Greece 2015+...

[Externet]

How wrong do you see my inexpert politics view of Greece ? :

 

Young Greeks have and will have difficult times, older Greeks have their mattresses stuffed with money from long lasting easy bonanza, reflecting a near 50/50 division in voting.

 

Both lenders and recipients of financial aids will get wealthier no matter what be the end result of Greece paying or not a debt.

 

Too easy living for too long causes unreal expectations for the future to be even easier.

 

 

[iNow]

It misses the point that austerity is likely to make matters worse and that these politics of morality seem to be trumping / rendering silent obvious economic paths out of this mess.

[StringJunky]

It misses the point that austerity is likely to make matters worse and that these politics of morality seem to be trumping / rendering silent obvious economic paths out of this mess.

You've lost me, can you elaborate?

[John Cuthber]

This might help

http://www.newstatesman.com/blogs/world-affairs/2012/05/exploding-myth-feckless-lazy-greeks

[DimaMazin]

It is good thing when thievish friends of Russia have big problems.

[Roamer]

How wrong do you see my inexpert politics view of Greece ? :

 

Young Greeks have and will have difficult times, older Greeks have their mattresses stuffed with money from long lasting easy bonanza, reflecting a near 50/50 division in voting.

 

I don't think the older Greeks still have mattresses filled with money, though i'm sure some of the smarter ones do, why do you tigh voting to this ?

 

 

Both lenders and recipients of financial aids will get wealthier no matter what be the end result of Greece paying or not a debt.

 

 

I'm sure the lenders will lose out if Greece doesn't pay, generally though they will have distributed their financial investments/risks and survive.

 

 

Too easy living for too long causes unreal expectations for the future to be even easier.

 

 

agreed.

[iNow]

You've lost me, can you elaborate?

There are obvious economic solutions to this, but they're really not even being considered because this is being framed as a moral issue where Greeks need to be punished. The proposal to cut spending and impose austerity is politically popular, but likely to make matters worse.

 

Economically, they just need the IMF to open some liquidity and/or forgive some debts. Boom, problem solved, but nobody is willing to do that because so many feel that the Greeks shouldn't be rewarded for making poor choices and not managing their books well in the past.

 

Alternatively, if Greece had its own currency they could devalue it to erode the real value of the debt, but nobody wants to do that either because it would mean breaking the political union and potentially causing other euro countries to do the same... Leave the Euro.

 

What's lacking here is political leadership, not economic solutions, and the "solutions" under discussion like austerity really aren't solutions at all.

[DimaMazin]

There are obvious economic solutions to this, but they're really not even being considered because this is being framed as a moral issue where Greeks need to be punished. The proposal to cut spending and impose austerity is politically popular, but likely to make matters worse.

 

Economically, they just need the IMF to open some liquidity and/or forgive some debts. Boom, problem solved, but nobody is willing to do that because so many feel that the Greeks shouldn't be rewarded for making poor choices and not managing their books well in the past.

 

Alternatively, if Greece had its own currency they could devalue it to erode the real value of the debt, but nobody wants to do that either because it would mean breaking the political union and potentially causing other euro countries to do the same... Leave the Euro.

 

What's lacking here is political leadership, not economic solutions, and the "solutions" under discussion like austerity really aren't solutions at all.

The help was a punishment. Absence of help is nothing.

[waitforufo]

There are obvious economic solutions to this, but they're really not even being considered because this is being framed as a moral issue where Greeks need to be punished.

How is requiring an entity to pay the debts it owns punishment? Also, It's not a moral issue it's a business issue. They borrowed, they are required to pay. Simple. Until now many EU nations have been quite generous to the Greeks. They have been giving Greece free money for quite some time now. Why castigate these generous nations?

 

The proposal to cut spending and impose austerity is politically popular, but likely to make matters worse.

Worse for who? Well quite obviously the Greeks. By entering into debts they cannot pay, they will suffer the consequences of there own actions. Again, this is not punishment.

Will it be worse for the Germans? Maybe, but maybe not. So it's time to convince nations like Germany that a Greek default would be worse than giving Greece more free money.

...they just need the IMF to open some liquidity and/or forgive some debts. Boom, problem solved...

 

I love the word 'just' in the above. Aren't you really saying "just give Greece German money?" I'm sure Germany is tad bit concerned that if they start giving out free money, that a queue may form.

Do you have a solution that doesn't require free money? No, other peoples money doesn't count because it isn't free. In the Greek case it belongs to Germany.

 

Alternatively, if Greece had its own currency they could devalue it to erode the real value of the debt, but nobody wants to do that either because it would mean breaking the political union and potentially causing other euro countries to do the same... Leave the Euro.

If Greece had it's own currency we wouldn't be talking about this. Maybe countries like Germany also think the Greeks would be better off with their own currency. Perhaps Germans are willing to take the financial losses of a Greek default in part for the betterment of Greece.

 

What's lacking here is political leadership, not economic solutions, and the "solutions" under discussion like austerity really aren't solutions at all.

Yes Europe and Greece need political leadership. So what needs to be done is to convince countries like Germany that there citizens "just" need to give money that they acquired through their own labor to Greeks for free. The crisis is beyond the point of political sugar coating. It should be called the "More Free Money for Greece Plan." To convince nations like Germany, it would be good to not only appeal to their altruism, but also to their best interest. So why is it in Germany's best interest? There are good reasons, but how do the scales balance?

Young Greeks have and will have difficult times, older Greeks have their mattresses stuffed with money from long lasting easy bonanza, reflecting a near 50/50 division in voting.

 

I lived in Greece for over a year. I have been back for visits many times. I have many friends living there. Greek culture is very family oriented. I have met many older Greeks. I can assure you that none of them had money in there mattresses. The little money they had was spent on life's necessities. And yet, I found them all to have joy in their lives. I can assure you that older Greeks would spend all of there money in support of family and young Greeks would only accept their family's money with shame.

[iNow]

Until now many EU nations have been quite generous to the Greeks. They have been giving Greece free money for quite some time now. Why castigate these generous nations?

One can acknowledge the deep economic ignorance involved in forcing repayment now in these circumstances without being described as "castigating those generous nations" that lent to them.

 

Worse for who?

For the greeks and also anyone who'd like to be paid back and ensure that the greek economy isn't forced into further tailspin. Implementation of austerity measures now would do little more than further increase hardship, increase unemployment, increase debt, and decrease GDP. When one stops framing this as a moral issue, one realizes that imposing austerity now has the opposite of the intended effect.

 

I love the word 'just' in the above. Aren't you really saying "just give Greece German money?"

First, I should have said the ECB above, not the IMF. That was a mistake on my part. Second, yes. Investment paradoxically will allow them to grow in the way they need to repay their debt. That, or let them leave the Euro so they can devalue their currency and reduce the real value of the debt. Either option works and achieves the stated objective, but people refuse to look at it this way due to the moral argument that "they borrowed, they must pay now now now."

 

Remove the morality and the hard politics. The economics on this are clear.

 

Yes Europe and Greece need political leadership.

More specifically, they've aligned under a unified currency, but do not have an equal alignment under a signal fiscal power or governing body. These situations can be mitigated if they were truly a union of countries across Europe, but they're not. They instead continue to operate as independent countries with individual and (justifiably) selfish approaches, thus imposing unnecessary duress and hardship by use of a single currency that cannot be devalued relative to others.

 

My guess here is they'll leave the Euro, return to a local currency, flex it to address the debt issue and encourage influx of tourism dollars, and return to black balance sheet, but I obviously don't have a crystal ball and could very well be wrong.

[StringJunky]

How is requiring an entity to pay the debts it owns punishment? Also, It's not a moral issue it's a business issue. They borrowed, they are required to pay. Simple. Until now many EU nations have been quite generous to the Greeks. They have been giving Greece free money for quite some time now. Why castigate these generous nations?

 

Worse for who? Well quite obviously the Greeks. By entering into debts they cannot pay, they will suffer the consequences of there own actions. Again, this is not punishment.

Will it be worse for the Germans? Maybe, but maybe not. So it's time to convince nations like Germany that a Greek default would be worse than giving Greece more free money.

I love the word 'just' in the above. Aren't you really saying "just give Greece German money?" I'm sure Germany is tad bit concerned that if they start giving out free money, that a queue may form.

Do you have a solution that doesn't require free money? No, other peoples money doesn't count because it isn't free. In the Greek case it belongs to Germany.

 

If Greece had it's own currency we wouldn't be talking about this. Maybe countries like Germany also think the Greeks would be better off with their own currency. Perhaps Germans are willing to take the financial losses of a Greek default in part for the betterment of Greece.

 

Yes Europe and Greece need political leadership. So what needs to be done is to convince countries like Germany that there citizens "just" need to give money that they acquired through their own labor to Greeks for free. The crisis is beyond the point of political sugar coating. It should be called the "More Free Money for Greece Plan." To convince nations like Germany, it would be good to not only appeal to their altruism, but also to their best interest. So why is it in Germany's best interest? There are good reasons, but how do the scales balance?

I lived in Greece for over a year. I have been back for visits many times. I have many friends living there. Greek culture is very family oriented. I have met many older Greeks. I can assure you that none of them had money in there mattresses. The little money they had was spent on life's necessities. And yet, I found them all to have joy in their lives. I can assure you that older Greeks would spend all of there money in support of family and young Greeks would only accept their family's money with shame.

I think this is the first time I've agreed with one of your posts. It's pretty much how I see the situation. Also, celebrating a decision to tell the hand that feeds you to, basically, "fuck off" is not going to enamour you to your creditors or facilitate conciliation..

 

iNow. The UK and other European countries are imposing austerity measures on themselves. The Greeks aren't alone in having to feel the pinch.

Edited July 6, 2015 by StringJunky

[waitforufo]

One can acknowledge the deep economic ignorance involved in forcing repayment now in these circumstances without being described as "castigating those generous nations" that lent to them.

.

Can one really accuse people of "deep economic Ignorance" and also deny they are castigating those same people? How is it that those Germans have so much money when they suffer from "deep economic ignorance?" Next, you will accuse the Germans of being predatory lenders.

 

I think this is the first time I've agreed with one of your posts. It's pretty much how I see the situation. Also, celebrating a decision to tell the hand that feeds you to, basically, "fuck off" is not going to enamour you to your creditors or facilitate conciliation..

 

iNow. The UK and other European countries are imposing austerity measures on themselves. The Greeks aren't alone in having to feel the pinch.

Agreeing with my posts must be a bitter pill. Don't forget that the Greeks are also calling the Germans Nazi's. iNow keeps telling us that we are making a morality play when it comes to Greek debt. I think it is iNow that is making the morality play by telling us that it is immoral to let Greece go bankrupt. Neither is true. It's just business.

[StringJunky]

..

Agreeing with my posts must be a bitter pill.

Yes, I needed to take couple of antiemetics first, or else I would've chucked. It is far easier to be objective about things happening in other countries than your own, since ones view is generally not coloured so much by prejudice. We in Europe can see America's problem clearer than the Americans.

 

 

Don't forget that the Greeks are also calling the Germans Nazi's. iNow keeps telling us that we are making a morality play when it comes to Greek debt. I think it is iNow that is making the morality play by telling us that it is immoral to let Greece go bankrupt. Neither is true. It's just business.

The Syriza party's bombastically, divisive rhetoric and fervour has been reminiscent of the Nazi party; Pot, kettle.... The Germans have been the height of measured calm and desire to reconcile in several world situations lately. Dragging up their past is beneath contempt...the second world war ended far beyond those Greek politicians living memory. The morality is that Greece must take responsibility for its predicament.

Edited July 7, 2015 by StringJunky

[iNow]

The UK and other European countries are imposing austerity measures on themselves.

And those economists that haven't been wrong at every turn seem to agree that the UK would've been far better off right now without those austerity measures than with them... Or, as summarized in one write up (though there are a great many from which to choose):

 

http://www.economonitor.com/dolanecon/2015/04/08/did-austerity-work-in-britain-one-chart-tells-it-all/

In short, it is much easier to argue that the British economy has recovered despite austerity than because of it. Its strengths lie in other growth-friendly policiesgood trade relations with the United States, which has itself enjoyed a stronger-than-average recovery; a business-friendly legal and regulatory environment (ranking eighth on the World Banks Ease of Doing Business index, just behind the US); and the good sense to stay out of the euro.

More on my previous point:

 

http://krugman.blogs.nytimes.com/?s=austerity&_r=0

given Greeces starting point, with debt at 170 percent of GDP, the adverse effects of austerity mean that trying to raise the primary surplus by 1 point quickly causes the debt-GDP ratio to rise by 5 points (.03*170). So this might suggest that it would take 5 years of austerity just to get the debt ratio back to where it would have been in the absence of austerity.

<snip>

a 1 point rise in the primary surplus, which requires austerity that causes a 3-point fall in real GDP, will reduce inflation by about 0.7 percentage points (3*0.23). And if you start with debt of 170 percent of GDP, this raises the debt ratio by more than a percentage point each year. That is, the attempt to reduce debt by slashing spending actually raises the ratio of debt to GDP, not just in the short run, but indefinitely.

 

Can one really accuse people of "deep economic Ignorance" and also deny they are castigating those same people?

Yes, of course they can. I just did.

 

How is it that those Germans have so much money when they suffer from "deep economic ignorance?"

I didn't say Germany suffered from economic ignorance. I said people calling for immediate austerity in Greece do.

 

That said, and to answer your question, Germany disproportionately benefits from a single unified Euro currency and that is a far more parsimonious an explanation of their current surplus than the moral argument you continue trying to make.

 

Summarized: Germany is so strong largely because they joined a union where other members are weak, and plans to distribute EU funds to help peripheral economies restructure domestically were invested with too much self-interest (i.e. Strengthened those who administered them contrary to their core objective of strengthening institutions within the weaker member countries).

 

More here: http://fortune.com/2014/10/22/why-germany-is-the-eurozones-biggest-free-rider/

Edited July 7, 2015 by iNow

[waitforufo]

I didn't say Germany suffered from economic ignorance. I said people calling for immediate austerity in Greece do.

People like the Germans?

 

That said, and to answer your question, Germany disproportionately benefits from a single unified Euro currency and that is a far more parsimonious an explanation of their current surplus than the moral argument you continue trying to make.

Summarized: Germany is so strong largely because they joined a union where other members are weak, and plans to distribute EU funds to help peripheral economies restructure domestically were invested with too much self-interest (i.e. Strengthened those who administered them contrary to their core objective of strengthening institutions within the weaker member countries).

More here: http://fortune.com/2014/10/22/why-germany-is-the-eurozones-biggest-free-rider/

So they are predatory lenders?

[iNow]

Read the article to which I linked. It's not there just for decoration and it says nothing about predatory lending (nor did I).

[swansont]

I'm sure Germany is tad bit concerned that if they start giving out free money, that a queue may form.

 

Germany is no position to complain. They did not pay back debt a number of time in recent history, and the people holding their debt realized it was in everyone's best interest not to hold the current/future generations accountable for the past generation's mistake.

 

There was an article on this in German; the translation has been taken down while the copyright gets sorted out

https://medium.com/@gavinschalliol/thomas-piketty-germany-has-never-repaid-7b5e7add6fff

 

(but the wayback machine has it archived)

[DrP]

True - pretty much all of their post war debt was written off... I think Greece signed off on that too.

[swansont]

True - pretty much all of their post war debt was written off... I think Greece signed off on that too.

 

Yes.

http://jubileedebt.org.uk/reports-briefings/briefing/europe-cancelled-germanys-debt-1953

[Roamer]

Alternatively, if Greece had its own currency they could devalue it to erode the real value of the debt, but nobody wants to do that either because it would mean breaking the political union and potentially causing other euro countries to do the same... Leave the Euro.

 

 

Greece can't erode the value of their debt by creating drachme's, because their debts are in euros,

(they could AND DID before the euro, btw)

 

 

 

What's lacking here is political leadership, not economic solutions, and the "solutions" under discussion like austerity really aren't solutions at all.

 

Politicians have political priorities, hence they will likely keep Greece in the eurozone, bankrupt or not.

[michel123456]

The real problem is not what is going on now.

The real problem will come up after the next elections. Because the right wing has being a mess, the left wing has being a mess, the centre does not exist, the extreme left is a mess, in such a way that the only remaining choice for voters is the extreme right. It is the history rewritten. And that will be very very very very bad.

[dimreepr]

History isn't doomed to be repeated but it should be learnt from.

Edited July 7, 2015 by dimreepr

[Delbert]

Sounds like a classic case of: If you owe the bank a hundred pounds, you are in trouble; but if you owe the bank a million pounds, the bank's in trouble.

 

And as for the voting business: by robbing Peter to pay Paul, Paul will always be on your side.

 

Frankly, I find it laughable. Even as far as the politics of the madhouse.

[waitforufo]

Greece has no plan.

http://www.nytimes.com/2015/07/08/business/international/greece-debt-eurozone-meeting.html?_r=0

 

Well the Greeks did request more free money to pay their near term debt installments while promising, cross your heart and hope to die, to have a plan maybe sometime soon.

 

Ms. Merkel said "I say it is no long about weeks, but a matter of days."

 

One less day now.

[iNow]

Greece can't erode the value of their debt by creating drachme's, because their debts are in euros

You are right. Thank you for the correction. I was not just sloppy, but wrong when I mentioned erosion of the real value of their debt.

 

If they move to their own currency and deflate it relative to their neighbors, however, they can enhance the inflow of tourism cash, make exports more attractive thus increasing manufacturing, shipping, and services jobs, consequently raising tax collections and ultimately GDP, and thus with that increased revenue be in a much better position to care for their people and pay off their debts more quickly in parallel.

 

I believe that and some debt forgiveness is the obvious solution here... Of course, that is only if people can get past the morality issue of "they borrowed thus must pay now now now."