|
Source: (consider it)
|
Thread: Greece and the Euro
|
Alan Cresswell
Mad Scientist 先生
# 31
|
Posted
To me it looks like a compromise - so no real winners at all. Greece has secured (subject to approval in various parliaments) a cash input to keep the immediate problems of total economic collapse at bay for a short while, hopefully long enough to allow economic growth so they can start digging their way out of the pit the country is in.
The international financiers get to wring some concessions from Greece, but not the extreme extensions to the existing austerity measures.
I don't know how privatisation of national assets such as the electricity grid will go down with the more left leaning members of the Greek parliament. But, it is a way of raising cash - though it needs to be handled to get the best possible price (so, don't get advice from the UK Conservative party who have mastered the art of underselling assets so that their chums who buy our assets get a bargain).
--------------------
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
| IP: Logged
|
|
Dave W.
Shipmate
# 8765
|
Posted
quote:
Originally posted by Alan Cresswell:
To me it looks like a compromise - so no real winners at all. Greece has secured (subject to approval in various parliaments) a cash input to keep the immediate problems of total economic collapse at bay for a short while, hopefully long enough to allow economic growth so they can start digging their way out of the pit the country is in.
The international financiers get to wring some concessions from Greece, but not the extreme extensions to the existing austerity measures.
A compromise? What did the creditors want that they did not get?
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
| IP: Logged
|
|
Doublethink.
Ship's Foolwise Unperson
# 1984
|
Posted
Debt restructure was agreed in principle.
--------------------
All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell
Posts: 19219 | From: Erehwon | Registered: Aug 2005
| IP: Logged
|
|
|
|
John Holding
Coffee and Cognac
# 158
|
Posted
Alan -- just how does the deal encourage growth?
It's a recipe for further recession, IMO., with further declines in employment and personal income.
Moreover, though this is not always the case, in an economy like that of Greece, increasing consumption taxes like VAT is simply an incentive to take yet more activity into the black market. I would expect a net decline in tax revenues as a result.
From well outside the game, it looks to me as if Frau Merkel decided to crucify Greece in order to punish a man she clearly loathes.
I'd go further, and suggest that an essentially Western/Northern (German largely, but other nations as well) approach to laws is being imposed on people, Greece in this case but not exclusively, who do not understand that approach. Primarily this is being done out of ignorance, I believe -- the Western/Northern paradigm is "Well, it's the law so people will of course simply obey it". That's never been the case south of the Pyranees/Alps, and it won't be now in Greece.
All this has done is postpone Greek bankruptcy...if they're lucky. If they're not, I fear major political unrest in Greece, possibly extending well beyond what a democracy can tolerate. It's not inconceivable, in my view, that the present government may fall, it will be impossible to find a successor, and elections in a month or so will produce no party with enough seats even to be the core of a new government. Greece, that is, will become ungovernable -- and the effective takeover of what is supposed to be a sovereign member of the European Union (which is what there now it) will have to be followed by a political takeover of the country by a bunch of unelected bureaucrats in Brussels who are anxious to do whatever Frau Merkel decides is best for the Greeks.
Perish the thought that the Greeks might have an opinion or a say.
John
Posts: 5929 | From: Ottawa, Canada | Registered: May 2001
| IP: Logged
|
|
Beeswax Altar
Shipmate
# 11644
|
Posted
quote:
Originally posted by Doublethink.:
Debt restructure was agreed in principle.
Yes but Greece needed debt forgiveness not restructuring. This isn't much of a compromise at all. Tsipras bluffed and lost. He needed to go all in. Again, Greece really needed to abandon the Euro five years ago when they could have everybody else down with them. Instead, the rest of the Europe spent the five years transferring Greek debt from private bankers to the government. Being a German investment banker is like playing craps with the casino's money.
--------------------
Losing sleep is something you want to avoid, if possible.
-Og: King of Bashan
Posts: 8411 | From: By a large lake | Registered: Jul 2006
| IP: Logged
|
|
MarsmanTJ
Shipmate
# 8689
|
Posted
quote:
Originally posted by Beeswax Altar:
Tsipras bluffed and lost. He needed to go all in.
According to Varoufakis, that was what he wanted to do. I think they'd've done fairly well out of it, actually, since it would have scared the French and Italians enough to get some screams to Merkel to improve the deal.
Posts: 238 | Registered: Oct 2004
| IP: Logged
|
|
Alan Cresswell
Mad Scientist 先生
# 31
|
Posted
quote:
Originally posted by Dave W.:
quote:
Originally posted by Alan Cresswell:
To me it looks like a compromise - so no real winners at all. Greece has secured (subject to approval in various parliaments) a cash input to keep the immediate problems of total economic collapse at bay for a short while, hopefully long enough to allow economic growth so they can start digging their way out of the pit the country is in.
The international financiers get to wring some concessions from Greece, but not the extreme extensions to the existing austerity measures.
A compromise? What did the creditors want that they did not get?
As far as I can tell, no demand to cut government expenditure even further. They got a commitment to improve tax collection efficiency, but Greece would have needed to do that anyway. The Greeks got control over that €50billion fund, rather than it being administered by the debtors, and if used wisely that would hopefully allow a small boost to the economy - though it would only bring longer-term benefits if that economic growth results in increased tax revenue.
--------------------
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
| IP: Logged
|
|
Enoch
Shipmate
# 14322
|
Posted
Might not a larger black economy be just what might rescue Greece from the hole it's in?
--------------------
Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
| IP: Logged
|
|
John Holding
Coffee and Cognac
# 158
|
Posted
quote:
Originally posted by Enoch:
Might not a larger black economy be just what might rescue Greece from the hole it's in?
It might indeed, except that actual economic activity is not the object of the current plan. The objective of the plan is to increase the amount of revenue raised from taxes, and specifically, from the increase in VAT.
John
Posts: 5929 | From: Ottawa, Canada | Registered: May 2001
| IP: Logged
|
|
Dave W.
Shipmate
# 8765
|
Posted
quote:
Originally posted by Alan Cresswell:
quote:
Originally posted by Dave W.:
quote:
Originally posted by Alan Cresswell:
To me it looks like a compromise - so no real winners at all. Greece has secured (subject to approval in various parliaments) a cash input to keep the immediate problems of total economic collapse at bay for a short while, hopefully long enough to allow economic growth so they can start digging their way out of the pit the country is in.
The international financiers get to wring some concessions from Greece, but not the extreme extensions to the existing austerity measures.
A compromise? What did the creditors want that they did not get?
As far as I can tell, no demand to cut government expenditure even further.
I'm pretty sure that "ambitions pension reforms" means the same thing as further cuts to government expenditure - see page 3 of the text of the agreement. quote:
The Greeks got control over that €50billion fund, rather than it being administered by the debtors [sic]
(By the creditors, I think you mean.) The fund that comes from the forced sale of Greek government assets? I suppose the Greeks can also congratulate themselves that the victors have graciously allowed them to keep the Parthenon. For now, at least.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
| IP: Logged
|
|
Alan Cresswell
Mad Scientist 先生
# 31
|
Posted
quote:
Originally posted by Dave W.:
I'm pretty sure that "ambitions pension reforms" means the same thing as further cuts to government expenditure - see page 3 of the text of the agreement.
I read that section as mostly about further clarification over existing proposals, rather than introduction of new steps. In particular the pension section refers to 2012 reforms that still haven't been completely implemented (I admit to not knowing what the Constitutional Court ruling is, however).
Maybe that's because the document was drafted to allow scope for both sides to claim they'd stood up to the other side, and hence be able to sell it to their own constituencies.
--------------------
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
| IP: Logged
|
|
Enoch
Shipmate
# 14322
|
Posted
quote:
Originally posted by John Holding:
quote:
Originally posted by Enoch:
Might not a larger black economy be just what might rescue Greece from the hole it's in?
It might indeed, except that actual economic activity is not the object of the current plan. The objective of the plan is to increase the amount of revenue raised from taxes, and specifically, from the increase in VAT.
Yebbut.
The argument is that increasing VAT and tax collection to pay off debt will throttle the economy's ability to regenerate itself. That's probably true. If so, though, the black economy is economic activity which escapes its compass and which wouldn't otherwise happen.
The bad feature about it, isn't that it happens. That's understandable. It's difficult really to condemn people from finding that way round the problem.
The bad features are that the effort needed for people to find their way through the interstices of the system would be better expended directly on the economic activity itself. It confuses commercial ethics because it becomes harder for people trying to be honest to be clear where the boundaries are. It is also likely to discourage people from commercial enterprises that involve significant capital investment rather than just buying and selling.
--------------------
Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
| IP: Logged
|
|
fletcher christian
Mutinous Seadog
# 13919
|
Posted
Posted by Enoch:
quote:
The bad feature about it, isn't that it happens. That's understandable. It's difficult really to condemn people from finding that way round the problem.
Maybe I'm misreading this, but I'm presuming this statement relates to a 'black economy? If so (and if not then this can all be ignored), then I would have to ask if a 'black' economy where you live would be something you would be happy to see continue unchecked and unregulated. To my mind it amounts to robbery. It is removing money that would otherwise go towards the running of a state for the benefit of all and keeping it for a greedy self. I'm not sure I'd have any difficulty condemning that.
--------------------
'God is love insaturable, love impossible to describe'
Staretz Silouan
Posts: 5235 | From: a prefecture | Registered: Jul 2008
| IP: Logged
|
|
Alan Cresswell
Mad Scientist 先生
# 31
|
Posted
VAT income can be increased without increasing the VAT rate. It can be increased by reducing the proportion of black market activities. Which will need an investment in enforcement.
--------------------
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
| IP: Logged
|
|
Enoch
Shipmate
# 14322
|
Posted
quote:
Originally posted by fletcher christian:
Posted by Enoch:
quote:
The bad feature about it, isn't that it happens. That's understandable. It's difficult really to condemn people from finding that way round the problem.
Maybe I'm misreading this, but I'm presuming this statement relates to a 'black economy? If so (and if not then this can all be ignored), then I would have to ask if a 'black' economy where you live would be something you would be happy to see continue unchecked and unregulated. To my mind it amounts to robbery. It is removing money that would otherwise go towards the running of a state for the benefit of all and keeping it for a greedy self. I'm not sure I'd have any difficulty condemning that.
That depends on how far you trust the state and identify with it as your state or not.
--------------------
Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
| IP: Logged
|
|
John Holding
Coffee and Cognac
# 158
|
Posted
And now I see that the BBC is reporting that the IMF itself doesn't want to participate in the loans because it believes what is really needed is a massive write-down of debt, without which, it reportedly says, the rescue attempt is doomed to failure.
John
Posts: 5929 | From: Ottawa, Canada | Registered: May 2001
| IP: Logged
|
|
Doublethink.
Ship's Foolwise Unperson
# 1984
|
Posted
Yup, they've apparently just noticed the Greek finance minister was right. Now do we think it would have helped to mention this earlier ...
[ 15. July 2015, 07:04: Message edited by: Doublethink. ]
--------------------
All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell
Posts: 19219 | From: Erehwon | Registered: Aug 2005
| IP: Logged
|
|
Alan Cresswell
Mad Scientist 先生
# 31
|
Posted
About 10% of the Greek debt is to the IMF. But, I'm not seeing the IMF taking a lead by cancelling some of that debt.
--------------------
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
| IP: Logged
|
|
Barnabas62
Shipmate
# 9110
|
Posted
I don't think the deal will hold for long, even if the Greek parliament passes the necessary measures today. It looks as though Tsipras thought that "horrible and humiliating" was better than the massive uncertainties of Grexit (from the Euro and possibly the EC also). And he didn't have a Grexit mandate anyway.
The IMF announcement did surprise me. I thought Christine Lagarde was "in on the act", which I thought was the French and the Germans colluding over "good cop bad cop" tactics to drive Tsipras into the ground. But apparently not. Unless this is just another bit of public show-setting.
But it's a typical EC deal. Plenty of smoke and mirrors about, so the truth can be as many-sided as people feel they need for their various political purposes.
--------------------
Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?
Posts: 21397 | From: Norfolk UK | Registered: Feb 2005
| IP: Logged
|
|
L'organist
Shipmate
# 17338
|
Posted
Athens is beginning to burn. ![[Votive]](graemlins/votive.gif)
--------------------
Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
| IP: Logged
|
|
Sioni Sais
Shipmate
# 5713
|
Posted
quote:
Originally posted by L'organist:
Athens is beginning to burn.
I was afraid of that. Let's hope it doesn't turn out too serious.
--------------------
"He isn't Doctor Who, he's The Doctor"
(Paul Sinha, BBC)
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004
| IP: Logged
|
|
orfeo
Ship's Musical Counterpoint
# 13878
|
Posted
quote:
Originally posted by Doublethink.:
Yup, they've apparently just noticed the Greek finance minister was right. Now do we think it would have helped to mention this earlier ...
Aargh. Just... aargh.
I'm beginning to feel as if Germany is never going to want to change the situation because, fundamentally, the situation is good for Germany.
--------------------
Technology has brought us all closer together. Turns out a lot of the people you meet as a result are complete idiots.
Posts: 18173 | From: Under | Registered: Jul 2008
| IP: Logged
|
|
Beeswax Altar
Shipmate
# 11644
|
Posted
Somewhere, Bismarck is smiling.
--------------------
Losing sleep is something you want to avoid, if possible.
-Og: King of Bashan
Posts: 8411 | From: By a large lake | Registered: Jul 2006
| IP: Logged
|
|
alienfromzog
Ship's Alien
# 5327
|
Posted
Seumas Milne in the Guardian this week is spot on, I think.
quote:
Seumas Milne:
That this is about politics more than economics should now be obvious. It’s not just that the austerity imposed on Greece has delivered a 1930s-style depression, or that Ukraine was recently bailed out with generous debt write-offs but without any crucifixions or waterboarding. One part of the troika, the IMF – dominated by a US anxious to keep Greece in the Atlanticist camp – has now revealed it is well aware Greece’s debts will never be repaid without massive relief and that this week’s deal could swell them to more than 200% of GDP. In other words, it won’t work. But pre-Keynesian balanced-budget economics has the eurozone’s rulers in its grip, as they seek to overcome the crisis by restoring corporate profitability.
AFZ
--------------------
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
| IP: Logged
|
|
quetzalcoatl
Shipmate
# 16740
|
Posted
Yes, there are some interesting stories now about the IMF criticism of the Greek deal. Not only that the IMF thinks Greece cannot pay off its debts, and so therefore should get some kind of write-off, but that the whole European neo-liberal approach is a slow-motion car-crash.
Some journos are saying that behind the IMF stands the US, which is now critical of EU approaches, but this sounds like conjecture to me.
But presumably some senior US figures are leaking this stuff to the press, no idea who. I wonder if they are saying that it's time to go back to Keynesian measures - that will go down in Europe like a lead pancake, although of course, European economies do go Keynesian surreptitiously, when they think no-one is looking.
--------------------
I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
| IP: Logged
|
|
Dave W.
Shipmate
# 8765
|
Posted
quote:
Originally posted by quetzalcoatl:
But presumably some senior US figures are leaking this stuff to the press, no idea who.
Why do you presume this? Surely the reports are distributed to others, and U.S. officials aren't the only ones who think the debt is unsustainable.
[ 19. July 2015, 14:11: Message edited by: Dave W. ]
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
| IP: Logged
|
|
quetzalcoatl
Shipmate
# 16740
|
Posted
quote:
Originally posted by Dave W.:
quote:
Originally posted by quetzalcoatl:
But presumably some senior US figures are leaking this stuff to the press, no idea who.
Why do you presume this?
Because when journalists start doing stories such as this, 'IMF critical of Greek deal', 'US stands behind IMF', 'US critical of EU neo-liberalism', they are not just getting this stuff out of their own heads. And they are not getting it just from European sources, I would bet. But maybe it is not from leaks, but from open sources, I wonder who.
--------------------
I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
| IP: Logged
|
|
quetzalcoatl
Shipmate
# 16740
|
Posted
Possibly Jack Lew, US Treasury secretary, who has been travelling round Europe recently.
Old story - Jack Lew warns of European 'lost decade' with present economic policies, do not count on US as an engine of economic recovery.
--------------------
I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
| IP: Logged
|
|
Dave W.
Shipmate
# 8765
|
Posted
quote:
Originally posted by quetzalcoatl:
quote:
Originally posted by Dave W.:
quote:
Originally posted by quetzalcoatl:
But presumably some senior US figures are leaking this stuff to the press, no idea who.
Why do you presume this?
Because when journalists start doing stories such as this, 'IMF critical of Greek deal', 'US stands behind IMF', 'US critical of EU neo-liberalism', they are not just getting this stuff out of their own heads. And they are not getting it just from European sources, I would bet. But maybe it is not from leaks, but from open sources, I wonder who.
But again, other people also have access to the reports and agree that the debt is unsustainable, so why do you only suspect American officials? And can you provide a link to any of these examples? They don't seem to turn up in Google searches.
Thanks for the Jack Lew itinerary tip, though - now I'm envisioning him skulking about the great cities of Europe, meeting journalists in darkened parking garages with a bundle of illicitly mimeographed IMF reports tucked under his arm.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
| IP: Logged
|
|
|
|
Dave W.
Shipmate
# 8765
|
Posted
quote:
Originally posted by quetzalcoatl:
http://www.theguardian.com/business/2015/jul/15/imf-greece-future-analysis-bailout
No actual sources quoted or even claimed, really. "Fingerprints," eh? Not so much a story, article, or report as an opinionated blog post. quote:
But this seems to be saying that Obama is actually pushing the EU to cut Greece some slack.
Well, yes - that was the whole thrust of the IMF analysis, whoever supplied it to the reporters.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
| IP: Logged
|
|
Enoch
Shipmate
# 14322
|
Posted
quote:
Originally posted by quetzalcoatl:
Because when journalists start doing stories such as this, 'IMF critical of Greek deal', 'US stands behind IMF', 'US critical of EU neo-liberalism', they are not just getting this stuff out of their own heads. ...
Perhaps, but why not? Sadly, experience of the press means that as an argument - 'we don't know where they are getting the story from; therefore they must be getting it from somewhere' is a non sequitur.
A lot of unattributed stories start of as a journalist or commentator's wishful thinking.
--------------------
Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
| IP: Logged
|
|
Eutychus
From the edge
# 3081
|
Posted
The BBC currently has a headline saying "Greek debt relief possible - Merkel" while Le Parisien French news site has one saying, of the same TV interview, "Merkel repeats her opposition to any reduction of Greek debt".
I haven't seen the two nation's media report such differing versions of reality since the Iraq war.
[ 19. July 2015, 21:38: Message edited by: Eutychus ]
--------------------
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
| IP: Logged
|
|
Dave W.
Shipmate
# 8765
|
Posted
Those two positions aren't contradictory - as the BBC story says, she's ruling out reductions in the face value of the debt, but willing to consider other forms of relief like maturity extensions and rate reductions.
Posts: 2059 | From: the hub of the solar system | Registered: Nov 2004
| IP: Logged
|
|
Ricardus
Shipmate
# 8757
|
Posted
Maybe the plan is to push the bulk of repayments to some point in the future when Greek debt relief is no longer politically toxic - or when it may still be toxic but someone else will have to deal with it.
--------------------
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
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by Ricardus:
Maybe the plan is to push the bulk of repayments to some point in the future when Greek debt relief is no longer politically toxic - or when it may still be toxic but someone else will have to deal with it.
That may be the plan in the minds of some - and at least in the English media, the most optimistic commentators are assuming that that is what will happen ('Everyone knows .. unsustainable etc')
I think the past few weeks have shown that what is obvious to some is generally not obvious to the eurogroup.
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
Ricardus
Shipmate
# 8757
|
Posted
quote:
Originally posted by lowlands_boy:
So this morning's proposals after an all night discussion in Brussels consist of everything that the Greek PM urged his people to reject recently.
The Greeks suposedly have just three days to approve all this, including rolling back all the anti austerity laws from February, and sticking 50 billion of assets in some sort of trust fund to be run for them.
It's going to be fascinating to see how Tsiparis sells this to them.
Apparently he sold it very well - his approval rating is at 60%.
--------------------
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
| IP: Logged
|
|
alienfromzog
Ship's Alien
# 5327
|
Posted
I think this ( Mainly Macro: 'German self-interest') is important. Not so much for the analysis of German policy (although that's interesting as there is a very broad consensus in economists except in Germany) but for the data about where the German economy is at. I knew that this was the case but this blog brings the numbers together in an easily accessible way.
There are many who like the wax lyrical about how awful Greece are, the how dare they complain about the bail out terms? - they should just be bloody grateful! mentality. Two things to note here.
1) Part of the problem for Greece (and Spain, Portugal, Italy) is how the Euro setup benefited Germany at their expense...
quote:
Perhaps the largest benefit Germany has received from the Eurozone has been as a result of undercutting its fellow members around ten years ago. Everyone knows about the ‘excess inflation’ in the periphery during those years, but the story of insufficient wage inflation in Germany at the same time is not often told. This policy - which if it had occurred via exchange rates rather than domestic inflation would be called beggar my neighbour - may well have been accidental, but it is a key reason why Germany is the only Eurozone economy that has not suffered since 2010.
2) The current policies further benefit Germany.
quote:
In fact in many ways Germany has done rather well out of the EZ crisis. Henning Meyer points us to a study which suggests that, as a result of the crisis and Germany’s ‘safe haven’ status, the German government has saved more than E100 billion from 2010 to 2015 in debt interest. As Henning notes, this has helped Germany ‘set an example’ on deficits without having to do anything too painful. That is slightly more than its total loss if Greece completely defaults. It has also not done badly as a result of the profits the ECB has made on its lending.
As such the morality play argument that Germany are the good-guys and Greece should just be grateful is deeply flawed.
As I have said on previous pages, the fact that we currently have self-defeating policies is quite depressing and we really should be looking just for what-works. However, if you are looking for a justice argument - the fact the previous and current Euro policy significantly favours Germany is surely an argument for magnanimity of their part - the very antithesis of their current approach.
AFZ
--------------------
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
| IP: Logged
|
|
lowlands_boy
Shipmate
# 12497
|
Posted
And in the meantime Tsiparis is getting hammered in the Greek parliament. In the most recent vote for the third bailout, more then 120 of his own MPS didn't support him, and this could trigger a confidence vote.
Former finance minister Varoufakis gives the deal a good kicking in
this document
--------------------
I thought I should update my signature line....
Posts: 836 | From: North West UK | Registered: Apr 2007
| IP: Logged
|
|
lowlands_boy
Shipmate
# 12497
|
Posted
So, Tsipiras has resigned and called snap elections as a referendum on the way he is trying to get Greece out of the crisis.
Bit of a turnaround from the man who was the anti-austerity candidate.
--------------------
I thought I should update my signature line....
Posts: 836 | From: North West UK | Registered: Apr 2007
| IP: Logged
|
|
L'organist
Shipmate
# 17338
|
Posted
I don't know why its only now that people are waking up to the fact that the main beneficiary of the set-up of the Euro is the German economy: if you cast your mind back, there was massive disquiet in Germany before the Eurozone came into existence and it was only the promise that the Eurozone would be run as tightly as if it were the Bundesbank and the Mark that made it possible for German politicians to 'sell' the Euro project to the German electorate.
So, they set it up so that the ECB was run as tightly as possible - but with the fatal flaw that the currencies allowed into the Eurozone would not be vetted as thoroughly as they should be. After that, disaster was bound to happen.
--------------------
Rara temporum felicitate ubi sentire quae velis et quae sentias dicere licet
Posts: 4950 | From: somewhere in England... | Registered: Sep 2012
| IP: Logged
|
|
chris stiles
Shipmate
# 12641
|
Posted
quote:
Originally posted by L'organist:
So, they set it up so that the ECB was run as tightly as possible - but with the fatal flaw that the currencies allowed into the Eurozone would not be vetted as thoroughly as they should be. After that, disaster was bound to happen.
.. and this was partly by design, there had been numerous breaches of the rules, followed by temporarily ignoring them (France and Germany breaching the Stability and Growth Pact in 2003 being a notable example). There was also a drive to make the market covered by the currency as large as possible - hence Germany intervention to allow Italy in.
All of this wasn't the best foundation to build a currency union.
Posts: 4035 | From: Berkshire | Registered: May 2007
| IP: Logged
|
|
Printer-friendly view
