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Source: (consider it)
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Thread: Greece and the Euro
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lowlands_boy
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# 12497
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Posted
There seems to be more than a few people concerned that they'll get chummy with the Russians though.
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L'organist
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# 17338
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Posted
My Greek friends love the idea that their black economy is 'only' 24% - quoted by Jolly Jape.
As one put it, by his calculation the black economy in his home town used to run at about 45-50% but that shifted to something more like 60% after Greece entered the EU. In some more rural areas the access to various subsidies brought an explosion of 'wealth', much of which has been sensibly invested in portable wealth so is unknown to the authorities.
Since the first banking crisis many rural communities have gone over to a barter system for most things: as my mate Theo says, its a bit like the traditional fakelaki but more honest!
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
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Honest Ron Bacardi
Shipmate
# 38
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Posted
One of the problems of the current Greek position is that there are so many factors involved that you can construct almost any narrative you like to try and join the dots up. There's an element of that visible in this thread. It's not that anyone is wrong overall, rather that their explanation is incomplete.
It may be that that itself leads to a temptation to cut the Gordian knot by one side or the other, which I guess is what a forced Grexit is.
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Anglo-Cthulhic
Posts: 4857 | From: the corridors of Pah! | Registered: May 2001
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Ricardus
Shipmate
# 8757
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Posted
quote:
Originally posted by fletcher christian:
Why should every other country in Europe have to make the effort, pay off its debts and make reforms to strive towards a more sustainable and secure economy while Greece sits in the Med and says to itself, 'We'll do whatever we like'.
Who is saying they'll do what they like? Not Varoufakis.
Who is saying economic reforms are unnecessary? Not Varoufakis.
There are however a number of words for arguments such as 'economic reform is necessary, this is an economic reform, therefore it is necessary.'
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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by lowlands_boy:
There seems to be more than a few people concerned that they'll get chummy with the Russians though.
yes, I'm one of them. However, the point is they're in a continent wide financial straitjacket that does nothing for them in circumstances like this because there aren't the things which logically should be there for one size to fit all ie:
1)common financial policy
2)central political union
3)genuine fiscal transfer from the rich areas of the union to the poorer as part of harmonisation (try getting that one past the German taxpayer for starters).
For the historians there's echoes here of the British/Maltese scheme to bring Malta into the Uk in the 1960s with county status. The conclusion reached was that union meant that everyone would have to be treated at least theoretically equally across the UK. Apparently HM Treasury took one look at how much it would cost to integrate Maltese health care into the NHS, Maltese schools into the education system, Maltese social security into etc, and scotched it.
However, both sides did at least recognise it was probably doomed and pull back rather than haring off and doing it anyway.
Either Germany (as the paymaster) takes a haircut, and the principle is set in stone that Euro members are bailed out regardless of the circumstances; or Greece goes. I think it has to be the latter, but ideally with "sweeteners" as a goodbye to kickstart them and hedge against Russian attempts to get their feet under the table.
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Posts: 1481 | From: behind the dreaming spires | Registered: Mar 2013
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fletcher christian
Mutinous Seadog
# 13919
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Posted
Posted by Honest Ron B:
quote:
One of the problems of the current Greek position is that there are so many factors involved that you can construct almost any narrative you like to try and join the dots up. There's an element of that visible in this thread. It's not that anyone is wrong overall, rather that their explanation is incomplete.
This is very true and is further compounded by the fact that various press agencies throughout the world in reporting it are happy to heavily bias their reporting with a particular agenda; whether that be support of Europe or implying that Europe is the nastiest most evil thing since a certain angel realised he was beautiful.....and everything in between.
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'God is love insaturable, love impossible to describe'
Staretz Silouan
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L'organist
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# 17338
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Posted
We in the UK should look at the Greek meltdown and learn a few lessons in relation to pensions.
With only 30 years of contributions required to fund a full state pension, our own system is on pretty shaky ground.
Granted, we have raised the pension age, granted we have reduced the age at which HRP (home responsibilities protection - basically making contributions on a parent's behalf to acknowledge that it is valid for the children to be the first priority) stops, but we still give a full pension for only 30 years of contributions when even in Greece that level has been raised to 40 years. We are planning to raise this to 35 years of contributions but that won't make much difference.
In the meantime, the taxpayer will continue to pick up the bill for unfunded public sector occupational pensions, almost all of which are final salary schemes so it is almost impossible to put a brake on the losses.
Should Greece remain in the Euro? Probably not but IMO the EU has a moral duty to do all it can to prevent complete meltdown in Greece - not least because the current Greek government perhaps offers the first genuine chance since the second world war for public life in Greece to get a handle on corruption and graft.
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lowlands_boy
Shipmate
# 12497
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Posted
There are a few strands to that though aren't there. How long you need to pay in should really be related to how long the state expects to pay out. Sticking up the age at which you can start to claim (as we have done) therefore reduces the amount of time the state will need to pay out. Although I agree that it's unlikely to close the gap in life expectancy.
The Greeks are also notorious (in the recent press bashings at least) for very young retirement ages. If they were dying young as well, maybe that's OK, but if they need to now do 40 years, is that just overcompensating, or are we a long way behind too as you suggest.
There was clearly an assumption when state pension provision started that the state would only be paying out for a few years, as people would die not too long after retiring.
I know of someone retired early on a public sector pension who in the next couple of years will have been retired for the same number of years that he worked. That's clearly untenable, unless the same workers are putting at least 50% of their salary aside.
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Honest Ron Bacardi
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# 38
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Posted
AfZ - all those articles were written around 5 months ago. I think a surprising amount of things have moved on since then. But - correct me if I'm wrong - the "think flows, not stocks" argument only works when the accountancy is principally inter- or intra- governmental. It breaks down at the point when that condition ceases to apply, as for example when say Greece leaves the Euro.
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Anglo-Cthulhic
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alienfromzog
Ship's Alien
# 5327
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Posted
Absolutely, if Greece leaves the Euro it changes the game very significantly.
But I think Krugman's summary very helpful - particularly as he refers to the numbers. Basically Greece has done an heroic job at achieving austerity at huge cost to the citizens and still they're being treated as a naughty child. I wouldn't mind so much but as Krugman points out the economic idiocy behind the IMF/EU policy prescriptions mean that it's all so self-defeating for all sides. So the right thing to do is to give Greece some room for maneuver to restore their economy to some extend and make some sensible, balanced adjustment of the debt.
The Troika have always successfully bullied Greece in the past as seem to believe they can do so again. FWIW (i.e. not much) IMHO (or not so humble) Greece should stand up to them - and I'll give you three reasons 1) Greece will be much better off 2) Anything else is doomed to failure 3) It's the mandate that the government was elected on.
I know the IMF has lots of form at overriding democratically elected governments all over but that doesn't make it right.
AFZ
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Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]
An Alien's View of Earth - my blog (or vanity exercise...)
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Palimpsest
Shipmate
# 16772
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Posted
If Greece does leave the EU does that change anything with the U.K. trying to decide if it should leave?
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alienfromzog
Ship's Alien
# 5327
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Posted
quote:
Originally posted by Palimpsest:
If Greece does leave the EU does that change anything with the U.K. trying to decide if it should leave?
I don't think anyone is talking seriously Greece leaving the EU, just the Euro. I cannot see it having any real effect of the UK position. It may have propaganda value for the euroskeptics.
AFZ
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Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]
An Alien's View of Earth - my blog (or vanity exercise...)
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by Palimpsest:
If Greece does leave the EU does that change anything with the U.K. trying to decide if it should leave?
Not really, although counter-intuitively it's quite good news for the In camp.
Greece won't leave the EU, but it may leave the Euro. This will be fuel to the fire of the sceptics who've been saying for the best part of 3 decades that monetary union was a political decision *not* an economic one - because when it comes down to it they'd rather a country was sovereign than prosperous.
A sovereign country can do something to address its prosperity (or lack of), but a poor country shackled into a monetary union not run with one eye on its particular circumstances doesn't have the sovereignty to start pulling leavers.
A poor sovereign country can default, or more importantly devalue its currency. Greece can't do the latter because it hasn't got one, and the first is already presented as the "nuclear option" when in fact it's the only rational option left for them.
So, why is this positive for the UK "in" camp?
The inexorable logic of the federalists is that they have to do something to stop this happening again - which means faster and deeper political, fiscal and economic integration to go with the social and monetary integration. Arguably the former should have happened first anyway, with monetary union as the icing on the cake at the end, not the main ingredient.
However, there are enough realists in Brussels to know that some countries are just not going to wear this, so it's more likely that the de facto 2 speed Europe will be made formal. The core countries can go ahead and become Eurozonia/The Gerspanfrantalyluxbelportlands*, or whatever, with the others remaining in a mutually beneficial trading alliance with a few other bits. The UK can be in the latter, with Denmark, Sweden, Poland, Greece, Ireland, etc.
This is basically the reform that even Labour want, let alone the Tories. To be honest, give that to the British people and you'd get an in vote by the truckload - even many of the Tory Euroheadbangers want the EEC back, just not an integrationist "ever closer union" EU.
*please can it be this!
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itsarumdo
Shipmate
# 18174
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Posted
I'd tend to agree with that.
The only caveat I have (not that it means anything - que sera, sera) is that the monetary ripples of a Grexit will probably be bigger than the Grexit itself. Great BBC R4 series on the history of debt - apparently we have had no basis for currency other than some rather dodgy institutionalised belief system ever since de Gaulle demanded gold in exchange for dollars and the USA refused. If Greeks have accumulated transportable wealth (like the Chinese), they may be better off than other Europeans who have not done so.
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"Iti sapis potanda tinone" Lycophron
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by itsarumdo:
I'd tend to agree with that.
The only caveat I have (not that it means anything - que sera, sera) is that the monetary ripples of a Grexit will probably be bigger than the Grexit itself. Great BBC R4 series on the history of debt - apparently we have had no basis for currency other than some rather dodgy institutionalised belief system ever since de Gaulle demanded gold in exchange for dollars and the USA refused. If Greeks have accumulated transportable wealth (like the Chinese), they may be better off than other Europeans who have not done so.
Maybe, although to be honest I think even that's more of a problem for Greece (and consequently manageable by them and the wider world because localised).
Unless the "ripples" cause a global existential crisis about the meaning and value of currency as currency, then it might not be too bad. If that happens then all bets are off.
It might make people jittery about the eurozone (although even then people are likely to be more sanguine about the French and German governments' likelihood to honour credit/debt say than some of the others if the whole Euro imploded), but sovereign countries with their own currencies should be ok (absent the putative existential breakdown).
A knock-on potentially might be that Scotland say became much less keen on leaving the UK without keeping the pound, or even on leaving the UK at all; because it would be given a sobering worked example on what happens when a country either:
a) leaves a currency union
or
b) is in a currency union without a political and fiscal one.
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Honest Ron Bacardi
Shipmate
# 38
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Posted
betjemaniac - I think the main thing that's missing from your argument about Eurozone vs. sovereign currency is that it is immensely beneficial to those countries whose performance is above-average, in exactly the same way as it is detrimental to those below-average. Without the euro, the Deutschmark would have been trading somewhere around where the Swiss Franc is at present, and the financial pain would be much more evenly distributed.
The reason Germany has been the biggest net contributor to EU structural funds is to try to counteract that tendency, and assist bringing the lower-performers into the range where their economies are convergent with the average. That that hasn't happened is due to the many factors already discussed of course.
But on this analysis, if we are to have a two-speed Europe (or perhaps more accurately a two-zone Europe), then it might make more sense for the Eurozone to expel Germany into the outer zone, as rather perversely its success has made its economy pronouncedly divergent from the norm.
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Anglo-Cthulhic
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by Honest Ron Bacardi:
The reason Germany has been the biggest net contributor to EU structural funds is to try to counteract that tendency, and assist bringing the lower-performers into the range where their economies are convergent with the average. That that hasn't happened is due to the many factors already discussed of course.
But on this analysis, if we are to have a two-speed Europe (or perhaps more accurately a two-zone Europe), then it might make more sense for the Eurozone to expel Germany into the outer zone, as rather perversely its success has made its economy pronouncedly divergent from the norm.
Indeed, but then you have to question whether the ECB's in Frankfurt for a reason. Can't remember who it was that described the Euro as "the continuation of the DM by other means"...
Like imposing "austerity" on Greece which conveniently (and explicitly) exempts the order for new submarines being built in German shipyards. Which are clearly a pressing need for Greece in the current climate.
Just highlights the fact that there's a monetary union in which all the players continue to act in their own interests, not collectively, because there's no concommitant fiscal and political union. Which is lunacy.
[ 18. June 2015, 10:03: Message edited by: betjemaniac ]
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Honest Ron Bacardi
Shipmate
# 38
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Posted
Oh, I don't consider it remotely likely, betjemaniac - to a degree I'm just chucking it out to show how much other factors are at play here. But I do think it is true nevertheless.
By the way, for those following current developments, there was a very important interview with Euclid Tsakolotos (head Greek negotiator) on Radio 4 this morning. If you haven't heard it it is almost essential listening.
iPlayer link here - interview starts at 02h10 in and runs for about 15 minutes. I think that radio iPlayer also works outside the UK.
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Anglo-Cthulhic
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itsarumdo
Shipmate
# 18174
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Posted
Personally I don't understand the economic basis on which it is constructed. Probably the main purpose of local currency is so that local values can be adjusted to offset imbalances with regional norms. Any fule know that the larger the economic block and the greater the regional disparities. We even see that in the UK, but currency also requires boundaries, borders and some degree of autonomy, so entities such as Scotland and Wales are possibly not big enough to seriously support their own currency with the administrative overheads, but in regional terms of trading balance that might be justifiable . The Eurozone essentially prohibits local economic structures on a massive scale. Up to the point that I might even hazard a guess that the increase in Greek black economy on entry to the Eurozone was a local attempt to normalise value when the Drachma no longer filled that role.
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Posts: 994 | From: Planet Zog | Registered: Jul 2014
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by itsarumdo:
Personally I don't understand the economic basis on which it is constructed.
I don't want to be overly flippant, but that's largely because there isn't really one.
The euro is a construct, an article of faith in the European project. It's the supreme global example of putting the cart before the horse in the 21st century thus far.
Rationally, it (and a flag) should be the last thing to be set up, when everything else has been completed along the road to European integration. Unfortunately, the cheerleaders decided instead that it and a flag should be the engine of integration.
It probably will be, but not remotely in the way the enthusiasts wanted.
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L'organist
Shipmate
# 17338
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Posted
posted by alienfromzog quote:
I don't think anyone is talking seriously Greece leaving the EU, just the Euro. I cannot see it having any real effect of the UK position. It may have propaganda value for the euroskeptics.
A few people are talking about Greece leaving the EU - more should be doing do.
What a lot of the 'older' EU members fail to understand is just how different the government of Tsipras is from anything that has gone before - but then they never understood why there was a coup in the 1960s.
A fundamental part of the problem is that there is a deeply held, romantic subliminal notion of current day Greece being directly in line from the so-called 'cradle of democracy': this is wrong and blights much of ensuing arguments about Greece.
There was never a satisfactory solution to the civil war that erupted at the end of WW II: there was bitter resentment about the actions of Metaxas and the so-called 4th of August goverment, and always a suspicion that the Italians were invited into Greece by their fellow fascist Metaxas. The fact that George II supported Metaxas and his party didn't help; there was virtually no contact between the monarchy once they fled to Egypt and occupied Greece, and almost all of the resistance to the Italians and then the Germans was from left-wing groups.
Even after the civil war and subsequent restoration of the monarchy, the only member of the royal family to be regarded with any respect was Princess Andrew (mother of our Duke of Edinburgh) for her bravery in staying in Athens throughout the occupation and her humanitarian efforts during and after the war.
The present government is a coalition of 19 different leftist parties/movements and Tsipras has already indicated that any negotiations must be approved by his coalition partners - that was why the talks between him and Jean-Claude Juncker, which had been described as 'positive' and 'nearing a settlement' were suddenly repudiated: Tsipras couldn't get agreement from his coalition partners.
There is strong support within the Greek cabinet for reaching an independent settlement with Russia over sanctions - in fact that are members of the cabinet who would welcome a move to have a Russian fleet make its home in the med in a Greek port in return for financial support.
As for whether or not Greece leaving the Euro (or the EU) having an effect on UK attitudes: make no mistake, if Greece moves closer to Russia this will hand a huge club to the OUT campaign with which they'll be able to beat the pro-Europeans. The argument will go somewhere along the lines of "after 14 years in the Eurozone and 35 in the EU Greece now feels closer to Vladimir Putin and has left the EU with debts that will never be repaid." Bearing in mind the exposure of many banks based in the City of London, this will be something almost impossible to counter.
Face it: the over-rapid expansion of the EU from 1981 onwards, and the inclusion in the Eurozone of countries with massive problems of debt and fraud only shine a light on the incompetence and lunacy of much of the central Euro bureaucracy such as Juncker, Delors, etc.
Is there a solution? Yes, but only if every country in the EU is prepared to keep bankrolling Greece for at least another 15 years, maybe more. I can't see that playing well with the public in Germany or France and as for here in the UK - you'd get more positive response if it were suggested that we ditch the pound and join a US dollar zone.
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
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L'organist
Shipmate
# 17338
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Posted
WHOOPS!
I didn't spot that a section was missing from the above: should be inserted between "humanitarian efforts during and after the war." and "The present government..."
Most of the governments in Athens since the end of the civil war have been fatally tainted by two things: being closely associated with neo fascist movements during the 1930s and 40s, and/or with being responsible for corruption and graft on a scale unimagineable in most of the rest of the world. And even when evidence was found and people put on trial and found guilty nothing was done, no one was punished. Look at the record of Andreas Papandreou - found guilty and remained at liberty, nothing paid back; there is ongoing scandal about the premiership of George Papandreou - you can best his mother's appearance on the so-called Lagarde list as having no obvious source for her €550 million Swiss bank account.
The EU itself sent in several investigators, one of whom simply vanished, others refused to return to Athens because of threats.
It has taken 40+ years but much of the Greek population has had enough and won't tolerate any backsliding from the current cabinet. Indeed, the reason why they voted for Tsipras at the last election was because they felt that every other party was riven with corruption and incapable of reforming itself, never mind Greek natonal life or finances.
And, of course, other EU governments still haven't taken on board that
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Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by L'organist:
WHOOPS!
I didn't spot that a section was missing from the above: should be inserted between "humanitarian efforts during and after the war." and "The present government..."
Most of the governments in Athens since the end of the civil war have been fatally tainted by two things: being closely associated with neo fascist movements during the 1930s and 40s, and/or with being responsible for corruption and graft on a scale unimagineable in most of the rest of the world. And even when evidence was found and people put on trial and found guilty nothing was done, no one was punished. Look at the record of Andreas Papandreou - found guilty and remained at liberty, nothing paid back; there is ongoing scandal about the premiership of George Papandreou - you can best his mother's appearance on the so-called Lagarde list as having no obvious source for her €550 million Swiss bank account.
The EU itself sent in several investigators, one of whom simply vanished, others refused to return to Athens because of threats.
It has taken 40+ years but much of the Greek population has had enough and won't tolerate any backsliding from the current cabinet. Indeed, the reason why they voted for Tsipras at the last election was because they felt that every other party was riven with corruption and incapable of reforming itself, never mind Greek natonal life or finances.
And, of course, other EU governments still haven't taken on board that
I agree with most of your 2 posts (although my own knowledge is more Crete-centric and as with many things, it's all a little different there to the rest of Greece.
However, I'd be interested though in how you think they're going to square the apparent dichotomy between the Greek people being unwilling to tolerate backsliding from the elected position, and their simultaneous spectacularly high levels of support for the EU/Euro projects?
Which one do you think is going to give first?
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Posts: 1481 | From: behind the dreaming spires | Registered: Mar 2013
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L'organist
Shipmate
# 17338
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Posted
Yes, it is an oddity - until you look at it through Greek eyes.
They want Tsipras and Co to refuse any more austerity measures because people are hurting. Fact is, not everyone is but the people who've done very well for the past 15+ years and who've got a substantial bit of financial padding to fall back on are keeping schtum - not least because among some sections of government supporters there is increasing talk of forcible seizure of assets/wealth.
The support for EU projects is because they're perceived as being the country getting something for nothing and with no accountability, and some would say that the EU has encouraged this attitude from day one.
To find an example, look no further than the vast fraud that went with the building of 'Motorway 1', the European motorway grade road that was supposed to run from Kilkis (on the border with what is now Macedonia) to Piraeus. Started in the mid 1970s as a pre-accession project, the original target date for completion was 1989; that date was pushed back to 1992, then 1996, then it was made a 'millennium aim' - but that got missed as well.
As of today it is still not complete - there is a section missing between Leptokaria and Evangelismos of approximately 150km. Moreover, for much of the motorway you'll look in vain for central barriers, hard-shoulder, emergency telephones.
As at 1990 the EU had given Greece funds that should have been sufficient to build the road to EU standard twice over - but at that stage less than 20% had been built and only 15km was to standard.
God only knows how much this road has cost so far - but you can see who has benefited from the palatial villas in the hills to the north of Athens in places like Ekali and Stamata.
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
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Ricardus
Shipmate
# 8757
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Posted
quote:
Originally posted by lowlands_boy:
The Greeks are also notorious (in the recent press bashings at least) for very young retirement ages.
They have already raised the retirement age to 67.
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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
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Albertus
Shipmate
# 13356
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Posted
When and from what? 'Cos if the answers were, say, (and I've no idea whether they would be) 'last year' and '55', I wouldn't be too impressed.
Posts: 6498 | From: Y Sowth | Registered: Jan 2008
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alienfromzog
Ship's Alien
# 5327
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Posted
I've learnt a lot from the above posts. Thank you.
I think this by Simon Wren-Lewis is important.
quote:
Wren-Lewis, Oxford Economics Professor:
What that means is that the involvement of European governments has not helped Greece at all. With only IMF support, Greece would have suffered the same degree of austerity that has actually occurred. The additional money provided by the European authorities has been used to pay off Greece’s creditors,
<snip>
It is pretty clear why the European authorities were so generous to Greece’s creditors. They were worried about contagion.
<snip>
The key point is that the European authorities and the IMF were wrong. Contagion happened anyway, and was only brought to an end when the ECB agreed to implement OMT (i.e. to become a sovereign lender of last resort).This was a major error by policymakers - they ‘wasted’ huge amounts of money trying to stop something that happened anyway. If Eurozone governments had needlessly spent money on that scale elsewhere, their electorates would have questioned their competence.
AFZ
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Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]
An Alien's View of Earth - my blog (or vanity exercise...)
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Ricardus
Shipmate
# 8757
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Posted
quote:
Originally posted by Albertus:
When and from what? 'Cos if the answers were, say, (and I've no idea whether they would be) 'last year' and '55', I wouldn't be too impressed.
It was raised in 2013 from 65.
Playing around with the graphs on this page would suggest that the average Greek retirement age is in line with the EU average and in some years has been above average. It has mostly been below Germany and the UK but above France.
It is true that some special interest groups (including hairdressers apparently) have previously managed to wangle early retirement packages from the government. I don't think anyone is justifying these and both Syriza and their predecessors made efforts to close these concessions. The problem is when sensation-seeking media decide to whip up outrage by pretending this is normal for all Greeks.
Also, insofar as we are discussing the current negotiations, I am not sure how reforms that took place last year or the year before could be described either impressive or unimpressive when the current administration was not in place. It's like complaining that David Cameron didn't increase the personal allowance in 2009.
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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004
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alienfromzog
Ship's Alien
# 5327
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Posted
Well, this is the Jubilee Dept Campaign's position:
quote:
Jubilee Dept Campaign:
The Greek people are burdened by an enormous and unpayable debt caused by the lending of irresponsible European banks, the borrowing of the corrupt Greek elite, and a global network of tax havens allowing money to flow out of the country
[link removed]
AFZ
[ 20. June 2015, 09:40: Message edited by: Eutychus ]
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Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]
An Alien's View of Earth - my blog (or vanity exercise...)
Posts: 2150 | From: Zog, obviously! Straight past Alpha Centauri, 2nd planet on the left... | Registered: Dec 2003
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Eutychus
From the edge
# 3081
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Posted
hosting/
alienfromzog, inviting people to sign a petition, no matter how worthy the cause is deemed to be, falls foul of Commandment 9, so I have removed your link.
For your information, there is a tolerance for such invitations in people's sig lines.
/hosting
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Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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L'organist
Shipmate
# 17338
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Posted
Even allowing for the fact that the school holidays began on Wednesday, I'm told that the more prosperous suburbs of Athens are very quiet at what should be the rush hour and that traffic on Kifisias Avenue (the equivalent of the Edgware Road) is not at its usual level.
Word is that people with their own villas outside greater Athens/on an island have decamped early, taking unusually large amounts of day-to-day essentials with them.
Meanwhile, most people with relatives elsewhere in Europe are on their way (or have already left) for a long visit: in fact I spent last evening making arrangements for my Greek SiL to stop-over on her way to her husband's family in Cork.
Meanwhile, the reckoning is that over €1 billion was withdrawn from banks on Thursday alone.
Alexis Tsipras may want to do a deal but word is that the majority of the cabinet are not minded to (as they see it) give in to the ECB, IMF and other creditors. Opposition within Syzira to any deal has firmed considerably over the past three months and the list of ministers who are likely to be resistant to any deal is significant- Yannis Dragasakis - Deputy PM
- Nikos Kotzias Foreign minister
- Yanis Varoufakis - Minister of Finance
- Panos Skourletis - Minister of Labour
- Panagiotis Lafazanis - Minister for Industry & Commerce
And if opposition from within his cabinet isn't enough to stiffen the resolve of Tsipras, then it will come from his partner: Peristera Batziana was the person who got Alexis Tsipras interested in politics and has always been far more radical than him. 'Betty' has let it be known that any backsliding on what she sees as a fundamental question of Greek sovereignty will mean an end to their relationship, and Tsipras is likely to be more wary of upsetting the woman who insisted on naming their younger son Ernesto in honour of Che Guevara than Chancellor Merkel.
If the other EU prime ministers think that Tsipras is going to back down they can think again, because if he does he's going to be deposed at the head of Syriza - which is, after all, a coalition of 19 mainly far-left factions - and someone much more radical will take his place.
From the outset the Brussels machine has misunderstood Greece and 35 years of Greek EU membership hasn't given most of them any more insight than they had back in the 1970s.
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
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alienfromzog
Ship's Alien
# 5327
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Posted
quote:
Originally posted by Eutychus:
hosting/
alienfromzog, inviting people to sign a petition, no matter how worthy the cause is deemed to be, falls foul of Commandment 9, so I have removed your link.
For your information, there is a tolerance for such invitations in people's sig lines.
/hosting
My apologies. I meant to highlight the position rather than push the petition per se. Sorry won't happen again.
AFZ
Posts: 2150 | From: Zog, obviously! Straight past Alpha Centauri, 2nd planet on the left... | Registered: Dec 2003
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L'organist
Shipmate
# 17338
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Posted
alienfromzog
At first glance the idea of something along the lines of the 1953 London Conference deal being worked out for Greece is attractive: the Jubilee Debt Campaign aren't the only people urging that it is given an airing.
However, what the JDC and other proposers ignore is that, unlike 1950s Germany, Greece doesn't have a well-developed industrial sector capable of producing exports to earn their way out of debt and into prosperity.
Moreover, in 1950s Germany you had a population which saw working their way out of the situation as a realistic possibility - that isn't the case in Greece today, even if they had the industrial base.
As I posted above, the colossal rule-bending that went on in the late 1970s to allow Greece to join the EU has come back to bite those people in Brussels who have steadfastly refused to look at the reality of the Greek economy.
The so-called Jenkins commission - particularly Claude Cheysson and Antonio Giolitti - have a lot to answer for.
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
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alienfromzog
Ship's Alien
# 5327
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Posted
quote:
Originally posted by L'organist
However, what the JDC and other proposers ignore is that, unlike 1950s Germany, Greece doesn't have a well-developed industrial sector capable of producing exports to earn their way out of debt.
I don't really know Greece well enough but don't forget that Tourism is an export.
AFZ
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Everyone is entitled to his own opinion, but not his own facts.
[Sen. D.P.Moynihan]
An Alien's View of Earth - my blog (or vanity exercise...)
Posts: 2150 | From: Zog, obviously! Straight past Alpha Centauri, 2nd planet on the left... | Registered: Dec 2003
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Ricardus
Shipmate
# 8757
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Posted
quote:
Originally posted by L'organist:
alienfromzog
As I posted above, the colossal rule-bending that went on in the late 1970s to allow Greece to join the EU has come back to bite those people in Brussels who have steadfastly refused to look at the reality of the Greek economy.
The so-called Jenkins commission - particularly Claude Cheysson and Antonio Giolitti - have a lot to answer for.
Indeed. What happened to due diligence? Institutions have been fined for not checking out Bernie Madoff properly even though they weren't themselves party to the fraud. And Madoff seems to have been a bit more subtle than the people the EU was showering with money.
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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004
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Ricardus
Shipmate
# 8757
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Posted
Incidentally, does anyone else find it mildly amusing that Jean-Claude Juncker presumes to lecture the Greeks on paying their taxes, after having himself been instrumental in turning Luxembourg into the EU's own tax haven?
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Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004
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L'organist
Shipmate
# 17338
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Posted
Anyone who doubts that one of the biggest successes of the EU is news management need only look at the heralding of the 'deal' that is being sorted out at the moment and then pause for, oooh, 10 seconds thought.
If the Greek government cannot collect taxes at the moment, especially from the commercial sector, how is it magically going to increase its tax take from that same group of businesses and industries by 6 % to meet the latest EU demand?
The money-go-round that is Greek indebtedness and repayment has been given a couple more months, at most.
One of the reasons why its got this far is because of the IMF which, contrary to its usual practice, allowed itself to get embroiled in the Greek madness and is now desperate for a face-saving way out of the mess it walked into under its last head, Strauss-Kahn. Christine Lagarde is determined that Greece doesn't join Cuba and Zimbabwe as one of the few countries thats been able to make a mockery of the rules of the IMF.
Meanwhile people in Athens are still quietly withdrawing as much money as they can from banks and making contingency plans because they know, even if EU finance ministers don't, that nothing has altered: Tsipras hasn't a mandate or support, never mind the will, to change the whole basis on which he was elected which was 'no more austerity to be imposed on the Greek people'.
[ 23. June 2015, 13:15: Message edited by: L'organist ]
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by L'organist:
Anyone who doubts that one of the biggest successes of the EU is news management need only look at the heralding of the 'deal' that is being sorted out at the moment and then pause for, oooh, 10 seconds thought.
If the Greek government cannot collect taxes at the moment, especially from the commercial sector, how is it magically going to increase its tax take from that same group of businesses and industries by 6 % to meet the latest EU demand?
The money-go-round that is Greek indebtedness and repayment has been given a couple more months, at most.
One of the reasons why its got this far is because of the IMF which, contrary to its usual practice, allowed itself to get embroiled in the Greek madness and is now desperate for a face-saving way out of the mess it walked into under its last head, Strauss-Kahn. Christine Lagarde is determined that Greece doesn't join Cuba and Zimbabwe as one of the few countries thats been able to make a mockery of the rules of the IMF.
Meanwhile people in Athens are still quietly withdrawing as much money as they can from banks and making contingency plans because they know, even if EU finance ministers don't, that nothing has altered: Tsipras hasn't a mandate or support, never mind the will, to change the whole basis on which he was elected which was 'no more austerity to be imposed on the Greek people'.
That was my thoughts exactly as I drove to work this morning and they were talking about it on the Today Programme - if one of Greece's besetting problems has been heroic levels of tax avoidance, in what possible world is upping the tax rates a workable solution??
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And is it true? For if it is....
Posts: 1481 | From: behind the dreaming spires | Registered: Mar 2013
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L'organist
Shipmate
# 17338
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Posted
I love the way that everyone is talking about Greece yet few are joining up the dots and looking at Cyprus.
Cyprus exports over 25% of its goods to the Greek mainland and over a fifth of its imports come from there. In addition, two of its biggest banks (Alpha and Laiki) are either junior branches of a Greek parent or are heavily exposed in Greece.
The icing on the Cypriot cake is the collapse in property values: most property built in the past 20 years has fallen in value by 60% and all Cypriot banks have huge numbers of properties it has repossessed and cannot sell. Meanwhile, in 2013 rents were cut by 20% by Government decree and there are rumours that this may happen again: even if it doesn't average rents are now approximately 25% of what they were ten years ago, so the prospect of investors bailing out the property sector are nil.
And the EU persuaded itself that Greece and Cyprus were a better bet for membership than Turkey ![[Killing me]](graemlins/killingme.gif)
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by betjemaniac:
quote:
Originally posted by L'organist:
If the Greek government cannot collect taxes at the moment, especially from the commercial sector, how is it magically going to increase its tax take from that same group of businesses and industries by 6 % to meet the latest EU demand?
That was my thoughts exactly as I drove to work this morning and they were talking about it on the Today Programme - if one of Greece's besetting problems has been heroic levels of tax avoidance, in what possible world is upping the tax rates a workable solution??
This seems to be conventional wisdom, but is contradicted by the fact that Greece is currently running a primary surplus, something they wouldn't be able to do if "the Greek government cannot collect taxes at the moment". If the Greek government lacks the ability to collect taxes, where did that primary surplus come from?
quote:
Originally posted by L'organist:
Meanwhile people in Athens are still quietly withdrawing as much money as they can from banks and making contingency plans because they know, even if EU finance ministers don't, that nothing has altered: Tsipras hasn't a mandate or support, never mind the will, to change the whole basis on which he was elected which was 'no more austerity to be imposed on the Greek people'.
This seems to be the point of major frustration for those outside Greece. The way it's supposed to work is that the leader of an indebted country is supposed to betray his people in favor of foreign investors, after which he can retire to a nice sinecure in Davos or someplace similar. I think one of the reasons there's so much anger directed at Prime Minister Tsipras is that he's refusing to play along and is actually following through on his electoral platform.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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betjemaniac
Shipmate
# 17618
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Posted
quote:
Originally posted by Crœsos:
quote:
Originally posted by betjemaniac:
quote:
Originally posted by L'organist:
If the Greek government cannot collect taxes at the moment, especially from the commercial sector, how is it magically going to increase its tax take from that same group of businesses and industries by 6 % to meet the latest EU demand?
That was my thoughts exactly as I drove to work this morning and they were talking about it on the Today Programme - if one of Greece's besetting problems has been heroic levels of tax avoidance, in what possible world is upping the tax rates a workable solution??
This seems to be conventional wisdom, but is contradicted by the fact that Greece is currently running a primary surplus, something they wouldn't be able to do if "the Greek government cannot collect taxes at the moment". If the Greek government lacks the ability to collect taxes, where did that primary surplus come from?
no, it can collect taxes, I'm suggesting it might struggle to collect significantly more of them. Particularly across 6 regional rates of VAT (VAT being one of the things they're hoping to put up) at a time when there are an awful lot of Euros in suitcases....
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And is it true? For if it is....
Posts: 1481 | From: behind the dreaming spires | Registered: Mar 2013
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Honest Ron Bacardi
Shipmate
# 38
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Posted
Croesos wrote: quote:
This seems to be conventional wisdom, but is contradicted by the fact that Greece is currently running a primary surplus, something they wouldn't be able to do if "the Greek government cannot collect taxes at the moment". If the Greek government lacks the ability to collect taxes, where did that primary surplus come from?
Presumably from the people who are currently saying "no more", i.e. the employed. Though more accurately, the word on the streets about that is that there is indeed a problem with Greek tax collection. The part that isn't down to inefficiency is structural. The above as compared with OECD peers.
(Though it is also worth pointing out that this is a growing trend everywhere, with companies like Apple, Amazon, Starbucks et al avoiding taxation in many countries of operation by canny company registrations in tax havens.
Still, you know the solution to the latter. Just don't buy from them. More of a problem for Greece and its shipping industry.)
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Anglo-Cthulhic
Posts: 4857 | From: the corridors of Pah! | Registered: May 2001
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L'organist
Shipmate
# 17338
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Posted
The so-called 'primary surplus' is nothing of the sort: these figures include the amount pumped into the Greek economy by the ECB to cope with the huge amounts being drawn out at ATMs (which is well publicised) and the transfers to banks elsewhere (which is kept pretty quiet).
To put it into some sort of context, the amount taken out of banks at ATMs alone last week was more than the total amount repayable to the ECB and the IMF in June and July.
As for any further cuts in pensions: wait and see. Tsipras and Varoufakis presented their latest 'plan' to the EU meeting so late that no one had a chance to look at it properly and do any number crunching to see if it would work.
Jean-Claude Juncker made sure that the simple existence of the plan (which started with the word correction) was hailed as if a major deal had been done, which is far from the case. The finance ministers of Germany and the Netherlands, in particular, are going to be very hard to convince that further bailout monies should be given to Athens: Germany's Schäuble because he knows he can't sell it to a home electorate who were sceptical at the whole Euro project from the outset, Dijsselbloem because he realises that the Cypriot 'bail-in' that he helped devise in 2013 has't worked and that a Greek deal is going to fail.
Whatever so-called deal is reached, the spin put on it by the EU bureaucrats is going to be that it is a good deal for everyone, which is not going to be the case.
Quite apart from anything else, the production of accurate statistics is as far beyond the capabilities of the present Greek government as it has been for its predecessors. And any deal based on increasing the tax revenue ignore the fact that no Greek government has been able to collect taxes properly since the demise of the Ottoman Empire.
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Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by L'organist:
The so-called 'primary surplus' is nothing of the sort: these figures include the amount pumped into the Greek economy by the ECB to cope with the huge amounts being drawn out at ATMs (which is well publicised) and the transfers to banks elsewhere (which is kept pretty quiet).
![[Confused]](confused.gif) You seem to be confusing a lot of different topics. You start off saying the Greek primary surplus (a measure of government fiscal activity) is false because of cash flows in the general economy (a financial act, not a fiscal one) due to the ECB acting in the way we typically expect central banks to act when faced with bank runs. For the sake of clarity could you make another run at it and try to stick to either fiscal or financial analysis and not try to pass the one off as the other?
Unless your point is just "Greece bad!", in which case I think we've all got it.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Honest Ron Bacardi
Shipmate
# 38
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Posted
Croesos - it certainly is confusing, but I don't think it's l'organists fault. Rather it is due to the prolonged financial engineering of the accounts in these latter years, especially involving the transformation of off-balance sheet liabilities into balance sheet assets, as aided and abetted - and audited - by EUROSTAT, the EU statistical office.
A right-wing neocon assertion? Er, no - that would be Yannis Varoufakis, the current minister of finance, and former Professor of Economics at the University of Athens. Basically, assertions of Greek primary surplus are worthless. Especially worthless are those such as "cyclically adjusted primary surpluses", as cited by Paul Krugman. Effectively they take an error then multiply it by a correction factor that assumes that Greece's economy is cyclically in line with other OECD peers. Having just been kicked into heavy austerity, it isn't obvious what cycle it is currently reasonable to expect it to be in.
I like Paul Krugman, but he is distinctly naive about the so-called audited figures. I also like Yannis Varoufakis. And here I may part company with L'organist, because I feel the current Syriza negotiators are doing the best they can to clear out the Augean stables of Greek finances, whilst avoiding too much grief for the Troika who, let's face it, merit a thorough pummelling in public opinion.
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Anglo-Cthulhic
Posts: 4857 | From: the corridors of Pah! | Registered: May 2001
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Honest Ron Bacardi:
Croesos - it certainly is confusing, but I don't think it's l'organists fault. Rather it is due to the prolonged financial engineering of the accounts in these latter years, especially involving the transformation of off-balance sheet liabilities into balance sheet assets, as aided and abetted - and audited - by EUROSTAT, the EU statistical office.
Which is interesting and relevant, but not really connected with "huge amounts being drawn out at ATMs . . . and the transfers to banks elsewhere". As far as I can see, this kind of activity by private citizens has little to do with current Greek government balance sheets. I'm still wondering what the connection is that L'organist is trying to make.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Honest Ron Bacardi
Shipmate
# 38
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Posted
Agreed, Croesos. It's just the way it was handled last time, but I hope and trust the Syriza govt. will do the right thing so far as accounting is concerned this time round.
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Anglo-Cthulhic
Posts: 4857 | From: the corridors of Pah! | Registered: May 2001
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Palimpsest
Shipmate
# 16772
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Posted
I think years of Congressional deadlock have left me with the feeling that the Drama Queens will always push thinks to brink just to feel important. I'm wondering if this is the case now with Greece; that they won't cave till the last moment and then back down. Or it may be out of the control of the government at this point.
Posts: 2990 | From: Seattle WA. US | Registered: Nov 2011
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Alan Cresswell
Mad Scientist 先生
# 31
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Posted
There certainly seems to be a strong element of brinkmanship within modern political practice. No one can afford to seem to back down, they need to maintain standing at home in front of a usually hostile press. Ultimately a solution is needed that needs to be sold as a success by all parties. Some small concessions at the last minute allow everyone to go home and present themselves as standing up to for their principles and forcing a last minute concession, and that what they gave was insignificant.
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Don't cling to a mistake just because you spent a lot of time making it.
Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001
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