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JR*
02-17-2015, 04:20 AM
As I write, the Greek government and the European Union "Euro Group" are locked in conflict over how the collapse of the Greek banking system and economy is to be avoided. There had been some speculation (in Athens, hope) that Greece would be supported by other "peripheral" Member States that had been subjected to the yoke of a tripartite "bailout" - Spain, Portugal and Ireland - as well as states that were suffering similar economic problems, notably Italy. Not at all. Rather than rousing resistance to the onerous "bailout" model of relief, the rest of the Eurozone has shown a hard, common front against Greek demands. The Council of Ministers Eurogroup has gone so far as to administer an unusually public slap-down to the European Commission, which attempted to advance a somewhat conciliatory plan. German diplomacy, behind the scenes, undoubtedly did much to produce this situation.

There are two possible scenarios. First, the Greeks back down, and accept a bailout extension (at least an interim one) with highly restrictive fiscal provisions. This would allow Greece to limp on under its onerous "bailout" arrangement, its government effectively transferred to its "Troika". It might also destroy the credibility of the Greek government overnight, with serious implications for the country's stability. The other is that the Greeks will not blink - resulting in the probable collapse of the Greek banking system and unpredictable adverse consequences for the EU banking system generally, and for global currency and banking stability that could extend far from Greece itself.

Only days to go. Interesting times. Yours from Constitution Square, JR.

JR*
02-18-2015, 06:46 AM
As I write, Wednesday, 19 February, the war of words between Greece and Germany continues. Germany insists on Greece staying under the "Troika" yoke; Greece accuses Germany of arrogance, accusing it of behaving as it did towards Greece in WW2. One might mention a certain absence of panzers. But then, much of Germany's approach to "Europeanism" in recent decades has been characterized by Eurosceptics as "conquest without panzers".

These Greek references to WW2 are not particularly helpful now, but they are understandable. Greece has a particular issue with Germany, not common among occupied countries, insofar as the Nazis looted the Greek banks at time by means of forced "loans", for which compensation was never paid. This noxious legacy is clearly poisoning the German/Greek discourse at this critical time. What were the words put in the mouth of the Emperor Claudius in "Claudius the God" - "Let all the poisons that lurk in the mud hatch out" ? This one is certainly hatching out, literally, with a vengeance. It raises an interesting question for the "peacemaking" European Union. When things are going well, the dangerous legacy issues of the past are easy to bury. When the pressure is on, they tend to "hatch out". How many more may be lurking around Europe, awaiting just the right pressure point to cause them to "hatch out" ? Answers on a postcard ... Yours from the Bunker, JR.

Rising Sun*
02-18-2015, 08:23 AM
The Greek claims relating to German occupation during WWII have some validity, in the senses that:
1. The forced loan to Germany in WWII deprived the Greek economy of capital to operate, which was exacerbated by other aspects of the German occupation.
2. The Marshall Plan required Greece to abandon claims if it wanted post-war aid under the Plan, which probably gave Greece a lot less than its fair share of reparations. http://www.economist.com/blogs/freeexchange/2012/06/economic-history
3. Like the Marshall Plan, the 1960 and 1990 agreements had elements of major powers dictating terms to Greece as a minor power to accept what it was given, rather than what might have been its fair entitlement in contemporary money.

Against those aspects:
1. The Greek economy was in a very poor state after the Germans left, but in a far worse state after the end of the Greek Civil War 1946-49 which had nothing to do with the Germans.
2. The Greek economy would have been in a very much worse state post-war but for the Marshall Plan aid provided to Greece.
3. Continuing Greek political instability post-war contributed to economic problems, with the Civil War, Colonels' junta, and various experiments with democracy denying Greece the same sort of stability that Western Europe, notably Germany and France which are now the main players in the Greek debt issue, enjoyed during the same period for their strong economic growth.
4. Greece was, by Western European standards, a pretty backward economy before WWII, and remained so for much of the post-war period.
5. Greece has benefited from the support of stronger European economies, notably Germany.
6. Raising inadequate war reparations to avoid paying properly incurred post-war debts to keep Greece afloat reeks of trying to weasel out of paying just debts rather than pursuing any moral or legal claim when those moral or legal claims were subsumed in the Marshall Plan and 1960 agreements and not raised until the rest of the world currently wants Greece to pay its just debts.

I'm inclined to think that Germany got off lightly so far as reparations to Greece were concerned, but the Greeks have certainly made huge contributions to their own economic instability by the events mentioned as well as endemic corruption for much of the post-war period.

My inclination is that the argument for currently offsetting some or part of Greece's debt for inadequate German reparations makes sense only if one ignores Greece's own significant contribution to its own economic woes and it's a case of a desperate nation clutching at straws rather than pursuing a deeply held and justifiable moral or legal claim.

If one wants to pursue historical claims for Greece's economic problems, there is a much stronger case for the much, much longer occupation and exploitation of Greece by Turkey, which led to Greece being a fairly weak economy before the Germans invaded to rescue the failing Italian invasion in 1941. Which leads to Greek claims against Italy, if Greece wants to be consistent.

JR*
02-18-2015, 09:24 AM
Sitting within the Eurozone, it is in some ways difficult to sympathize with the Greece. It should not have adopted the Euro - it was not remotely ready for this change, and only obtained admittance by falsifying its own national accounts, an act of insane irresponsibility from the viewpoint of other EU Member States. The Greek banks (along with their Cypriot cousins) built a huge business on laundering dubious Russian money. Greek governments have been consistent in ignoring the need for reform of a corrupt, incompetent, bloated public service, that includes a very substantial (and mismanaged) commercial public sector. As a result, when the general crash came and the Russian money dried up, the Greek economy - with little in the way of tradeable resources and production - was exceptionally vulnerable to the prospect of a super-crash, as actually eventuated.

However, we now face a complex problem. The Greek economy - the export products of which largely consist (apart from shipping services) in olive oil (highly competitive market), wine (highly competitive market) and tobacco (heavily subsidized by EU, and unsmokeable) - has spent the last few years under the yoke of a particularly harsh regime of Troika/"austerity" rule, which has prevented any possibility of Greece "expanding" out of its crisis. The Greek people, as a result, are under severe economic pressure, beyond anything which other "Troika" countries have experienced. The Greek electorate has now emphatically rejected the Troika/austerity model that has reduced them to penury. The Greek government rejects the continuation of "Troikaism"; the Germans have rallied just about all of the rest of the EU in insisting that, if Greece is to continue to receive assistance, it must be in a "Troika/bailout" model, even by name. Unless this impasse is unjammed, the Greek banks are faced with collapse, and Greece is faced with exit from the Eurozone like Indiana Jones in his refrigerator.

However badly the Greeks have behaved, it is hard to see how the collapse of its banking system and self-expulsion from the Euro would be in anyone's interest - not least that of Frau Merkel's "Fourth Reaich". The consequences are truly unpredictable. Euro-wide destabilization is a strong possibility; worldwide destabilization (by way of Euro destabilization) is distinctly possible. The whole "Euro project" - the basis for Germany's "neo-mercantilism" in Europe - could collapse. However otiose it may be, there is a strong case for coming to some sort of settlement (at least a short-term one) between Greece and the "Eurogroup" in the few days remaining to achieve it. The continuing war of words (and insults) between the antagonists do not promise it at this point.

Oh well. I suppose the usual EU way is to achieve a compromise (often temporary) at the last moment. However, the Greeks show no sign of yielding, any more than do the Germans. We shall see. Watch this space. Yours from the Frankfurt Tower of Mystery, JR.

Rising Sun*
02-19-2015, 05:49 AM
I wonder if Greece is just another example of the tail wagging the dog in the modern world, along with ISIL, Israel, North Korea and sundry other minor, bandit or rogue states which cause problems out of all proportion to their geographic, economic or population significance.

JR*
02-19-2015, 06:39 AM
The Greek government has now repeated its request for a "bridging loan" for six months, allowing for a hoped-for re-negotiation of the terms of support for the bankrupt Greek economy. Germany quickly rejected this proposal, insisting on continued "Troika"/austerity arrangements. There may be scope for coming to some temporary arrangement around this; however, the fiscal straight-jacket implied by continuing "Troika"/bailout will be very unpalatable to the Greek government, not least because it could result in a total loss of political credibility. Who will blink first ? Can this impasse, even at this stage, be fudged ? We shall see. JR.

Rising Sun*
02-19-2015, 07:35 AM
My expectation is that the rest of the EU will decide that the unpredictable and potentially disastrous consequences of Greece leaving the EU or collapsing further economically will result in some sort of accommodation to Greece, which is probably just extending its current debility with no recovery in sight.

Or maybe the rest of the EU will see that there is little point in prolonging Greece's agony and insolvency, and crunch it now. If so, stand by for a bumpy economic ride.

JR*
02-19-2015, 08:53 AM
I tend to agree - although the issue here is substantive, not just presentational. Greece wants to agree "principles" which, as far as I can make out (no details from Athens) would allow them a degree of fiscal discretion, albeit subject to "consultation" with its Eurozone partners. Germany seems to be adamantly opposed to this, understandable, as the German government would have to explain to its parliament, and its electorate, why further relief for Greece (effectively out of Germany's pocket) is justified, or at least expedient. The confrontational approach of the Greeks clearly frustrates the Eurocracy, which is used to deciding issues on the basis of compromise brokered between bureaucrats and rubber-stamped by ministers. Not since the days of Charles de Gaulle as President of France has this sort of confrontation occurred.

There is a strong case for Greece exiting the Euro in its own long-term interest. However, neither the Greek government nor its electorate wants this - understandable, in view of the implications for their banking system and the value of savings. Also, while extensive and comprehensive planning went into the introduction of the Euro, there is no planned exit strategy for member states leaving the Single Currency. At this moment, I have no idea how this will pan out and, I suspect, neither do the parties involved in this confrontation. Interesting times. Yours from the Justus Lipsius Bunker, JR.

Rising Sun*
02-19-2015, 09:31 AM
The central problem is that, no matter how profligate and corrupt the Greeks may have been, harsh austerity wasn't and isn't going to cure it.

Personal debt can be reversed by austerity measures, but the same doesn't work for nations because they aren't simple money in / money out accounts.

Put simply, if my personal spending exceeds my income the solution is to rein in my spending until the savings correct my debt as long as I'm employed, but that doesn't work for a national economy because reining in spending excessively causes reductions in national economic activity which reduce whatever surplus might have been produced to pay the national debt and, as predictably (by me, anyway, but I'm not an economist or Euro finance minister so WTF would I know about high finance?) happened in Greece, results in, for example, rising unemployment which reduces national income and increases the burden on national welfare which reduces any ability to repay debt. The same problem of reduced national economic activity and income occurs across most sectors under an austerity program so that austerity steadily reduced the ability of Greece to repay its debts. Add in the inevitable devaluation of domestic assets, such as Greek banks, and the problem is compounded, and further compounded by the unwillingness of external capital to invest in or lend to Greece.

The well founded Euro desire to impose austerity measures upon the prodigal Greeks is understandable, but it was always going to reduce rather than improve their ability to repay the rescue loans.

However, what was the alternative?

Pump more money into Greece and watch the Greeks piss it up against the wall in their usual fashion?

So, I can see that austerity was doomed to fail, but I don't have a better idea.

Could well be time to cut loose these millstones on the Euro economy.

JR*
02-19-2015, 10:10 AM
Agree, RS* but ... the consequences are unpredictable. To be clear - I have always opposed the "Euro Project", as it attempts to yoke together economies that are incapable of behaving as a coherent, single monetary area. Fiscal, as well as monetary union would be necessary to allow this system to operate properly. However, this could only happen in the context of an open abandonment of fiscal authority by Eurozone Member States - an outcome obviously desired by the Brussels Eurocracy, but for which most Member States are unready, since it would involve a surrender of core sovereignty to the would-be EU superstate.

That having been said - we are so far enmired in the "Europroject" that dismantling it could have hugely disruptive consequences. We must press on, and hope that the depth of the Euro-swamp does not submerge us ... Yours from the Frankfurt Bunker, JR.

Rising Sun*
02-19-2015, 10:29 AM
Fiscal, as well as monetary union would be necessary to allow this system to operate properly.

That goes beyond the EU but to the whole planet.

The rapacious and egregious tax avoidance of major and minor corporations hiding in low tax countries (of which yours is one) where usually they do bugger all except have a presence for tax purposes is long overdue for rectification by international cooperation.

Western tax departments, inevitably being staffed by unimaginative people fond of cardigans, combovers and lunch in Thermos flasks of vegetable soup (okay, I got a bit carried away there, but you know what I mean) are very good at collecting tax from sitting duck wage and salary earners who contribute a disproportionate share of tax to the nation while the taxation authorities fail to get stuck into those with the resources to avoid tax. There comes a point in income in my country, and probably in most countries, where one has sufficiently high personal or corporate income to decide how much one is going to sacrifice in tax. And the threshold isn't that high, for a moderately successful professional or business person to cross it. The result is that, say, 90% of the working population pays a vastly disproportionately high share of the total tax take compared with the top 10% of income earners and large corporations.

As for Greece, and sundry parts of Southern Europe, informal tax avoidance has been a national sport since the Romans paid their soldiers in salt.

JR*
02-20-2015, 04:22 AM
Friday, 20 February - the German-Greek impasse continues in Brussels. The latest Greek proposal was greeted positively by the EU Commission, but rejected - emphatically and unilaterally - by the German Finance Ministry. They apparently "fear" that a reference to future fiscal measures in Greece be subject to "mutual agreement" may be a "Trojan Horse" designed to free the Greeks from Troika austerity. Maybe so. However, I am not sure about the "Trojan Horse" comparison. Perhaps the Germans could consider "Thermopilae" as a comparison. That is one worth thinking through, right to the end of the reel.

As to global tax reform - I do not believe it will happen to any substantial degree. Why ? Well, the key to such a "programme of change" is amendment of US corporation tax law to impose worldwide taxation on profits of US corporations not repatriated to the US. US administrations have shown interest in this idea for at least the last 15 years, but have done nothing about it. Why ? Well, because the corporations that stash their overseas profits in the Cayman Islands, Bermuda etc. are also the corporations that fund the extraordinarily costly US political system. I have had some experience of working with US administrations (mainly the Office of the US Trade Representative) which made it clear to me that the US political system is under total capture by Big Business and its representative associations. (I used to joke that USTR officials needed permission from the Motion Picture Association of America, probably in writing, before they visited the "rest room".) It will be a long day before this apparatus moves against the tax dodging ways of US business overseas. Yours from the Ronald Reagan Center, JR.

Rising Sun*
02-20-2015, 06:23 AM
As to global tax reform - I do not believe it will happen to any substantial degree. Why ? Well, the key to such a "programme of change" is amendment of US corporation tax law to impose worldwide taxation on profits of US corporations not repatriated to the US. US administrations have shown interest in this idea for at least the last 15 years, but have done nothing about it. Why ? Well, because the corporations that stash their overseas profits in the Cayman Islands, Bermuda etc. are also the corporations that fund the extraordinarily costly US political system. I have had some experience of working with US administrations (mainly the Office of the US Trade Representative) which made it clear to me that the US political system is under total capture by Big Business and its representative associations. (I used to joke that USTR officials needed permission from the Motion Picture Association of America, probably in writing, before they visited the "rest room".) It will be a long day before this apparatus moves against the tax dodging ways of US business overseas. Yours from the Ronald Reagan Center, JR.

There are signs that nations losing out to the mega-corporations' tax avoidance are moving to deal with it http://www.smh.com.au/business/g20/g20-leaders-in-the-mood-to-act-on-tax-avoidance-after-luxembourg-leaks-20141107-11icy3.html Whether there is much prospect of success is a very different question. You are probably correct that there won't be much movement adverse to the interests of the super-rich corporations and individuals, because of the golden rule: Them as has the gold, make the rules.

I'd take the view that the US political system isn't so much a captive of those sorts of businesses, and the rich, but that the Republican Party is essentially their political incarnation forced to deal with the annoyance of the Democrats, who answer to their own and often not all that different funders.

JR*
02-20-2015, 09:43 AM
The impasse continues. At this stage, I suspect that there will be agreement on a temporary fudge - but it is far from certain.

I would make one point - it is not just the Republican Party that is in thrall to US Big Business. The Clinton administration was every bit as much a slave to the great corporations. I would not expect any change from the "progressive/liberal" Democrats, any more than from the Republicans. Yours from Georgetown, JR.

JR*
02-23-2015, 04:37 AM
The Greeks and the Eurozone ministers (actually the German Finance Ministry) cobbled together some sort of agreement designed to halt the clock on the "Time-Bomb" in Brussels last Friday. It is worrying that there are indications suggesting that they may not be agreed on what they have actually agreed. Germany thinks Greece has totally surrendered; Greece is still talking about future fiscal measures being "for agreement" between the Eurozone and the Greek government. This seems a strange sort of "agreement".

The Greeks are supposed to be submitting a more detailed outline of their proposals today, Monday. Indications leaking out of the Greek camp suggest that this will rely heavily on increases in tax collection, presumably, to render some of the Troika measures unnecessary, freeing them to promote fiscal expansion in some areas. To be entirely fair, tax collection in Greece appears to have been stepped up no end in the last 18 months or so. Their Value Added Tax (sales tax) system seems actually to be working now, and some progress has been made on tightening up income tax collection. Greece, at the level of primary budget disregarding debt is actually running at a government income surplus at the moment. However - one cannot ignore the incredibly huge debt burden, mainly owed, one way or the other, to Germany and France in official debt and to banks in those countries, officially guaranteed. The German government certainly has no intention of ignoring it. Notwithstanding successes to date, the idea that the Greeks can up their tax collection further to an extent sufficient (in Germany's eyes) to render the Troika measures unnecessary may seem fanciful from the viewpoint of Berlin and Frankfurt. The fact that tax evasion, "unacceptable" tax avoidance, black marketeering, smuggling and bootlegging of various sorts are more or less national sports in Greece will be a major barrier to further progress, certainly in the short to medium term. Thus, indications that the Greek proposals will rely to a significant extent on tackling smuggling, black marketeering and bootlegging is not reassuring.

Still less is the reliance it is said to place on collecting substantial increased taxes on Greece's "oligarchs" and their companies, the few private sector industrial giants in its economy, notably in the shipping industry. Frankly, the Onassis, Niarchos etc. oligarchy is not in Greece because it likes paying taxes; the contrary is the case. The shipping oligarchs in particular have threatened to move their operations from Greece on previous occasions on which they appeared threatened by tax enforcement and reform. Were they to do so, this would be an economic disaster for Greece, and Greek governments in the past have always backed down in the face of this threat. Even if this proved to be a bluff, it might not do the government much good in terms of tax yield, since the super-rich Greek oligarchs can easily plug their money into the thriving international tax avoidance/evasion industry, leaving little for the Greek taxperson to collect. Taxing the "rich" (a term often defined to include workers on relatively modest remuneration) is a staple of the European Left at the moment (we have plenty of talk about it from that source here in Ireland). It usually fails to allow for the fact that, first, there are not really may rich people, for example, in Greece to target and, secondly, that the truly rich will still have ample means to protect their income and assets from taxation.

Perhaps the present Greek government is up to such a challenging programme. However, the prospects for achieving much success in the short to medium term is, frankly, poor. If this is where we are heading, Germany may simply insist that a long-term programme of improvement in tax collection is something that Greece should be doing anyway, and that the Troika austerity programme is still required. It is possible that the Time-Bomb's clock may start ticking again as early as tonight ... Yours from the Fiscal Bunker, JR.

JR*
02-24-2015, 04:03 AM
Tuesday, and the Greeks have submitted their proposals. Seem to be much on the lines indicated by yesterday's leaks, and rather "thematic" than detailed. It will be interesting to see the response ... JR.

JR*
02-25-2015, 10:27 AM
Wednesday - fascinating ! The Germans seem to have accepted the Greek crock. In effect, the Germans have blinked, a very, very surprising outcome. This is probably going to stop the Time-Bomb's clock for about four months. But let's hope, on that one. The Greeks' promises are very insubstantial, and the Germans' demands remain very concrete. We shall see. Yours from the Hall of Mirrors, JR.

witman111
03-11-2015, 07:43 AM
Put simply, if my personal spending exceeds my income the solution is to rein in my spending until the savings correct my debt as long as I'm employed, but that doesn't work for a national economy because reining in spending excessively causes reductions in national economic activity which reduce whatever surplus might have been produced to pay the national debt and, as predictably (by me, anyway, but I'm not an economist or Euro finance minister so WTF would I know about high finance?) happened in Greece, results in, for example, rising unemployment which reduces national income and increases the burden on national welfare which reduces any ability to repay debt.

You are essentially correct. GDP is made up of 4 components:
- household spending
- government spending
- investment spending
- exports

Austerity is self-fulfilling prophecy that all will collapse one after another. Households are tied to employment in companies and all pay taxes for government spending.companies need market for their revenues.

In essence more money (euros) is taken out of Greek economy than pumped in and Greece can never recover.

Only debt write-off or return to national currency with devaluation and debt default will save Greece. But creditors can also swap debt for nice parts of Greek land :):)

JR*
03-11-2015, 09:02 AM
Wednesday, 11 March - the Eurogroup/Germans have "unblinked". The time-bomb is ticking again. Problem is that the present Greek government has a very different idea of how to get out of the mess. Some I might agree with; however, it is hard to see the "Centre" agreeing to scrap the privatization of semi-state enterprises and public sector staff/salary cuts in favour of vague promises of tax "reform" and suchlike. Unfortunately, the "crunch" is still on ... JR.

Kregs
03-11-2015, 12:16 PM
you are essentially correct. GDP is made up of 4 components:
- household spending
- government spending
- investment spending
- exports

But, GDP as a measurement of economic growth is much more complex than the list above. There is nominal GDP and real GDP. Is not that what you are describing above? I am confused.

JR*
03-16-2015, 10:13 AM
The ticking gets louder. Greece and Germany continue to exchange barely-veiled insults, and the nervier elements of the Eurocracy are beginning, belatedly, to bleat about the dangers attending on a possible "Grexit" from the Eurozone. Of course, this could all be play-acting but - like Putin's recent nuke-waving - it is political play-acting of a dangerous and unpredictable sort. Yours from the Edge of Sanity, JR.

JR*
03-20-2015, 07:23 AM
Tick-tock, tick tock ... the Eurozone leaders and the Greeks have come to yet another agreement that they are agreed as to what their last agreement meant. This came about under pressure from German Chancellor Merkel and her "Caesar", French President Hollande. It remains unclear what this means. The Greeks have agreed to produce yet another proposal within days. However, the Greek Prime Minister still says that the renamed Troika - "reviewing officials" or somesuch - have no right to impose policies on Greece that will press their economy further into recession. The Eurozone and Greece still seem to be singing off different hymn-sheets. Tick-tock, tick-tock ... Yours from the Justus Lipsius bunker, Brussels, JR.

JR*
03-30-2015, 05:21 AM
After a brief intermission to address the Alpine Air Disaster, the Time-Bomb may be set to start ticking today in Brussels as Greece is set to present another set of proposals for reforms/cuts or whatever to their Eurozone partners. Unfortunately, there is every indication that the two sides are still singing off different hymn sheets. All Greek proposals to date have, apparently, been very general, and have concentrated on reform of the tax system and a campaign against corruption, rejecting further cuts in public services and unpalatable measures such as the privatization of publicly owned industries and utilities - the Eurozone (proprietor A. Merkel) still appears to be insisting that both are necessary. While organ-grinder Merkel and her "monkey", Hollande, continue to insist that they do not want Greece to exit - or self-exit - the Eurozone, there are increasing indications that German voters are increasingly confident that such an exit can occur without significant danger to the Euro Project as a whole. This is reflected in the other side of Merkel's position, which continues to require the Greeks to impose further expenditure cuts and to privatize public assets (even at knock-down prices) in the interests of furthering an austerity-based "solution" to Greece's economic problems. The problem is that if both parties hold their line, a situation could easily develop in which Greece's continued membership of the Euro becomes a technical impossibility, leading to chaotic Greek debt default and its self-ejection from the Common Currency. And, whatever the German electorate, or Frau Merkel may profess to believe, nobody really knows how the situation might develop then. Not least among the imponderables is the effect such developments might have on the French and German banks who are actually holding all those Greek bonds.

Tick-tock, tick-tock ... JR.

JR*
04-07-2015, 04:17 AM
Ticking very loud at this stage. The Greeks still appear to be pfaffing around, promising to meet their next debt repayment deadline, but still failing to produce detailed proposals as to how they are going to achieve the "austerity" targets required by their out-bailers in order to secure the release of the required funds. The Evil Day is getting very close ... Yours from Thermopylae, JR.

JR*
04-08-2015, 05:59 AM
Tick-tock ... Greek Prime Minister is in Moscow today, meeting the leader of Greece's long-time "cultural connection". This will not please the Eurocrats one little bit. Speculation seems to be that Greece has two objectives in this - obtaining some form of alternative funding that might free it from the grip of the Troika bailout, and securing an exemption from Russian counter-sanctions to allow Greek agricultural products (soft fruits, olive oil, tobacco) back into the Russian market. As far as the first is concerned, it seems highly unlikely that Putin the Terrible can afford the luxury of bailing out Greece at the moment, given the declining state of the Russian economy. As regards the olive oil etc., it will be interesting to see how Tsar Putin responds. A positive response could deliver a very cheap hit to the EU, causing no end of discord within the EU/NATO camp. Whether this would really be in the interests of Greece is distinctly questionable. We shall see ... Yours from the Olive Grove, JR.

Rising Sun*
04-09-2015, 04:28 AM
Greece plays the war reparations card again. http://www.theguardian.com/world/2015/apr/08/greece-germany-war-reparations-demands

I haven't studied it, but I wouldn't be surprised if the various agreements representing war reparations to Greece didn't constitute fair value.

I wouldn't be surprised if no war reparations following WWII were fair value.

For example, for what may be the worst case, I suspect that Japan didn't make any, and certainly not fair, reparations to China before the communist success in 1949.

How does one value the appalling loss of life, liberty and property under the various Axis powers? (Or the same by the Allies in pursuit of their objectives, such as civilians killed and injured and their property destroyed in Axis and non-Axis nations, notably France before and after D-Day but also in other theatres such as North Africa where civilian casualties and property damage are routinely ignored by all combatant nations.)

Anyway, coming back to Greece now, its primary claim should be on Italy as Italy invaded Greece which resulted in Germany, with characteristic generosity to the Italians as in North Africa, coming in to rescue Mussolini from another overly ambitious military adventure.

But Italy isn't a major player in the current pressure to force Greece to reverse generations of economic and fiscal incompetence and mismanagement, so Italy doesn't get a guernsey in Greece's demands.

JR*
04-09-2015, 05:49 AM
Alexis Tsipras may not be the Messiah but, from the point of view of the Eurocracy, he is a Very Naughty Boy. Reaching out to Russia, embroiled in a sanctions war with the EU, is bad enough - but raising this business of war reparations in clear public view breaks a serious EU taboo. Not that issues such as this are unaddressed. However, this is usually done quietly, with as little publicity as possible, in order to preserve the façade of amity between the EU Member States. The Greeks have broken this taboo in the worst way - by using the reparations argument as a weapon in a very public slanging match, not least in circumstances in which Germany considered the matter "done and dusted". This is the first EU Member State government - at least since General de Gaulle - that has refused to play the EU establishment game by the "rules"; and the "rules" are currently a lot more stifling than they were in the General's day. Will this Greek stance help their cause ? Or the cause of the Euro ? Or EU "amity" ? Doubt it. Whether the Greeks see it or not, it appears to me that all it is doing is further alienating German public opinion, and making it more likely that Germany will countenance the exit of Greece from the Euro into the Outer Darkness. No doubt, this would occasion much Weeping, and Wailing, and Gnashing of Teeth among Greeks. In the longer term, they would probably be better off. Whether the same can be said of the rest of us in the Eurozone is distinctly questionable.

Meanwhile, Greece is due to pay back a paltry €450 million tranch of that part of its Troika debt owed to the International Monetary Fund today - and the Greek Finance Minister has given public assurances that this gale day obligation will be met. The economic "chatter" suggests that this can only be done by scraping the bottom of the Greek fiscal barrel. The term "looking for change down the back of the couch" is commonplace. What this seems to mean for Greece is raiding various publicly controlled funds (such as public sector pension funds) to make up the amount. Apart from the fact that this is yet another example of Greek "funny" accounting, it has the disadvantage that (unlike the change behind the couch), these funds will need to be put back in their proper place in the near future. Even if it works - within the next 6 weeks or so, further repayments of at least €2 billion are due, some, I think, to the EU. All this in the context that there is still no agreement for the continuation of Greek bailout funding; Greece is surviving day-to-day on European Central Bank "emergency funding"; and there are not enough "couches" in Greece to come up with €2 billion. Tick-tock, tick-tock ... Yours from the Metaxas Line, JR.

Rising Sun*
04-09-2015, 07:09 AM
Succinct analysis of Greeks. ;) :)

https://www.youtube.com/watch?v=qovVWAaPiOc

Nickdfresh
04-12-2015, 04:15 PM
Succinct analysis of Greeks. ;) :)

https://www.youtube.com/watch?v=qovVWAaPiOc

I did not realize until rather recently that our local population of those with Greek ancestry actually dominate the local restaurant scene. The line sort of reminds me of that. :D

tankgeezer
04-13-2015, 07:11 PM
This is an aside I S'pose, but my interest is in which Nation(s) move to exploit whatever Flap arises from the eventual outcome of the Greek question, and to what ends they work.

Rising Sun*
04-14-2015, 07:59 AM
This is an aside I S'pose, but my interest is in which Nation(s) move to exploit whatever Flap arises from the eventual outcome of the Greek question, and to what ends they work.

Is this part of a larger question about whether it was a good idea to admit various economically and otherwise weak countries to EU and or NATO membership, and whether maybe it's time to thin them out on an economic basis, but which thinning out conflicts with strategic aspects of major Western European countries' and US aims in the face of rising Russian expansionism?

tankgeezer
04-15-2015, 08:23 AM
Is this part of a larger question about whether it was a good idea to admit various economically and otherwise weak countries to EU and or NATO membership, and whether maybe it's time to thin them out on an economic basis, but which thinning out conflicts with strategic aspects of major Western European countries' and US aims in the face of rising Russian expansionism?

Only in the reason behind the admission of the weaker States into the larger Conglomerates. On the one hand, they may have been allowed membership in order for the weaker State to learn from the Mentoring states in order to strengthen, and grow their economy, and become a full strength partner in the larger group. The other hand, their admission may have been encouraged by those who have an interest in the weakening of the group through the repeated draining of resources of the strong members to support the weak one(s) who in turn never seem to learn from their economic mistakes. There will in this case, come an inevitable crisis. Which crisis may be manipulated, and taken advantage of by those above mentioned interests for whatever purpose motivated them in the first place. You can pick the Villain of the month, Russian expansionism, Chinese subtle practice, or the ever popular mysterious Central Banking system wanting to control the World's wealth conspiracy. Plus, there always seems to be a Vulture waiting to reap whatever spoils can be taken.

JR*
04-17-2015, 04:19 AM
Tick-tock ... Latest is that the Greeks seem to have made some sort of approach to the IMF to secure a deferral of the repayment date for the forthcoming tranche of their IMF debt - the small matter of €750 million. IMF chief Christine Lagarde has rebuffed the suggestion. Despite the string of deadlines, there appears to have been no progress whatsoever on formulating an actual plan to allow a new Greek "bailout" to be put in place. Default is now a real possibility, and the plug could be pulled as soon as the next Eurogroup meeting, due to take place in Riga next week - although it is more likely that an emergency Council of Heads of State and Government would be needed to deal with such an explosive matter.

Meanwhile, over in the Merkelbunker, tolerance for the continued antics of the Greeks appears to have run out. Germany now appears to believe that Greek exit from the Eurozone would now be less costly that continuing to bankroll the unco-operative Greeks. The view, apparently, is that sufficiently strong "firewalls" (unspecified) have been put in place to prevent the whole European banking system being dragged down in a post-Grexit panic. Just hope they are right.

By the way - it just occurred to me that Shakespeare's play, "Timon of Athens" is about a profligate man who gives away his fortune to unworthy "friends", then "defaults" on his debts (often to the same people). He renounces society, and ends up expending another fortune (gold, discovered in his misanthrope's cave) to advance the destruction of the city of Athens which he has, in his bitterness, renounced. A play for our times, perhaps ? Yours from Fortress Frankfurt, JR.

JR*
04-20-2015, 04:22 AM
"When Fortune in her shift and change of mood
Spurns down her late beloved, all his dependants
Which labour'd after him to the mountain's top
Even on their knees and hands, let him slip down,
Not one accompanying his declining foot."

- Timon of Athens, Act I, Scene I.

Not sure the Greek Finance Minister has brushed up his Shakespeare, recently ... Yours from the Stoa of Athens, JR.

JR*
04-22-2015, 04:18 AM
Latest from the Cradle of Democracy is that, in an effort to scrape together the cash required to pay the looming €750 million loan tranche, the Greek government has ordered local authorities to lodge their local reserves in the Bank of Greece. The local mayors and chairpersons are, understandably, less than amused, since it leaves them running on empty without at all relieving them of responsibility to maintain local services.

This situation is completely, absolutely bonkers. If it were possible to damage Greek public finances more than they have been damaged already, moves like this would do the trick. And, again (but even more urgently than was the case with public enterprise pension funds) this money will have to be put back soon, or public services will fall into chaos. And still, no sign of any new terms for a "bailout" to which both Greece and the "non-Troika" can sign up. It is understood that Prime Minister Tsipras and his core group of ministers may have seen enough sense to be willing to make some compromise - without, as the Finance Minister put it recently, "being compromised". Their problem is that they will have to get any compromise past their less pliable ministerial and parliamentary colleagues, and it is by no means evident that they can do this. Meanwhile, the rest of the Eurogroup/Troika show no willingness to agree a further bailout without seeing "substantial" further reforms from Greece. Maybe everybody is playing "chicken". Maybe some further "financial arrangement" will be patched together. But things are not looking good ...Yours from the Church of St Jude (patron saint of hopeless cases), JR.

JR*
06-15-2015, 05:36 AM
It hasn't gone away, you know. For the last month, skirmishing and trench-raiding has continued across the "Tsipras Line". The process seems to consist of Greece's creditors repeatedly demanding concrete proposals to achieve concrete "reforms" (read further financial retrenchment), with the Greeks repeatedly responding with another programme of aspirational proposals, accompanied by resolute resistance to a meaningful concrete programme including such measures as pension and public sector salary cuts and privatization of state-owned commercial assets. Repeated exchanges of paper and consequent meetings in Brussels seem to have produced very little result. Last week, one of the major "Troika" creditors, the International Monetary Fund, got so fed up with the whole business that they withdrew their negotiating team from Brussels, indicating that they were in effect fed up with leaving their team sitting around the Berlaymont just waiting for something to happen.

Meanwhile, it is interesting to note that the Evil Empire of Brussels has shown some suggestion not of blinking, but at least of a slight trembling of the eyelids. This is probably because (1) the idiots have finally realized that there are some points of their position off which the Greeks are really determined not to be pushed and (2) that for all the talk of "firewalls" and so on, the Eurocrats really do not know what the effect a Greek exit from the Euro might have on the stability of the Euro currency and the European (not to mention global) banking system. There is also the possible political damage of driving an EU Member State into the welcoming paws of the Russian Bear. Minds have, perhaps, been focused by the timetable as it currently stands. The Greek government has taken the highly unusual step of using IMF rules to "roll up" its total June repayment commitments to that organization into an end-month payment; the amount owed then appears to be a whopping €1.5 billion. Worse, the Hellenes are due, in the course of the month of July, to pay (mainly EU creditors) some €6.5 billion. The Greeks have only survived this far on the basis of miracles of creative accounting (something that may come back against them later) effectively condoned by the EU and the IMF. The possibility of their finding an additional €8 billion seems completely fanciful, unless they are allowed to use Monopoly money for repayments. A "Grexit" from the Euro looms, and nobody knows where that may lead.

Many analysts still think that some fudge solution will be found, allowing the Greeks a second "bailout" that defers the fundamental problems of the Greek situation. Perhaps. However, with the overall burden of Greek debt still piling up behind the Acropolis, this may prove very difficult. Let's hope that those "firewalls" really work, after all ... Yours from the Merkelbunker, possibly Blinking, JR.

leccy
06-15-2015, 12:05 PM
I was listening to a member of the Greek financial team when he was being interviewed a few days ago - they were of the opinion that all their creditors were bluffing and would back down - hmmm

Greece has lived beyond its means for too long and can't keep doing it, present debts if paid off on time it will take decades at the rate agreed already - basically Greece wants another debt write off - European banks already did 50% write off in 2011, in 2011/2012 private creditors had to accept a more than 55% cut to the value of Greek bonds - despite that the debt keeps getting bigger -

The government promised what it could not do for the people of Greece - banking on a cave in of all creditors to solve their problems - but that will not help if they do not reform, something they promised not to do any more.

Its got to be a bit of a habit with nations living beyond their means, defaulting and having to have debt written off as they will never be able to pay it back - only thing is all they learn is borrow and borrow - it will be written off before we all starve or the country collapses.

JR*
06-16-2015, 07:10 AM
In relation to some recent comments - some comments. Regarding leccy's recent contribution, you are really pointing up the fact that, for some time, the Greek government and the "Troika" creditors have been involved in a "Rebel without a Cause"- style game of chicken, something of which the Greeks seem to have been aware, while the "Troika" was not, at least up to very recently. The Greeks really do seem to drive over that cliff if "necessary"; whether the Troikites are similarly willing remains to be seen.

Of course, rulers and states have greased the wheels of government through borrowing, if not from time immemorial, at least since the Roman period. This is justified on grounds of practicality; complex systems of government cannot easily match revenue with expenditure on a current basis. Even "expansive" borrowing is justifiable - so long as both borrowers and lenders are in agreement as to the terms on which the loans will be managed, and so long as both parties are realistic (or honest) about the prospects of repayment terms being honored. In practice, the history of state borrowing has been ... rather patchy. One of the "patchiest" examples is that of Spain (properly, of the Spanish kingdoms) between 1480 and 1620. In this period, the Kingdom of Castile received a huge windfall - the acquisition of the Spanish New World in the Americas. The gold of Mexico was significant enough; however, the acquisition of the enormous silver resources of Peru were much more so. The Castilian/Spanish régime, starting with that of King Carlos I (Holy Roman Emperor Charles V) chose to use this bonus "expansively" in the most literal sense. Charles used the bonus to launch an expensive programme designed to secure his Empire in Germany and Italy, a programme continued by his son, King Philip II of Spain in the much more complex circumstances of the late-16th century (Netherlands revolt, wars with England, France, south German states, Switzerland ...). In order to secure the cash-flow and liquidity, huge borrowings were required. These were mainly secured from bankers in the Spanish-controlled area of northern Italy - notably the Genoese state "Bank of St George", that largely came to function as a Spanish state bank. Considerable resort was also had to "domestic" borrowing in metropolitan Castile and Aragon which, unfortunately, was ill-structured in such a way as to impede the roll-over of domestic debt that had become too expensive to service. The state's ability to honor these debts often hung on a knife edge; if the annual treasure fleet from the Americas was delayed, unsatisfactory in yield or - worse - captured by English privateers, default threatened. And indeed it happened (actually, in the form of state bankruptcy), repeatedly. It is a tribute to the Mysteries of Banking that Spain continued, for a long time, to retain credit with the bankers (even the Bank of St George). In the end, however, by about 1620, the game was truly up. The King became increasingly dependent on actual current revenue to continue its efforts to maintain itself as a major European power, and the inhibitions put on this by the "constitutions" of the Spanish kingdoms largely strangled its ability to do this. No accident, then, that the "enlightened dictatorship" of the Count-Duke of Olivares collapsed, and Spain's progressive decline as a European power began its long period of decline. Debt crises are nothing new; the Greek one is just lesser, and faster, than would have been the case in former times.

As regards the "fudge" that might save us from the "Time-Bomb" - the Troikists have set their face against debt relief. This is consistent with their attitude to the "Irish situation". However, there remains the option of the "restructuring" of many of Greece's loans - effectively kicking the debt repayments far, far down the road. Germany should be familiar with this concept; after all, Germany only recently completed its repayment of debts due to WW1 reparations, something allowed only by such "restructuring". The solution to Ireland's recent predicament also included a substantial restructuring of this sort. The difference between the situations of Ireland and Portugal is that those countries committed themselves to rigorous programmes of retrenchment and "reform" - the present Greek government has not. To be fair to them, their clear democratic mandate supports them in this. Of course, the Troikists, and the Eurocracy, have little or no regard for democracy. Impending testimony at Ireland's parliamentary enquiry into our "banking collapse" (far, far more catastrophic than the fall of the Rupee) may throw further light on this.

It will be interesting to see how this plays out. Yours from the GrAnderson Shelter, JR.

JR*
06-17-2015, 04:11 AM
Overnight, the ticking got louder. Tsipras is now accusing EU negotiators of making oppressive fiscal proposals, while the Eurocracy is accusing the Greek government, in effect, of lying to its electorate about the content of "negotiations". A "Big Push" against the Tsipras Line threatens, perhaps imminently ... Yours from the Nearest Bunker, JR.

JR*
06-19-2015, 04:28 AM
Things looking really bad along the Tsipras Line. Still no concrete proposals from the Greek government. Further exchanges of insults yesterday. Also, the Governor of the Greek Central bank has, in an unprecedented move, publicly urged his government to sign up to the most recent proto-deal offered two weeks ago to avoid turmoil in the Greek banking and monetary system. Also, the European Central Bank - a powerful but hitherto generally silent partner (at least in public), in the negotiations has publicly warned that the Greek banks may be unable to open next Monday due to continuing outward capital flows. Chaos threatened, and who knows how far this may spread.

Actually, it is almost too late to arrive at any agreement at this point. Not only is the Greek financial and monetary situation already incredibly dire, but it is getting worse by the hour, as funds continue to flow out of Greek banks of all sorts. The idea that these banks will be forced to signal default over the weekend is entirely credible. Furthermore, even an interim bailout agreement (to carry the Hellenic Republic to the end of the year), the best that can reasonably be hoped for at this stage, would require votes of assent in the parliaments of a number of EC Member States, including Germany. This sort of thing takes time, and there is no guarantee that the parliaments in questions would assent. This is particularly true for Germany's Bundestag, which contains more than its share of monetary hard liners.

From recent statements from the Greek government, they seem to have given up on generating what they view as an acceptable deal through the official negotiating channels. They are now hoping that continuing pressure at high political level will produce a result for them. Much of this hope centres on Chancellor Merkel who, clearly, hopes that some sort of deal can be done. However, while she is the most powerful leader in the EU, she has her own problems. Apart from the Bundestag and another "silent" negotiator, the Bundesbank (German central bank), she finds herself in the unusual position of being at odds with her principal lieutenant, German finance minister Wolfgang Schauble; all of these powers appear to have reached (or over-reached) the limits of their flexibility, and are now firmly on the "hawkish" side.

Whether Tsipras and his crew are right to trust in high-level political contact (in effect, high-level political blackmail), well, we will find out on monday, when a special meeting of the Council of the Eurozone states. It may actually be too late by then. But you never know - in the Evil Empire, anything is possible ... Yours from the walls of Mycenae, JR.

leccy
06-19-2015, 05:48 AM
A small amount of money was made available to the Greek banks to keep them in buisness (1.5 billion euro) during the week - 2 billion was withdrawn from Greek banks though sparking fears they may impose restrictions like Cyprus did in 2013.

When asked of Greek banks would be open on Monday a spokesman said they would tommorrow (Friday) but unknown about Monday.

Rising Sun*
06-19-2015, 08:05 AM
When asked of Greek banks would be open on Monday a spokesman said they would tommorrow (Friday) but unknown about Monday.

Asking Greeks to think and plan more than a couple days ahead at the moment is a bit unfair when the rest of the world has even less idea about what's going to happen, and the consequences.

JR*
06-19-2015, 09:59 AM
And the sad thing is ... one really has to have some sympathy for the Greeks, and even the Tsipras Gang. Only by employing the lame argument that "they all partied at others' expense" can this position be sustained. Greece is in its present position because of the irresponsibility, cowardice and corruption of a succession of (generally) right-wing and centre-right governments and their political and financial supporters, who allowed the country to be run largely for the benefit of a small number of local "oligarchs" and bought political support by maintaining a "lenient" social and economic policy involving its own low-level of corruption and tax evasion. This was only exacerbated by Greek entry into the EU. It is highly questionable whether EU accession was timely or even appropriate. The main effect on its economy was to pump new, foreign money into the country's corrupt, dysfunctional system. By contrast with, say, Ireland and Portugal, the Greek system responded to EU initiatives such as the "Structural Funds" programmes, not by developing new infrastructure and enterprise but, by and large, by diverting large amounts of this funding into the existing rotten, stagnant system. As for the adoption of the Euro currency - there is no way that Greece was ready for this, or that it should have been permitted. Tying the Greek monetary system to that of (notably) Germany was an act of political folly, totally unjustified by any clear-sighted economic appraisal. One wonders whether the would-be Masters of the Universe in Brussels were really fooled by the then (centre-right) Greek government and its fraudulent national accounting. I am (unusually for an Irishman) an unabashed anti-Single Currency person (although now that we are stuck with it, there may be no way back that avoids disaster). However, the lack of realism in admitting Greece was a peculiarly fantastical example of EU political imperialism forcing economics into a pattern fitting its purposes. As the old song says, "He's your guy when stocks are high/But beware when they start to descend ...". When the great international financial/banking/monetary disaster struck, the fundamental differences between the Greek and the German economies emerged in earnest and, trapped in the Euro, the Greek economy had no way of making the monetary adjustments demanded by the new situation.

So where are the Greek people now ? Unemployment is huge, and the safety-valve (for youth unemployment in particular) of emigration is highly restricted by a myriad of cultural and political restraints. The situation has become so bad that, as Tsipras himself recently pointed out, cuts in pension commitments would ruin a large number of Greek families who now actually depend on the pensions of the family's elder members for survival. The EU is alleged to have suggested increasing the Value-Added Tax (VAT - the Sales Tax) on electricity and on fuel generally. Fine - except that, as a member of the national Chamber Orchestra of Greece recently pointed out on Irish radio, even Greeks who were relatively affluent find fuel costs beyond their ability to pay, and many (even of the hitherto relatively well-off) have shivered through a number of cold Greek winters for want of an ability to pay for electricity or gas. Public sector pay cuts and additional redundancies ? Great - the Greek civil and public services are manned on a "how many Greeks does it take to change a lightbulb" basis, and this problem needs to be addressed. However, addressing it "with extreme prejudice" just now can only magnify all the population's existing problems in merely surviving. The apparent policy of the EU/IMF/ECB "Troikists" appears to be merely to squeeze the rock harder and harder. No blood can be squeezed from a stone. They are all done.

The Central Bank of Greece is, in one sense, right. Greece needs some sort of renewed interim "bailout". In the alternative, having scraped the very bottom of the financial barrel, having employed the most "creative" of money-gathering "expedients", Greece and its banks will surely default calamitously, leading to capital controls, self-expulsion from the Euro, and possible departure from the EU. In the short term, this would result in a huge depreciation in the Greek currency and chaos in its trade relations, along with the exclusion of Greece from the financial markets. The "austerity" implied by this scenario would make the terrible "austerity" experience so far seem slight. And it is hard to see how this can be borne by ordinary people.

On the other hand - and in a way I hate to say this - the Tsipras Gang is also right. One can argue the rights and wrongs of this, of how we got here. However, the reality is that firing a lot of people and "reforming" (i.e. cutting) pensions and salaries would reduce much of the Greek population to something less than penury. This would pave the way for severe civil unrest and, at higher political level, for the possible loss of Greece to the sphere of Putin's influence, something that the latter could not have hoped for up to recently. How to square this vicious circle ?

The Eurozone "managers" have set their face against outright debt relief, notwithstanding the fact that Greek repayment of loans on any normal timescale really is impossible. Very well - there are reasons for this. However, debt restructuring, allowing the bulk of Greek debt to be put on a "never-never" timescale (already done for other Member States owing money in this direction) is possible, and should be seriously considered. This should initially done on a short-medium term basis. In the meantime, core reforms in the matter of pension rates and eligibility, Greek public sector salaries and employment levels, pricing and taxation of essential public services and so on should be imposed on a gradual basis in line with the (hopeful) growth of the Greek economy that should (hopefully) be permitted by such an enlightened policy. This would still be very, very hard on the Greek people. However, it would at least offer some possibility of a recovery - which the present Wolfgang (Barney Rubble) Schauble hardline solution does not offer.

May happen. We shall see. Best regards, JR.

Rising Sun*
06-19-2015, 11:14 AM
Greece is in its present position because of the irresponsibility, cowardice and corruption of a succession of (generally) right-wing and centre-right governments and their political and financial supporters, who allowed the country to be run largely for the benefit of a small number of local "oligarchs" and bought political support by maintaining a "lenient" social and economic policy involving its own low-level of corruption and tax evasion.

Substitute any other developed, and undeveloped, country's economy for "Greece" in the preceding statement and, to varying degrees, it covers all of them.

Then we have the countries run as the workers' paradise, such as the USSR and its present reduced form of Russia along with the People's Republic of China which, being nobly and ideolocially focused on elevating the proletariat to dizzying heights of fair wages and living standards, didn't. Yet they all managed to elevate their rulers and favoured elites to levels of avarice beyond those of the worst capitalist countries.


So where are the Greek people now ? Unemployment is huge, and the safety-valve (for youth unemployment in particular) of emigration is highly restricted by a myriad of cultural and political restraints. The situation has become so bad that, as Tsipras himself recently pointed out, cuts in pension commitments would ruin a large number of Greek families who now actually depend on the pensions of the family's elder members for survival. The EU is alleged to have suggested increasing the Value-Added Tax (VAT - the Sales Tax) on electricity and on fuel generally. Fine - except that, as a member of the national Chamber Orchestra of Greece recently pointed out on Irish radio, even Greeks who were relatively affluent find fuel costs beyond their ability to pay, and many (even of the hitherto relatively well-off) have shivered through a number of cold Greek winters for want of an ability to pay for electricity or gas. Public sector pay cuts and additional redundancies ? Great - the Greek civil and public services are manned on a "how many Greeks does it take to change a lightbulb" basis, and this problem needs to be addressed. However, addressing it "with extreme prejudice" just now can only magnify all the population's existing problems in merely surviving. The apparent policy of the EU/IMF/ECB "Troikists" appears to be merely to squeeze the rock harder and harder. No blood can be squeezed from a stone. They are all done.

What's wrong with the usual solution that those who did not benefit from the massive profits leading to the collapse should pay for it? This is the standard solution to excesses of capitalism, cronyism, and anything with laissez faire in front of it.

Greek public servants and pensioners didn't design or control the system which has brought Greece to its knees, any more than a tiny number of economic brigands (I prefer to see them as criminals guilty of massive national economic crimes who should be treated as traitors to my nation) destroyed much of Australia's economy several decades ago, as part of my nation's steadily downward trajectory under the impetus of big money and the craven politicians in big money's pockets.

I've wasted half a century discharging what I now realise were my seriously misconceived principles that it is a matter of honour to pay one's debts on time and a civic duty to pay one's tax for the common good.

These are the foolish notions of the bulk of the decent common people.

The rich, the criminals, and the politicians don't subscribe to these principles.

So what does that have to with Greece, and the consequences of its default in Greece and globally?

The rich, the criminals and the politicians won't be the ones shivering through a Greek, or any other, winter because they can't afford the energy bills.

But the rich and the politicians, in and out of Greece, will be the ones making the rules determining who gets the energy to endure the Greek winter, and taxing and acting accordingly.

Meanwhile the criminals will just take what they want and not pay any bills, and probably extort money from those who can't pay their bills.

It was ever thus.

JR*
06-19-2015, 11:40 AM
I fully sympathise, RS*. And so, I suspect, would most of the Irish population. But will we do anything about it ?

"As soon as this pub closes, the Revolution starts !".

Doubt it. Yours from the Slough of Despond, JR.

Rising Sun*
06-19-2015, 12:41 PM
I fully sympathise, RS*. And so, I suspect, would most of the Irish population. But will we do anything about it ?

No, because representative democracy in the modern developed (and I use 'developed' with some cynicism) world usually means choosing one of two (or one of two and a bit for conservative coalitions that can never get their own majority) parties comprised of professional self-seeking party apparatchiks whose potential contribution to the common good is limited by their own lack of personal and social experience and utility. The constant factor across all parties and candidates is that they all excel at being useless arseholes given to spurting out meaningless daily messages determined by party HQ for consumption by the news media. The people who run our Western democracies are hidden turds who run focus groups and generally tell our elected representatives what these turds think we think, because our elected representatives are too busy listening to these turds instead of talking to us to find out what we think.

If these arseholes had been in power on both sides in WWII, there would have been almost no deaths as each side confined itself to flinging violent but ultimately empty rhetoric at each other.

Maybe that's something to aim for, but in the meantime the revolution will start when this pub closes. :D

https://www.youtube.com/watch?v=B96qKs4-EI8

Rising Sun*
06-19-2015, 01:29 PM
Just for a bit of proletarian musical video on working men, here is an Irish version (which curiously starts out with and briefly maintains an Australian Aboriginal didgeridoo twanging beat ):
https://www.youtube.com/watch?v=EvFqVgz1AGo

And an Australian version, which no longer involves the spectacular burning of the canefields (sung by a major Australian rock singer who, like many of our rock singers, was a post WWII migrant and, even worse, a Scot ;) :D):
https://www.youtube.com/watch?v=PeDHRjr8TzE

And here is the same Scot with what has pretty much become the unofficial anthem for many of our Vietnam veterans (despite no Australians having been anywhere near Khe Sahn):
https://www.youtube.com/watch?v=JDpZlBJQmbY

JR*
06-22-2015, 06:36 AM
Well, ladies and gentlemen, the Balloon is well and truly up, the flares are in the air, and the Big Push has commenced along the Tsipras Line. Maybe. Also, it is less than clear at this stage who is pushing whom. Today, we have a fully fledged Eurozone emergency Council. By now, senior officials should have met to asses the latest (how many is it now ?) Greek proposal. Shortly, the Finance Ministers should take over discussions, followed by a meeting of Eurozone Heads of State and Government this afternoon, with further technical discussions, at official level, scheduled for this evening. Doubt whether it will run as smoothly as this schedule suggests. The end-result is supposed to be a "deal" that will allow the last tranche of the current Greek "bailout" to be released by the Troikists. Should this not happen, the dreaded "Grexit" from the Eurozone will come very close (if still stopping short - just - of inevitability).

The latest metzedakia menu from Athens appears to be a bit more specific than the many previous Stifado menus offered. However, at this point, Tsipras and his crew are still saying that they will not budge on pension cuts or increasing Value-Added Tax on electricity. The EU Commission has welcomed this latest proposal as positive, and a possible basis for a settlement. Clearly, they know something not revealed to the general public. Or maybe not - desperation and denial may be present here.

It has become painfully clear over the last few days that the Greek government's hopes rest heavily on their ability to persuade Chancellor Merkel to accept something like their latest proposal, and basically force the rest of the Eurozone to accept it. This suggests that he is still hoping that the decisive stage of today's process will be the meeting of the Heads of Government and Heads of State. This is already looking a bit problematic. The spin from Brussels last night was that the Heads of Government and State expect to be presented with a near-complete agreement by the officials and Finance Ministers; also, their target, Frau Merkel, previously indicated that she thought an agreement would be impossible today unless it had essentially been agreed over the last weekend. It is not clear that this has happened; far from it. Not, on the face of it, very promising.

And yet ... there is a distinct odour of fudge mixed with that of cordite. Tsipras is now under serious and public pressure from the Masters of the Greek Economy to come to some sort of deal to allow the release of the final tranche of the current "bailout" money. Merkel, even if she has not blinked in this game of chicken, is definitely showing tremblings of the eyelid. At this stage, the Greek banks are, actually, insolvent. They only survived the last week because the European Central Bank extended a drip feed of cash to balance the gathering run on the Greek banks. The "drip feed" is of dubious legality of course but ... the is the New Yerp. It is bonkers to continue drip-feeding the Greek banks with cash, only to see it all go out the door in withdrawals. Into the Gap of Death ... JR.

JR*
06-23-2015, 05:47 AM
Well. After a day of meetings in Brussels, the EC Commission and the Eurogroup bureaucrats have welcomed the latest Greek proposal for a deal to release their final tranche of bailout #1 funding as a "possible basis for agreement". Details are to be fleshed out by a special Council of Eurozone Finance Ministers today, in preparation for yet another emergency Council of Group Presidents and Heads of Government tomorrow (Thursday). So - everything settled ? Er ... not quite.

The contents of the Greek proposal remains somewhat obscured by the fog of war, not to mention fudge fumes. However, the details that have emerged are not particularly promising. Proposals for the target area (from a Eurozone viewpoint) of pension reform are vague. So are those on VAT (sales tax) - although a general rise in VAT is proposed. How the sensitive area (for the Greek people) of electricity and fuel will be treated is not clear. It would appear that heavy reliance is to be placed on income taxes on the "better off" element of the population and on increases in business taxes. What emerges is probably more specific than previous Greek "reform" proposals ... but can it work ?

In the dear dead days of my youth, I worked in the Emerald Isle's finance ministry on both corporation tax and VAT, so I have some idea as to how changes in the rates and effective rates of these taxes are likely to work. Cutting through the detail, the problem with relying on corporate taxes for significant increases in revenue (which also applies to the "soaking the rich" through increased income taxes) is that one is launching a direct attack on the interests of that section of the population most likely to be able to resist, avoid and evade, even within a generally efficient and effective tax regime. The Corporate Tax Unit of the Greek Finance Ministry will soon cease to feel overmanned as it becomes completely clogged with representations from lawyers, accountants and other lobbyists representing the "rich". Meanwhile, the clever lawyers that only companies and the "rich" can afford will be busy weaving new schemes of avoidance and evasion. It is no exaggeration to say that substantial increases in the nominal burden of taxation in this area can result in yield reducing rather than increasing. This ties in with a connected economic consequence - increases in company tax and in tax on "high earners" will discourage investment in Greek enterprises, especially among high-value foreign investors who could contribute to a badly-needed modernization and diversification of the Greek economy. In summary, this element of the "package" may be appealing to the left-wingers of the Greek régime, but it seems less than likely to raise substantial increased revenues, and may significantly impair the development of the Greek economy. An unpalatable truth, perhaps - but nonetheless true.

As for VAT - this is essentially a tax on final consumers of goods and services. The way it works - all manufacturers and service suppliers in the supply chain of consumer goods and services pay VAT invoiced to them by their suppliers and reclaim it from the revenue, with the eventual burden of the tax falling on the final consumer, or the last supplying entity not registered for the tax. This can, again, be a very effective model for a consumer tax, at least in an efficient and effective tax system. The system under which commercial suppliers in the supply chain reclaim "input VAT" invoiced to them by their own suppliers provides a strong incentive for them to comply with the tax, and the standard form of VAT accounting should (and, in Ireland, does) make it difficult for all but the most clever fraudsters within the system to avoid detection indefinitely. Ahem. The problem with Greece is that it is not noted for having an efficient, effective tax system. The predominance of a "cash economy" in Greece has long been recognized to supply ample opportunity to evade the tax at all stages of trade. If this happens, and the revenue supervision system is less than effective, increases in rates (except in services closely controlled by the government) cannot be relied upon to produce proportionate increases in yield. There is also an economic point here - the narrowly-based Greek economy relies disproportionately on tourism, and VAT, being a "scattergun" tax, will adversely impact in this area. One of Prime Minister Tsipras's close parliamentary colleagues says that he will not vote for any VAT increase that affects the Greek Islands, which are almost totally dependent on tourism and which are already suffering their own version of the EU's African/Syrian refugee crisis. I can see his point.

Overall, if the new Greek proposal is, as appears, heavily dependent on measures such as this, its prospects of raising the required additional revenue are slim. As a former Finance official, I know well that my former colleagues in our Department of Finance, and their colleagues in other Eurozone finance ministries, will be well aware of this - which explains why leaks from yesterday's meeting of Eurozone finance ministers describe it as "heated". Today's meeting - which is supposed to develop the Greek proposal for potential ratification by the Heads of State and Government tomorrow - is unlikely to be particularly friendly, either.

Whether the Greeks themselves are oblivious to these concerns is unclear. If the rhetoric of their equivalent political space here - the Sinn Féin Party, the Socialist Party, the People against Profit group et cetera - is anything to go by, their ideological position may persuade them that such measures may work, in the face of all international evidence. Or - more likely ? - they are just codding, having no real expectation that these measures will work, but will at least succeed in their getting their hands on the money, and in kicking the can down the road to the next Battle of the Tsipras Line by at least six months. Either way, this approach may "work", if only because the Eurozone governments, following Chancellor Merkel (as usual), now seem desperate to avoid a Greek exit from the Euro at any cost. If that is the case, the infuriating Greek tactics in these protracted "negotiations" may be regarded as delivering them a "win". But that can only be of the "battle". Whatever the Masters of the Euro may decide tomorrow, the war will certainly go on ... Yours from the Slough of Despond, JR.

JR*
07-03-2015, 09:27 AM
Tumultuous fortnight along the Tsipras Line. After ten days of mutual insult and high-level meetings in Brussels, the Greek government appeared to walk away from discussions, and blew the whole thing out of the water by calling an a referendum at one week's notice (!), asking the Greek people whether they approved of, or disapproved of, the latest Troika proposal for a "deal". One problem with this - with Greece's withdrawal from discussions and unilateral decision to call a referendum, the proposal upon which the Greeks will be voting became invalid. Another - nobody seems to have taken account of the difficulty of calling a national referendum in a largely rural/island based state at one week's notice (we Paddies could have told them ...). Then, there is the little difficulty of what proposal the bemused electorate will be voting on, and the consequences of the result either way. The Tsipras Gang are calling for a "No" vote on the basis that it would, allegedly, "strengthen the government's negotiating position" (regardless of the fact that there is a huge difference of opinion between Athens and Brussels as to whether there is actually a process of negotiations in place. At the same time, the Troikists are claiming that anything but a "Yes" vote will be regarded as a vote "for exit from the Euro", if not from the EU in total. Further exchanges of fire continue as to what any of this means. One contributor on Irish radio this morning recalled a statement from former Northern Ireland MP and MEP John Hume, who once remarked that anybody who claimed to be able to explain the Northern Ireland "sitiation" could not really understand it. That is about where Greece is at the moment. God help the electorate.

Anything, anything could happen. I still think that something will be fudged together at least to postpone the next Battle of the Tsipras Line for six months or so. However, this is far from certain. With their record of contradictory (or at least "overly subtle") series of statements, "offers" and accusations over the last five months, they are now heartily distrusted by the "Troika" side, who clearly wish they would go away to be replaced by a more pragmatic régime. In any event, another comment from a commentator on Irish radio seems appropriate - "the Greek government is a caution against putting the Students Union into government". Whether one agrees with their fundamental position or not (and I do have a lot of sympathy with it), the people in charge of Greece at the moment would certainly be more at home in university politics than in real politics. Maybe even in student politics. They appear incapable, or unwilling, to adapt to the real world represented by the Eurocracy and the IMF. They claim that an agreement is "very close". However, there is every reason to believe that a pragmatic approach would have produced a settlement of sorts months ago that would at least have put the whole Greek default problem aside for 6 months to a year, allowing time for further, pragmatic negotiations on the overall, enormous problem of Greek indebtedness. Instead, we are all left staring at the "Time-Bomb of Athens"; the ticking has stopped - now it is merely a question of whether or not it actually goes off and, if it does, who it blows to the heights of Olympus, or deep into the Styx. We shall, I suppose, see. Yours from Charon Ferries, JR.

leccy
07-04-2015, 07:10 AM
Yesterday on the news in the UK they had an alleged proposal that the 'Greeks' had put to the 'Troika' last week and which was rejected.

Lenders accept a shaving of 30% off of the loans they have made, loans not to be paid back for 20 years (to allow for recovery).

In the meantime Greeks were told that the rumour of their savings in Greek banks being shaved by 30% were false. No reduction in pensions and no increase in pensionable age (which is much lower than the UK).

Seems to me they have gone from the hope for part of the debt to be written off to a partial debt write off and not pay back what they owe for years (yet still able to borrow more money from those same people who are not going to get back what they are already owed - something odd there). No real reform or reduction in spending to live within the country's means.

Reminds me of the third world nations in the 70/80's that were in the news all the time getting all their debt written off as they had no hope of repaying - then promptly going out and getting new loans to buy new palaces and military equipment then defaulting again.

Rising Sun*
07-04-2015, 07:37 AM
Seems to me they have gone from the hope for part of the debt to be written off to a partial debt write off and not pay back what they owe for years (yet still able to borrow more money from those same people who are not going to get back what they are already owed - something odd there). No real reform or reduction in spending to live within the country's means.

Reminds me of the third world nations in the 70/80's that were in the news all the time getting all their debt written off as they had no hope of repaying - then promptly going out and getting new loans to buy new palaces and military equipment then defaulting again.

Whatever happened to the old rule: Don't throw good money after bad?

Which, alas, is no consolation for the average Greek citizen facing misery and ruin.

But isn't there an issue that Germany needs to keep Greece in the EU as Germany is a very strong export economy and it would be disadvantaged by a stronger Euro following Grexit? So Greece is playing that card to blackmail Germany into keeping Greece in?

32Bravo
07-05-2015, 02:10 PM
That one might take some explaining to the German electorate.

JR*
07-07-2015, 05:54 AM
Chaos along the Tsipras Line. The Greek "Big Push" in the form of their referendum proved a stunning success, somewhat to their own surprise. The week leading up to the vote was loud with sententious saber-rattling from the Troikists, insisting that a "No" vote would be a vote for Greek exit from the Eurozone, and possibly from the EU. By contrast, the Greek government - who clearly realized that the referendum might prove to be a self-annihilating own-goal - retreated into hysterical, inflammatory insults in the Troikist direction and appeals to the electorate to uphold Greek "dignity", "honour" and such by voting "No". In spite of predictions that the vote would produce a narrow "Yes", it actually produced a whacking 60 per cent-plus "No". Another one for the opinion pollsters (LOL).

The reactions have been interesting. The Troikists, buoyed up by their usual arrogance, clearly expected a "Yes" vote, and have been back-tracking on the "vote No for Grexit" line, mind you, in considerable confusion. On the Greek side there has been a marked lack of triumphalism. The wild insults have stopped. Also, Tsipras has dropped his provocative (and much disliked by Troikists) Finance Minister Verofakis, replacing him with an urbane smoothie technocrat reckoned to be more pragmatic. The terror felt by the Troikists at the imminence of the Time-Bomb actually exploding is now all too clear.

And the explosion really could be, at long last, imminent. The formal Greek economy is melting down, a lot faster and more dramatically than seems to have been expected. The banks are closed, and Greek account holders are limited by capital controls to withdrawing €60 per day at ATMs (that is, assuming that the ATM actually contains cash, which it often will not). In a peculiar irony, Athens and other traditionally wealthy parts of the country are suffering most from this. Those who are least affected are Greeks living in areas totally dependent on tourism - the islands, and mainland historical sites. This is partly because foreign tourists are not subject to the capital controls affecting ATM and credit card use, but mainly because savvy tourists are now (prudently) carrying more Euros and other hard currency in cash, which preserves a semi-normal currency system in such places. Nonetheless, the Greek Central Bank and commercial bankers are warning that "liquidity" in the system is about to evaporate completely. They are literally running out of Euros to stock the ATMs. Unless some solution is arrived at, the Greek government will have to start issuing IOUs (similar to the "assignats" of the French Revolution) or else issue a new currency (the Drachma, perhaps?). In either case, the much-feared "Grexit" would be touching-close.

Hence, Prime Minister Tsipras, complete with new Finance Minister, journeys yet again to Brussels today for yet another emergency Summit. He is supposed to have yet another Greek proposal to put on the big table. The issues remain the same - the mix of fiscal "reforms" to be required of Greece, and the issue (one of principle for the Greeks) of securing a formal, total write-off of the massive overall debt. The latter point may appear inconsequential - after all, the same effect could be achieved by restructuring the overall debt, delaying repayments and adjusting interest rates to put the debt on the "never-never", much as a fair whack of Irish and Portuguese debt has been kicked into Neverland. For the Troikists (and for the EU Troikists in particular) there is a very practical problem with formal debt write-off. Apart from the fact that all write-offs have two sides (someone's balance sheet, somewhere will take the hit, Euro for Euro), there is the problem posed by other "programme" countries. These are Spain, Portugal and, of course, Ireland. All of these consistently managed their Troika situations in a positive (indeed sometimes ruthless) way. They played largely by the Troika rules. In the case of Ireland in particular, the impact of Troikist impositions was mitigated to some extent by skilled negotiation. In the case of Spain, Portugal and Ireland, this process was conducted at substantial economic and social cost and, for Ireland and Portugal at least, their economies are showing definite recovery. However, the issue of whether these countries should have received a formal write-down of debt has not really gone away. Should the errant, incompetent, uncooperative Greeks receive a formal debt write-down, this could revive demands from the "good boy" programme states for similar relief, and set a precedent for possible future car crashes such as Italy, and even France. Thus, the implications for someone's balance sheet could be huge, especially for the main "funding state", Germany. Try explaining that one in words of one syllable to the German electorate.

All that having been said, the Troikists are in such a state of panic at this stage (about time, too) that some solution is likely to be fudged out over the next couple of days. However, this is unlikely to do more than avert the imminent disaster. Even if this "Time-Bomb of Athens" is defused, it may only make place for another that will start ticking on a time scale not likely to exceed one year. We should be a lot wiser within the next 36 hours. Otherwise - expect a bang loud enough to be heard in Australia ... Yours from the Anthill, JR.

JR*
07-07-2015, 09:47 AM
"So all day long the noise of battle rolled" ...

Tennyson, "Morte d'Arthur.

Sounds from Brussels do not sound good. Possible that Merkel and Shauble have done the job of "hard-lining" their allied Eurozone states all too well. Things do not look good ... JR.

32Bravo
07-08-2015, 03:45 PM
No, because representative democracy in the modern developed (and I use 'developed' with some cynicism) world usually means choosing one of two (or one of two and a bit for conservative coalitions that can never get their own majority) parties comprised of professional self-seeking party apparatchiks whose potential contribution to the common good is limited by their own lack of personal and social experience and utility. The constant factor across all parties and candidates is that they all excel at being useless arseholes given to spurting out meaningless daily messages determined by party HQ for consumption by the news media. The people who run our Western democracies are hidden turds who run focus groups and generally tell our elected representatives what these turds think we think, because our elected representatives are too busy listening to these turds instead of talking to us to find out what we think.

If these arseholes had been in power on both sides in WWII, there would have been almost no deaths as each side confined itself to flinging violent but ultimately empty rhetoric at each other.

Maybe that's something to aim for, but in the meantime the revolution will start when this pub closes. :D

https://www.youtube.com/watch?v=B96qKs4-EI8

I thought your comments were a rallying cry for electoral reform and P.R. until I got to the last line. :( :)

But there's always Rawhide https://www.youtube.com/watch?v=IWMDuRZBnnw

JR*
07-10-2015, 05:27 AM
Friday, 10 July - bomb or dud, we should be a lot wiser by Monday next. This is because by then, the European Central Bank will have run totally out of excuses for funding the Greek Central Bank to fund, in turn, Greek retail and commercial banks that are to all practical purposes, not just illiquid but insolvent, and spectacularly so. The IMF already seems to have crumbled, and sounds from Brussels and Berlin today seem, surprisingly, mutedly positive. The latest Greek proposal - on which the Greek government is understood to have had "assistance" in its composition from French officials - seems to have persuaded Chancellor Merkel and Finance Minister Schauble that it contains enough meat to allow the last tranche of its recently-expired bailout to be released. So, then, on to the next bailout, which Prime Minister Tsipras has already applied for. Mind you, it is hard to see how all the parliamentary formalities required, in Greece and elsewhere, can be completed in the time available but ... this is, after all, the EU. A greater threat to the defusing of the Time-Bomb at this stage may be that Tsipras may have difficulty in steering this (at least theoretically) pretty "austere" package through his own parliament. The trick would seem to lie in persuading the Greek deputies to accept more austerity reforms than they would really like in return for larger reconstruction funds in the next bailout. After al that gush about pride, honor and dignity, will this trick come off ? Remains to be seen. Another busy weekend in Brussels, at any rate ... Yours from the Lex Building, JR.

JR*
07-10-2015, 06:20 AM
Latest from the Brussels Anthill - it now appears that the emergency summit of all EU Heads of State and Government planned from next Sunday may not take place if the Eurogroup Finance Ministers can sign off on a Greek bailout-release deal tomorrow. Can't say I blame the Heads - they must have worn out the carpet in the Justus Lipsius in the last few weeks. The "defusing" of the "Time-Bomb" seems a done deal as far as the EU (and presumably the IMF) are concerned. Not sure how the Greek parliament is going to handle this; if they reject it and precipitate another Greek general election, anything could happen ... JR.

leccy
07-13-2015, 03:02 AM
So for the latest, Greece has till Wednesday night to put into law some of the reforms they have proposed (the Euro Zone ministers seem reluctant to accept yet more promises after previous ones have not been implemented).

Tsiparis seems to have admitted that he made stupid promises to get in power (maybe not in so many or so few words), ones it was impossible for the Greek nation to keep due to the financial circumstances.

The Greek people saying they have their pride so will not bow down to the troika's demands - that pride though does not seem to go as far as - not holding out a begging bowl nor to demanding more and more money (while of course expecting it all to be written off - many investors have already seen 30% wiped off their 'loans' and told to accept it or get nothing back). Selective pride!!!

They blame the Troika for Greece's problems and will not accept it was their elected governments that led them into this position (So ultimately they are to blame). Their votes that brought in popular governments and poor coalitions - those elected governments that failed to introduce the measures needed over decades.

Heavy government subsidies or government ownership of huge money losing buisnesses, earlier retirement than other nations (so an increasing and hefty pension bill), failure to collect taxes and low tax rates have contributed to their present predicament - An economy that was not stable enough to meet the rules of the ERM (Exchange Rate Mechanism) which was the first step to forming the Euro - which Britain joined in 1990 then left in 1992 after being unable to meet the stringent demands of it - of course Europe then relaxed the rules of the ERM to allow weaker economies in - (Britain though once bitten twice shy stayed out after Black Wednesday although sometimes termed White Wednesday as the british economy took a huge upward turn afterwards with interest rates plummeting).

JR*
07-14-2015, 10:31 AM
At the moment, the hapless Tsipras is trying to sell the "deal" to his fractious coalition. Not surprising that this is proving difficult. Incredibly, the overall "package" now being proffered by the Troikists is even more harsh than the one the Greek electorate voted emphatically against just over a week ago. I have to say that I do not have much knowledge of the ins-and-outs of the Greek legislative system. However, it now appears that Tsipras (who is beginning to look like a Greek tragic hero) will be dependent on the support of opposition parties to get the general vote, and initial "financial resolutions" through parliament. Not promising, since it will put the opposition parties in a position to pick off subsequent "reform" measures (expected by the Troikists), making for a highly unstable political situation. The "Time Bomb of Athens" is still live ...

Whatever eventuates - enormous damage has been done to the EU and its undemocratic system of governance by this lamentable epic.

Yours from the ship-lines at Troy, JR.

JR*
07-14-2015, 10:44 AM
I reserve comments on the final outcome of the "Time-Bomb" case. I can see points on both sides. However, one wonders whether it was really necessary to grind the Greeks into the ground in the way it was done. An image of Orwell's "1984" comes to mind. Will certainly have more to say on the consequences for the EU and the Eurozone anon ... JR.

JR*
07-15-2015, 08:46 AM
Sigh ... the Goddess Hera (Christine Lagarde) apparently thundered from Olympus/Washington before the other Troikists had concluded their "bailout" agreement with the Tsipriots, stating that the Greeks needed much greater debt relief than the EU was willing to contemplate. This, to say the least, creates doubt as to whether the IMF is willing to participate in the "bailout" on the terms currently on offer. Something of a problem, since the Germans insist that, legally, they can only participate if the IMF is also is there also. Meanwhile, poor Tsipras is trying to shore up a defection-plagued party, and to persuade the Greek parliament that it should vote for a bailout proposal that is (a) more severe than the one previously on offer, which the Greeks voted against in a referendum and (b) is regarded by the IMF as inadequate to the needs of the situation. This situation would be laugh-a-minute farce, were it not so serious. The Greek Parliament is supposed to vote on this mess tonight. Ho-hum. Yours from my local mental hospital, JR.

leccy
07-15-2015, 10:37 AM
Tsipras and his party wanted and expected to get a debt write off without having to accept any more austerity (or even to really enforce what was already agreed which may have helped their position).

Problem for them though is they want to borrow more money from those who had already loaned them money and who they wanted to write off existing debts - Seems the fundamental issue of trying to pass your debt on to others is not realised fully by them.

Several other nations are also looking at the outcome - after all if Greece gets more of its debt written off - they think should as well. This will knock on to more nations as the debt is shifted to those who have lent money.

One of the last things the Labour Government did was agree to act as a guarantor for 6 billion on Greek loans when they were initially called for - Britain would not actually give the money to Greece - that was to come from the Eurozone nations - Gordon Brown's claim it was just a figure of support and we would never have to actually pay any money looks a little suspect now.

Looking at a nice patch of wild forest land and considering building a house out of old pallets and becoming a Hermit away from it all.

tankgeezer
07-15-2015, 06:39 PM
A nice Cottage in Rannoch Moor would keep the beggars away,, (worked on the Romans,,)

Rising Sun*
07-19-2015, 07:58 AM
How the bail out package works.


​It is a slow day in a little Greek village.

The rain is beating down and the streets are deserted.

Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.

The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna.

The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.

The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything.

No one earned anything.

However, the whole village is now out of debt and looking to the future with a lot more optimism.

And the German tourist is glad that his €100 has held its value while he was looking at the hotel room in Greece's shaky economy.

JR*
07-20-2015, 04:13 AM
I seem to remember an economist friend of mine once explaining to me the concept of "High-Powered Money" ... JR.

JR*
07-21-2015, 07:08 AM
Well, all's (almost) quiet on the Tsipras Front at the moment. Both the Greek government (what's left of it) and the Troikists are working out the details for implementing the extremely onerous terms - more onerous than those voted against by the Greek populous in the recent referendum. This will allow the remainder of Greece's second bailout fund to be released, and allow the Greeks to negotiate a third bailout with the Troikists. At least that's the idea ...

It remains far from certain that this course represents the road back to prosperity for Greece. A former Irish ambassador to Greece, now retired and living in the country, had an article published in an Irish newspaper this morning, insisting that the possibility of Greece ever, ever repaying its enormous underlying debt is about zero, and default is certain at some stage. I tend to agree with him. Further activity on the Tsipras Line can confidently be expected ...

It is perhaps about time for consideration of the broader consequences of the present Greek crisis for the European Union, and for the Eurozone, as a whole. These are serious, and several. The most important, it seems to me, is that it has blown away forever the illusion that the EU is a benign shelter of democracy, involving an equally benign process of "ever deeper union" capable of incorporating national democratic interests. A small minority of us here have always believed that this impression of the EU agenda is a lie. For me, at least, it is no pleasure to say that the views I have held for so many years on this subject have been absolutely vindicated. Interesting, however, that the scales appear to have fallen from the eyes of many hitherto Europhile commentators, who now, at last, see the truth in the words of more than one economic commentator on the Greek crisis, to the effect that "local" democratic decision-making processes are absolutely antithetical to the EU process of governance. In the words of one top EU administrator in recent days, "Dissent is impossible outside the scope of the Treaties". Quite.

Where this broader scenario goes is somewhat doubtful. President Hollande of France has, within the last few days, put the matter from the EU "centre" baldly - the Single Currency can only work in the context of a unified EU "government", with full effective control of fiscal as well as monetary policy throughout the EU. Again, quite - the Eurorealist minority have been saying this since before the institution of the Euro. The problem is that this places the cart before the horse. Sacrificing national democratic control of budgets should only occur in the context of a much greater programme of cultural and economic integration; the idea of handing fiscal control over to the profoundly undemocratic Eurocracy simply to support a profoundly misconceived, politically inspired monetary union is ridiculous. However, the deliberate crushing and humiliation of Greece by the Eurocracy (organ grinder - A. Merkel, monkey - F. Hollande) makes it quite clear that, as part of the German/French centralization process, that same Eurocracy is willing to exert "correction with extreme prejudice" against any Member State, undertaking or individual person daring to challenge its line. Again, surprise me ... Yours from the GPO, JR.

leccy
07-23-2015, 06:25 AM
I think some of the underlying reasoning behind the strict insistence on harsher rules than previously (and ones that have to be enacted in law - not just promises), was to really get Greece (and other nations in the EU) to start sorting out their government spending compared to national income.

No perpetual hand outs or loans growing bigger and bigger till you have to get loans that just cover your last bill and no cash left for yourself.

Any nation that borrows and does not pay back has in effect just passed their bad financial planning onto others, it can only happen for so long before resentment grows

Greece potentially exiting the Euro was probably seen as a lesser effect than them having a huge debt write off now and able to borrow again easily. That would just give impetus to other nations to follow the 'Greek example', Greece after all is not the only nation in the Euro Zone (or outside who owe money to the EU) who are looking for debt reduction/write off.