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On June 29 2015 04:15 zlefin wrote:
How so? via the statement I quoted. There is a perceived, with some justification, view that Greece has been acting in bad faith in some of the negotiations. To call it might makes right or that other thing you said is not trying to view things from a reasonable perspective. If you cannot see that, I do not think any explanation I can provide will change your mind. It's very common in discussions like this to find people who are not going to change their mind no matter what evidence is provided, so I try to avoid getting into it with people who seem like they are that way.
In response to your edit: if there is no mutually agreeable deal, because the terms Syriza wants are incompatible with what the others want, then you just thank the other side for the discussion and announce that no satisfactory deal could be reached, and move on. Also, just because Syriza claims a deal is bad, doesn't mean it's actually a bad deal, as Syriza has proven itself incompetent at governance.
Read the Syriza proposal and compare it with the institutions proposal. It is obvious you have not.
On June 29 2015 04:54 RvB wrote:Show nested quote +On June 29 2015 04:48 silynxer wrote:On June 29 2015 04:40 RvB wrote:On June 29 2015 04:32 silynxer wrote:On June 29 2015 04:27 Gorsameth wrote:On June 29 2015 04:21 silynxer wrote:On June 29 2015 04:15 zlefin wrote:
How so? via the statement I quoted. There is a perceived, with some justification, view that Greece has been acting in bad faith in some of the negotiations. To call it might makes right or that other thing you said is not trying to view things from a reasonable perspective. If you cannot see that, I do not think any explanation I can provide will change your mind. It's very common in discussions like this to find people who are not going to change their mind no matter what evidence is provided, so I try to avoid getting into it with people who seem like they are that way.
In response to your edit: if there is no mutually agreeable deal, because the terms Syriza wants are incompatible with what the others want, then you just thank the other side for the discussion and announce that no satisfactory deal could be reached, and move on. Also, just because Syriza claims a deal is bad, doesn't mean it's actually a bad deal, as Syriza has proven itself incompetent at governance. But isn't this exactly what happened? SYRIZA moved on with posing the existential question they now faced (after the negotiations failed) to the people who it concerns most and so they could decide whether the deal is bad? Again it would be ridiculous if the Greek people voted Yes but the Eurogroup would decide to not accept that because the decision came 2 days too late. 5 days btw, not 2. And negotiations have been failing for months. If they had held this referendum 1 week earlier, you know before the deadline then Greece would have had a point regardless of how they vote. You call it ridiculous that the Eurogroup cant wait a week, The Eurogroup calls it ridiculous you couldn't ask the question a week earlier. Considering how long the deadline has been standing, I'm with the Eurogroup on this. But what is the benefit of taking a such a hard-line on the deadline? Is it to punish Greece? To punish SYRIZA? To make an example out of them? It cannot be out of principle for procedure because these principles have been violated far too often. They're not taking a hard-line on the deadline. The deadline is a deadline because Greece has to make their payment to the IMF July 1st which they can't and the deal has to be ratified by parliaments as well. Yes and it is absolutely impossible to find a workaround for another couple of days... But ok I should not call it a hard-line anymore, perhaps stubborn is a better term. Btw you may correct me if I am wrong but isn't a country that cannot pay back IMF loans usually given a grace period? I really don't know this but something comes to mind. Well I usually don't post and now I remember why. It's just stressing me out too much so sorry to all I'll vanish again. I hope for the best for Greece. Well actually I hope for the best for the best of the EU as well, I like it as a concept but the outlook is rather dire now. You can bundle all the payments you have to do and pay it at the end of the month but Greece already used that option. That's why they have to pay July 1st.
IMF payment is a nonissue regarding the referendum. You don't pay IMF => you go into arrears for a month, then the board gets notified. That is the usual procedure. Lagarde bluffed when she said she'd call in Greece's debt Jul 1st, she has already recalled that statement since, just today, she said that not paying IMF means nothing more than that IMF won't be disbursing more funds (they've stopped doing that since last summer so whoopdedoo) and no more consequences.
On June 29 2015 05:26 maartendq wrote:
Apparently Greek banks will remain closed for a week and capital controls will be enforced. Tsipras going for a nationalist rethoric again, claiming the Greeks are the true democrats while the "Institutions" are fascism incarnate, basically.
What a world we would live in if every newly elected government would be allowed to randomly alter or outright cancel agreements between the previous government and other instututions or countries during their time in power.
Tsipras: "The Greek people voted against austerity"
The rest: "Very well. Now how are you going to fund that? Because we sure as hell are not going to give you any more money, not before you've fulfilled your end of the bargain."
Greek proposal.
Creditor proposal.
Such wildly divergent proposals, huh. Update the creditor one, hotel VAT according to Juncker is supposed to be at 13% after all.
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On June 29 2015 06:08 RvB wrote:sourceThe IMF's opinion on the sustainability of debt is not as clear cut as you make it out to be. They're in favour of a haircut but even without it can be sustainable.
No it is very clear, IMF's official forecasts always assumed high rates of growth and primary surpluses, it's more likely Santorini's volcano to erupt and colorful unicorns jump out of it.
Is Greece's debt really so unsustainable? Yes, it is.
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On June 29 2015 06:23 accela wrote:Show nested quote +On June 29 2015 06:08 RvB wrote:sourceThe IMF's opinion on the sustainability of debt is not as clear cut as you make it out to be. They're in favour of a haircut but even without it can be sustainable. No it is very clear, IMF's official forecasts always assumed high rates of growth and primary surpluses, it's more likely Santorini's volcano to erupt and colorful unicorns jump out of it. Is Greece's debt really so unsustainable? Yes, it is.
The Greek economy underwent a huge dive and it is not totally out of the question that with sound economic policy it could rebound back. +3% economic growth over 5 years would not even put it back to where it was back in 2009. Meanwhile, the interest payments as % of its GDP are very reasonable thanks to the troika. So I wouldn't call the debt unsustainable, I think it'd be better described as a pain in the ass. A pain in the ass that pales in comparison to what can happen with an exit from the Eurozone and a default.
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On June 29 2015 06:52 warding wrote:Show nested quote +On June 29 2015 06:23 accela wrote:On June 29 2015 06:08 RvB wrote:sourceThe IMF's opinion on the sustainability of debt is not as clear cut as you make it out to be. They're in favour of a haircut but even without it can be sustainable. No it is very clear, IMF's official forecasts always assumed high rates of growth and primary surpluses, it's more likely Santorini's volcano to erupt and colorful unicorns jump out of it. Is Greece's debt really so unsustainable? Yes, it is. The Greek economy underwent a huge dive and it is not totally out of the question that with sound economic policy it could rebound back. +3% economic growth over 5 years would not even put it back to where it was back in 2009. Meanwhile, the interest payments as % of its GDP are very reasonable thanks to the troika. So I wouldn't call the debt unsustainable, I think it'd be better described as a pain in the ass. A pain in the ass that pales in comparison to what can happen with an exit from the Eurozone and a default.
Now think in terms of a potential investor looking to open a business somewhere. He sees a country with ok infrastructure, inside EZ, low wages, people generally want to live here... sounds good so far. He knows about the crisis and the problems it generated for businesses but he has assurances from politicians and lawyers (most FinMins are, after all, lawyers) that the debt surely is sustainable, no problems there.
And he takes a look at the debt since he's a wise businessman. He sees it is currently 180% GDP, although with low upkeep. He sees projections of growth amidst austerity and he begins to question these models, since growth inside austerity generally does not actually happen unless extraneous economic circumstances are very favorable (the world is a mess right now so that's out of the question, not to mention the state Greece is in). And he sees that the one major point in favor of debt sustainability, that debt service only requires ~2% gdp currently, expires in 2022. That's only 6,5 years from now, an eternity in terms of politician thinking but a short while in terms of economic planning for major businesses setting up somewhere new.
Does he really invest here? The writing is on the wall, this situation we're having now will repeat over and over and over again.
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If I were an investor, I'd be worried about the following:
- A history of rampant tax evasion, signalling rampant corruption;
- A history of political inability to achieve responsible fiscal policy;
- Popular support for populist left governments, signalling a lack of appetite from the people to tackle the real economic problems of the country.
Greece already had a primary surplus. It's not like a ton more of austerity was needed, you were practically there already. If the following governments keep a sane fiscal policy, there's no reason the debt levels will interfere in any way in his calculations. There's also no reason why you couldn't achieve economic growth, at least if you keep the populists away from government. Also, isn't the average debt maturity 16 years?
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On June 29 2015 06:23 accela wrote:Show nested quote +On June 29 2015 06:08 RvB wrote:sourceThe IMF's opinion on the sustainability of debt is not as clear cut as you make it out to be. They're in favour of a haircut but even without it can be sustainable. No it is very clear, IMF's official forecasts always assumed high rates of growth and primary surpluses, it's more likely Santorini's volcano to erupt and colorful unicorns jump out of it. Is Greece's debt really so unsustainable? Yes, it is.
To support your point :
We should follow the IMF vision on this, they must be right at some point... ?
- A history of rampant tax evasion, signalling rampant corruption;
- A history of political inability to achieve responsible fiscal policy;
- Popular support for populist left governments, signalling a lack of appetite from the people to tackle the real economic problems of the country.
lol...
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How many investors do you think align with Syriza's ideology?
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The more I read from Greek posters here (accela especially), the more I just have to roll my eyes.
In what world are you guys living? Like, is Greece not part of the financial reality we all live in?
This delusion of Syriza voters, that apparently their new government is going to spark this worldwide revolution in how we do business with each other, is hilariously sad.
You want loans from outside parties, you comply with their demands or you will not get any. You want to be in a monetary union, you conform to the set up rules, if you don't like the rules you are out. It is not hard to get (I thought).
If a vote for Syriza was really seen as a 'vote to end austerity', than that was a vote for the Grexit! If you want to stay in the Euro you have to accept austerity, because no one is going to loan you any money if you don't. That is how it works everywhere, literally everywhere. One lonely Greek left government is not going to change the world.
You whine about the IMF being neo-liberal bastards and you think that is news, why? You think they will not crack down on you like they did every other country, why? Because you voted against it and they surely will respect that, really? What kind of mass delusion is going on in Greece these days?
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To warding and lord_nibbler : Read the damn Greek proposals. Compare them with creditor proposals. Stop this idiotic blathering about mystery leftist policies that AREN'T THERE.
You talk about debt sustainability, you're gonna get an answer about debt sustainability and its potential effects on investment. Who the hell disagrees about Greece's public sector needing tons of reform (this word does not mean cuts, it's been so long with the doublespeak I feel I need to remind people and myself), that tax evasion needs handling, so on and so forth? Stop with the pettiness if you want to have a dialogue, I'm not talking about left vs right or any of that, it's about solving a real problem, in the real world, with real means, not ideology or morality or who messed things up the most.
http://timesofindia.indiatimes.com/business/india-business/World-economy-may-be-slipping-into-1930s-type-Great-Depression-Raghuram-Rajan/articleshow/47827821.cms
Unrelated to Greece, just some wider perspective about what's been going on with policy in general that I found interesting and relevant to austerity-> growth shenanigans.
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Then why is Syriza advocating for voting 'no' in the referendum?
Why did they leave the negotiations?
Why do you consider 'ending austerity' not as a left policy?
What is the point you are trying to make with the fact that the proposals are quite similar?
What are you trying to say really?
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I did read the proposals from the links you posted. The difference between them seems minute. So minute that it baffles me how Tsipras could have chosen to go this route instead of trying to bridge the gap.
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On June 29 2015 09:19 lord_nibbler wrote:
Then why is Syriza advocating for voting 'no'?
Why did they leave the negotiations?
Why do you consider 'ending austerity' not as a left policy?
What is your point you are trying to make with the fact that the proposals are quite similar?
What are you trying to say?
You understand that one of these very similar proposals was submitted by the otherwise far left Syriza, right? You understand the only major differences are the fact that lenders require more cuts in what pensioners and wage earners receive, so that profits over 500k are left completely untouched? You realize that lenders wish to not implement a one-off tax on corporate profits because they view it as recessionary when, in the same breath, they wish for businesses to pay, up front, in the current economic climate, all the tax they WILL owe for the next year, right? On money they have NOT made yet.
You realize they wish for all these things and in return offer enough money to pay back themselves up until ~November, right? At which point we'll once again have the same bloody conversation. So Greece is supposed to implement another massive wave of austerity, muddle through until November at which point who knows what happens. Perfect scenario for a recovery, right? Very sane plan, this, perfectly acceptable, Greek people (most of whom don't actually own businesses making profits over 500k, imagine that) will surely support this paragon of social justice with all their might. No taking to the streets, no sir.
I've been reading some Twitter commenters bemoaning the level of disinformation that goes on in Germany these days. Your Vice-Chancellor (he's a Socialist too, not even right wing) apparently said something to the effect that Greeks just want free money. Well, here are the proposals. Read them, thoroughly. If you're not willing to at least stop pretending you know what's up.
On June 29 2015 09:24 warding wrote:
I did read the proposals from the links you posted. The difference between them seems minute. So minute that it baffles me how Tsipras could have chosen to go this route instead of trying to bridge the gap.
Debt relief, social justice (I've mentioned this several times, profits over 500k not getting taxed in favor of cutting pensions and wages some more), inadequate financing (money gets us up to November, it is extremely doubtful that Greece will be able to go to the markets then) that keeps up the stranglehold on the economy and shuts down growth expectations.
Recall that the Greek state essentially stopped paying contractors all these months so that it could pay off loans - last bailout tranche released was Aug 2014 iirc - arrears have gone up once again, further depressing the economy as should be obvious. Well, no money is forthcoming to rectify this situation, even though according to program terms this financing should have been provided. Remember the bridge loans requested by Varoufakis in February? They were supposed to carry us to June while negotiations went on, so that the Greek economy didn't collapse in the meantime. Welp.
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Is "The European debt" crisis worth reading? Ive always liked Costas Simitis.
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On June 29 2015 09:50 lastpuritan wrote:
Is "The European debt" crisis worth reading? Ive always liked Costas Simitis.
That's the guy who engineered the debt swap with Goldman Sachs that fudged the numbers enough so that Greece could enter the EZ. Probably worth reading if only to find out whether he owns up to this or not :p
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On June 29 2015 08:51 lord_nibbler wrote:
The more I read from Greek posters here (accela especially), the more I just have to roll my eyes.
In what world are you guys living? Like, is Greece not part of the financial reality we all live in?
This delusion of Syriza voters, that apparently their new government is going to spark this worldwide revolution in how we do business with each other, is hilariously sad.
You want loans from outside parties, you comply with their demands or you will not get any. You want to be in a monetary union, you conform to the set up rules, if you don't like the rules you are out. It is not hard to get (I thought).
If a vote for Syriza was really seen as a 'vote to end austerity', than that was a vote for the Grexit! If you want to stay in the Euro you have to accept austerity, because no one is going to loan you any money if you don't. That is how it works everywhere, literally everywhere. One lonely Greek left government is not going to change the world.
You whine about the IMF being neo-liberal bastards and you think that is news, why? You think they will not crack down on you like they did every other country, why? Because you voted against it and they surely will respect that, really? What kind of mass delusion is going on in Greece these days?
You are right that the Greeks can't just vote away their debts, and are sill for thinking they can.
But it is also the case that, when a party's debts are unsustainable for those debts to be restructured in a rational manner. Nothing about the response to the euro-crisis has been rational. It's been all smoke, mirrors and politics and because of that the crisis persists into 2015.
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Closed until July 7th now?
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Taguchi -> your response did not answer the questions of nibbler that you quoted. You did raise some interesting questions of your own, but they do not in any way answer nibbler's ones. Your nitpicking on the similarities of the proposals (that are shown on a blog, not an official site and not finalized or agreed to by the negotiators themselves) feels wrong-ish. I'm sure there's a better word to describe the feeling I get from it, but I'm not sure what that word is
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On June 29 2015 06:52 warding wrote:Show nested quote +On June 29 2015 06:23 accela wrote:On June 29 2015 06:08 RvB wrote:sourceThe IMF's opinion on the sustainability of debt is not as clear cut as you make it out to be. They're in favour of a haircut but even without it can be sustainable. No it is very clear, IMF's official forecasts always assumed high rates of growth and primary surpluses, it's more likely Santorini's volcano to erupt and colorful unicorns jump out of it. Is Greece's debt really so unsustainable? Yes, it is. The Greek economy underwent a huge dive and it is not totally out of the question that with sound economic policy it could rebound back. +3% economic growth over 5 years would not even put it back to where it was back in 2009. Meanwhile, the interest payments as % of its GDP are very reasonable thanks to the troika. So I wouldn't call the debt unsustainable, I think it'd be better described as a pain in the ass. A pain in the ass that pales in comparison to what can happen with an exit from the Eurozone and a default.
The problem is that austerity is not sound economic policy. It is wishful thinking at this point that Greece will see any kind of growth if they accept the demands of the creditors. Meanwhile, Greece has a current account surplus. The danger of a default is that it makes borrowing harder in the future. Again, Greece has a current account surplus.
The biggest danger to the Eurozone is not that Greece falls off the cliff. It's what happens if they default, leave the Euro, bring back a vastly devalued drachma, and start growing again after a few years of painful correction. Sure beats a long austerity fueled depression with no end in sight. The next country that falls into massive debt can see that there are better alternatives to austerity.
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On June 29 2015 08:51 lord_nibbler wrote:
The more I read from Greek posters here (accela especially), the more I just have to roll my eyes.
In what world are you guys living? Like, is Greece not part of the financial reality we all live in?
This delusion of Syriza voters, that apparently their new government is going to spark this worldwide revolution in how we do business with each other, is hilariously sad.
You want loans from outside parties, you comply with their demands or you will not get any. You want to be in a monetary union, you conform to the set up rules, if you don't like the rules you are out. It is not hard to get (I thought).
If a vote for Syriza was really seen as a 'vote to end austerity', than that was a vote for the Grexit! If you want to stay in the Euro you have to accept austerity, because no one is going to loan you any money if you don't. That is how it works everywhere, literally everywhere. One lonely Greek left government is not going to change the world.
You whine about the IMF being neo-liberal bastards and you think that is news, why? You think they will not crack down on you like they did every other country, why? Because you voted against it and they surely will respect that, really? What kind of mass delusion is going on in Greece these days?
Well, personally i totally agree with you. Totally!
Based on the obvious destructive force of the EU/IMF programs and because, after all, "if the map and the terrain disagree, trust the terrain", part of the greek government and a big majority of the people believe that it is possible to bend or change established rules.
Same for the IMF, the fools believe (i hear this for almost 5 years) that IMF has left its black days behind or that because Greece is/was among the developed economies IMF wouldn't use its usual "break your feet" mafia policies to us. Nonsenses.
Again, i was always saying that Greece should follow the "capitalistic normality", exit from the eurozone, default, delete a big part of the debt and move on from there. Anything else just prolongs the misery.
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What it means to say that you are going to vote to end austerity is that you are voting to establish a 'credible threat of default' so that you can put yourself in a better negotiating position. Unfortunately the idea of a 'credible threat of default' is a game theoretical hall of mirrors
Greece needs to exit and get on with it. July will be an interesting month. First the PBOC rate hike, now puerto rico on top of all this. The sky is falling!
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EPT![[image loading]](https://s.qwant.com/thumbr/0x270/e/e/306ef59cb28d2150ed5a0378846b19/b_1_q_0_p_1.jpg?u=http%3A%2F%2Fgraphics8.nytimes.com%2Fimages%2F2015%2F06%2F25%2Fopinion%2F062515krugman1%2F062515krugman1-blog480.png&q=0&b=1&p=1)
