Greece debt crisis: Athens seeks new last-minute deal

Thommo · **#41** by **Thommo** » Jul 02, 2015 12:13 pm

Nicko wrote:The question is what to do now? The austerity measures have only deepened the recession to the point where the economy is basically paralysed.

Greece's economy was the fastest growing in the Eurozone and the government was once again issuing bonds last time austerity was in effect. The economy has become paralyzed under Syriza.

minininja · **#42** by **minininja** » Jul 02, 2015 12:20 pm

Sendraks wrote:
johnbrandt wrote:Looking from afar the whole dollar thing has always looked to be a bit of a weird idea...you would have successful economic powerhouses right beside countries without a pot to piss in, and they are all expected to use the same currency worth the same amount whether you are in New York State, Illinois, or Alabama

F.I.F.Y

But the difference is the federal taxes and redistribution between states. That's what Europe needs if the single currency is to continue. The rich countries and their banks have been exploiting the poorer countries. If there isn't a mechanism to constantly redistribute the money back towards the weaker economies then inevitably they'll run out of money and grind to a halt.

Scot Dutchy · **#43** by **Scot Dutchy** » Jul 02, 2015 12:37 pm

minininja wrote:
Sendraks wrote:
johnbrandt wrote:Looking from afar the whole dollar thing has always looked to be a bit of a weird idea...you would have successful economic powerhouses right beside countries without a pot to piss in, and they are all expected to use the same currency worth the same amount whether you are in New York State, Illinois, or Alabama

F.I.F.Y

But the difference is the federal taxes and redistribution between states. That's what Europe needs if the single currency is to continue. The rich countries and their banks have been exploiting the poorer countries. If there isn't a mechanism to constantly redistribute the money back towards the weaker economies then inevitably they'll run out of money and grind to a halt.

It had nothing to do with it. Greece created its own problems nobody else.

Redistribute money? Why? What are you going to achieve? More corruption?
Some countries would stop working altogether and live off the fat of others. Who as been exploiting who? Greece has had years of corruption. They finally get caught out and now they expect the rest to bail them out. Sorry is does not work like that.

Sendraks · **#44** by **Sendraks** » Jul 02, 2015 12:39 pm

minininja wrote:
But the difference is the federal taxes and redistribution between states.

Except that this only applies within the US and even with this system of redistribution, there are still significant differences in deprivation between the richer and poorer stats. Clearly the US system mitigates the worst of this problem, hence...

minininja wrote: That's what Europe needs if the single currency is to continue. The rich countries and their banks have been exploiting the poorer countries. If there isn't a mechanism to constantly redistribute the money back towards the weaker economies then inevitably they'll run out of money and grind to a halt.

...which is what I was getting at in my response to John. You can have a single currency system between a number of varied states, providing you put the proper systems in place to ensure it works. There isn't anything inherently wrong with a single currency union, as the USA aptly shows, but if you're going to have one you need to ensure that finances are properly distributed to ensure all member states keep ticking over economically and can continue to operate. Its actually pretty socialist compared to Europe.

Unless the richer nations Europe grasp the nettle of accepting that to make the shared currency work, they need to operate on the basis of a shared currency, euro membership is going to consist of periodically kicking the poorest performing economies out in favour of preserving the better performing ones. And getting a proper shared economy going will require US style federal controls over spend, with each of the member nations relinquishing a degree of control to mitigate against the chances of further greek style scenarios.

Thommo · **#45** by **Thommo** » Jul 02, 2015 12:43 pm

minininja wrote:
Sendraks wrote:
johnbrandt wrote:Looking from afar the whole dollar thing has always looked to be a bit of a weird idea...you would have successful economic powerhouses right beside countries without a pot to piss in, and they are all expected to use the same currency worth the same amount whether you are in New York State, Illinois, or Alabama

F.I.F.Y

But the difference is the federal taxes and redistribution between states. That's what Europe needs if the single currency is to continue. The rich countries and their banks have been exploiting the poorer countries. If there isn't a mechanism to constantly redistribute the money back towards the weaker economies then inevitably they'll run out of money and grind to a halt.

The same prime prime mechanisms exist in both cases - free trade and free movement of labour. The US dollar survived for literally hundreds of years with relatively little top down redistribution of any meaningful kind, the Euro conversely operates in a mechanism whereby governments of poor countries receive hundreds of millions of Euros and rich countries contribute hundreds of millions.

That said, to call Greece (back in 2008 before the house of cards built on corruption, oligarchy and cooking the books fell apart) a poor country is something of a misnomer, with a GDP per capita of US$31,700 we are talking about a country comparable with South Korea, Israel, Spain or New Zealand.

tuco · **#46** by **tuco** » Jul 02, 2015 12:53 pm

Question is if there are in fact entities with understanding, power and will to make the currency, and political, union to work in long term unlike say entities with short term interests and power with pretty much disregard for anything else.

Sendraks · **#47** by **Sendraks** » Jul 02, 2015 12:59 pm

Thommo wrote:

That said, to call Greece (back in 2008 before the house of cards built on corruption, oligarchy and cooking the books fell apart) a poor country is something of a misnomer, with a GDP per capita of US$31,700 we are talking about a country comparable with South Korea, Israel, Spain or New Zealand.

Effectively Europe is punishing an entire nation of people for the actions of an elite minority.
Much like an untalented teacher, punishing an entire class for the actions of one pupil under the delusion that the culprit will somehow feel "worse" about what they've done. In reality the culprit suffers less, because everyone is suffering along with them and there is not differentiation between doing wrong and doing nothing wrong at all.

Thommo · **#48** by **Thommo** » Jul 02, 2015 1:05 pm

Sendraks wrote:
Thommo wrote:

That said, to call Greece (back in 2008 before the house of cards built on corruption, oligarchy and cooking the books fell apart) a poor country is something of a misnomer, with a GDP per capita of US$31,700 we are talking about a country comparable with South Korea, Israel, Spain or New Zealand.

Effectively Europe is punishing an entire nation of people for the actions of an elite minority.
Much like an untalented teacher, punishing an entire class for the actions of one pupil under the delusion that the culprit will somehow feel "worse" about what they've done.

Effectively not. Europe are simply refusing to lend more money unless Greece reforms it's behaviour in ways that assure the lenders they will get their money back.

Why on Earth should anyone feel obliged to lend money with no assurance it will be paid back? How do we suppose the voters of Portugal or Ireland would feel about having their money used to support Greeks retiring early or receiving overly generous pensions or not paying their taxes (or others of the measures the Troika want to see ended as a condition for further loans) when they get no such benefits and have also been subjected to austerity.

Of course, like you I feel terrible for the ordinary Greeks, but it is their sovereign democratically elected government that lies at the root cause (not the Tsipras administration, the corrupt one from a decade back) and demanding that taxpayers who are not represented by that sovereignty pick up the tab and suffer some of the hardships inflicted by a government that doesn't represent them is far from obviously reasonable.

tuco · **#49** by **tuco** » Jul 02, 2015 1:12 pm

Hence the root of the problem. Power over monetary policies is essential for currency union but not many are willing to give up power of their governments and parliaments over their own budgets. Its part of the so-called sovereignty debate and one of the pillars of euro-skepticism.

As a side note. Here we are again wondering about predictability of economy as science. But not its not poor predictability its politicians, governments, nations, states, whatever bodies? Since such bodies do not have legal responsibility they dont legally exist we could say. In other words, when shit hits the fan we say .. oh its whatever body to blame .. and move on because what to do with someone who is not legally responsible?

Thommo · **#50** by **Thommo** » Jul 02, 2015 1:16 pm

tuco wrote:Hence the root of the problem. Power over monetary policies is essential for currency union but not many are willing to give up power of their governments and parliaments over their own budgets. Its part of the so-called sovereignty debate and one of the pillars of euro-skepticism.

Absolutely right, that's the elephant in the room.

Scot Dutchy · **#51** by **Scot Dutchy** » Jul 02, 2015 1:17 pm

Ireland, Portugal and Spain had to take a much tougher deal but the one offered to the Greeks is not good enough for them. All they want is to return back to the fat years of corruption. Sorry medicine can be bitter but they should have thought that back then.

Scot Dutchy · **#52** by **Scot Dutchy** » Jul 02, 2015 1:19 pm

Thommo wrote:
tuco wrote:Hence the root of the problem. Power over monetary policies is essential for currency union but not many are willing to give up power of their governments and parliaments over their own budgets. Its part of the so-called sovereignty debate and one of the pillars of euro-skepticism.

Absolutely right, that's the elephant in the room.

All national budgets of the Eurogroup are subject to EU approval.

Thommo · **#53** by **Thommo** » Jul 02, 2015 1:21 pm

Scot Dutchy wrote:
Thommo wrote:
tuco wrote:Hence the root of the problem. Power over monetary policies is essential for currency union but not many are willing to give up power of their governments and parliaments over their own budgets. Its part of the so-called sovereignty debate and one of the pillars of euro-skepticism.

Absolutely right, that's the elephant in the room.

All national budgets of the Eurogroup are subject to EU approval.

But they're under sovereign control, hence the dispute we are seeing now. The only reason the Greek government isn't able to just bulldoze ahead with what they want on these issues is because they don't have the money and must ask someone else to provide it for them. If they'd had the common sense to wait for 1-2 years more growth to put their net budget into surplus we wouldn't be in this mess where the Troika has that leverage on them.

We might well be seeing a different mess, but its severity would be less.

Darkchilde · **#54** by **Darkchilde** » Jul 02, 2015 1:33 pm

electricwhiteboy wrote:
Darkchilde wrote:
Scot Dutchy wrote:
Darkchilde wrote:they were hiring back cleaning ladies with their old salary of 3-4 thousand euros,

You are joking? Will they never learn?

To people working in the public sector in the energy company (DEH) they gave 150 euros per month allowance for sandwiches during lunch break. And a number of hospitals were short on materials...

That's insane. I assume public sector jobs are well paid, but the process of getting them is hugely corrupt and nepotistic?

Yes. And despite the crisis, those people and the government do not understand that they are one major part of the problem. So, instead of cutting the salaries to the very well paid, they cut salaries to nurses, doctors, etc. Governmental organizations under the previous government refused to give a detailed list of employees and their salaries, and the new government has not even considered doing so. In fact, Tsipras et al. were protesting that it is against socialism and democracy and such bull. IMO that would be the second thing I would do, and if anyone refused, their budget would be completely cut off until they gave the list. First thing would be to sever all ties with the church, as we are paying the salaries of priests etc.

If Greece remains in the eurozone and the euro, there is a hope that these practices will die even if slowly. If however Greece is cut out of Europe and the Eurozone, then corruption will be even worse than before. Corruption was high in general, but it had started to subside with the european policies.

And also: if Greece is out of the eurozone, we will have a huge humanitarian problem. LGBT people, immigrants, those who are not "pure" greeks will be in grave danger as there will be no european law to stop discrimination. And I am serious because "Golden Dawn" is right around the corner and are part of those who will vote No in the referendum.

For me a NO vote means total chaos, anarchy, a return to the corruption practices pre-euro, and really really bad human rights for minorities.

mattthomas · **#55** by **mattthomas** » Jul 02, 2015 1:40 pm

Scot Dutchy wrote:
minininja wrote:
Sendraks wrote:
johnbrandt wrote:Looking from afar the whole dollar thing has always looked to be a bit of a weird idea...you would have successful economic powerhouses right beside countries without a pot to piss in, and they are all expected to use the same currency worth the same amount whether you are in New York State, Illinois, or Alabama

F.I.F.Y

But the difference is the federal taxes and redistribution between states. That's what Europe needs if the single currency is to continue. The rich countries and their banks have been exploiting the poorer countries. If there isn't a mechanism to constantly redistribute the money back towards the weaker economies then inevitably they'll run out of money and grind to a halt.

It had nothing to do with it. Greece created its own problems nobody else.

Redistribute money? Why? What are you going to achieve? More corruption?
Some countries would stop working altogether and live off the fat of others. Who as been exploiting who? Greece has had years of corruption. They finally get caught out and now they expect the rest to bail them out. Sorry is does not work like that.

Using terms like "they" are great for distancing the reality that punitive measures enforced by European governments upon Greece are going to affect millions of people whose role in the economic failings equate to the square root of fuck all.

Scot Dutchy · **#56** by **Scot Dutchy** » Jul 02, 2015 1:41 pm

Thommo wrote:
Scot Dutchy wrote:
Thommo wrote:
tuco wrote:Hence the root of the problem. Power over monetary policies is essential for currency union but not many are willing to give up power of their governments and parliaments over their own budgets. Its part of the so-called sovereignty debate and one of the pillars of euro-skepticism.

Absolutely right, that's the elephant in the room.

All national budgets of the Eurogroup are subject to EU approval.

But they're under sovereign control, hence the dispute we are seeing now. The only reason the Greek government isn't able to just bulldoze ahead with what they want on these issues is because they don't have the money and must ask someone else to provide it for them. If they'd had the common sense to wait for 1-2 years more growth to put their net budget into surplus we wouldn't be in this mess where the Troika has that leverage on them.

We might well be seeing a different mess, but its severity would be less.

They are still under sovereign control but subject to EU approval. Countries cant do what they like.
If they had done the same as Ireland, Portugal and Spain did they would have been by now back in growth but that was not good enough for them. They wanted more and now the shit is deeper.

Peter Brown · **#57** by **Peter Brown** » Jul 02, 2015 1:42 pm

I think we should make a deal with Greece. Like hire the Greeks as the boots to combat Daesh and other terrorists. Hire the Greeks to be aid workers, build up Africa etc.

Every person gets a better than Greek living wage, the country get 1/2 of that level of wage counted off the dept.

tuco · **#58** by **tuco** » Jul 02, 2015 1:48 pm

Leaving the eurozone does not mean leaving the EU. The referendum is about whether or not the creditors proposal should be accepted. Bankruptcy and return to drachma is another matter. But total chaos?

Scot Dutchy · **#59** by **Scot Dutchy** » Jul 02, 2015 1:51 pm

mattthomas wrote:Using terms like "they" are great for distancing the reality that punitive measures enforced by European governments upon Greece are going to affect millions of people whose role in the economic failings equate to the square root of fuck all.

Why did not Greece accept the same package as Ireland, Spain and Portugal? It was not good enough for them. Sorry.
You dont accept that corruption was high very high in Greece? That only a tiny minority were involved?
Then you are deluded I am afraid. Corruption was rife throughout the Greek society.
It was not just the big boys it was all the way down.

Did you read what Darkchilde wrote? Even today the last vestiges are still holding out. Still refusing to see that they are the cause of the problem.

Scot Dutchy · **#60** by **Scot Dutchy** » Jul 02, 2015 1:52 pm

tuco wrote:Leaving the eurozone does not mean leaving the EU. The referendum is about whether or not the creditors proposal should be accepted. Bankruptcy and return to drachma is another matter. But total chaos?

Greece would return to its pre-euro currency, the drachma, suffer instant devaluation and inflation and there would be a banking crisis.

It could end up a pariah in the international markets for years, much like Argentina in 2002, warns Prof Begg.

Tourism - one of Greece's main earners - would be hit hard, dealing a hammer blow to an ailing economy.

Unemployment, already steep, could climb further and Greek companies would close, Prof Kousenidis believes.

Some economists believe a return to the drachma could eventually benefit the economy, but it is difficult to see anything positive in the short term.

http://www.bbc.com/news/world-europe-32332221

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