Grexit

[Jack Knave]

If you are looking for 'blame' the immediate crisis has obviously occurred because the Greek electorate were naive enough to believe that a bunch of Lefties could sort out a broken economy.

But the real problem is that Greece never met the criteria for Eurozone entry. Lots of people said so at the time, but those creating Euroland were so desperate to recruit members that they turned a blind eye to a lot of details (like the fact the the Greek government couldn't actually collect their taxes) and Greece joined anyway - so those who allowed Greek entry are the real culprits.

It's difficult to see a happy ending for Greece. My guess is that the Eurozone officials and creditors will just stand back until Greece gets a more sensible government.

You might find those Lefties are more shrewd than you think.  Just wait and see!!!

There is no time for the Eurogroup to wait for a 'better' government, the EZ is a busted flush.

[Jack Knave]

But the real problem is that Greece never met the criteria for Eurozone entry. Lots of people said so at the time, but those creating Euroland were so desperate to recruit members that they turned a blind eye to a lot of details (like the fact the the Greek government couldn't actually collect their taxes) and Greece joined anyway - so those who allowed Greek entry are the real culprits.

It's difficult to see a happy ending for Greece. My guess is that the Eurozone officials and creditors will just stand back until Greece gets a more sensible government.

LA, only three European economies met the convergence criteria for Eurozone entry back in 1998.  They were Germany, Sweden and the UK (and, of course, the latter 2 weren't even planning to join the zone).  In order to make the system work at all, these criteria had to be relaxed, but because France - a central element in the whole charade - was so far below the bar, the relaxation had to be dramatic, thus allowing Greece, Italy, Portugal and Ireland - all of which have had bail-outs since 2007 - in as well.  As such, the Eurozone has long been an unstable economic powderkeg waiting for the right trigger to set it off.

...and then Greece had to have its books cooked by Goldman Sachs to get in even with that low bar; hence the total mess we see now.

[Hope]

Not my day today, I was thinking who is Grexit?

Who knows we might be next.

That would be impossible, Rose.  We have never joined the group that use the Euro - aka the EuroZone - so we couldn't be next.

I suspect that the most likely likely candidate for that role will be found amongst Italy, Portugal and Ireland.

[Hope]

...and then Greece had to have its books cooked by Goldman Sachs to get in even with that low bar; hence the total mess we see now.

Only Greece?   

[BashfulAnthony]

Not my day today, I was thinking who is Grexit?

Who knows we might be next.

That would be impossible, Rose.  We have never joined the group that use the Euro - aka the EuroZone - so we couldn't be next.

I suspect that the most likely likely candidate for that role will be found amongst Italy, Portugal and Ireland.

And Spain.

[Hope]

I suspect that the most likely likely candidate for that role will be found amongst Italy, Portugal and Ireland.

And Spain.

Thinking about it a bit more, Irelanmd sees to have had a very strong recovery - so replace Ireland with Spain - as you suggest.

[Jack Knave]

...and then Greece had to have its books cooked by Goldman Sachs to get in even with that low bar; hence the total mess we see now.

Only Greece?   

I don't know about the others, but I am guessing you will be telling me that some of the others also had trouble reaching that low bar.

[L.A.]

If you are looking for 'blame' the immediate crisis has obviously occurred because the Greek electorate were naive enough to believe that a bunch of Lefties could sort out a broken economy.

But the real problem is that Greece never met the criteria for Eurozone entry. Lots of people said so at the time, but those creating Euroland were so desperate to recruit members that they turned a blind eye to a lot of details (like the fact the the Greek government couldn't actually collect their taxes) and Greece joined anyway - so those who allowed Greek entry are the real culprits.

It's difficult to see a happy ending for Greece. My guess is that the Eurozone officials and creditors will just stand back until Greece gets a more sensible government.

You might find those Lefties are more shrewd than you think.  Just wait and see!!!

There is no time for the Eurogroup to wait for a 'better' government, the EZ is a busted flush.

They are playing a game of brinkmanship, the stakes are high and they can't be allowed to win - or the others would jump on the bandwagon.

I'd say it isn't a good time to be a Greek.

[ad_orientem]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

[Nearly Sane]

Stiglitz on the referendum and the issues


http://tinyurl.com/porjduk

[ad_orientem]

Stiglitz on the referendum and the issues


http://tinyurl.com/porjduk

Good article.

[Hope]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

I'm not sure that simply concentrating on the events of the last 5-10 years is actually that helpful.  Folk I know who have family over there have pointed out that for the last 30 or 40 years the Greeks have enjoyed one of the most generous retirement and pension packages in the whole of Europe - most retiring at about 50 - and many other perks.  OK, this might be seen as the younger people feeling hard done by in that they can't retire that early - except that the story has been the same for 25+ years.  In that sense, Greece have brought this upon themselves.  The pieces on 'Post-World War 2' and 'late 20th century' in the wikipedia article - https://en.wikipedia.org/wiki/Economic_history_of_Greece_and_the_Greek_world makes for instructive reading.

Note the 'disastrous' as applied to their Civil War in the middle of the century.

[jeremyp]

Paul Krugman

http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html?_r=0

[L.A.]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

I think most people would say that they promised the electorate the impossible - and sure enough, it's proved to be impossible.

Sure, the Greek electorate want loads of cushy public sector jobs with generous pensions - but their economy can't afford that now and in reality it never could.

[ad_orientem]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

I think most people would say that they promised the electorate the impossible - and sure enough, it's proved to be impossible.

Sure, the Greek electorate want loads of cushy public sector jobs with generous pensions - but their economy can't afford that now and in reality it never could.

This is simply not true or at least you're painting a distorted picture. Here are some of the reforms the Greeks have implemented at the behest of EU/IMF and their consequences:

That Greece needs to adjust there is no doubt. The question, however, is not how much adjustment Greece needs to make. It is, rather, what kind of adjustment. If by ‘adjustment’ we mean fiscal consolidation, wage and pension cuts, and tax rate increases, it is clear we have done more of that than any other country in peacetime.

The public sector’s structural, or cyclically adjusted, fiscal deficit turned into a surplus on the back of a ‘world record beating’ 20% adjustment
Wages fell by 37%
Pensions were reduced by up to 48%
State employment diminished by 30%
Consumer spending was curtailed by 33%
Even the nation’s chronic current account deficit dropped by 16%.
No one can say that Greece has not adjusted to its new, post-2008, circumstances. But what we can say is that gigantic adjustment, whether necessary or not, has produced more problems than it solved:

Aggregate real GDP fell by 27% while nominal GDP continued to fall quarter-in-quarter-out for 18 quarters non-stop to this day
Unemployment skyrocketed to 27%
Undeclared labour reached 34%
Banks are labouring under non-performing loans that exceed 40% in value
Public debt has exceeded 180% of GDP
Young well-qualified people are abandoning Greece in droves
Poverty, hunger and energy deprivation have registered increases usually associated with a state at war
Investment in productive capacity has evaporated.

http://uk.businessinsider.com/full-greece-proposal-leaked-by-yanis-varoufakis-2015-6?r=US

[Jack Knave]

If you are looking for 'blame' the immediate crisis has obviously occurred because the Greek electorate were naive enough to believe that a bunch of Lefties could sort out a broken economy.

But the real problem is that Greece never met the criteria for Eurozone entry. Lots of people said so at the time, but those creating Euroland were so desperate to recruit members that they turned a blind eye to a lot of details (like the fact the the Greek government couldn't actually collect their taxes) and Greece joined anyway - so those who allowed Greek entry are the real culprits.

It's difficult to see a happy ending for Greece. My guess is that the Eurozone officials and creditors will just stand back until Greece gets a more sensible government.

You might find those Lefties are more shrewd than you think.  Just wait and see!!!

There is no time for the Eurogroup to wait for a 'better' government, the EZ is a busted flush.

They are playing a game of brinkmanship, the stakes are high and they can't be allowed to win - or the others would jump on the bandwagon.

I'd say it isn't a good time to be a Greek.

Which ever way you look at it it isn't good for Greece.

My hutch is that though Syriza got to power on a mandate of staying in the Eurozone I reckon they actually want to leave as they know staying would just be a grind to the bottom and staying there for Greece with this EU austerity attitude. Being out would be hard for a short while, but would mean at least they could avoid being at the bottom for ever in the EZ, and with some form of growth to follow this initial period being out of the EZ.

But they knew the Greek people wanted to stay in so they gave them what they wanted to hear with the plan that they knew the EU wouldn't budge on the austerity plan the Greek people didn't want. They then could say to the Greek people we were forced out by those nasty EU lot, getting what they want, which is to be out, and not taking the flak for taking them out. That's why I said they are more shrewd than some people think - they may play dumb but they are not.

[Hope]

This is simply not true or at least you're painting a distorted picture.

If its a distorted picture its a distorted picture that many Greeks agree with, ad_o

[Jack Knave]

Stiglitz on the referendum and the issues


http://tinyurl.com/porjduk

Good article.

Yeah, good one and on the button.

The old Labour of Britain called the EU (the EEC at the time) a rich boys club, and that is exactly what it is. Some Unions still air this viewpoint. It has nothing to do with the people of Europe.

[Hope]

The old Labour of Britain called the EU (the EEC at the time) a rich boys club, and that is exactly what it is. Some Unions still air this viewpoint. It has nothing to do with the people of Europe.

The problem with this claim is that 'the old Labour of Britain' were happy to argue for us to remain in the EU long before that party became Red Tories.

[Jack Knave]

The old Labour of Britain called the EU (the EEC at the time) a rich boys club, and that is exactly what it is. Some Unions still air this viewpoint. It has nothing to do with the people of Europe.

The problem with this claim is that 'the old Labour of Britain' were happy to argue for us to remain in the EU long before that party became Red Tories.

OK. The more wiser ones in the Labour of old had that viewpoint. You're right the EEC split Labour as the EU today has split the Tories.

[BashfulAnthony]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

The Greek Government of the time entered into an agreement, to save their bacon, in effect. Because this is a new Government it goes not justify reneging on a commitment.   They have been given huge leeway, but the immensity of their debt leaves little or no further room for leniency.  They are asking for more money from their creditors to pay them some of the money owed to them!  It is farce, and total economic unreality.  It is hard on the Greek populace, but you still have to play by the rules.  We do; Spain, Ireland, Italy, Portugal, all do;  all of whom owe, but are attempting to honour their obligations. 

[Jack Knave]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

The Greek Government of the time entered into an agreement, to save their bacon, in effect. Because this is a new Government it goes not justify reneging on a commitment.   They have been given huge leeway, but the immensity of their debt leaves little or no further room for leniency.  They are asking for more money from their creditors to pay them some of the money owed to them!  It is farce, and total economic unreality.  It is hard on the Greek populace, but you still have to play by the rules.  We do; Spain, Ireland, Italy, Portugal, all do;  all of whom owe, but are attempting to honour their obligations.

Are you saying that never in the history of democracy has an incoming government not reversed what a previous government has done?

[BashfulAnthony]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

The Greek Government of the time entered into an agreement, to save their bacon, in effect. Because this is a new Government it goes not justify reneging on a commitment.   They have been given huge leeway, but the immensity of their debt leaves little or no further room for leniency.  They are asking for more money from their creditors to pay them some of the money owed to them!  It is farce, and total economic unreality.  It is hard on the Greek populace, but you still have to play by the rules.  We do; Spain, Ireland, Italy, Portugal, all do;  all of whom owe, but are attempting to honour their obligations.

Are you saying that never in the history of democracy has an incoming government not reversed what a previous government has done?

Of course not.  Bur this is somewht different.  The Greeks belong to an organisation of supposedly equal partner.. To renege on your partners is pretty low:  and then expect them to bail you out of your troubles to the tune of some 230 billion euros to date, and still asking for more takes the cake.

[Jack Knave]

Brinkmanship? No, they're doing what they were elected to do: bring an end to tve unreasonably harsh austerity demanded by its creditors.

The Greek Government of the time entered into an agreement, to save their bacon, in effect. Because this is a new Government it goes not justify reneging on a commitment.   They have been given huge leeway, but the immensity of their debt leaves little or no further room for leniency.  They are asking for more money from their creditors to pay them some of the money owed to them!  It is farce, and total economic unreality.  It is hard on the Greek populace, but you still have to play by the rules.  We do; Spain, Ireland, Italy, Portugal, all do;  all of whom owe, but are attempting to honour their obligations.

Are you saying that never in the history of democracy has an incoming government not reversed what a previous government has done?

Of course not.  Bur this is somewht different.  The Greeks belong to an organisation of supposedly equal partner.. To renege on your partners is pretty low:  and then expect them to bail you out of your troubles to the tune of some 230 billion euros to date, and still asking for more takes the cake.

Brussels, the Troika, Eurogroup, whatever, don't give a damn about the Greek people or Greece all they are bothered about is keeping the Euro as one of the big boys; playing at the top of the financial game. The bailouts have been about bailing out the banks. 92% of the bailout monies that have been given to Greece have just passed through them like a train not stopping at a station and gone to the banks. That is what Brussels is concerned about. They will strip Greece the way vultures strip a carcase and will not shed one tear or lose their smile. The EU is about the project not the people just as the Soviet Union was about the fulfilment of the ideology not what the people needed. That's not democracy that's socialism, fascism.

Tsipras and his team know this and are looking for a way for Greece to grow and exit this vortex that is sucking them down to the very pits of hell. If that means reneging on their feudal masters then so be it. Partners? what a sick joke!!!

[BashfulAnthony]

Greece was allowed into the EU because they wanted to be in:  they applied, they were not coerced.  Having done so, they were expected to follow the rules, as equal partners.  Nobody realised they were just out to make hay at the expanse o ftax-payers throughout the EU, by their excessive borrowing and wilful use of the loans.  Now that the chicken is home to roost they are reneging on their responsibilities.  They have had two bail-outs already, and now they seek a third.  They have been given plenty of leeway, but have not put their house in order.  What are the creditors supposed to do:  let this go on and on, whilst Greece gets further and further into debt?  That would be insane and unrealistic.  I might add, that as contributors to the IMF, the UK has stumped up £12.5 billion so far to help Greece, and we actually owe more than they do.  How do you feel about that, as a tax-payer?   If, in the long run, Greece leaves the Euro, as seems likely, then they will turn to the EU for further assistance,  As members, we will then be expected, with all the other members, to fund them again!