The Greek "tragedy"

[Shelter]

Always here is said, the Greek people must not suffer if the other European countries will waive their debts.

But already two times they haved waived Athens their liabilities and that on a grand scale.
In March 2012 renounced predominantly private creditors as Banks and Insurance Companies on 53,5% of their receivables - the debts of Greece shrinked down to 105 billions of Euros.

In November 2012 the Eurogroup duplicated the lending terms for the credits of Greece from 15 to 30 years. The interest rates were lowered or deferred for 10 years. That was a debt relief which saved Athens again 44 billions of Euros.

And what has all this helped? Nothing .... Nothing .... and again Nothing!

So tell me why to burn more good money of the tax-payers.

 

[gb2000ie]

Dear GB I honestly think you must have misunderstood my words. Never ever in NO post I have said Varoufakis "is good because he is NOT diplomatic" - honestly that is pure nonsense.

no no no - I said you had been complimentary of the German minister for finance, citing his lack of tact as a positive.

I'm familiar enough with your position to know you don;t like any of the Greek delegation

And "the oaf Germany send" is Mr. Schäuble, you must not love him but he has a name. And what he has said that was so undiplomatic that he (Mr. Schäuble!) insulted Mr. Varoufakis of Mr. Tsipras or the whole Greek people?

You are right that Schäuble is very different to the Greek delegation. He's much more boring and grey, and, well, boring I guess.

But his inflexibility, his staggering ability to deny reality, and his smug superiority are at least as unhelpful as the Greek's flamboyancy.

When ever I hear him speak it's like he is living in a parallel universe. He's describing an alternative reality as if it is fact, and appears to have learned nothing form the last decade of global economic crisis.

Like I say, they are very different, but I find his arrogance and ignorance every bit as infuriation as you find the Greeks.

He only is adamant that the Greek Government finally is implementing all the many promises they have told since they are in office. And surely it will be his due slowly to be angry week after week like a bear leaded around on a nosering.

No. He is out of touch with the realities of the damage Germany's policies have done, and is impenetrable to new information.

And as for myself I'll never agree with a blunt person. :no:

How a person presents their argument has nothing to do with it's veracity. Why would you not agree with a blunt person who is correct?

You are blaming me that I get my information only from conservative papers and TV. Well, perhaps you are right. But in the same way I can blame you to read only left wing papers. You say that my papers are lying - well and I play the ball back to you. Back and forth, back and forth and so on and so on - really a senseless act! ~X(

Firstly, I do not only get my facts from lefty papers, and secondly, I have taken a LOT of time to research the facts and figures for myself. That is why I so often back up my points with economic data.

So far, your posts have not been all that heavy on data.

Just because we have come to opposite conclusions, that does not mean we are mirror images of each other!

B.

 

[dargelos]

If looks could kill...


I don't think anyone has forgotten about the 1953 bailout, they've just swept it under a thick carpet. The thing to remember is that it was not an act of sympathy or kindness. Few thought that the still despised nation deserved any charity. It was simple cold hearted economics, it being cheaper to bear the price of the bailout than to pay the much larger price of dealing with a Germany that had completely fallen apart. Justice, morality and public opinion were irrelevant distractions.
So much debate has been wasted on whether the citizens of another country are feckless or industrious, fragrant or smelly, deserving or undeserving. None of that having anything to do with the question, is it in the long run cheaper to;
A bankrupt a nation
B help her back on her feet

Going back further, the vast cost to America of the Marshall plan looked like genorosity, it was really investment. She got back in trade many times more than she spent on aid.

 

[Shelter]

You are right that Schäuble is very different to the Greek delegation. He's much more boring and grey, and, well, boring I guess.

B.

:rofl::rofl::rofl::rofl:
This is a point we are 100% congruent!

 

[gb2000ie]

...
So much debate has been wasted on whether the citizens of another country are feckless or industrious, fragrant or smelly, deserving or undeserving. None of that having anything to do with the question, is it in the long run cheaper to;
A bankrupt a nation
B help her back on her feet

Exactly!

History tells us that when a nation has an impossibly large debt overhang (as Greece definitely does now after the utter failure of the first bailout), debt relief is inevitable, and, VERY effective at getting the country back on it's feet.

Perfectly timed, a research paper on the effects of debt forgiveness has just come out a few weeks ago: http://anon.projectarchive.net/?htt.../reinhart-working-paper-sovereign-debt-relief (link includes link to the full paper)

Firstly, the paper finds that history IS a good guide, even to modern situations:

A central finding of this paper is that the resolution of debt overhangs in advanced and emerging market economies has much in common − even when they are separated by more than half a century.

And it finds that debt relief is an effective tool for providing real and lasting solutions:

we show here that the magnitude of debt relief was often large (even by conservative estimates) and contributed importantly in solving debt overhang situations of the past.

(I think we can count Germany's 50% write-off in 1953 as 'large'!)

I think this part is very relevant to Greece:

We also study the aftermath of debt relief and conduct difference-in-differences regressions for several centrally orchestrated debt relief initiatives. We find that the economic panorama tends to improve in terms of growth, ratings and debt sustainability. This is particularly the case after debt operations that imply face value debt reduction, such as in the mid-1930s and early 1990s. In contrast, we find that softer forms of crisis resolution, such as debt rescheduling, temporary payment standstills, and bridge lending operations were not generally followed by higher growth and better ratings. These crisis resolution tools were ineffective in solving debt crises that had been dragging on for several years.

In short - the half-measures that have been forced on Greece for the past 8 years have a history of not being effective. What history shows IS effective at actually fixing problems is large-scale debt relief.

It is important to note that the paper does not say that debt relief ALONE is successful, but what it does say is that history shows that plans that do not include debt relief are not effective at actually solving problems.

So, it would be very valuable to be discussing the structural changes Greece should make in exchange for debt relief, but, alas, what I have been hearing from the Euro-zone finance ministers, and especially from the German minister (I know his name but I can't find the two dots over the a in his name on my Irish keyboard), is that debt relief is "off the table". The one thing history shows is a part of all successful plans, and missing from all failed plans, that is verboten. Not a good approach!

B.

 

[gb2000ie]

If there is something to learn from that situation, it is that Adenauer had a vision and a plan, in which direction to move. Such a vision is entirely lacking in the case of Merkel. Her constant "no" is not the result of a strong opinion, it is the lack of a an opinion and her hope that by waiting long enough, some lack of alternatives would come to help her. Which also explains why she sticks to the austerity idea.

A very insightful point!

We have ended up where we are, in effect, by default. At each point, the easiest, not the best, decision was made.

As much as on pleasing his own people Tsipras should have worked on convincing all people of europe to follow a different route. But he just made it more difficult for them to come up with reasonable alternatives, and that way very very easy for every conservative/neoliberal government, not to give in to his demands.

Everyone keeps saying Tsipras should have come up with something else, but I don't see how he could have done that. As long as the trokia stick to their austerity fantasy, and as long as the Euro elite keep ignoring the Euro's role in all this, all Tsipras can do is call out how wrong the Germans are, and when he does, they just take his lack of agreement as evidence that Greece is broken and can't be dealt with!

As long as the Germans & co. are living in a fantasy world where austerity is an effective way of dealing with a collapsed economy, it is IMPOSSIBLE to be constructive with them. Everything reality-based you propose will be ridiculed!

B.

 

[Gruet98]

When will people in the Eurozone get to vote if they actually want Greece to stay?

 

[Shelter]

The Germans, the Germans, the Germans ----- if it is raining, it has to be the Germans fault! If there is a thunderstorm, it has to be the Germans fault! If the Greeks can't pay their debts - oh surely - it has to be the Germans fault. On the disasters of these world always someone finds a reason that is has to be the Germans fault.

Germany is not Europe alone!!!!!! The EU consits of 28 member-states!!!!! And surely Germany is not the "emperor" of the EU!!!!

And yes, Germany has lost a horrible war which was started by Germany. And yes, after the war the Marshall-Plan helped Germany to recover one's legs.

But what is it? Is it envy or rage that Germany (the western half) has recovered because the Germans have worked hard to leave the ruins and to build up a new, a modern state with a democratic system. And because our Grandparents and our parents have been so hardworking people we could reach the Wirtschaftswunder (economic miracle). They have worked and flounderd so long until the milk was butter under their feet and our grandparents and parents layed us future generations the rich foundations on which we can further build our country. Once more the question: is it envy or simply rage that we managed it better than the victors?

It is for someone's own self-confidence obviously very important always to find a person or a country or whatever who/which can be blamed to be the perpetrator of all evil in the world.

I for myself I refuse very vigorous after 70 years still taken in the Nazi-stranglehold.

 

[Shelter]

When will people in the Eurozone get to vote if they actually want Greece to stay?

Very good question!!!!!!! :thumbs up::thumbs up::thumbs up::thumbs up:

 

[gb2000ie]

Today's news is absolutely depressing.

Clearly, Germany cannot take 'yes' for an answer!

I thought the Greeks were nuts to offer SO MUCH "more of the same that we know doesn't work" to the Germans. They basically caved completely and told the Germans they could have their way.

The German response "Not good enough, we want MORE of what we know is a totally flawed approach".

The Germans government have lost all touch with economic reality.

Also, to the anti-greeks here in this thread, who, exactly, is moving the goalposts now? Who, exactly, is negotiating REALLY badly?

I hope this latest outrage is enough to trigger the rest of the European finance ministers to FINALLY develop a spine and start standing up to Germany. They have now proven they cannot be trusted to represent Europe on their own.

B.

 

[dargelos]

This man sums it up neatly;

"Nobel laureate economist, Paul Krugman, has lambasted the summit developments in his column at the New York Times, and thrown his support behind #thisisacoup.

Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.

Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for."

Tonight has been sickening and it's not over yet.

 

[Gruet98]

the German Fondamental Law (Grundgesetz = constitution) does not recognize the vote direct on questions (= referendum) on a national level ...

Well apparently they do. Merkel and the others are the only ones that honored that referendum with a Grexit :rofl: No more troika's austerity with a Grexit, thanks Germany :thumbs up:

No thanks to that nincompoop Tsipras who dug an even greater hole for Greece to jump into. Even if Germany accepts a third bailout you know Tsipras is still going to blame the Germans, the banks and everyone except himself for their predicament.

 

[gb2000ie]

The power to decide about a bankrupt and decaying Greece simply isn't worth the money which has to be spent on it.

I find that attitude deeply distasteful, and an anathema to the aims of the European project.

It's easy to criticise the institution currently known as the EU, but something it has been spectacularly good at historically is turning around struggling regions. I live in one of the biggest success stories of the EU's ability to turn around struggling nations. While the EU of the last decade did a lot to damage Ireland, the EU of the previous three decades played a major role in transforming Ireland from a remote backwater to a modern prosperous nation.

Leaving aside what I consider to be a shitty attitude to your fellow Europeans, lets take a moment to remember some facts, and the economics of how we got here. (NOTE - when I talk about 'Greeks' and 'Germans' that is short-hand for 'the Greek Government' and 'the German government').

1) Greece is no worse than Italy when it comes to borrowing or corruption:
a) In the decade preceding the crash the Greeks had a lower debt burden than the Italians (see earlier posts from me for the numbers)
b) to the best we can measure corruption (gonna be fuzzy), Greece is indistinguishable from Italy (see earlier post from me for the source on this)

So why are we happy to stick with Italy, but all to ready to throw Greece under the bus? It can't be because Italian leaders have been soooooooooooo good, and sooooooooo uncontroversial! (I'll take Tsipras over Berlusconi any day)

2) Europe gets to share a lot of the causal blame for this crisis:
a) the design of the Euro institutions was fundamentally flawed - the area's unpreparedness to deal with asymmetric shock had a lot to do with Greece finding itself in need of a bailout in the first place
b) the economically un-sound design of the first bailout made things infinitely worse for Greece, turning a bad situation into a disaster, and necessitating an equally flawed second bailout. The reason the Greece are so reluctant to agree to doing more of the same for a third time is how utterly the same flawed plan failed the previous two times. Doing the same thing over and over again and expecting a different outcome is often given as a definition of insanity. The Greeks are understandably reluctant to do something so bat-shit-crazy, and the Germans are so religiously bound to their economic beliefs that they refuse to change their opinions, regardless of the evolving reality of the situation.
c) to this day, those who have been allowed to dictate Euro-area policy remain religiously committed to now utterly dis-credited economic theories.
d) no economically viable plan has been offered to Greece since their first request for help at the start of this crisis.
e) the failure of the ECB to achieve anything NEAR it's 2% inflation rate, let alone an economically desirable higher rate, has made things dramatically worse for Ireland, Spain, Greece, and others outside of the core. This is in quite a large part due to Germany putting political pressure on the ECB, and absolutely not helped by Germany's failure to stimulate it's own economy sufficiently out of an absolute paranoia about inflation

3) Greece is not the only victim of the currently poisonous administration of the Euro. Spain and Ireland were also badly damaged by the EU's flawed policies. Ireland and Spain managed to survive, but only just. Greece did not.

We need to treat this as the EUROPEAN problem it is, not as a national problem, because it really isn't a national problem.

I keep hoping that some day soon, someone will make an economically sound, realistic offer to Greece. So far, there is absolutely positively no sign of that happening at all. The German belief in the confidence fairy and expansionary austerity remains utterly un-dented by reality!

B.

 

[Shelter]

Schäuble with a Hitler moustache, Mrs. Merkel with a swastika-band. Both defamed in the Greek parliament as "felons" and "terrorists". You could think - that will be nothing than fuss. But no - it is very serious. Most of the Greeks are thinking the Germans are to be at fauld for their misery - and they hate us. You should think they would not bite the hand that feeds them. The opposite is true! They take our money and they feel humiliated. No gratitude. The saviour as the enemy!

And Germany again is paying the largest sum to help this corrupt country. Ask England how much they are ready to pay - NOTHING. And who is bashing this country? They have no feelings for the Greeks and they say their money is better in England than in Greece! And who is bashing them????

There is a Greek writer, Nikos Dimou and he has written in his book AT THE DISASTER TO BE A GREEK a remarkable phrase: "On two days two Greeks manage a task, which can be managed by one Greek on one day!" There is nothing left to be added because this little phrase declares the whole Greek situation.

 

[dargelos]

I am pleased to find a little bit of common ground with you, Shelter. However one may dislike Mr Schauble and Mrs Merkel, personal insults are degrading, only reflecting badly on the people making them, and Nazi jokes are offensive and never funny.
The British Conservative party do not speak for me or for much more than a quarter of UK citizens, so do please feel free to bash away at it's attitude towards Europe. It looks like they will be forced to contribute to up to £850M, very much against their will, via the European Financial Stability Mechanism, but I hope it does come off, just to see the xenophobes frothing at the mouth.
Niko Dimou makes a witty comment about low productivity that is perfectly true but there is a lot that can be added. When unemployment is so very high, and labour very cheap, increasing productivity is not as urgent a task as getting people into work again. Demand has to rise alongside output. If output rises before demand, prices fall and companies cant make a profit. The holiday trade is an essential source of income for Greece, increasing productivity in that sector is not such a great idea because it's the laid back, I've got all day, style that gives a Greek holiday it's charm.

 

[Shelter]

Frenchgerman with your your last passage in your post I'm on your line and I hope so much you will be right. But I think it will be a very long and stony way.

 

[gb2000ie]

Schäuble with a Hitler moustache, Mrs. Merkel with a swastika-band. Both defamed in the Greek parliament as "felons" and "terrorists".

Caricatures of politicians is normal. They are supposed to be extreme. They are supposed to shock you into thinking more deeply. I guess it doesn't work on everyone.

You could think - that will be nothing than fuss.

In a free society, that kind of political satire should indeed be nothing to fuss about.

But no - it is very serious.

Compared to the millions of unemployed and the millions suffering in horrible poverty, you think that is important? I disagree REALLY strongly.

Most of the Greeks are thinking the Germans are to be at fauld for their misery - and they hate us.

Not just the Greeks. Those of us with a working understanding of macro-economcis think so too, and we have data to back that view up with.

You should think they would not bite the hand that feeds them.

Err - no, the Germans are the hand that STARVES them! The Germans (government, not random citizens) were, and are one of the strongest driving forces behind the DISASTROUS policies ENFORCED on the Greeks in the first and second bailouts. The Germans helped formulate the policies that turned a solvable problem into a complete catastrophe in Greece.

Also - the Germans have tried to execute a coup in Greece, they have tried to remove the government elected by the Greeks, and when that failed, they have taken almost all the power from the elected government and are making them implement utterly misguided and totally self-destructive policies.

It's frankly vile and disgusting.

The opposite is true! They take our money and they feel humiliated. No gratitude. The saviour as the enemy!

In a mirror universe, that is true. In this universe the Germans ARE the enemy of the Greeks! They are doing their very best to ruin Greece for decades to come. Not out of malice I grant you, but out of ignorance and dogmatic, verging on religions, economic delusions.

If you ignore reality, the German position makes sense, and if you drink the confidence fairy coolaid the German actions can be seen as well intentioned.

However, the road to hell is paved with good intentions, and the effects of the well-intentioned German fallacies have been, and continue to be, disastrous. And rather than learning from their mistakes, the Germans are doubling down on their discredited theories.

(I am aware the Germans are just the leaders of a group who share their delusions, but it would be too long to type "the Germans and those who also subscribe to their faith, or are too afraid to voice their decent" each time)

....

There is a Greek writer, Nikos Dimou and he has written in his book AT THE DISASTER TO BE A GREEK a remarkable phrase: "On two days two Greeks manage a task, which can be managed by one Greek on one day!" There is nothing left to be added because this little phrase declares the whole Greek situation.

The plural of anecdote is not data, but the plural of stereotype might be racism.

B.

 

[dargelos]

Satire is something I am a great fan of. It was an essential part of survival in the miserable days of the GDR. Good political satire hits hard against the public face of its target without going inside the person, his/herself. As much as I loathe and despise Mr Cameron, I would not joke about his private family tragedy. Dr S and Mrs M have to absorb whatever political insults anyone cares to hurl at them, that is part of the job. Calling them Nazi is not satire, it is nothing more than the gratuitous causing of offence, which takes attention away from all the genuine criticisims of their damaging actions that they do deserve.

 

[Shelter]

Dear GB I know I can write whatever I want - you will have something against it. And if I'll write information - you don't answer on it. What you don't like cannot be true! And the best way to tell everyone that it isn't true is to defame the writer.

A new example: I have a very good friend in Slovakia and he told me the average pension there is € 300,00 and in Greece it will be € 1.000,00. And now the Slovaks have to pay for the Greeks that they can have their better life forever! Perhaps your admired Mr. Krugman will say that that is correct - ask the people on the street what they are feeling - and I can promise you: your and Mr. Krugman's ears will be burning.

 

[Shelter]

The former German Minister for Finance Mr. Steinbrück (SPD = Social Democrats) called this new bail-out package for Greece "a monstrous delayed filing of insolvency". In the economy you are calling that a crime!

And the new bail-out package for Greece: two weeks ago there was a talk in Brussels of 29 Billion Euros, a week later of 50 Billion Euros, last Monday of 86 Billion Euros and in the meantime there is a rumor of 100 Billion Euros until 2018!!!!!!!

And what means that for the German tax-payer (because Germany shoulderd again the biggest sum!)? The President of the Center for European Economic Research Mr. Clement Fuest did not bargain of the return of the money and Germany will be burdened over three years with 66 Billion Euros. That means that in Germany the taxes will get up again. So we are working for the Greeks and will be abused by them brazenly.