Eurozone Sovereign Debt Crisis part 2 - Ireland

[Perados]

lol
In your last post one point of you was THE LAW, why greece couldnt go default in the euro...

And now you wonder why the UN IMF or worldbank should help greece insted of just the ez...
Take a look at THE LAW... The ez are independent states that chare a currency. So why should greece akt different to every other independent state and didnt ask "the world" for help?

Also you point out that the greek economy had a minus of 7% last year.
That is one goal of the troika. It sounds bad but nothing else would happen if greece would leave the euro.
The drachme would devalue by 30% to the euro in one year... This would mean in euro the greek economy would have a minus of 30%.

What we are trying is to get these 30% over the next years.
Also you know that greece is importing 20% of its economy... Or in other words every greek consumes 120% of his income.
By this calculation a cut by 10% in income would mean 12% lower consume... In this system every austerity becomes bigger as the amount its started with. And it has to be... By this the huge imports will shrink

The only thing we could talk about is, how sensitive in the details the troika and greek gov is by fulfilling what is needed




And now lets diskus how we can create a greate Gerope ( GERmany and euROPE )

 

[MichiganRico]

Agreed MichiganRico.

The priority IMO will be to get the aid into Greece - but there will be a massive argument about who is responsible and who will pay. I'm assuming aid will be through the UN, so it will be most of the world paying, certainly including the USA. This isn't aid for flood or drought but aid for the mess caused by a failed economic experiment in Europe. If USA has to make a financial contribution I wonder what US politicians will say about the euro experiment. And will they say to the EZ that the experiment can continue and the USA will help pick up the mess in Portugal, Spain and Italy?

Keep in mind the US did help bail European banks with our so-called TARP funds and by guaranteeing all of the CDS's issued by US entities at 100%. (And to be truthful, that's something I wouldn't have done. I would have demanded some discounting.) Not sure the current political climate would support any additional action.

And just as an aside, I heard a commericial spot on cable news today by an organization that suggests the US should adopt the same austerity programs as Europe "before it's too late." Ya, just what we need...the same double-dip recession Europe is now entertaining.

 

[Drifterwood]

Or...would this just mean despite defaulting they couldn't return to prosperity, due to the lack of means to devalue?

This seems to me to be the Catch 22 of the EZ. Despite the facts that Greece and others have endemic problems with "competent" government, they were wooed into the EZ on the promise of financial benefits by people with a political agenda for a unified Europe.

I share that political agenda. However, there is a fundamental problem in the fiscal model which has not been addressed. Countries, or zones/states within Europe do not share the same advantages to be equally financially successful. You therefore have to have a system of redistribution within a framework of accepted performance parameters.

Germany and France broke those parameters themselves in 2003, and the others followed (as did the UK under its own volition). We now have a system where we have to pick up the pieces and this will entail the richer nations accepting that the benefits of the Euro that they have predominantly enjoyed will have to be shared, and those who are to benefit need to manage themselves as well as they can rather than simply be basket cases that are thrown enough scraps to survive.

I would think that it is easier to pick up the pieces and address the intrinsic faults in the system rather than to bin it as Jason and others would wish, but of course you are asking for help in hard times rather than good which makes it all a bit tougher as well as the fact that Greek Politicians (and others) have been so utterly incompetent and corrupt.

 

[Jason]

The new development is the Troika micro-managing the Greece. They have already extracted promises from the leaders of the two main parties (PASOK and New Democracy) that they will stick to the austerity targets. However it now seems that in March they will pay (if they pay anything) only just enough to roll over the 20th March bonds. Greece will need funds most months in the years ahead. So we are seeing a position evolve where every month Greece must jump to the Troika's tune to get that month's funding - and this is in terms of austerity and its implementation. In effect we are seeing a situation where the Greek government will be controlled by the Troika. This has been the case during their technocrat government, a short-term emergency government. But we are now seeing this situation being continued indefinitely. The idea is that one parliament binds a future parliament, ignoring the way the voters vote. This is not democracy.

I agree with Drifterwood that the fundamental choice is between fixing the euro system and getting rid of it. One area where we disagree is around whether it can be fixed - I think it passed the point of no return a while ago and is beyond fixing. But additionally I believe the demise of the euro should be welcomed and hastened as the only way to keep democracy in Europe.

 

[Drifterwood]

I agree with Drifterwood that the fundamental choice is between fixing the euro system and getting rid of it. One area where we disagree is around whether it can be fixed - I think it passed the point of no return a while ago and is beyond fixing. But additionally I believe the demise of the euro should be welcomed and hastened as the only way to keep democracy in Europe.

The problem for the Euro is that the inherent weakness that I was talking about was exposed during a financial meltdown that was not the Euro's fault. The financial conditions and the whims of the markets have made it far more difficult to deal with the problem. However that problem, those problems can still be dealt with, only it will be tougher for everyone.

Disbanding the Euro altogether will make it even tougher for more people. I appreciate that that sounds a bit like you are damned if you do and damned if you don't but I think it is a case of being damned if you do fix it and more damned if you don't and just bin it.

It isn't a direct issue for the UK and you could argue one way or the other as to which course would more benefit the UK in the short term. In the longer term, I firmly believe that the UK should be a full part of the European group, you don't. You're wrong :biggrin1:

 

[Jason]

Meanwhile in EuroLand - more and more commentators are talking about Grexit, and no one with any authority is saying this will not happen. Greece cannot ever pay back the money "loaned", nor is there any expectation that the austerity agreed will be actioned. With the economy now contracted at 7%pa (and accelerating) Greece appears to be in a death spiral. There is (yet another) rumour, this one that the delays around approval of the bailout have nothing to do with clarification of details and everything to do with Grexit next week.

There is consensus that 80,000 people took part in the demonstrations in Athens - and that this represents a substantial vox populi. The Greek media endlessly repeats that Greece is now governed by Prime Minister Merkel and the Bank of Berlin. The level of hatred of many Greeks for Germany is very high indeed. 2012 Germany is being seen in Greece as if another third reich, and the German involvement in Greece as comparable to the war-time occupation. Does Germany really want to be cast in this role? Surely good PR for Germany would be to pull out. A refusal to pay the next bailout would do Germany a favour.

 

[Perados]

Keep in mind the US did help bail European banks with our so-called TARP funds and by guaranteeing all of the CDS's issued by US entities at 100%. (And to be truthful, that's something I wouldn't have done. I would have demanded some discounting.) Not sure the current political climate would support any additional action.

And just as an aside, I heard a commericial spot on cable news today by an organization that suggests the US should adopt the same austerity programs as Europe "before it's too late." Ya, just what we need...the same double-dip recession Europe is now entertaining.

Dont worry... There is no double dip in the usa, even if you would start an austerity right now. Cause you arent even fully out of the first "dip", so for this your economy cant start a second one :tongue:

So what you say with your post is, that the whole ez performed better then the usa in the last 3 years. This even with austerity and now in the 4th year some periefery countries are performing worst then the usa...

And jason dont worry, just stop reading shity news paper and start talking with the greeks and you will notice that the 80.000 are nearly the full minority and that the greek newspaper just akt like the british yellow press...

Most of the greeks understand why these cuts are needed and that germany isnt the reason

 

[Drifterwood]

I don't like the anti German sentiments that are being stirred up. Planks and motes, my Greek friends.

 

[eurotop40]

Interesting pages:

Why does the euro mean so much to Germany? - CNN.com

http://edition.cnn.com/2011/11/04/world/europe/european-unity-explainer/index.html

 

[Perados]

Interesting pages:

Why does the euro mean so much to Germany? - CNN.com

Why is unity so important to Europe? - CNN.com

Interesting posts but also a lot of bla bla bla...

The question was why is the euro so importent for germany... They tryd to answer it but they didnt. Later in the post they talk about that some countries see europe as a market others as a political project. And i think this project plus that we had to give up the deutsche mark are the reason why we are protecting the euro so mutch...

But i think very importent are the two points that the politics and press should stop to publish bullshit, cause this is the real danger for europe and that germany would go very far to protect the euro...

The only thing i dont confirm is that the most germans have a problem with bailing out the south... For the most germans it isnt a problem, as long as we can be sure that we only have to make it one time...

Most germans are so obsesst with the bailout and austerity that they dont akzept any cuts in taxs... If someone wants to win the next election in germany he has to promise higher tax and austerity

 

[eurotop40]

Have you heard the bullshit that the president of Greece has said? They should reinstate the King!

 

[Perados]

what did he said?

I try to lissen atm more to the italien pm... He is from the eu politic class (he has mutch better connections to the eu parlament and eu politicans then merkel or sarkozy will ever have) and also the ecb president is italien. He will become way more importent in the next month as berlusconi ever was for europe

 

[Jason]

Have you heard the bullshit that the president of Greece has said? They should reinstate the King!

yes. The best comment I've heard from a Greek politician for a long time.

"We were always proud to defend not only our freedom and our country, but Europe's freedom too".

Coming from an 86 year old war veteran this is being interpreted as meaning that Greece is prepared to defend itself and Europe against Germany. In the same (short) speech he made some very critical comments about Germans, Dutch and Finns - basically who are they to threaten the freedom of Greece and Europe.

The speech was given at the Greek ministry of defence, the president speaking with men in uniform behind him. Yes there is an implied threat.

Papoulias is making the ideological point that the euro project (and therefore Germany) is at odds with democracy. This is more important than any comment about economics. Right now we are seeing an attempt by the EZ(Germany) to bind future Greek governments to policies agreed now, and to ensure that the main parties will fight the next election on what is in its key policies the same manifesto. This is a fundamental assault on democracy.

Greeks do not see a way out. Perhaps the one conclusion of this epic thread is that neither do any of us. But Greeks do see a nation that is to blame. Greeks regard Germany, Merkel, German banks and even individual Germans as responsible for what has hit their nation. They believe that the right thing for Germany to do is agree an EZ debt union and assume the debts. (of course they are right in this last point). My Greek is Ancient and the modern papers are difficult for me, but many of the headlines are lead sentences are quite easy. Greeks are demonising Germany. They feel subject to an abuse comparable to the 2WW invasion. Sooner or later there is going to be some group of Greek nut cases who start a terror campaign in Germany. I don't think the German press has come anywhere near realising or reporting the extent to which Germans are now hated by very many Greeks. It isn't disliked, it is hated in a chilling expression of utter loathing. Germany has a choice. It can continue propping up Greece, governing Greece by proxy, and become more and more hated until these problems erupt on the streets of Germany. Or they can bail out now. The choice is Germany's.

Papoulias has given Greeks a voice. He is saying it is right to fight for freedom.

 

[Perados]

its NOT up to germany... I guess we made our point quite cleare.
Its still up to greece... Can they akzept it or not


And yes its an epic post... But its sad that there is no real progress in this thread, cause you post for month the same things.

 

[Jason]

For clarification I understand that Papoulias is saying it is right for Greeks to fight IN A METAPHORICAL SENSE for their freedom, ie to oppose imposition of economic policy from abroad. In this I think he speaks sense.

 

[Drifterwood]

For clarification I understand that Papoulias is saying it is right for Greeks to fight IN A METAPHORICAL SENSE for their freedom, ie to oppose imposition of economic policy from abroad. In this I think he speaks sense.

The Greeks (much as I am a philhellene) should have been fighting the corruption endemic in their systems for the last generation. I predicted a long time ago in this thread that attitudes would change towards Germany because they not only broke the rules themselves but have been the major beneficiaries of the Euro in commerce and finance.

However the Germans are capable of making tough decisions in the interests of long term prosperity. I shake my head to say this, but the Greeks and some others continue have not been and don't seem to realise that there has to be an end to that road. They have reached it and are faced with the choice to continue as they are but outside the Euro, or to change.

I was chewing the fat with a Greek firend three years ago, bemoaning the way things are/were in Greece. I asked him how long things could continue as they were. He said, for as long as the Germans keep giving us money. Smart guy.

 

[Jason]

I shake my head to say this, but the Greeks and some others continue have not been and don't seem to realise that there has to be an end to that road. They have reached it and are faced with the choice to continue as they are but outside the Euro, or to change.

This seems fair.

But changing Greeks means changing Greek society and Greek attitudes. This is a project which will take at least a generation, quite possibly a couple of generations. They will continue as they are. We have the example today from Germany of a presidential resignation for an alleged wrongdoing which in Greece would be accepted as proper behaviour. Values are different.

The situation demonstrates why a nation needs its own currency. A group of shared norms of behaviour are not only part of national character but also actually NEED the flexibility of a currency in order to function. The euro project seemed to think that a currency could force the creation of a shared European set of values. Well it has failed.

Yesterday Lawson (former UK chancellor) said that Greece leaving the euro was "inevitable". The father-in-law of our present Chancellor George Osborne (who is a peer) made similarly critical comments which probably reflect GO's view. IMO Greece is leaving the euro.

 

[lucky8]

Can someone explain to me why Greece hasn't ditched the Euro?? It seems to me it would be a much better idea than having to negotiate, use austerity, and having the rest of Europe pay for their entitlements. Why haven't they abandoned it yet? I don't understand??

 

[deleted213967]

Can someone explain to me why Greece hasn't ditched the Euro?? It seems to me it would be a much better idea than having to negotiate, use austerity, and having the rest of Europe pay for their entitlements. Why haven't they abandoned it yet? I don't understand??

As it happens, the euro is far more tempted to ditch the Greeks than the Greeks are tempted to ditch the euro:

• A return to the drachma would instantly result in massive inflation, severely hurting consumers and depressing real wages.
• A run on the banks and capital flight would almost certainly ensue, making the move even more tragic.
  
• Since Greece has virtually nothing to export but everything to import, the tired old myth about devaluation "helping" the export economy would not apply to a significant extent.
• No one would want to buy any Greek debt, public or private, since it would be denominated in highly volatile, likely to collapse, Monopoly money.
• Yeah, Greek island real estate and tourism there would be cheap, but who would want to risk being caught in a civil war, regardless of the stunning backdrop and fair weather?
  

 

[Jason]

Duplicate post