one is unlikely.

A highly respected thinktank, allegedly using the ECB numbers. Perhaps you can find it for me on the official ECB site, since I don't see a listing for current balance transfers to Greece.
http://sdw.ecb.europa.eu/home.do

The Wall Street Journal has got the whole thing broken down by creditor, due date, amount, description and rate from now until 2054.

[Crown]

Deal agreed*; Varoufakis got most of what he wanted from Thursday's letter, Germany 'The Institutions' got a line by line oversight on a quid pro quo basis.

Looks like they're kicking the can down the street for another 4 months. Maybe SYRIZA can have time to show that they can get a plan to either make this work within the Euro between now and July, or enough time to get the Drachma printing presses out of storage and up and running again. From a purely selfish standpoint it gives me enough time to get to Greece and withdraw most of my Euros (I happen to be one of those mythical Greeks who has plenty of savings and no debt) as a cautionary measure - and yes, I've paid all my taxes for all that money.




*Subject to the Greek government getting it's plan in on Monday (considered first draft) where the horse trading begins.

[Thanas]

There is a very cynical view on todays statement which I do not share, but put here for sake of another perspective. link. I really hope that this is not the the way the Eurozone really thinks about this.

This is a preliminary analysis of what the text allegedly means:

Greece bends to Eurozone will to find short-term agreement
At tonight’s Eurogroup meeting, the Eurozone and Greece finally found a preliminary agreement which will lay the ground for the extension of financial assistance to Greece. Open Europe assesses who secured what and why Greece seems to have failed to achieve many of its goals.

Immediately after SYRIZA’s election victory in Greece, we predicted that:

While a compromise could still be possible, it will be quite painful to reach and will imply someone taking big steps back from their previous stance.

Tonight that looks to have been proven true – at least in the short term.

What does this agreement do and why?

Tonight’s deal (you can read the full Eurogroup statement here) extends the current Master Financial Assistance Facility Agreement (MFAFA) by four months in order to allow Greece to fund itself in the short term and to allow time for negotiations over what happens afterwards.

The purpose of the extension is the successful completion of the review on the basis of the conditions in the current arrangement, making best use of the given flexibility which will be considered jointly with the Greek authorities and the institutions (European Commission, ECB and IMF – formerly known as ‘the Troika’).

Tonight’s agreement seems to essentially extend the existing agreement and the tied-in conditionality of the current Memorandum of Understanding.
What points has Greece capitulated on?

Completion of the current review – Greece has basically agreed to conclude the current bailout. Any funding is conditional on such a process:

Only approval of the conclusion of the review of the extended arrangement by the institutions in turn will allow for any disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits. Both are again subject to approval by the Eurogroup.

This is a clear capitulation for Greek Prime Minister Alexis Tsipras, who said the previous bailout was “dead” and the EU/IMF/ECB Troika is “over”.

Remaining bank recapitalisation funds – Greece wanted this money to be held by the Hellenic Financial Stabilisation Fund (HFSF) over the extension period, and possibly be open for use outside the banking sector. However, this has been denied and the bonds will return to the EFSF, although they will remain available for any bank recapitalisation needs.

Role of the IMF – The Eurogroup statement says, “We also agreed that the IMF would continue to play its role”. Again, Greece has given in on this point and the Troika continues to exist and be strongly involved in all but name.

No unilateral action – According to the statement,

The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.

In light of this, a large number of promises that SYRIZA made in its election campaign will now be hard to fulfil. In the press conference given by Eurogroup Chairman Jeroen Dijsselbloem and EU Economics Commissioner Pierre Moscovici, it was suggested that this pledge also applied to the measures which were announced by Greek Prime Minister Alexis Tsipras in his speech to the Greek parliament earlier this week – when he announced plans to roll back some labour market reforms passed by the previous Greek government.

Four months rather than six months – Greece requested a six-month extension, but the Eurogroup only agreed to four months. This is a crucial point: it means the extension expires at the end of June. As the graph below shows, Greece faces two crucial bond repayments to the ECB in July and August which total €6.7bn. This is a very tough hard deadline. There is limited time for the longer term negotiations which will take place – provided that a final agreement on the extension is reached. It is very likely we will be back in a similar situation at the end of June.

Has Greece secured any wins?

Greece has received a couple of small fillips in the wording:

The institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account.

This suggests that Greece may, during this year and the extension in particular, get more fiscal leeway. As we predicted many times, this would manifest itself as a lower primary surplus target. A small victory which may provide a bit of temporary breathing space for the government. In practice, though, it was already looking difficult for Greece to meet its target this year given significant shortfalls in tax revenue.

Greece also managed to get the word “bridge” into the statement, and a specific promise to discuss a fresh programme and approach:

This extension would also bridge the time for discussions on a possible follow-up arrangement between the Eurogroup, the institutions and Greece.

What happens now?

As was stressed in the press conference, Greece will on Monday “present a first list of reform measures, based on the current arrangement”. Moving forward from this agreement, which is still largely in principle, will be conditional on these measures being judged as sufficient by the EU/IMF/ECB as a step towards completing the current bailout.

Once that is confirmed work will begin on getting the “national procedures” in place, so that all the necessary parliaments (such as Germany and Finland) have approved the extension by the end of next week.

In the not too distant future, discussions will begin on the “possible follow-up arrangement”. As we outlined in extensive detail here, there are a huge amount of differences which need to be resolved. The crucial ones being labour market and pension reforms, as well as debt relief. Chances of an agreement remain unclear, but we would expect Greece to struggle once again to get what it wants.

Finally, the Greek government has to return to Greece and sell what is almost an entire capitulation to its own MPs (some of whom would have rather left the Eurozone than abandon their aims), its coalition partner, and the public (which has strongly supported the hard-line stance). We got a taste of this in the presser, when Finance Minister Yanis Varoufakis said:

From the very first day, we refused to see these negotiations as a zero sum game.

We’re beginning to be co-authors of our destiny.

The Eurogroup statement is a good example of ‘constructive ambiguity’ on primary surplus targets.

I’m pleased to report that our commitments are commitments we wanted to make anyway.

Focusing on the longer term and selling the openness of the negotiation as an escape from the current programme. This may or may not be true, it is in the end a negotiation.

As we said yesterday, Greece has folded this hand but the game of poker continues. Greece is now short stack and living hand to hand (day to day). It continues to be in a very tough position and how the evaporation of the vision which SYRIZA sold at the election is a crucial and potentially explosive unknown.

IMO this is a bit too pessimistic. Greece has won what they needed the most - time to fully start implementing their reforms and to explain their larger plan, which to many people is still a mystery.

[Crown]

IMO this is a bit too pessimistic. Greece has won what they needed the most - time to fully start implementing their reforms and to explain their larger plan, which to many people is still a mystery.

You should have watched Varoufaki's press conference live.

But it's like I said; kicking the can down the road for the next four months. I expect when the next round of negotiations begin there will be a figurative freshly printed Drachma note attached to the Greek proposal if SYRIZA have any brains at all.

[Thanas]

IMO this is a bit too pessimistic. Greece has won what they needed the most - time to fully start implementing their reforms and to explain their larger plan, which to many people is still a mystery.

You should have watched Varoufaki's press conference live.

Couldn't, what did he say?

But it's like I said; kicking the can down the road for the next four months. I expect when the next round of negotiations begin there will be a figurative freshly printed Drachma note attached to the Greek proposal if SYRIZA have any brains at all.

I don't think there will for I can't see Greece exiting the EU and then somehow becoming more competitive when they have to pay the tariffs levied against non-Euro members. And I can't see what they would offer to investors what the Czech Republic, Poland and Hungary cannot.

[Crown]

You should have watched Varoufaki's press conference live.

Couldn't, what did he say?

You could watch it live on the Commission's webpage; http://ec.europa.eu/avservices/

They might archive it so you can watch it yourself, but there were some very interesting questions particularly the 'Slovak' question vis-a-vis pensions, why were the Portuguese and Spanish FinMins trying to scuttle you, haven't you capitulated, how come you're re-hiring public sector workers, privatisation and how can you reconcile old MoU with your election promises which leads to ...

But it's like I said; kicking the can down the road for the next four months. I expect when the next round of negotiations begin there will be a figurative freshly printed Drachma note attached to the Greek proposal if SYRIZA have any brains at all.

I don't think there will for I can't see Greece exiting the EU and then somehow becoming more competitive when they have to pay the tariffs levied against non-Euro members. And I can't see what they would offer to investors what the Czech Republic, Poland and Hungary cannot.

SYRIZA (if they are who they claim they are) will not be coming to the next debt negotiations (and there will be one in 4 months time) the same way they came to this one. For a variety of reasons; political landscape may have changed within Europe for one, Greek economy may have changed, their reforms may be in place and you would have to be a simpleton to discount the fact they will come up with a contingency to exit the Euro.

And I do mean Euro and not EU.

And I will say this again; Varoufakis campaigned in the 90s for Greece to not join the Euro. Was an advisor to Papandreou from 2004-2006 but quit, became a whistleblower in 2005 on Greece's economy to Eurostat and sees the best way to save Greece is by changing the Eurozone entirely. But I say 'best way' and not 'only way', I can't imagine he hasn't given thought to a Grexit, but more importantly the more radical elements of SYRIZA which is an acronym literally meaning Coalition of the Radical Left sure have.

[Crown]

Here's the interview, English starts at about 10:55mins in.

[Tribble]

Congratulations go out to Greece and the EU for kicking the can down the road! Tune in again in another 4 months for the next episode!

[BabelHuber]

Oh look I can't be arsed with you again, here are the undeniable facts which are provided in nice graphical terms by the good people of

+ some totally meaningless stats which show the effect of the Greek policy, not the cause

I don't know whether you are trolling or if you are really so fucking clueless! Your stats show the effect of the Greece policy of the last decades, not the cause!

For the causes, look no further than this:

http://en.wikipedia.org/wiki/File:Helle ... Euros).png

http://en.wikipedia.org/wiki/Greek_gove ... e_1977.png

I can also repeat the fact that the old Greek governments did not reform enough since then! Greek still is unable to collect taxes while at the same time refusing offers of Germany to help them creating a functioning bureacracy! On top of it, investing in Greece is a bureaucratic nightmare for any investor!

Your stats show exactly the result I'd expect of such a policy!

Also you still have not addressed the two main points:

How can your Keynesian approach work in an open economy like Greece?

How can your Keynesian approach work in a country which severely lacks industry, like Greece?

Newsflash: It cannot!

So either concede the point or explain how your voodoo economy bullshit is supposed to work, fucking moron!

I have asked this question time and time again, but you do not come up with any answer. I know that quoting meaningless stats is much easier, but this is no excuse.

[Crown]

Oh look I can't be arsed with you again, here are the undeniable facts which are provided in nice graphical terms by the good people of

+ some totally meaningless stats which show the effect of the Greek policy, not the cause

I don't know whether you are trolling or if you are really so fucking clueless! Your stats show the effect of the Greece policy of the last decades, not the cause!

Jesus titty fucking Christ; the charts showed the affects of austerity in Greece compared to the Eurozone as a whole; i.e. the outcomes of a fucking batshit crazy economic policy where every single empirical metric shows does not work.

<snip>

Tough talk for a brain-trust who cannot concede that having a strong currency makes it almost impossible to compete in the manufacturing industry.

[BabelHuber]

Jesus titty fucking Christ; the charts showed the affects of austerity in Greece compared to the Eurozone as a whole; i.e. the outcomes of a fucking batshit crazy economic policy where every single empirical metric shows does not work.

Are you really that dense?

Greece created wealth by overspending for fucking decades! Consequently, they went bancrupt. They were bailed out by the EU, but then failed to put the necessary reforms into place, which massively compounded their problems.

If you call this austerity, then it does not work, yes.

Tough talk for a brain-trust who cannot concede that having a strong currency makes it almost impossible to compete in the manufacturing industry.

Bullshit. It depends on what you manufacture and how you do it. Otherwise Germany, Austria, the Netherlands, Slovakia, Lithuania etc. all would face the same problem. Or do these countries manage the 'almost' impossible, while Greece has no chance to do so?

Also you don't seem to understand that Greece has to solve its structural problems before its currency even starts to play a role.

And finally, you haven't explained how your retarded concept of continuing to overspend should work in the long run.

[Crown]

Jesus titty fucking Christ; the charts showed the affects of austerity in Greece compared to the Eurozone as a whole; i.e. the outcomes of a fucking batshit crazy economic policy where every single empirical metric shows does not work.

Are you really that dense?

Greece created wealth by overspending for fucking decades! Consequently, they went bancrupt. They were bailed out by the EU, but then failed to put the necessary reforms into place, which massively compounded their problems.

A lie that has been dispelled multiple times in this thread, you embarras yourself and continue to lose (whatever shred) of credibility you have left.

Bullshit. It depends on what you manufacture and how you do it. Otherwise Germany, Austria, the Netherlands, Slovakia, Lithuania etc. all would face the same problem. Or do these countries manage the 'almost' impossible, while Greece has no chance to do so?

*cough*Australia*cough*

Also you don't seem to understand that Greece has to solve its structural problems before its currency even starts to play a role.

Patently untrue; you're treating this as an either/or scenario. The New Deal shows us that you can introduce structural reforms while increasing spending.

And finally, you haven't explained how your retarded concept of continuing to overspend should work in the long run.

What do you do when you have 25% unemployment? Do you savagely cut all spending?

[BabelHuber]

Greece created wealth by overspending for fucking decades! Consequently, they went bancrupt. They were bailed out by the EU, but then failed to put the necessary reforms into place, which massively compounded their problems.

A lie that has been dispelled multiple times in this thread, you embarras yourself and continue to lose (whatever shred) of credibility you have left.

http://www.heritage.org/index/country/greece

Greece’s economic freedom score is 54.0, making its economy the 130th freest in the 2015 Index. Its score has declined by 1.7 points since last year due to a substantial deterioration in the control of government spending and smaller declines in business freedom, labor freedom, and fiscal freedom. Greece is ranked 40th out of 43 countries in the Europe region, and its overall score is below the world and regional averages.

The rule of law remains problematic, with property rights weakly enforced, tax evasion on the rise, and corruption pervasive. Despite efforts to create a more business-friendly regulatory environment, the labor market remains rigid and slow to adjust to market realities.

The overall pace of regulatory reform lags behind other countries. With no minimum capital required, launching a business takes five procedures and 13 days. However, completing licensing requirements still takes about four months on average. Despite reform efforts, the labor market remains rigid and stagnant. Monetary stability is weak, and Greece is receiving substantial subsidies from the European Union.

EU members have a 1.0 percent average tariff rate. Although some non-tariff barriers exist, the EU is relatively open to external trade. Greece maintains additional barriers to the provision of some professional services. Foreign investment in some sectors is capped.

This is not bad for a liar without credibility, I'd say.

Bullshit. It depends on what you manufacture and how you do it. Otherwise Germany, Austria, the Netherlands, Slovakia, Lithuania etc. all would face the same problem. Or do these countries manage the 'almost' impossible, while Greece has no chance to do so?

*cough*Australia*cough*

Come visit Australia, the famous Euro Zone member!

Patently untrue; you're treating this as an either/or scenario. The New Deal shows us that you can introduce structural reforms while increasing spending.

I try it for a last time: The USA of the 19030ies is a prime example where Keynesian concepts work, while today's Greece is a prime example of an economy where these concepts will fail:

The USA back then was a ressource-rich country with the biggest industry in the world. After 1929, its industry was heaviliy under-utilized. Also, it can be modelled as closed economy without distorting the results too much.

So by overspending, Roosevelt created a virtous cycle:

1.) Lower unemployment ==> more demand for food/ consumer goods/ apartments etc.

2.) More demand for food/ consumer goods/ apartments etc. ==> Agricultural and industry production raises, more houses are built

3.) Agricultural and industry production raises, more houses are built ==> lower unemployment

4.) Lower unemployment ==> go back to 1.)

After a few iterations, the country is growing again. Hence tax income is on the rise, and this money can be used to pay back the loans which were needed for the overspending. In the next recession, you can repeat this.

Overspending in Greece in 2015:

1.) Lower unemployment ==> more demand for food/ consumer goods/ apartments etc.

2.) More demand for food/ consumer goods/ apartments etc. ==> More houses are built, but consumer goods are imported, food is partly imported

3.) More houses are built, but consumer goods are imported, food is partly imported ==> Go back to 1.)

This creates a bubble - the GDP will raise of course, but it cannot create sustainable growth because the country lacks the necessary industrial debth. As soon as you end overspending, a recession occurs.

What do you do when you have 25% unemployment? Do you savagely cut all spending?

Unfortunately I don't see a way of fixing this in the short term. But you can fix this long-term. You'll have some positive effects after a few years, but not immediately.

What you can do:

- Attract investors to lower unemployment. For this you need a detailled concept: Which skills do my unemployed have? Do I want to compete mainly with Romania, Poland or Germany? In what areas do I want to have investors? Etcetc.

- Strengthen the areas where you are already strong. For Greece, this mainly means international tourism and agriculture

- When you invest, don't invest to create a bubble, but to become more competitive in the long run:

-- Offer vocational training for your unemployed, so they have more chances to get a new job (this has to be in line with the investments you want to have)
-- Improve schools/ universities. Support universities, so start-ups are created.
-- In general, improve in areas where you are weak to become more competitive: Do you have broadband internet in all areas? Are your streets and railroads up to support new factories at all? Etcetc.

This won't solve your problems within 6 months or so, but it will solve them long-term.

[Crown]

Greece created wealth by overspending for fucking decades! Consequently, they went bancrupt. They were bailed out by the EU, but then failed to put the necessary reforms into place, which massively compounded their problems.

A lie that has been dispelled multiple times in this thread, you embarras yourself and continue to lose (whatever shred) of credibility you have left.

http://www.heritage.org/index/country/greece

<snip>

This is not bad for a liar without credibility, I'd say.

You're quoting the Heritage Foundation to me? The racist, I hate poor people, rightwing, often debunked think tank as a source willingly?

Lets see what the OECD says about the implementations of reforms and Greece, from their 2015 'Going for Growth' publication as sourced by Forbes (relevant graph here). Oh look, Greece is the highest economic reformer over the 2007-2014 period. Remind me again how Greece 'failed to put the necessary reforms into place' again asshole?

Does Greece still need to implement more reforms in its bureaucratic/political/economical/social set up? Sure, no one, not me not SYRIZA is arguing otherwise. But to pretend it hasn't done a lot already and that is the cause of austerity fucking up is beyond disingenuous.

*cough*Australia*cough*

Come visit Australia, the famous Euro Zone member!

Neither Poland, the Czech Republic or Romania were Eurozone members either but you felt more than comfortable to bring them up as a stick to beat Greece over the head with. Because you have some pathological aversion to admitting that being a member of the Eurozone could somehow be a hindrance in maintaining competitiveness against countries whose currencies were weaker. It had to be every reason but with you; corruption, laziness, etc and yet Australia outranks every single one of those countries on every economic indicator (even on The Heritage Foundation) and yet it's manufacturing sector is being gutted consistently from 25% of the workforce to 10% (and falling).

I will concede that there are various reasons for this; geographical ones for example, however the main one when looking at the auto industry that all commentators agree on is that the Aussie is just too damn strong to make it worthwhile to keep factories there, which is why Toyota have closed, GM/Holden have closed and Ford should have it's factory closed by 2017/20.

Patently untrue; you're treating this as an either/or scenario. The New Deal shows us that you can introduce structural reforms while increasing spending.

I try it for a last time: The USA of the 19030ies is a prime example where Keynesian concepts work, while today's Greece is a prime example of an economy where these concepts will fail:

The USA back then was a ressource-rich country with the biggest industry in the world. After 1929, its industry was heaviliy under-utilized. Also, it can be modelled as closed economy without distorting the results too much.

So by overspending, Roosevelt created a virtous cycle:

1.) Lower unemployment ==> more demand for food/ consumer goods/ apartments etc.

2.) More demand for food/ consumer goods/ apartments etc. ==> Agricultural and industry production raises, more houses are built

3.) Agricultural and industry production raises, more houses are built ==> lower unemployment

4.) Lower unemployment ==> go back to 1.)

After a few iterations, the country is growing again. Hence tax income is on the rise, and this money can be used to pay back the loans which were needed for the overspending. In the next recession, you can repeat this.

Overspending in Greece in 2015:

1.) Lower unemployment ==> more demand for food/ consumer goods/ apartments etc.

2.) More demand for food/ consumer goods/ apartments etc. ==> More houses are built, but consumer goods are imported, food is partly imported

3.) More houses are built, but consumer goods are imported, food is partly imported ==> Go back to 1.)

This creates a bubble - the GDP will raise of course, but it cannot create sustainable growth because the country lacks the necessary industrial debth. As soon as you end overspending, a recession occurs.

Housing bubbles are created by private markets and not public markets. While I concede with an interest rate of 0.05% from the ECB there might be a possibility if Greek banks start offering outrageous loans again, but this can simply be sidestepped by good fiscal policy; that being if someone makes €20,000 per year, don't offer them mortgages of €500,000 because that is fucking stupid. And who is creating this demand for more housing when there are 300,000 empty ones currently?

You're assuming that any money in the pocket of Greek citizens will automatically float away. While the first obvious beneficiary of Greeks having money again will be Greece's largest industry; its service industry. Cafe's, bar's, tavernas, tourism areas etc would see an immediate upturn, and all you need to do is continue to reform the taxation code to properly tap these establishments tax streams.

Sure this doesn't make it all 'alright again' as it were, but it arrests the first immediate issue of a depression in the economy which is leading to political and social schism which should be the first priority of any legitimate government.

What do you do when you have 25% unemployment? Do you savagely cut all spending?

Unfortunately I don't see a way of fixing this in the short term. But you can fix this long-term. You'll have some positive effects after a few years, but not immediately.

What you can do:

- Attract investors to lower unemployment. For this you need a detailled concept: Which skills do my unemployed have? Do I want to compete mainly with Romania, Poland or Germany? In what areas do I want to have investors? Etcetc.

Which is in line with what Varoufakis mentioned in his press conference from Friday (regarding seeking private partners to invest/improve Greek infrastructure rather than outright privatise for privatise sake)

- Strengthen the areas where you are already strong. For Greece, this mainly means international tourism and agriculture

Hard to do while within the Euro.

- When you invest, don't invest to create a bubble, but to become more competitive in the long run:

-- Offer vocational training for your unemployed, so they have more chances to get a new job (this has to be in line with the investments you want to have)
-- Improve schools/ universities. Support universities, so start-ups are created.
-- In general, improve in areas where you are weak to become more competitive: Do you have broadband internet in all areas? Are your streets and railroads up to support new factories at all? Etcetc.

This won't solve your problems within 6 months or so, but it will solve them long-term.

All of which would require more government spending, so exactly what are we in disagreement over here?